China Gengsheng Minerals, Inc., a developer, manufacturer, and retailer of a range of mineral-based heat-resistant products for various industrial applications, announced that it has earned a $4.2 million follow-on fracture proppants supply contract from AMSAT International, a technology company based in Florida that specializes in advanced ceramics. The company will initiate the shipping of fracture proppants with this new contract in July of 2011, and expects to supply approximately 1,500 metric tons a month through December of 2011.
“This represents our fourth supply contract with AMSAT, and we are proud that they continue to recognize GengSheng as a long-term, value-added partner and supplier of high quality proppant materials to their North American customers,” said Mr. Shunqing Zhang, Chairman and CEO of China GengSheng Minerals. “This latest order reinforces our belief in the sizeable growth opportunity for fracture proppants in the overseas markets, as we continue to build our brand, expand our sales channels, increase capacity and advance our products through continued technological development.”
Mr. Zhang continued, “We remain excited about the international opportunities for our proppants business, as export sales typically carry more favorable payment terms than our domestic contracts. We believe that the continued expansion of our overseas business will help reduce receivables and DSOs, while improving cash flow from operations and supporting our overall working capital needs as we grow the Company.”
The company had launched its fracture proppant products in late 2007, and had achieved revenue of $14.3 million in 2010, representing for a three-year compound annual growth rate of 217%. In order to address the increasing international and domestic demand, GengSheng has expanded its manufacturing capacity to 90,000 metric tons for the first quarter of 2011, via a combination of in-house and OEM capacity. The Company has also initiated construction on its second 60,000 metric ton fracture proppant manufacturing facility, which is expected to begin production in the third quarter for 2011. So far this year, GengSheng has signed contracts for fracture proppant supply that amount to $20.1 million.
For more information on the Company and its products, visit their company website: http://www.gengsheng.com
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