China Armco Metals signed a long-term sales contract with a state-owned Chinese building material company
SAN MATEO, Calif., May 22, 2013 /PRNewswire/ -- China Armco Metals, Inc. (NYSE MKT: CNAM) ("China Armco" or the "Company"), a distributor of imported metal ore and a metal recycler with a state-of-the-art scrap metal recycling facility in China, today announced that Armco (Lianyungang) Renewable Metals, Inc., the Company's wholly owned subsidiary, has signed a long-term sales contract with CNBM International Corporation, a subsidiary of a Hongkong Stock Exchange listed (HKEx, stock code 3323) and state-owned Chinese building material company, China National Building Materials Group Corporation. According to the contract, Armco (Lianyungang) will provide CNBM International monthly supplies of scrap metals and waste plastics for the next three years starting May 15, 2013.
Under the contract, the Company will supply approximately 15,000 MT (subject to 20% up-or-down adjustment) of scrap metals of various types and waste plastics to CNBM International every month from May 15, 2013 to May 14, 2016. The contract calls for a separate single sale agreement to be formed prior to each monthly supply, and CNBM shall make full payment for each supply at the time of such single sale agreement. With the prepayment arrangement under a pre-selling model, China Armco could increase its recycling production and sales significantly without additional working capital. This contract will increase the Company's recycled scrap metals sales, and is also expected to improve the Company's profit margin as a result of a lowered idle capacity cost accompanying the increased production.
"We are pleased to establish the business cooperation with CNBM International Corporation. This 3-years contract is a very important part of our efforts to build a pre-selling model for recycled scrap metals, which is expected to provide us with a relatively consistent and stable sales performance. In addition, with a higher output at our recycling facility, we expect to see an improved profit margin as a result of the lowered idle capacity cost. We are hoping to explore more business cooperation opportunities with CNBM International in the future. We believe that, with our brand building initiates, we will be able to continue to expand our client base," commented Mr. Kexuan Yao, Chairman and CEO of China Armco.
ABOUT CHINA ARMCO METALS, INC.
China Armco Metals, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals throughout China and is in the recycling business in China. China Armco's customers include some of the fastest growing steel producing mills and foundries throughout China. Raw materials are acquired from a global group of suppliers located in various countries, including, but not limited to, Brazil, India, Indonesia, Ukraine and the United States. China Armco's product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet and recycled scrap metals. For more information about China Armco, please visit http://www.armcometals.com.
SAFE HARBOR STATEMENT
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Armco Metals, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") are forward-looking and involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding our revenues and production related to our scrap metal recycling operations, pricing and demand for our product lines and the extent of government imposed energy and monetary policy restrictions and resulting blackouts and associated impact on our trading and recycling operations.
We caution that investors should not place undue reliance on any forward-looking statements herein. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. This press release is qualified in its entirety by the following, including, but not limited to, any expectations with respect to the Company's revenues and operations, institution of governmental regulations relating to our businesses and the international economic climate, and the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2012, and our Quarterly Filings on Form 10-Q for the periods ended March 31, 2013.
SOURCE China Armco Metals, Inc.