Hong Kong, June 2, 2002 - Asia's largest aluminum extruder Asia Aluminum Holdings Limited (SEHK: 930) today announces that the company has entered into a letter of intent for cooperation with 河南省林州市鋁業總公司 (Henan Province Linzhou City Aluminum Head Company) ("Linzhou Aluminum"). Linzhou Aluminum will supply its entire production of billets to the company as the source of raw material for the Group's aluminum extrusion production. Upon the signing of the letter of intent, both sides will actively pursue sincere discussion to finalize the collaboration plan. It is anticipated that Linzhou Aluminum will be able to provide to the Group not less than 35,000 tonnes of billets annually. Linzhou Aluminum mainly adopts the electrolyte anodizing method by smelting alumina into billets which constitute the main raw material for the production of aluminum extrusion products.

To ensure that Linzhou Aluminum will have sufficient and high quality supply of materials, Asia Aluminum will make use of its own business connection and network to assist Linzhou Aluminum to source the requisite anodized alumina from the international well-known aluminum raw material suppliers at competitive prices.

Mr Kwong Wui Chun, Chairman of Asia Aluminum Holdings Limited said: "Our Group needs to purchase more than 120,000 tonnes of aluminum ingots annually which after the smelting process turn into billets which are then applied to our production of aluminum extrusion products. The current annual production of Linzhou Aluminum amounts to 35,000 tonnes of billets. By purchasing the said entire production of billets, we can skip the re-smelting process that can save about 2% to 3% of our production cost. At the same time, this will ensure a stable supply of high quality billets for the Group. Linzhou Aluminum will produce the billets in accordance with the Group's specification which should further enable the Group to cut down on the production procedures and shorten the production cycle, and therefore further lowering our costs of production."

Apart from the Group's co-operation with Linzhou Aluminum in its upstream business in securing a stable supply of raw material billets for the production of aluminum extrusion products, the Group has also recently reached an agreement with its strategic partner, Indalex Inc. in expanding production further downstream to aluminum extrusion finished products and directly distribute its products to North America's mega chain stores such as Home Depot. Such endeavour will enable the Group to increase its profit margin of about 20% to 30%. Indalex is the North America's largest independent provider of soft alloy aluminum products and holds 25% interests in the company's main subsidiary, Asia Aluminum Group Limited ("AAG"). The combined business is the second largest aluminum extruder worldwide.

Mr Kwong further stated: "Apart from expanding into production of downstream finished products, the Group is also looking into developing vertical integration in the area of producing anodized billets so as to secure a stable supply of raw material for its aluminum extrusion business. At this stage, the Group will form an alliance with Linzhou Aluminum in the area of purchasing and at the same time, assist Linzhou Aluminum to improve its product quality, production efficiency and purchasing capability so as to increase the overall production capacity of Linzhou Aluminum. If the results are satisfactory, the Group will consider making investment in this upstream business to further reduce its costs of production and consolidate the Group's competitiveness in the market."

Linzhou Aluminum
Linzhou Aluminum was a state-owned enterprise established in 1994 with registered capital of RMB 12 million contributed by Henan Province Linzhou City Electric Bureau, specializing in smelting of non-ferrous metals. With an annual production reaching 35,000 tonnes and employing a total staff of nearly 700 people, Linzhou Aluminum is located in Henan Province, the biggest anodized aluminum extrusion base in the PRC. It mainly engages in producing billets by electrolysis method, which will then be supplied to aluminum extruders for them to produce various shapes and forms of aluminum extrusion products in an extrusion presser.

Asia Aluminum
Asia Aluminum Holdings Limited (SEHK: 930) is the world leading manufacturer of aluminum extrusion and stainless steel products. Headquartered in Hong Kong, the Group is the largest aluminum extruder in Asia, operating five extrusion plants in Nanhai, PRC with a total annual production capacity of 120,000 tonnes. For the year ended June 30, 2001, the Group had recorded an audited turnover in excess of HK$2 billion and a net profit of HK$195 million. Major projects recently secured by the Group include Shanghai CIMC Reefers Containers, Dongguan Municipal Government quarter, Hangzhou Theatre, Mongkok Bird Street re-development project, Hong Kong Science Park and Kowloon Station Phase IV.