Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 62

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 62
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 replace substantial usage of brass with stainless steel since 2023. Raw materials by weight of our locksets basing on
bill of materials and actual weighting, approximately 58% are iron, 30% are zinc alloy, 1% are brass and
11% are stainless steel for the year ended December 31, 2024 while approximately 50% are iron, 38% are zinc alloy, 1% are brass and 11% are stainless steel for for 2023. We don’t have long term purchase
contracts with our suppliers but only purchase via orders. For procurement purpose, management will get master quote from at least
two suppliers for every three (3) months. Management will bargain purchase price by taking into account price trends of brass, iron,
zinc alloy, and stainless-steel commodity and quantity volume discount. Xingfa has purchased approximately 5 tonnes brass, 525
tonnes iron, 276 tonnes zinc alloy and 100 tonnes stainless steel for the year ended December 31, 2024, while approximately 11
tonnes brass, 490 tonnes iron, 373 tonnes zinc alloy and 103 tonnes stainless steel for the year ended December 31, 2023.

Xingfa purchased iron from three Chinese suppliers
in Guangdong province in year 2024.

Xingfa purchased zinc alloy from two suppliers. One
supplier ships zinc alloy from Shanghai and Dongguan while one Hong Kong supplier ships them from Shenzhen in 2024.

Xingfa purchased brass from various subsidiaries of
one supplier in Dongguan and Shanghai in 2024.

Xingfa purchased stainless steel from two suppliers
in Guangdong province in 2024.

We have business relationships with our iron, zinc
alloy and brass suppliers for over 5 years. Some of them are public companies or subsidiaries of public companies listed on Shanghai,
Shenzhen or Hong Kong Stock Exchanges and the supplies and availabilities of our raw materials have never been an issued for us in the
past. Also, all of our primary raw materials are general commercial commodities. For 2024, total global production of: (i) brass is approximately
23 million tonnes; (ii) iron is approximately 2.5 billion tonnes and (iii) zinc alloy is approximately 12.5 million tonnes; (iii) stainless
steel is approximately 60 million tonnes. There are numbers of suppliers in China of our raw materials. Therefore, even our existing suppliers
may be temporarily