General Steel Holdings Inc · OTC:GSIH
General Steel — Investor Presentation (November 2012)
19 slides from General Steel's investor presentation, Nov 14, 2012
Slide 1: Investor Presentation
1 1 Investor Presentation (NYSE: GSI) November 2012
Slide 2: Forward Looking Statements
2 Forward Looking Statements The material presented is a presentation of general background information about General Steel Holdings, Inc . as of the date of the presentation . The information is in summary form and it does not purport to be complete . It is not intended to be relied upon as advice
Slide 3: GSI's Value Proposition
3 Longmen JV, a joint venture with a leading state - owned enterprise, benefits from leadership position in Shaanxi region and a robust market with sustainable demand driven by ongoing h ousing and infrastructure development in Western China GSI’s Value Proposition Strong financial performance: reve
Slide 4: Subsidiary Locations
4 Subsidiary Locations M G T Baotou Steel - General Steel Special Steel Pipe JV Co., Ltd. 80% owned / Capacity: 100,000 mts End product: Spiral - Weld Pipe Tianwu General Steel Material Trading Co., Ltd. 60% owned / C apacity: 2 - 3 million mts Raw Materials Trading Company General Steel (China) Co.
Slide 5: Key Subsidiaries - Longmen Joint Venture
5 ▪ Fully - integrated operation enables cost - efficient production ▪ 60% ownership interest - acquired stake for US $39M in June 2007 ▪ Approximately 70% market share in Shaanxi province ▪ Limited regional competition ▪ 15% corporate tax rate, incentivized through “Go West” tax policies ▪ 7 millio
Slide 6: Key Subsidiaries - Longmen JV Long-term Relationships and Cooperation
6 Key Subsidiaries - Longmen Joint Venture (“Longmen JV”) Long - term Relationships and Cooperation with Prominent SOEs ▪ State - owned background enterprise positioned for growth in Western China, where ongoing housing and infrastructure development are supported by substantial government investmen
Slide 7: Key Subsidiaries - Tianwu General Steel Material Trading
7 Key Subsidiaries – Tainwu General Steel Material Trading Co., Ltd (“T ianwu JV” ) Substantial Support to Longmen JV Tianwu General Steel Material Trading Co., Ltd (“T ianwu JV”) , a r aw materials trading company and joint venture with Tianjin Material and Equipment Group Corporation (“ Tewoo Grou
Slide 8: Products & Customers
8 Products & Customers Sales Channel Breakdown Baotou - Xi’an railway, China The Three Gorges Dam, Sichuan, China Xi'an Xianyang Intl Airport, Shaanxi, China Representative Direct - Sales Projects Jiuquan Satellite project, Gansu, China Applications: Infrastructure and construction Applications: Inf
Slide 9: Growth Strategy
9 Growth Strategy Capacity Expansion Organic Growth – new production lines Partnerships – access to third - party capacity Transition and relocation of production lines – improved throughput Operational Efficiency Upgrade and replace outdated equipment to improve yields Installation of recycling sys
Slide 10: Expanding Production Capacity
10 Expanding Production Capacity ▪ New, state - of - the - art equipment reduces energy consumption and improves yields ▪ Unified Management Agreement to operate two 1,280 cubic meter blast furnaces and other equipment installed by Shaanxi Iron and Steel Group ▪ In September 2012, initiated construc
Slide 11: Improving Operational Efficiency
11 Improving Operational Efficiency ▪ Replaced older, inefficient blast furnaces with new, state - of - the - art equipment to reduce energy consumption and improve yields at Longmen Joint Venture ▪ Reallocated resources to improve throughput (end - to - end production in a single location) ▪ Instal
Slide 12: Optimizing Raw Materials Sourcing
12 Optimizing Raw Materials Sourcing Current Raw Materials Procurement: Cost Advantage Iron Ore ▪ 50% imported ▪ 35% domestic ▪ 15% from Daxigou and Mulonggou mines, owned by Longmen Joint Venture and its partner ▪ A dedicated railroad for transportation of iron ore and finished goodsconnects Longme
Slide 13: Geographic Advantage and Growth Trends in Western China
13 » GSI’s subsidiary, Longmen Joint Venture, is the dominant supplier of rebar in Shaanxi province with 7 million metric tons of capacity under management Source: National Bureau of Statistics of China,, Shaanxi Bureau of Statistics of China, http://www.sn.stats.gov.cn/news/tjsj/2012723130434.htm ,
Slide 14: Sales Distribution Network
14 Hainan Heilongjiang Jilin Liaoning Hebei Shandong Fujian Jiangxi Anhui Hunan Guangd ong Guangxi Shanghai Shanxi Inner Mongolia Ningxia Gansu Qinghai Yunnan Tibet Xinjiang Jiangsu Zhejiang Beijing Sichuan Hubei Guizhou Henan Shaanxi Longmen JV Primary Markets (Xi'an Centered) Xi'an, Hancheng, Baoj
Slide 15: Second Quarter 2011 Highlights
15 Second Quarter 2011 Highlights Growth Driver: Capacity Expansion & Increase in ASP Capacity Expansion at Longmen Joint Venture ▪ Signed a 20 - year Unified Management Agreement with Shaanxi Coal and Shaanxi Steel ▪ New equipment adds 3 million metric tons of annual crude steel production capacity
Slide 16: Growing Revenue Amid Capacity Expansion
16 139.5 772.4 1,351.2 1,668.4 1,893.6 3,000.0 1,400.0 3,600.0 0 500 1000 1500 2000 2500 3000 3500 4000 2006 2007 2008 2009 2010 2011 1H2012 0.3 1.9 2.3 3.8 4.0 5.0 2.4 5.5 0 1 2 3 4 5 6 2006 2007 2008 2009 2010 2011 1H2012 Metric Tons (mm) US$(mm) Growing Revenue Amid Capacity Expansion Revenue Gro
Slide 17: Management and Board Experience
17 Name Title Experience Zuosheng (Henry) Yu CEO & Chairman ▪ Founded the Company in 1988 ▪ Bachelor’s degree from Sciences and Engineering Institute, Tianjin, China ▪ Granted “Senior Economist” by the Committee of Science and Technology of Tianjin City ▪ Member of China’s APEC (Asia Pacific Economi
Slide 18: Key Takeaways
18 Key Takeaways x Continuing cooperation and long - term partnership between Longmen JV and large SOEs including Shaanxi Steel, Shaanxi Coal and Tewoo Group provide multiple benefits x Poised to benefit from changing government policy and government - supported infrastructure projects x Proven mana
Slide 19: Thank You!
19 19 Thank You! Jenny Wang Joyce Sung Brandi Floberg / Lee Roth General Steel Holdings, Inc. General Steel Holdings, Inc. The Piacente Group Tel: + 86 - 10 - 5775 - 7691 Tel:+1 - 347 - 534 - 1435 Tel:+1 - 212 - 481 - 2050 Email: jenny.wang@gshi - steel.com Email: joyce.sung@gshi - steel.com Email:
General Steel Holdings — Investor Presentation (November 2012) on 6ix