Lihua International, Inc. (Nasdaq: LIWA), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum wire, today announced that it has signed a 2011 copper anode volume supply contract for 30,000 tons with its recently announced domestic customer, one of the world's leading copper and metal conglomerates.
Additionally, Lihua has received 2011 copper anode volume demand indication from 3 other customers totaling 80,000 metric tons.
In order to meet this expected demand, Lihua plans to break ground in the near term on its second copper recycling facility, located on approximately 33 acres of land adjacent to its existing copper recycling facility in Danyang, China. The Company expects to complete construction of this new facility during the second half of 2011, bringing annual refined copper production capacity to 100,000 tons. The Company plans to allocate 75,000 tons to copper anode, with the remaining 25,000 tons allocated to copper rod.
"We have received 2011 customer demand indications for copper anode which already exceeded our full year estimated refinery capacity, reinforcing our belief in the sizeable market opportunity that exists for this product and supporting our decision to launch the anode product line during the second quarter of 2010," said Jianhua Zhu, chairman and CEO of Lihua. "Since launching copper anode in July, we have shipped over 4,000 tons and remain on track to meet our goal of shipping 8,000 to 10,000 tons of copper anode during 2010."
Mr. Zhu added, "In our brief history as a public company, we have consistently surpassed our strategic, operational and financial objectives, while taking important steps to secure Lihua's future success. We see tremendous demand for our products across all the end markets we serve, driven by strength from consumer white goods, household appliances and automobiles, as well as infrastructure projects, giving us confidence in our ability to meet our 2010 guidance, which calls for significant growth in both gross profit and non-GAAP net income. We look forward to beginning construction on our new copper recycling facility, which will provide Lihua with a much needed increase in capacity, allowing us to better address the tremendous demand that exists in the Chinese market for our pure copper alternative products."
2010 Financial Guidance and Outlook
Lihua reaffirms its full year 2010 financial guidance based on its recent capacity expansion, positive market trends and strong end market usage for Lihua products. Lihua expects to increase its gross profit by 46-53% over 2009 to $52.9 to $55.7 million, and grow its non-GAAP net income by 48-57% to $38.1 million to $40.3 million.
Source: Lihua International, Inc.