The Group also announces another agreement ("Panel Agreement") to participate in a HK$3 billion project for the production of aluminum panels and plates, the first facility to be established in the Industrial City. Both plans were unveiled today in the presence of Mr Deng Yaohua, Mayor of Zhaoqing City, Guangdong Province (肇慶市市長鄧耀華先生) and Mr Kwong Wui Chun, Chairman of Asia Aluminum Holdings.

Pursuant to the Collaboration Agreement, Zhaoqing Municipal Government agrees to grant 6.6 sq. km. (約一萬畝) of land in the hi-tech development zone to Asia Aluminum Holdings to develop the aluminum Industrial City project under privileged terms. The first project in the Industrial City will be an aluminum panel/plate facility with a designed annual capacity of 400,000 tonnes. The total cost of investment of the panel/plate project will amount to about HK$3 billion.

Asia Aluminum Holdings and Mr Kwong will hold 60% and 20% interests in this project respectively. Other strategic shareholders include a raw material supplier and a distributor. The aluminum panel/plate plant will be funded by about 40% in the form of registered capital and about 60% by project financing. It is expected that the plant will become operational in 2005, with full capacity reaching 400,000 tonnes in 2007.

Mr Deng Yaohua, Zhaoqing City's Mayor remarked: "This Industrial City project is a top priority development for the municipal Government. We pledge our full support in granting privileged terms for land use rights and providing complementary infrastructure. The new plant will serve as our city's vehicle to tap into the vast potential of the underserved domestic requirements for aluminum panels and plates, which are now served mostly by imports. The Group's investments will also bring employment and new business opportunities for our local economy."

The planned project is principally engaged in the manufacturing of high-grade aluminum panels and plates, which are applied mainly in aluminum can manufacturing, automobile, construction, printing and aerospace industries. The plant will employ the latest technologies from the US and Europe, with the transfer of well-developed skill sets from world-class facilities. Equipment include a 1+4 hot rolling mill and a 5-stand cold rolling mill facilities to enable the production of panels and plates up to 3,000 mm wide and 0.05 mm thin.

Mr Kwong Wui Chun, Chairman of Asia Aluminum Holdings said: "Although China commands certain domestic production capability for aluminum panels and plates, it is heavily reliant on imports for the supply of premium flat rolled products. We aim to exploit this market opportunity with output from our new plant. The panel/plate project is the first facility in the Industrial City. We have reserved sufficient space there to phase in the establishment of other manufacturing and processing facilities in the future. We are grateful to the Zhaoqing Municipal Government for their strong support in enabling the development of the 'Asia Aluminum Industrial City'."

Demand for aluminum products in China is expected to shift gradually from the property sector to infrastructure construction and industrial consumptions, fuelled by the country's improving economies and such world events as the Beijing Olympics and World Expo in Shanghai.

Dr Benby Chan, Managing Director & CEO of Asia Aluminum Holdings explained: "In order to secure our leading position in the aluminum industry in China, we are committed to introducing new inventions and technologies into the country, extending product range, expanding capacities and enhancing product and service qualities. The planned advance into aluminum panel/plate manufacturing is a landmark move under our product diversification initiative."

"The panel/plate project also draws on the support of our two strategic shareholders in their respective capacities in raw materials supply and product distribution. Commanding world-leading technologies and strong cost competitive advantage, the new plant also enjoys a natural advantage in developing export sales," concluded Mr Kwong.

About Asia Aluminum
Asia Aluminum Holdings Limited (SEHK: 930) is the largest aluminum extruder in Asia, operating five extrusion plants in Nanhai District, Guangdong Province, PRC with a total annual production capacity of 140,000 tonnes. The Group is in equity alliance with Indalex, the second largest aluminum extruder in North America. It was named one of the "World's Best 200 Small Companies for 2002" by Forbes Global.

Issued by :
Asia Aluminum Holdings Limited

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