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DISCLAIMER This presentation material has been prepared solely for informational purposes only. Millcon Steel PLC (“MILL”) is furnishing it solely for use by prospective investors/analysis in the proposed event. MILL makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that MILL shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the information that may be material to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of MILL. Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto. 2 STRICTLY CONFIDENTIAL
Agenda 1. Company Profile 2. Industry Overview 3. Financial Performance 4. Strategy and Direction 3 STRICTLY CONFIDENTIAL
Company Overview 4 STRICTLY CONFIDENTIAL
MILL at a Glance Group Business Production Facilities in Thailand Production Facility in Myanmar Steel Bar 270,000 Tons/Yr Bangkok, Thailand 360,000 Tons/Yr Rayong, Thailand Associates Subsidiaries Scrap Metal Wire rod 460,000 Tons/Yr 500,000 Tons/Yr 50.00% Chonburi, Thailand 100.00% Rayong, Thailand Billet Structural Steel 650,000 Tons/Yr 64,397 Tons/Yr Rayong, Thailand 45.00% Yangon, Myanmar 99.10% Structural Pipe Construction 96,000 Tons/Yr 98% 100.00% 40.00% Management Bangkok, Thailand Software 51% 40.00% 99.99% Engineering Service Trading Company in Thailand Trading Company in 51.00% 25.00% Myanmar 5 STRICTLY CONFIDENTIAL
MILL Milestone A passion for steel to be high-grade steel business in Thailand and globally Target 2015 2016 2012 JV Backward for integration Wire rod project capacity at Billet Sale Value: Million Baht 500,000 capacity Thailand’s tons/year at 500,000 2008 Political tons/year Expand steel bar Revolution capacity Red To 550,000 Shirt Global tons/year 2006 Uprising Financial Expand Crisis Acquisition business 16,335 TSSI asset s 14,966 line to long 2007 13,547 12,331 steel IPO 2005 10,177 10,032 9,782 9,416 product Trading company 3,239.51 2,662.92 623.03 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F2016 Founded in 1998 and listed on the SET in 2007, Mill has produced variety of steel products to serve diversified needs of customers, such as round bar, deformed bar, lip channel steel, and etc. which has earned both domestic and international standard certification. Mill has developed its production facilities and capability toward high-grade special products to serve automobile and other industries over time. 6 STRICTLY CONFIDENTIAL
Industry Overview 7 STRICTLY CONFIDENTIAL
Overall Steel Industry • Steel industry continues to face challenges from China’s economic slowdown which has created significant impact globally across a range of indicators from volatility in financial markets, sluggish growth in global trade to declining oil and other commodity prices. • World steel forecasts that global steel demand will grow by 0.2% to 1,501 Mt in 2016. However, steady growth by 0.5% for steel demand in all markets except China is expected in 2017. • Steel demand in the ASEAN 5 (Thailand, Malaysia, Vietnam, Indonesia, Philippines) is also expected to maintain a growth rate of around 6% due to their infrastructure building activities and will reach 75 Mt in 2017. Region Q3/15 Q3/16 % Change 197,301 203,548 China 3.2% APPARENT STEEL USE KG. PER CAPITA 2015 Japan 26,197 26,328 0.5% 266 India 24,103 8.7% Thailand 22,183 1,119 South Korea United States 20,252 19,633 -4.2% 750 Taiwan, China Russia 17,974 17,677 -1.7% 497 Japan South Korea 17,337 17,591 1.5% 488 China Germany 10,420 10,152 -2.6% 261 Asia Turkey 7,482 8,080 8.0% 288 European Union Brazil 8,176 8,050 -1.5% 331 United States 5,836 5,867 0.5% Ukraine - 200 400 600 800 1,000 1,200 (Uni t : ‘000 Tons) Source : World steel 8 STRICTLY CONFIDENTIAL
Steel Supply Chain Midstream Downstream Construction Material and Special Application Slab HRC Structural Steel Special grade Commercial grade Cut and Bend service Electric arc furnace Deformed Bar Billet Wire Mesh PCW PCS Wire Rod Fasteners Nail Technology to produce special billet High end Low and High Carbon CO2 Wire Coil Springs Bead Wire 9 STRICTLY CONFIDENTIAL
