China GengSheng Receives $5.4m Fracture Proppant Orders for 2011

Dec. 21, 2010 - China GengSheng Minerals, Inc., a leading China-based high-tech industrial materials manufacturer producing heat resistant, energy efficient materials for a variety of industrial applications, today announced that it has received fracture proppant supply orders totaling $5.4 million from AMSAT International, a Florida-based technology company specializing in advanced ceramics. The Company will begin shipping product in January 2011, and expects to supply approximately 2,000 metric tons of proppant materials per month through June 2011, with specific quantities determined on a monthly basis based upon available capacity.
This is a custom order for 69 MPa-sized proppant materials, which AMSAT will distribute to its North American customers in the oil and gas industry.
In 2010 to date, GengSheng has shipped 36,000 metric tons of fracture proppants, including 17,000 metric tons to international customers. In order to meet the growing customer demand, GengSheng signed an operating lease for a 215,000 square foot fracture proppant manufacturing facility in October 2010, and expects full-year 2011 fracture proppant manufacturing capacity of approximately 100,000 metric tons.
"This new order reinforces our belief in the sizeable growth opportunity for fracture proppants, particularly in the overseas markets. Customer demand continues to grow, both domestically and internationally, and we are working to increase utilization rates while adding new capacity in order to more effectively address the needs of our current and potential customers," said Mr. Shunqing Zhang, Chairman and CEO of China GengSheng Minerals. "International proppant sales typically carry higher gross margins than domestic sales, and are characterized by shorter receivable collection periods, which contributes to improved operating cash flow and the overall growth of our business."