Should this trial shipment prove successful, Armco International will move onto a one-year total importation of 550,000 to 600,000 green metric tons. With the current market price in China, 600,000 green metric tons of wood chips is worth $63 million, and Armco Metals anticipates realizing 10% gross margins on the sales of the product.
Armco Metals inked the agreement while thinking of the woodchips' market potential in the Chinese economy. China is the world's biggest producer of paper and paperboard. But with the lack of sufficient quantity of high-quality domestic wood fiber supply, new pulp mills in China have been looking to import greater amounts of woodchips from plantation-rich countries to meet their growing needs.
Commenting on the announcement, Kexuan Yao, Chairman and CEO of Armco Metals Holdings, stated, "While keep confident in our metal ore trading and recycling business, management has been making efforts to diversify our product line and develop new profitable products into our business line. With the proven ability and expertise of our team in international trading and sourcing, we have the unique advantage to expand our business scope and carry new product which offers mitigated risks and high return potential. We will capitalize on our formidable business development team to develop the new product and expand into non metal ore business that offer high growth potential, as well as higher profit margins. We look forward to providing more updates on the developments and anticipate unlocking considerable value for our shareholders."
