HSCO is seeking oil & gas and construction partners from the pipeline and construction fields to work with us in delivering steel pipe around the world.
We are also connecting with oil & gas project developers to provide financing options for our clients. Financing options for hsco projects will be similar to those for other oil & gas, such as marine & offshore.
HSCO has a long-standing relationship with China Petrochemical Corporation (Sinopec Group),which is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group is a state-owned company solely invested by the State, functioning as a state-authorized investment organization in which the state holds the controlling share. Sinopec Group’s key business activities include: industrial investment and investment management.
After understanding the information and questions, I believe we can become an investment relationship.
1)What is the name of the group to which hunan standard steel co.,ltd belongs to and in which year hsco was incorporated and started its commercial production?
Hunan Standard Steel Co.,Ltd(HSCO) belongs to one of the eminent and respected Husteel Industry Group. Today it is one of the largest producers of Seamless Steel Pipes & Fittings in China.
2) What are the areas of activities undertaken by the Group?
Husteel Group is in the businesses of steel manufacturing and related industries, such as the Group investment (overseas Department, domestic commerce, hotel marketing company), real estate projects, shipbuilding, equipment base, electrically controlled valve factory.
3) What are the areas of operation of HSCO & the current capacity?
HSCO is the one of the largest manufacturer of Seamless pipes & tubes from 1/2” OD up to 24” OD. Besides, it is also having 3 Layer Polyethylene/Polypropylene & Dual Fusion Bond Epoxy Coating facilities for cross country line pipes.
4) What is the basic Raw material required for manufacturing Seamless Pipes and source of raw material?
Steel Round Billets are required to manufacture Seamless Pipe. Billets are procured both from indigenous suppliers and from abroad. Major Indigenous suppliers are Baosteel, henggang and steel round billets are imported from renowned mills from Europe, Far East countries, Canada, China.
5)Does the Company has any Joint Venture or Collaboration agreements with any Global players?
During the year 2014 the Company had entered into a Joint Venture agreement with Pemex, SWCC,EIED.
6)Whether HSCO is registered as an approved vendor with domestic Oil & Gas players and refineries?
Yes. HSCO is already approved as a vendor to Sinopec Group.
7)Whether HSCO is also registered as an approved vendor with Global Oil & Gas players?
Yes. HSCO is already approved as a vendor to renowned companies like Sinopec Pemex, EIED.
8)Whether HSCO is also registered as an approved vendor with energy or related fields?
Yes. HSCO is already approved as a vendor to renowned companies like SWCC,IBERDROLA.
9) Where do you see the industry over the coming years?
The exploration and production of crude oil is going up, this will lead to increasing demand of Seamless pipes mainly for Oil Companies & Tubular Goods (OCTG). Globally Exploration & Production activities have increased considerably which will lead to increase in demand of Seamless Pipe world over. We are also in the process of creating additional capacity to meet emerging market needs at competitive cost by reaping benefits of scale of production. As per market feedback from China as well international manufacturers, we do not foresee any possibility of lowering of demand in near future owing to Energy shortages.
10) How will the company capitalize on this opportunity?
HSCO has acquired a seamless plant in Vietnam. It is expected that the facility would be commissioned by December 2014.
11) Does the company have debt in its balance sheet?
It is a Debt Free company.
12) Is it a correct financial strategy to keep the Company debt free?
The company is having a strong cash generation business model and the approach is always to utilize the available funds with the Company for its Capex and Working Capital requirements rather than relying on external debt. However, the company can always leverage its Balance Sheet, once the bigger Project/Capex. is carried out.
13) What is the dividend policy of HSCO?
It is a continuous endeavor of the management to keep a nice balance between retention of profit and dividend payout. HSCO is a growing company and funding its capex and working capital requirement largely by internal accruals. Currently HSCO is having a policy of dividend payout between 10% to 15% of the Earnings of the company.