EMERGING MARKETS INVESTOR: DR NEWS
By Anita Hawser
The wave of Chinese companies opting to list on American exchanges continues with a China-based manufacturer of rare-earth coated and prestressed building materials for roads and bridges issuing five million American Depositary Receipts on the Nasdaq.
Proceeds from the share sale will be used to help Ossen Innovation expand its domestic production capabilities. Liang Tang, Ossen’s chairman, says the ADR program forms a crucial part of the company’s long-term growth strategy. J.P. Morgan announced in February that it was appointed depositary bank for the ADR program. Ossen Innovation was created when Ultra Glory International acquired Ossen Innovation Materials Group in July last year. Its products are not only used in the construction of bridges, highways and buildings in China but are also exported to Europe, South Asia and North America. The Shanghai-based company’s manufacturing facilities are located in Maanshan City, Anhui province and in Jiujiang City, Jiangxi province.
Ossen Innovation is following in the footsteps of the many Chinese companies that offered shares on US exchanges in 2010. According to investment bank Renaissance Capital, Chinese companies were responsible for almost a third of IPO listings on the US market in 2010. Renaissance says most Chinese companies that choose to list on a US stock exchange rather than their local exchanges tend to be young start-up companies looking to fund growth rather than older, well-established companies.