ZK International enters into budgeted $49.7 million expansion, supplying and distribution framework arrangement with Shandong Huaye Group

ZK International Group Co., Ltd. (ZKIN) ("ZK International" or the "Company"), a designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products primarily used for water and gas supplies, today announced that it entered into an Exclusive Supplying and Distribution Framework Agreement with Shandong Huaye Group ("Huaye"), a leading structural and fencing piping products manufacturer and suppliers in China, for Huaye's ongoing production line and machine upgrades (the "Upgrades') and act as the Company's strategic supplier and distributor.

The Upgrades, with Huaye's plan to allocate a total budget of RMB 350 million (approximately $49.7 million), is now underway at Huaye's existing 120,000 square meters facility in Mengyin County, Shandong Province. The Company licensed its patented technologies and assigned experienced engineers to support the Upgrades. Phase I of the Upgrades is expected to be completed by September, 2020 and will enable Huaye to manufacture premium gas and water pipe products that the Company specializes in. 

The major purpose for the partnership is to exchange resources and create synergies between Huaye and the Company. Upon completion of the Upgrades, Huaye will exclusively manufacture water and gas pipe products for the Company that will significantly shorten the Company's delivery cycle. Huaye, as a leading structural and fencing piping products manufacturer, will distribute the Company's products to its customer base which consists of more than 500 construction and real estate developing companies. 

Mr. Jiancong Huang, Chairman and Chief Executive Officer of ZK International, commented, "For over 18 years, Huaye has established itself as one of the leading manufacturers and suppliers of stainless steel structural and fencing piping products in the Northern and Eastern regions of China, particularly in Shandong Province. We are pleased to leverage our technological know-how with the Huaye partnership by assisting Huaye in its production line, re-tooling, and machine upgrades. As we are exploring potential broader cooperation with Huaye, we are optimistic that a geographically complementary and mutually beneficial relationship can be developed between the two parties."