Xiwang Special Steel Cooperates with the Institute of Metal Research, Chinese Academy of Sciences to Develop a Deep-Processing Production Line for High-End Steel with Annual Production Capacity Reaches 300,000 Tonnes

Aiming Military, Marine and Wheel Axle Steel in High-End Market

HONG KONG, Nov. 19, 2014 /PRNewswire/ -- Xiwang Special Steel Company Limited ("Xiwang Special Steel" or "the Group", HKEx: 01266) announced Shandong Xiwang Special Steel Company Limited ("Shandong Xiwang"), a wholly-owned subsidiary of the Group, has entered into a strategic framework agreement (the "Framework Agreement") with the Institute of Metal Research, Chinese Academy of Sciences ("IMR") to establish a "Demonstrative Production Line with Intelligent Cleansing System for the Manufacturing of High-end Steel For Use in Equipment" (the "Demonstrative Production Line") and to develop the technology for manufacturing high-end steel for use in equipment ("High-end Steel"). The Group expects the construction of the Demonstrative Production Line to be completed by the end of 2014, and production to commence in 2015. After the completion of the Demonstrative Production Line, it is expected that the annual production capacity for high-end special steel for use will increase to 300,000 tonnes while the production of related deep-processing products will be significantly enhanced.

According to the plan, production will be commenced by the end of the year. Products to be produced shall be high-end special steel for use in equipment, such as high-end tool and die steel, bearing steel, marine steel, wheel axle steel and military steel. High-end special steel for use will be applied in various industries, such as transportation, energy and electricity, marine engineering, and aeronautics and weaponry. Xiwang Special Steel and IMR shall continue to expand the scope of cooperation and develop high-end products and achieve their commercialization with reference to the demand of key industries.

The purpose of this Framework Agreement is to combine the advantages of Xiwang Special Steel and IMR in metallurgy and steel industry by establishing a research and development platform and formulate the technology for the manufacturing of high-end steel, in particular, the Demonstrative Production Line, which could give rise to a cleaner and more environmental-friendly steel production as well as create a high-end steel production line. Furthermore, by making use of IMR's research and development capability in materials science, the Group aims to improve the quality of its product, enhancing the product mix and refine the production process. The Group also aims to transform out of its electric arc furnaces to a production line with intelligent cleansing system for the manufacturing of high quality high-end special steel for equipment, and to research and develop high quality special ingot and its relevant products. This Demonstrative Production Line will be used for the manufacturing of high-end Steel, by using an intelligent system for injecting molten steel and cleansing steel moulds, the production process is expected to be cleaner and more environmental-friendly than the existing production process of steel in the Group.

National research institutes and private enterprises seldom cooperate in such a comprehensive scale. This first cooperation between Xiwang Special Steel and the IMR has introduced the Intelligent Cleansing System into the steel industry, and integrated with ten of IMR's highest-quality special steel production techniques. Meanwhile, the cooperation strives to develop special ingot, achieves a high-quality development for high-end equipment and its deep-processing products in order to fill the domestic gap and achieve a world-class standard.

Mr. Wang Di, the Chairman of Xiwang Special Steel, said, "Our Group has begun transition preparation as early as 2011. At present, the Group has completed the transformation of all production items which equip us with all-round prerequisite towards high-end transition. This reveals that our Group has always focused on both domestic and international cutting-edge technology, as well as taken the lead in the transition of steel industry. As both parties continue to strengthen their cooperation, it is expected that our Group has the potential to become a dark horse in the Chinese special steel industry in the next 2 to 3 years. With unremitting efforts of our Group, considerable returns for shareholders are foreseeable in the long-run."

About Xiwang Special Steel Company Limited (stock code: 01266.HK)

Founded in 2003, Xiwang Special Steel was listed on the Main Board of the Hong Kong Stock Exchange in February 2012. As the only special steel enterprise with mass production capability of bearing steel bar and wire rods products in Shandong Province, the products of Xiwang Special Steel manufactured mainly include high-quality and high-strength building materials including bearing steel, gear steel, engineering machinery steel, with an annual output capacity of 3 million tonnes of steelmaking and steel products respectively. In December 2013, Xiwang Special Steel passed the site inspection by the Ministry of Industry and Information Technology, and has become one of the second-batch enterprises that fulfils the standard of Iron and Steel Industry. After 10 years of development, the company formed a high-quality special steel production and operation mode which mainly focused on the production of bearing steel, gear steel, steel cord, automotive steel and Engineering Machinery steel. Xiwang Special Steel gradually transformed into a high-end steel production enterprise, and strives to become a "sophisticated special steel enterprise in Shandong Province".

About Institute of Metal Research, Chinese Academy of Sciences (IMR)

IMR was founded in 1953 in China. It positions itself as a base for materials science and engineering research in China. Research at IMR focuses mainly on high performance metallic materials, new types of inorganic nonmetallic materials, and advanced composite materials. IMR's research is directed towards the understanding and characterisation of materials properties, structure and performance, as well as materials synthesis and fabrication, processing, and application, with emphasis on the transformation and commercialization of products of scientific research and development. IMR has established the Shenyang National Laboratory for Materials Science, the State Key Laboratory for Corrosion and Protection, the Shenyang R&D Center for Advanced Materials, the Environmental Corrosion Center, the National Engineering Research Center for Corrosion Control of Metals and the National Engineering Research Center for High Performance Homogenized Alloys in furtherance of its research area.

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Source: Xiwang Special Steel Company Limited
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