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China
Risun Group Limited (“China Risun”, or the “Group”, stock code: 1907), a leading global
integrated coke, coking chemicals and refined chemicals producer and supplier, has recently provided
marketing service of coke, coke particles and other products to an independent
third party Group (the “Counterparties”) engaging in exploration of coking coal
and production of coke and chemical products in Inner Mongolia, the PRC (the
“Project”). The Project is the first of its kind pursued with an external party
by the Group, which will allow it to generate stable cash flow with little resource
investment. It is also another major achievement of the Group in pushing forward its “multi-growth approach,
multi-industry development, multi-regional deployment and nationwide planning and development” strategy, following the success
in rendering operation and
management services to projects including the benzene hydrogenation project of Shanxi
Sanwei Chemical, coal tar processing project of Shanxi Jinzhou Chemical, coke
project of Henan Luoyang Longze and coal tar processing project of Henan
Seastar Chemical. It also signifies the Group’s operation and management
service business extending its reach into Inner Mongolia.
Under the Project, the
Group will include the Counterparties into its supply chain system. It will also formulate monthly sales plan for the Counterparties to refer to in production, and assign professional production, technology, examination and marketing personnel to assist the Counterparties in improving
production efficiency and management standard. The Group will receive sales
service fees based on the sales volume, including fixed fees and premium
incentives. Fixed fees are determined based on the sales commission percentage
as agreed between parties, while premium incentives are calculated based on a
certain proportion in accordance with the part of actual sales price exceeding
the basic price as agreed by both parties.
The operation and
management service business is one of the four key businesses of the Group. Leveraging
on its over 20 years of experience in
coking and coal chemical operation and management, the Group exports operation
and management models and technological services to customers and help promote
industry consolidation. The services it provides are in different forms grouped
under integrated marketing, operation and management service and merger and acquisition.
The cooperation enables
both parties to apply their expertise to achieve a win-win situation as well as
to develop together. Looking ahead, the Group will keep enhancing its coke supply
capability and enlarging its share in the coke market. Entering the Inner
Mongolia market, an important coke production base in the PRC, will fortify the
roll out of the nationwide strategic deployment of coke business by the Group. In
the meantime, the Counterparties will have
reliable access to coke sales channels and obtain stable profits, ensuring production and operational stability while focusing on developing
the business that has privileged industry position.
Building on China Risun’s leadership
in the coking and chemical markets, brand advantages and global marketing
network, the Group will be able to constantly improve its capability to supply coke,
coking chemical and refined chemical products, maintain profitability and robust development, and improve the standard of its services to the iron and
steel and chemical industries in the PRC and the world. It will do so by embracing its business expansion strategies and
offering customers its proven service models that pinpoint integrated
marketing, operation and management, and merger and acquisition.
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