Highly and efficient manufacturing capacity

• The large production capacity of Hua-An Group (production capacity of 1.2 million tones metallurgical coke) and newly set-up plant with modern facility which employs high technology has enabled Hua-An Group to achieve economies of scale.
• With the application of better blending formula of coal and enhanced charging process, Hua-An Group is capable of running the production capacity at 110% (which exceed its designed capacity). As a result, Hua-An Group is able to reduce the coking period from industry average of 22 ½ hours to approximately 20 hours. That will boost up Hua-An Group's gross profit and net profit margin respectively.

Close proximity to steel production customers

• The main users of metallurgical coke are steel manufacturers of which the major steel players are mainly located in the Shandong and its neighbouring Provinces such as Hebei, Jiangsu, Shanxi and Liaoning Provinces.
• Whilst steel manufacturers have the option to purchase coke from other suppliers not within the neighbouring provinces, Hua-An Group's close proximity and availability of coke will inevitably enable Hua-An Group to supply its coke in a timely manner to its customers which Is one of the main criteria imposed by the steel manufacturers as any disruption in supply will result in huge losses to steel manufacturers.
• Transportation cost is also minimised thus enabling the Hua-An Group to price its coke competitively as compared to other coke manufacturers.

Close proximity to coal suppliers

• Approximately 50% of the China's coal reserves are located In Shandong and the surrounding provinces such as Shanxi, Anhui, Shaanxi and Henan provinces.
• Such geographical reserve distribution has enabled Hua-An Group to source approximately 100% of Hua-An Group's required coal from the above mentioned provinces.
• Hua-An Group's top ten suppliers are the major players in the coal industry and with Its close proximity to Its suppliers, Hua-An Group is able to ensure that it will have undisrupted supply of coal and lower transportation costs.

Relationship with rail company

• Transportation of coke to customers is mainly done by rail. The rail transportation costs, which is borne by the customers constitute an important part of the cost on Hua-An Group's customers.
• As such, as an incentive for its customers to purchase from the Hua-An Group, Hua-An Group has entered into a 10-year railroad transportation agreement and a supplemental railroad transportation agreement on 30 June 2005 and 27 April 2006 respectively with Huasheng Jiangquan Group Company Limited - Railroad Operating Branch Company for the use of their rail system network at a fee 10% lower than the normal rate charged.
• The railway system is set up right inside Hua-An Group's plant and is strategically linked to the national railway grid system thus allowing Hua-An Group's delivery network to be strategically linked to customers across the PRC. 

Relationship with power supply company

• Hua-An Group believes that cheaper power supply is a vital success factor as power supply is one of the main cost elements of coke manufacturers. As such, on 30 June 2005, Hua-An Group entered into an Electricity Supply Agreement with Shandong Huasheng Jiangquan Thermoelectricity Co., Ltd. ("Jiangquan Thermo"); which is Iocated within the same industrial zone as Hua-An Group, whereby (1) Jiangquan Thermo will provide electricity to Hua-An Group for production purposes; (2) Jiangquan Thermo guarantees to charge the electricity supply at a reduced rate of 10% lower than the market rate. Jiangquan Thermo is willing to give a 10% discount as Jiangquan Thermo and Hua-An Group are both located within the same industrial zone which is Shenquanzhuang Industrial Zone and Hua-An Group is the major customer of Jiangquan Thermo; and (3) The electricity supply agreement is valid for 30 years.
• With the above said Electricity Supply Agreement, Hua-An Group is assured that there will be continuous and reliable power supply from Jiangquan Thermo at a cost lower than the market rate.

Experienced management team

• Hua-An Group's management team have extensive experience in the coke-related industry, from the sales and marketing of coke down to the production of coke.
• With the vast experiences and knowledge possessed, the management team of Hua-An Group is able to identify the changing market environment and needs and react promptly to remain competitive.
• In addition, the management team's experiences and extensive industry knowledge also enable Hua-An Group to better position itself in its resource allocation and pollution control management, thus enhancing the operation efficiency and profitability of Hua-An Group.

Established customer base

• Hua-An Group is able to maintain a good customer base and strong working relationships with various large steel manufacturers which are located in the surrounding regions of its manufacturing facilities due to Hua-An Group's prompt delivery and high quality products which are in accordance with the quality control requirements as per ISO9001:2000.
• The manufacturing facilities of Hua-An Group are also relatively new as compared to its competitors thus further enhancing the product quality.
• Hua-An Group believes that its stable customer base will provide a strong foundation for future business expansion.

Future expansion in production

• Currently,Hua-An Group has two (2) production lines for its production of metallurgical coke with a designed coking capacity of 1.2 million tonnes along with the by-products of tar (60,000 tonnes); crude benzene (18,000 tonnes); ammonium sulphate (17,000 tonnes) and coal gas (360 million m3).
• As the major customers of Hua-An Group are steel manufacturers, the future production expansion plans of Hua-An Group will be skewed towards the development and growth potential of the steel industry.
• Hua-An Group is currently expanding its production capacity by building additional 2 coke ovens to provide incremental production capacity of 600,000 tonnes metallurgical coke per annum. The project is expected to be completed by mid-2008.

Accredited ISO9001:2000 certification

• Hua-An Group has fulfilled all the necessary requirements for the accreditation of ISO9001:2000 certification for product quality on 26 February 2006. Subsequently, on 3 April 2006 Hua-An Group successfully obtained the aforesaid certification.
• Hua-An Group also employs stringent environmental control procedures to ensure that its production processes are environmentally friendly.
• These are two of the crucial success factors for a coke manufacturers to be competitive in both the local and overseas market, especially for overseas customers from the US and European countries.

Intensive quality control and environmental management system

• Hua-An Group focuses significantly on the quality of the raw material and finished products to ensure the desired quality of outputs.
• Hua-An Group's quality control team is committed to attaining high quality in its products and as such, Hua-An Group has implemented stringent and comprehensive quality control and environmental management procedures.