Thailand’s Steel Trend For 2016, Thailand steel consumption has been forecasted at approximately 17.54 Million tons, which is growth by 3.8% - 5.7% from 2015. Graph below show Thailand’s Steel Demand and Supply Thai Production and Sales Car Forecast Thailand steel demand breakdown Construction Investment Trend Packaging, Other, 0.60% Billion Baht 3.70% Appliance, 8.80% 8.60% 2,000 10.0% 8.60% 7.00% 8.0% Machinery, Ship 1,500 Building & Industrial, 6.0% 10.40% 1,000 4.0% 1,499 1,363 1,243 500 2.0% Automotive, - 0.0% Construction 17.60% 2016F 2017F 2018F , 59.10% Total Construction Value Total Construction Growth Source :Iron and Steel Institute of Thailand Source : Krungsri Research 10 STRICTLY CONFIDENTIAL
AD issues in Thailand steel Thailand measurement protection Product Country Measurement protection Period Wire rod - Low carbon China Tax rate 12.81% - 31.15% of C.I.F 5 year (Start 10 Mar 2016) Wire rod - High carbon China Tax rate 5.17% - 33.98% of C.I.F 5 year (Start 16 May 2014) HRC China Tax rate 30.91% of C.I.F. 5 year (Start 23 May 2015) Malaysia Tax rate 23.57% - 42.51% of C.I.F. 5 year (Start 16 May 2015) Boron added HRC China Tax rate 14.28% - 19.47% of C.I.F 5 year (Start 26 Dec 2012) Pipe Korea Tax rate 11.96% - 51.53% of C.I.F 5 year (Start 15 Sep 2016) Taiwan Tax rate 2.38% - 29.04% of C.I.F 5 year (Start 15 Sep 2016) China Tax rate 145.31% of C.I.F 5 year (Start 15 Sep 2016) Vietnam Tax rate 310.74% of C.I.F 5 year (Start 15 Sep 2016) Remark - Billet – If import billet commercial and special grad not taxable. - Steel bar - TIS’s steel bar must produces from Electric Arc Furnace. 11 STRICTLY CONFIDENTIAL
Thailand’s Steel Consumption Thailand’s demand of wire rod has been consistently under supply for several years (Unit : Million Tons) APPARENT FINISHED STEEL Wire rod PRODUCT AND CONSUMPTION IN THAILAND 2.07 1.99 2.00 1.87 Million Tons 1.56 1.21 1.18 0.92 0.84 0.81 0.59 0.43 0.41 0.39 17.73 16.91 17.34 16.73 14.01 14.65 13.55 2010 2011 2012 2013 2014 2015 9M' 2016 7.48 6.94 7.02 6.88 6.79 6.50 5.80 Steel Bar 2010 2011 2012 2013 2014 2015 9M' 2016 3.85 3.76 3.65 3.71 3.61 3.44 3.40 3.51 3.45 3.24 Production Consumption 2.82 2.73 2.75 2.61 FINISHED STEEL CONSUMPTION IN THAILAND Million Tons 2010 2011 2012 2013 2014 2015 9M' 2016 Production Consumption 11.77 11.17 11.27 10.59 9.88 8.10 9.39 • Thailand’s steel demand contracted by more than 3% in 2015. This was mainly due to the political 5.96 6.17 6.14 5.64 5.45 4.62 4.76 problem in the country which has a negative impact on the country’s economic growth. 2010 2011 2012 2013 2014 2015 9M' 2016 Long Product Flat Product • Nevertheless, local demand of Wire Rod in Thailand has been quite stable. Source :Iron and Steel Institute of Thailand 12 STRICTLY CONFIDENTIAL
Financial Performance 13 STRICTLY CONFIDENTIAL
MILLCON STEEL - Financial as of 9M’2016 Sale Value breakdown 9M’ 2016 Sale Volume and Value Million Baht Tons Trading and Other 20,000 1,400,000 xxx 4% Million Baht YoY 9M’2016 growth 1,200,000 xxx Sale Volume 104% 15,000 Billet Sale Value 65% 1,000,000 809,569 35% Steel Bar 800,000 53% 10,000 14,545 600,000 12,330 386,679 370,356 343,513 400,000 269,771 5,000 165,265 176,135 198,397 5,221 4,795 4,528 3,550 200,000 3,181 2,760 2,869 Wirerod - - 5% Structural Steel 2015 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 F2016 3% • In 9M’2016, sale value increased 65% and sale volume increased Gross Profit GPM 104% or 563,447 tons compared to 9M’2015 as Millcon Burapa sold Million Baht billets to KMS for wire rod production. Sale value from billet selling 1,400.00 10% dramatically rose 235% 9% 1,200.00 8% Compare Sale 9M’2016 9M’2015 YoY As a result of 1,000.00 value Breakdown 6% 6% Steel Bar 8,196 6,513 26% - Market expansion 800.00 4% Wire Rod 815 - - - Launched new products of group 1,252.61 600.00 4% Structural Steel 592 419 41% - Market expansion 400.00 781.62 Billet 4,543 1,356 235% - Sell to KMS and also export 2% Other 399 498 -23% 200.00 415.75 Total 14,545 8,787 65% - 0% 2014 2015 9M'2016 14 STRICTLY CONFIDENTIAL
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