GFRE:
Xiaobin Liu was appointed Chief Executive Officer of Gulf Resources, Inc., on March 10, 2009. Mr. Liu has been closely involved with the company since January 2007, and as Vice President, he was responsible for all the company's operations. From June 2005 to December 2006, he was the Vice President of Shenzhen SEG. Dasheng Co., Ltd., a Shenzhen-listed company engaged in the real estate and hotel industries. Mr. Liu has a master's degree in international accounting from the City University of Hong Kong.
TWST: Please begin with a brief overview and introduction to Gulf Resources.
Mr. Liu: Gulf Resources (GFRE), located in the Shandong Province, is a leading provider of bromine and petrochemical products in the People's Republic of China. It has two wholly owned subsidiaries. The first is Shouguang City Haoyuan Chemical Industry, which produces bromine and crude salt, and the second subsidiary is Shouguang Yuxin Chemical Industry, which produces chemical products. So there are two operating subsidiaries in total. Bromine can be used by several industries, like wastewater treatment, industrial refrigerants, and for the manufacture of intermediate chemicals, agricultural intermediate chemicals, that are used for making pesticides and oil and gas exploration chemicals. The company is the largest bromine producer in the PRC, with a market share of around 19%.
TWST: If we were speaking 12 months ago, what would have been the goals and the expectations you had for the company? What would be your report card on the past 12 months with respect to your performance?
Mr. Liu: Twelve months ago, the company had set three goals. The first was to expand its market share and its capacity by acquisitions, as we wanted to reach 20% market share in a year. The second goal was to produce new products and to produce bromine derived products downstream of the value chain to help the company grow. The third goal was to upgrade to the Nasdaq stock market. Now looking back today, the company has completed two acquisitions and expanded production capacity by 6,000 metric tons, thereby achieving the 20% market share goal. In terms of the second goal, the company has developed new products that utilize bromine derivatives, such as new pesticides, through its upgraded production line. And the company is in the process of introducing another chemical product through the completion of a production line for additives for wastewater treatment chemicals, where the company expects to start production by the second half of the year. Third, the company successfully upgraded to Nasdaq last October, and the whole management team came to New York for the bell ringing ceremony.
TWST: What's the agenda at this point? What would be the priorities for the next 12 to 24 months, and what would make that time frame a success?
Mr. Liu: Looking forward in the next 12 to 24 months, the company also has three goals. The first is to continue on acquisition front, as we wish to continue acquiring assets of smaller bromine producers. In three years, our company's goal is to reach 30% market share. Second, the company will continue to dedicate resources for new products, and hopefully along with the pesticide production line and the wastewater treatment production line, the company is looking into other products, such as on the pharmaceutical front. Third, the company would like to continue to improve its operations in terms of transparency, and in terms of communication with investors and its shareholders. So at the end of the day, we want Gulf Resources to be a more mature and transparent company in the United States.
TWST: Would you tell us what has been the funding and the financial history of Gulf Resources to date? What's the current status of the balance sheet and P&L, and what items have your attention for improvement?
Mr. Liu: In terms of the company's financial situation, it has a very healthy balance sheet, no bank loans and very strong operating cash flow. In terms of revenue and income, the company has a very healthy growth rate and achieved for the last year over $100 million in revenue and over $30 million in income. So the company believes that it's very healthy and financially strong going forward. Of course, the company is looking forward to continue the growth and to maintain a very healthy balance sheet going forward.
TWST: Would you please introduce us to your top-level management team, two or three of your key individuals?
Mr. Liu: The senior management of the company includes Mr. Yang, the Chairman; Mr. Liu, the CEO; Mr. Li, the CFO and Mr. Miao, the COO. They form the core, key management group.
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