The company also indicated that it can now successfully purchase large seamless steel bottles, a key component to manufacture all transport trailers, from Chinese providers.
The two orders from Wuhan Green Energy Transport and Xuancheng Anjie Natural Gas Transport are considered a significant breakthrough in the production and sale of CNG equipment. Pursuant to the terms of the agreements, Sinoenergy will supply 40 gas transportation trailers to Wuhan Green Energy Transport and 50 to Xuancheng Anjie Natural Gas Transport. The agreements call for 45 trailers to be delivered during the fourth quarter of 2007 and the remaining 45 to be delivered during the first quarter of 2008.
With the sales volume of trailers in Sinogas fluctuating between 20 to 25 CNG transport trailers during each of the past five quarters, these recent orders represent a substantial increase in overall demand. Furthermore, with the core material of the CNG trailer now being manufactured domestically, in co-operation with domestic steel and iron companies, Sinoenergy can now realize a 20% reduction in the manufacturing costs.
Bo Huang, CEO of Sinoenergy, said: The two orders will greatly enhance our trailer sales volume and our ability to manufacture our own trailer storage cylinders. This will also reduce trailer manufacturing costs, thereby leading to increased profitability, while at the same time adding to our competitive presence in the marketplace. In addition, this order will significantly add to both our sales revenue and operating income during the fourth quarter.
