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China Wind Systems signs agreement with Wuxi Lida Gear
Source: China Wind Systems Inc Date: 2008-09-26
| China Wind Systems Inc which supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China, announced that it has signed a preliminary agreement with Wuxi Lida Gear Manufacturing Co Ltd to supply rolled rings measuring from 3 meters to 4.5 meters in diameter for use in the wind power industry. Wuxi Lida is a gear-rim fabricator with the capacity to fabricate up to 5,000 units per year. In addition, China Wind Systems also signed a preliminary agreement to supply Wuye Heavy Industry Machinery Co ("Wuye Heavy Industry Machinery") with forged products including shafts and pedestals for use in the heavy machinery industry. The agreement with Wuxi Lida stipulates that China Wind Systems will supply 1,350 tons of forged rolled rings for a total purchase price of approximately RMB 20 million ($2.9 million) starting from the fourth quarter of 2008. Wuxi Lida fabricates the rolled rings into gear rims and in turn sells the gear rims to companies in the wind power industry. China Wind Systems is required to manufacture the forged rolled rings based on the technical and quality specifications provided by Wuxi Lida, and Wuxi Lida has the right to inspect the Company's facilities to verify compliance with the specifications. The terms of the purchase are subject to a definitive agreement which sets forth the specific types, dimension and quantity of the forgings, as well as terms and conditions of the sale after the Company commences its production of forged products, which is expected in October 2008. The agreement with Wuye Heavy Industry Machinery, contemplates that China Wind Systems will start supplying Wuye Heavy Industry Machinery with 1,300- 1,650 tons of shafts and pedestals for a total purchase price of approximately RMB 20-25 million ($2.6-2.9 million) from the fourth quarter of 2008 through the second quarter of 2009. Wuye Heavy Industry Machinery will sign a formal contract with China Wind Systems after inspecting the forged products manufactured by the Company to ensure that the products conform to the technical specifications and quality standards provided. "We continue to see strong interest in our forged products both for the wind power and other industries, and we are confident that our product quality will meet the strict quality requirements of Wuxi Lida, Wuye Heavy Industry Machinery, and other potential new customers," said Mr. Jianhua Wu, chairman and CEO of China Wind Systems. "We expect to sign more contracts with wind- power equipment manufacturers as we ramp up our production in October 2008. Thus, we are confident we will meet the newly updated guidance for full year 2008 of $45 million in revenues and more than $7 million in net income," Mr. Wu said. | |
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