General Steel to add 150,000 tons of capacity to meet current demand

Tianjin, China— General Steel Holdings, Inc., a leading manufacturer of high quality hot-rolled steel sheets primarily for use in tractors, agricultural vehicles and other specialty vehicles, announced that due to market demand, its 70% owned subsidiary, Tianjin Da Qiu Zhuang Sheet Metal Co., Ltd., (“DQ”) will add four new production lines to increase production of steel products by 150,000 tons. The new facility will begin production by the end of 2005.

DQ currently has six production lines in operation and will expand to 10 production lines. As a result of this expansion, the company intends to increase its market share of steel sheets used in the production of agricultural vehicles in China to between 60% to 70% from the current 40%.

Zuosheng Yu, director and president of General Steel said, “Due to the tremendous demand for our products, we determined that our current supply was not adequate to satisfy our customers’ needs. We believe that greater production capacity and cost cutting will result in significantly higher net income in 2006. We intend to fully capitalize on this investment from the beginning of next year.”