Products

The four major lines of petroleum products that Longwei distributes to its customers are gasoline number 90 and number 93, diesel number 10, other fueling oils (a liquid petroleum product that is burned in a furnace or boiler for the generation of heat), and solvent. The numbers are denoted according to the Chinese Gasoline Grading System.

Longwei distributes/wholesales petroleum products for retail and commercial users in its region, including the following categories:

• Gasoline: #90 & #93 (in China, retail gasoline is labeled as #90, #93, #95 and #97)
• Diesel: #-10 (in China, retail diesel is labeled as #0, #5, #-10, #-20, #-35 and #-50)
• Other Fuel Oil: a liquid petroleum product that is burned in a furnace or boiler for the generation of heat
• Solvent: unrefined petroleum products used in solvents for paint, dry-cleaning, cutback asphalts and rubber industry.

Sales & Marketing

In order to avoid unnecessary competition, Longwei carefully selects its customer groups.

Target Group One: retail group (gasoline stations). The Chinese domestic gasoline business has become more competitive since private ownership of gas stations has expanded. Both state-owned and privately owned gas stations have become more aware of competitive pricing strategies.

Target Group Two: commercial group (enterprises). This group typically consume large amounts of fuel oil & petroleum on a regular basis. This group of customers is very sensitive to competitive pricing strategies as well as requiring a stable supply.

Direct Marketing Method: Longwei employs its own sales & marketing staff to directly establish distribution & sales networks with its customers. Its sales representatives regularly visit gas stations and fuel oil consumption intensive enterprises within the Company's distribution areas.

Referrals: Referrals from existing customers continue to be a strong source of new customers.

Distribution: Longwei's ownership of its own railroad system guarantees that it can meet its customers' demand, without the threat of shortages or supply interruption.