The 18000 t/a Zinc Alloy Project of Boway Alloy Delayed Start of Production

Boway Alloy issued public notice in the evening of April 14, saying the company’s“18000 t/a Deformation Zinc Alloy Material Production Line Project” would delay its start of production.

Deformation zinc alloy project is a key project in the state government’s the “Eleventh Five Year Plan” National Science and Technology Support Program, by adopting independently developed alloy and manufacture patented technologies, this project solved technical challenges such as brittleness and poor performance typical of zinc alloy products,after long years of tackling key problems by the company’s R&D personnel, it has developed high strength and high toughness zinc-based alloy material and manufacture methods, which has been awarded 6 national invention patents.This project is previously expected to start production in March 2014.

Since this project belongs to invention patent industrialization project, there is no readily available experience and criteria for borrowing and reference either at home or abroad, the verification cycle of the product’s performance parameters is long, resulting in longer than expected time needed for technique verification. This project’s key equipment items are all imported custom-made equipment,which also makes the commissioning time for production line exceed the estimated schedule.Up till now, massive labor and materials have been invested for commissioning in standardization of product technique,automation of equipment, and matchup between equipment and technological process,it is expected that this project will finish trial production in June 2014, and begin production in October 2014.

Boway Alloy concurrently released its annual report for 2013, during the reporting period the company recorded business income of 2435.2497 million yuan, up by 2.78% on Y-o-Y basis; fulfilled net profit of 84.0277 million yuan that belonging to listed company’s shareholders, down by 21.67% on Y-o-Y basis;net profit after deducting non-recurring gains and losses which belongs to listed company’s shareholders is 83.1675 million yuan, down by 14.95% on Y-o-Y basis. The main reason is the company’s investment project was just launched into production, the investment project required massive investment of human labor, material and financial resources, it still need certain duration of time before reaching the target production capacity, which results in increase in the company’s financial expense and administrative expense; the company introduced various technological talents from both home and abroad, intensified efforts in R&D investment, and developed new products,which significantly increased R&D expenditure.