About Longwei Petroleum

Founded in 1995 and approved by the Ministry of Commerce of the People's Republic of China, Longwei is one of the leading diesel, gasoline, fuel oil and solvent oil distributors/wholesalers in Taiyuan City, Shanxi Province, P.R. China. The company sells its products mainly to large-scale gas stations, coal plants and power supply companies, and on a smaller scale to small, independent gas stations. Shanxi Province, where Longwei operates, is a major energy center of China; and Longwei serves the heavy industries in this rapidly growing region. Longwei also owns a railway system to efficiently transport its products to customers. Longwei has been granted a Finish Oil Wholesale license by the People's Republic of China, which allows them to engage in the wholesale business of gasoline, fuel oil, and diesel oil. The company has 40 employees, including three management personnel.

Longwei engages its business through its subsidiary, Taiyuan Longwei Economy & Trading Company Ltd., located in Taiyuan City, where Longwei owns and operates a state-of-the-art fuel storage facility. This facility is ISO 9001:2000 certified and includes 14 storage tanks with a total capacity of 50,000 metric tons.

Longwei's primary customers are large-scale gas stations in Taiyuan City who purchase diesel and gasoline from the company. These gas stations represent about 60% of Longwei's sales and buy primarily gasoline and diesel.

Longwei's second largest group of customers, comprising about one-third of its business, are the coal plants and power supply companies that use fuel oil for heat and power.

The Company's third-largest customer base is made up of small, independent gas stations. Longwei owns twelve gasoline stations, including eleven franchised stations and one station which it operates on its Taiyuan property. These gas stations complement Longwei's fuel distribution business and represent about 10% of the company's total sales.

Longwei Fast Facts

• Longwei has been granted a Finish Oil Wholesale license, which allows them to engage in the wholesale business of gasoline, fuel oil, and diesel oil. This license is granted by the central government of the People's Republic of China. The license has no expiration date and is very difficult to obtain. In addition, Longwei also has a special license for Dangerous Chemical Products Businesses which allows the Company to handle or transport gasoline and diesel oil.
• Longwei has been in the fuel oil and petroleum product distribution wholesale business since 1995. The Company has earned a reputation for excellent customer service and a stable distribution capability at competitive prices.
• China's rapidly growing economy will drive energy demand growth rates of four to five percent annually through 2015. Production and distribution of energy will be one of China's greatest challenges in the coming years.
• Shanxi Province, where Longwei operates, has no oil fields or oil refineries and thus provides a unique market space for fuel oil and petroleum products. Shanxi Province's demand for fuel oil has experienced double-digit growth in the past several years.
• Longwei owns one state-of-the-art fuel storage facility and fourteen storage tanks with a total capacity of 50,000 metric tons at Taiyuan City, in Shanxi Province. Longwei is planning to expand its operations to Gujiao City and is adding 70,000 metric tons of storage capacity to service customers in Gujiao and surrounding areas. Gujiao is a major energy center of China.
• Longwei owns its own railroad system and has exclusive usage rights. This, coupled with Longwei's Finish Oil Wholesale license agreement, means that Longwei can reliably meet the needs of its customers.
• Longwei's fiscal year ends June 30th.
  Longwei Employees: 40
  Total Management: 3
  Technical: 1
  R & D: 1
  Workers: 35