Longhai commenced production of high quality steel wire from its second facility in Xingtai, Hebei province, China at the end of the second quarter of 2012. The state-of-the-art facility has a high speed production line capable of producing a wide variety of conventional and higher value steel wire used in a variety of specialized applications steel wire rope, steel strand, steel belted radial tires and steel welding rod.

　　Longhai Steel sold all of its initial production to a major distributor in Hebei for domestic and export markets which significantly reduces transportation costs and inventory risks. The Company also received positive feedback on its new higher value steel wire products and expects to ramp up production of high quality steel wire to full capacity by the end of 2012.