INVESTORS BRIEFING - MYCRON Steel Berhad

INVESTORS BRIEFING

PRESENTATION CONTENTS
1. Corporate Information
2. Operations
3. Financial Highlights
g
4. Business Outlook

MAJOR SHAREHOLDERS
MAJOR SHAREHOLDERS
No.Shares
As at Feb 28, 2009
(Million)
Share
holdings
%
Melewar Industrial Group 97.50 54.5
Melewar Equities (BVI) 934 9.34 52 5.2
MAA Berhad 2.80 1.6
Melewar Group 109.64 61.3
PNB (Skim ASB) 5.16 2.9
Group & Govt Funds 114.80 64.2
Foreign Shareholding 6.40 3.60
Balance Free Float 57.80 32.2
Total Paid Up Capital 179.00 100.00

BOARD OF DIRECTORS
1. Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
(Non-Independent Non-Executive Chairman)
2. Tunku Dato’ Kamil Ikram bin Tunku Tan Sri Abdullah
(Non-Independent Non-Executive Director)
3. Dato’ Zulkifly @ Sofi bin Haji Mustapha
(Non-Independent Non-Executive Director)
4. Azlan bin Abdullah
(Executive Director / Chief Executive Officer)
5. Dato’ Abu Talib bin Mohamed
(Independent Non-Executive Director)
6. Dato’ Narendrakumar Jasani a/l Chunilai Rugnath
(Independent Non-Executive Director)
7. Datuk Lim Kim Chuan
(Non-Independent Non-Executive Director)
8. Paul Chan Wan Siew
(Independent Non-Executive Director)

OPERATIONS

COMPANY BACKGROUND
‣ Attained SIRIM ISO 9001 in 1996.
‣ Manufacturer of highest quality Malaysian
CRC.
‣ Factory located in Shah Alam.
Location : Lot 717, Jalan Sungai Rasau,
Section 16, 40200 Shah Alam, Selangor
Land
: 781,423 sq.ft. (17.94 acres)
Built-up : 376,419 sq.ft.
Capacity : 21,000 t /mth / 260,000 t /year
Equipment :
Continuous Pickling Line
Hitachi 6-High Cold Reduction Mill
Electrolytic Cleaning Line
Batch Annealing Furnaces
Recoiling Line
Combined Skinpass Mill & Tension Levelling Line

WHAT IS CRC?
HOT ROLLED COILS COLD ROLLED COILS DOWN STREAM INDUSTRIES
Vehicle Parts &
Bodies
Consumer Goods
Electronics
Pipes
Thick & Rusty Steel
Sheet (1.7mm to
3.5mm thick)
Thin & Clean Steel
Sheet (0.2mm to
2.5mm thick)
MYCRON STEEL
Steel Drums
Office & Home Furniture

CRC CUSTOMERS
PRODUCT MIX Steel Centers Auto & Electrical
(FYE June 30, 2009) 41% 28,719 t /yr
Drum Makers Palm Oil,
21% 14,517 t /yr
Petroleum
MYCRON STEEL
Pipe Makers
Rated Capacity : 210,000000 t/yr 12% 8,403 t /yr
Furniture &
Capacity Utilized
Electrical
(YTD Q2 2009) : 105,000 t / yr Melewar Steel Tubes
8% 5,521 t /yr
YTD Q2 Production : 70,212 t Steel Galvanizers
Capacity Utilization : 67% 13% 9,700 t /yr
Furniture Makers
2% 1,461 t /yr
Steel Strappings
2% 1,257 t /yr
Others
1% 634 t /yr

STEEL CONSUMPTION (LONG & FLAT PRODUCTS)
kg
Per Capita Steel Consumption - kg/per annum
700
600
612
INDONESIA
PHILIPPINES
500
VIETNAM
400
300
200
124
208
270
THAILAND
MALAYSIA
SINGAPORE
100
0
28
51
Source : MISIF 2008
• Malaysia consumes 270 kg of steel per capita annually.
As Malaysia’s development continues, demand for steel will grow.
MISIF forecasts long-term average demand growth of 6-8% per year.

