20 August 2003 HG METAL MANUFACTURING LIMITED HG METAL MANUFACTURING LIMITED PLANT TOUR

 Moving Up the Value Chain  Competitive Strengths  Financial Highlights  Growth Prospects and Future Plans  Industry Comparison  Comparison between HG Metal & AnnAik PRESENTATION OUTLINE We Custom Manufacture to your Satisfaction

MOVING UP THE VALUE CHAIN We Custom Manufacture to your Satisfaction Mr Wee Piew Chief Executive Officer HG Metal Manufacturing Limited

Established partnership HGC - small retailer of steel products 1971 Became a stockist for steel products 1973 Acquired Almech 1984 HG Metal incorporated Expanded warehouse storage area Moved to current premise 30 Jalan Buroh Acquired OMP Commenced steel product mfg New 3 storey factory plus w/house Acquired JHL 2000 GROWTH PATH We Custom Manufacture to your Satisfaction

HG METAL Jin Heng Li Hardware Sdn Bhd (Malaysia) Oriental Metals Pte Ltd (S’pore) 59.2%100% (Our Manufacturing Arm) CURRENT GROUP STRUCTURE We Custom Manufacture to your Satisfaction

Retailer Small Stockist Post-IPO Enlarged Manufacturing Capabilities THE STEEL VALUE CHAIN Major Stockist Increased Profit Margin Custom Manufacturer We Custom Manufacture to your Satisfaction

Reinforcement Bars Pipes I Beams Hollow Sections Ship Plates Angle Bars TRADING Our Wide Range of Products Flat Bars We Custom Manufacture to your Satisfaction

Steel Plates Hollow Channels Pipes Mild Steel Lip Channels H-Beams A One-Stop Supermarket for Steel Products TRADING We Custom Manufacture to your Satisfaction

The Manufacturing Process Slitting Machine Forming Rolls Slitting Slitted Steel Coils Raw Materials – Mother Hot Rolled Coil Final Manufactured Products MANUFACTURING-Growth Driver Forming Line

Tailor According to Customers’ Specific Requirement Core Products i) Mild Steel Lip Channels ( Local Market Size: Estimated S$ 10 million ) ii)Flat Bars iii)Steel Pipes ( Local Market Size: S$50million per year ) MANUFACTURING-Growth Driver We Custom Manufacture to your Satisfaction Production Capacity i)600 MT/month for MSLC currently ii)Can easily increase to 1000 MT/month

Diversified Industry Applications End-users  Ship Building / Ship Repair  Industrial and Steel Fabrication  Oil and Gas  Construction (Building, etc)  Engineering  Major Infrastructure  and more… We are NOT dependent on any single industry! APPLICATIONS OF STEEL We Custom Manufacture to your Satisfaction

COMPETITIVE STRENGTHS We Custom Manufacture to your Satisfaction

Custom Manufacturing Capability  First Mover Advantage - Stock availability - Short delivery time  Better Customer Fulfillment - ability to manufacture according to clients’ strict requirements or commercially unavailable (vs competitors- NO manufacturing facility )  One-stop service provider  Enhanced Profit Margins Dominant Market Share in Mild Steel Lip Channels COMPETITIVE STRENGTHS We Custom Manufacture to your Satisfaction

High Barriers to Entry  First mover competitive advantage  Heavy initial investment  Large working capital  Established brand name and reputation  Skilled management and staff – difficult to find  Strong knowledge and understanding of the industry It’s Not Easy to duplicate our Business Model nor acquire our Manufacturing Capabilities COMPETITIVE STRENGTHS We Custom Manufacture to your Satisfaction

COMPETITIVE STRENGTHS Established Customer Base  > 400 customers = Diversified customer base  Solid and long working relationships Reliable and Established Suppliers  Long term relationships with established steel mills or their representatives and/or agents  Diversified supplier base = Best quality steel at the most competitive price We are NOT reliant on any single supplier! We are NOT dependent on any single customer / industry! We Custom Manufacture to your Satisfaction

Our Sales Network (Mainly South East Asia) Our SuppliersMyanmar Ukraine Turkey Russia Sri Lanka Brunei Indonesia Thailand Thailand Malaysia Singapore Other eastern European countries We Custom Manufacture to your Satisfaction COMPETITIVE STRENGTHS

Extensive Range of Steel Products  We carry > 2,000 different steel products  Customised or commercially available products  All dimensions available “You name it, we have it!” We Custom Manufacture to your Satisfaction

Hands On & Passionate Mgmt Team  Most of our executive directors have > 20 years experience in the steel industry  Supported by professional management team Our Men of Steel COMPETITIVE STRENGTHS We Custom Manufacture to your Satisfaction

FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction

Group Turnover For the financial year ended 31 October S$ millions Trading and others Manufacturing FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction 1H

For the financial year ended 31 October S$ millions Trading and others Manufacturing FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction 1H Profit Before Taxation

For the financial year ended 31 October percent PBT Margin: Manufacturing vs Trading Trading Manufacturing Overall FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction

Who We Sell To FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction Update??

Breakdown by Geographical Region Other countries include Thailand, Brunei, Myanmar, Sri Lanka and South Korea FINANCIAL HIGHLIGHTS We Custom Manufacture to your Satisfaction Update??

GROWTH PROSPECTS and FUTURE PLANS We Custom Manufacture to your Satisfaction

(F)2002(F) World Asia Million metric tons Source: International Iron and Steel Institute, Oct 2001 Steel Consumption GROWTH PROSPECTS We Custom Manufacture to your Satisfaction

Steel Product Manufacturing Business  Expand manufacturing product range to include steel pipes  Current demand for steel pipes approx. 5 times more than mild steel lip channels  Higher margins derived from manufacturing Versatile manufacturing capability GROWTH PROSPECTS - MFG We Custom Manufacture to your Satisfaction

Enhancement of our Return on Invested Capital (“ROIC”) Expected increase in utilisation rate will reduce our production cost and enhance our ROIC New Steel pipes (rectangular, round, etc) Current MSLC, flat bars GROWTH PROSPECTS - MFG We Custom Manufacture to your Satisfaction

Expand Manufacturing Operation Broaden Product Mix  Steel pipes (round and rectangular pipes)  Enlarge market share in steel pipes (Estimated 35% of market share)  Fully operational in 2003 Material impact in FY04 FUTURE PLANS - MFG Broaden Product Market  Leverage on established trading network in region to distribute manufactured steel products We Custom Manufacture to your Satisfaction

INDUSTRY COMPARISON * source: Business Times 15 August 2003 We Custom Manufacture to your Satisfaction CompanyRevenue (S$’000) Net Earnings (S$’000) Market Cap* (S$’ million) PE Ratio* HG Metal90,2912, x Lee Metal119,9502, x Nam Lee Metal 48,8761, x Hup Seng Huat 48,8261, x Average x Results are extracted from Company Annual Reports

* source: AnnAik Prospectus on Opera, MAS We Custom Manufacture to your Satisfaction CompanyHG METAL 1H2003 Results ANNAIK* FY2002 Results Revenue (S$’000)45,61526,843 PBT (S$’000)1,9282,836 Net Earnings (S$’000)1,3142,018 Business Manufacture customized steel products like flat steel bars, mild lip channels and steel pipes. Distribution business in steel products. Manufacture stainless steel flanges and distribute stainless steel products, which are used mainly in piping systems. Distribution business in stainless steel products. NTA25.55 cents12.21 cents HG METAL Vs ANN AIK

HG METAL MFG LIMITED Moving up the Steel Value Chain… Manufacturing towards Customer Satisfaction and Higher Profits We Custom Manufacture to your Satisfaction