Presentation Creating colors for the world Presentation Creating colors for the world Shenghua Group Deqing Huayuan Pigment Co., Ltd.

2 Outline Mission History Status Sales network Manufacturing & QC Sustainable development Product highlight Our customers

3 Mission Supply iron oxide pigments with stable quality, competitive price and excellent service.

4 History 1993: Established with 50 employees

5 History 1994: the first red line started to operate

6 History 1995: the first yellow line started to operate

7 History 1998: Certified by ISO9002 (converted to 9001:2008 in 2010)

8 History 1999: start to produce iron oxide black

9 History 2001: transformed to share-hold company

10 History 2002: acquired Hangde Chemicals

11 History 2003: set up independent blending plant

12 History Setting up thermo electrical power plant in early 2004

History Certificates: ISO14001(2004), CE(2010) 13

14 Status Area: 233,000m 2 Employees: Production plants: Huayuan, Hangde, Dechang Turnover 2010: USD115 million Largest iron oxide manufacturer in China & Asia

15 Status Overview

16 Status Numbers of Chinese iron oxide producers: 140 Hyrox capacity:120,000mts

17 Status Hyrox Export in 2009: 88080mt Represents 21% of Chinese IO export

Status Turnover 18

Sales network Sales department in China 19

Sales network Sole distributors in each specific market with sub-distributors network Close to end users Ready-to-ship stock system by distributors Frequent joint visit to end users Easy-to-access local website 20

21 Manufacturing Total production line: 17 iron oxide red: 8 iron oxide yellow: 6 iron oxide black: 1 compound ferric green: 2 Total annual capacity: 120,000mt iron oxide red 77,000mt iron oxide yellow 35,000mt iron oxide black 8,000mt

22 Manufacturing

23 Manufacturing Blender for color consistency

24 Manufacturing Iron oxide red (Basic types): 101, 110, 120, 130, 140, 160, 180, 190 Iron oxide yellow (Basic types): 311, 313, 586, 810 Iron oxide black (Basic types): 318, 330, 740, 750

25 Manufacturing Iron oxide orange (Blended colors): 960, 2040 Compound ferric green (Blended colors): 5605, 835 Iron oxide brown (Blended colors): 600, 610, 663, 686, 841

26 Manufacturing Micronized iron oxide red/yellow Heavy density iron oxide yellow Tobacco grade iron oxide red/yellow Customized service: Customized blending available Minimum blending quantity: 4mt

27 Manufacturing

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29 QC Standards Raw material control Production control Color control Consistency assurance Identification & tracing back

30 QC Quality assurance system: ISO9001:2008 Product standard according to ISO1248 Test method according to ISO787 for paint & coating application Test method according to EN12878 for construction application Customized test methods available: i.e. pigment dispersion

31 QC Raw material control Raw materials/subsidiary materials suppliers control process: File HY.CX82005, process 4.6 Qualified contractor/subcontractor control process: File HY A, process 4.6 Purchasing control process : File HY.82006, process 4.6 Raw materials/subsidiary materials inspection rule: File HY.QB9807-A

32 QC Production control Raw material ratio Reaction condition Inspection Intermediary inspection Semi-finished products Final inspection for finished products

33 QC Color control: Each lot of semi-finished products are marked and recorded into computer Blending ratio is suggested by computer and determined by qualified inspector Blending volume: 5~20mt per batch Colour difference report / Strength report of each batch by spectrophotometer

34 QC Consistency assurance (1): Administration evaluation process Administration planning process Contract evaluation process Files and data control process Raw materials/subsidiary materials suppliers control process Qualified contractor/subcontractor control process Purchasing control process Product identifying and traceability Working procedure control process Technology and technique control process Equipment control process Inspecting and testing control process

35 QC Consistency assurance (2): Inspecting/measuring/testing equipment control process Inspecting and testing status control process Off-grade product control process Rectifying and preventing method control Conveying, storage, shielding, packaging and delivery control process Quality record control process Inner quality system verify process Training process Service control process Statistics control process

36 QC Identification & tracing back Principle: Product identifying and traceability (HY.CX82007, process 4.8) Samples from customers will be kept forever Samples of each shipment will be kept for 12 months

37 QC Quality Center

38 Sustainable development Sewage system (US$4.5million investment)

39 Sustainable development New technology waste water treatment

40 Sustainable development Safety policy Offer safe working environment Safety rules and regulations Committee for safety Employee safety training Emergency system

Sustainable development Social accountability certificate SA8000 (GB/T 28001) 41

Sustainable development Favorable environment Stable political situation Strong support from local government Ideal geographic location No natural disaster Convenient transportation Abundant raw material 42

Product highlight Color consistency Improved physical and chemical properties Batch-to-batch reports Customized test method applicable 43

Our customers Monier (Roofing) PPG (Paint & Coating) CPS (Universal tinting system) Clariant (Leather & Plastic) Mundat (Tipping paper) ITACA (Ceramic) Parex Davco (Color concrete) Natural Reflection (Mulch) 44

45 Thank you Please kindly accept our gratitude for your valuable timey. It will be our greatest honor to be at your service.