China Gengsheng Minerals, Inc., China-based materials technology company making its main business through its BVI-domiciled subsidiary China Gengsheng Minerals Inc., announced on January 16 that it has renewed its full-service contracts for refractory products with two of its major customers for another year. Providing “full services” to China steel mills means refractory product installation, testing, maintenance, repair and replacement. In the last year, full-service customers contributed approximately 51% of the company’s total sales in 2008, compared with 38.3% in 2007.
Mr. Shunqing Zhang, Chairman and CEO of Gengsheng, said he was encouraged by the fact that they were able to renew the contracts with two of their biggest full-service customers, “at about the same price as last year’s”. He noticed that full-service contracts typically enjoy higher gross margins than straight product sales, also ensuring stable customer relations and regular monthly payments.