CRC MANUFACTURING PROCESS
Cold Roll Mill
Pickling Bath
HRC
CRC
Hot Rolled Coil
(HRC) Delivery
Batch
Annealing
Furnace
Quality
Inspection
Exit Looper
CONTINUOUS SKIN-PASS & TENSION LEVELLER SYSTEM
Tension
Leveller
Skin Pass Mill
Entry Looper
Welder
CRC
Uncoiler
Cutter
CRC
Recoiler
Packing & CRC
Finished Goods Store

CRC MANUFACTURING PROCESS
HOT ROLLED COILS (FROM SUPPLIERS)
CONTINUOUS PICKLING LINE - ENTRY
CONTINUOUS PICKLING LINE - EXIT
COLD REDUCTION MILL (Sheet compression)

CRC MANUFACTURING PROCESS
ELECTROLYTIC CLEANING LINE
H 2 ANNEALING FURNACES (Loading)
H 2 ANNEALING FURNACES (Heating)
COLD REDUCTION MILL (Skinpass Process)

CRC MANUFACTURING PROCESS
ELECTROSTATIC OIL COATER
RECOILING LINE – Exit Tension Reel
PACKING
CRC FINISHED GOODS STORE

FINANCIAL
HIGHLIGHTS

FINANCIAL HIGHLIGHTS
Actual 12 mths
July 07 – June 08
Actual 6 mths
to Dec 2008
RESULT OF OPERATIONS
Revenue (RM mil) 406.1 234.8
Gross Profit (RM mil) 30.9 (8.2)
Gross Profit (%) 8% (3%)
Profit Before Tax (RM mil) 16.7 (19.4)
Profit After Tax (RM mil) 30.3 (15.7)
BALANCE SHEET
Share Capital (RM mil) 179.0 179.0
Total Equity (RM mil) 275.9 256.7
Total Assets (RM mil) 526.5 521.3

FINANCIAL HIGHLIGHTS
Actual 12 mths
July 07 – June 08
Actual 6 mths
to Dec 2008
FINANCIAL RATIO
Return on Equity (%) 11% (6%)
Return on Total Assets (%) 6% (3%)
Net Borrowings/Equity (Times) 0.73 0.78
PER SHARE
Net Tangible Asset per share (RM) 1.54 1.44
Net Earnings per share (sen) 16.9 (8.8)
AVERAGE PRICE
Average Selling Price per unit (RM/t) 2,518 3,287
Average Cost of Prod. per unit (RM/t) 388 420

BUSINESS
OUTLOOK

BUSINESS OUTLOOK
• Business outlook for the coming months is expected to be weak.
• Not much recovery has been seen till end Feb 09
• Consumer confidence, production, investment and consumption
has been affected by:-
– Falling demand
– inadequate banking facilities
– declining inventory value
– a growing threat of unemployment
• Stock adjustments may be coming to an end. A price recovery
may take place soon.
• Market is expected to pick up from the 3 rd qtr of yr 2009
• Malaysian government is to announce a 2 nd stimulus economic
package.(1 st package - RM 7 billion, 2 nd package – Rm10 billion)
which will help to boost the local economy.
• Bank Negara Malaysia has taken action to reduce the interest rate
by reducing the OPR rate to 2%.
• The government has reduced the tariff rate for electricity to reduce
the burden of consumers.

BUSINESS OUTLOOK – Latest Development
MITI recently announced the Policy Review of Iron & Steel Industry
• To be effective from August 1, 2009
• To assist domestic producers meet challenges brought about by
global developments in the iron & steel industry
• To enhance competitiveness of the local industry
• To encourage the manufacture of more competitive products for the
International market

17 Feb Metal Bulletin : Metal Trends Index

18,000
16,000
14,000
12,000
10,000
8000 8,000
6,000
4,000
2,000
0
Monthly Sales Volume (tonnes)
Dec-08
Mar-09
Sep-05
Dec-05
Sep-08
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08

ACTION PLANS
• Reduce inventory holding
• Negotiate for better HRC prices
• Push customers to take delivery of completed CRC
• Undertake cost reduction measures (i.e. renegotiate cost of sub
raw materials supplies and consumables)
• Minimise wastage in utility consumption.
• Optimise use of manpower
• Tighten credit control and further improve collection period
• Wage freeze and minimise overtime
• Reduce production working hours
• Explore new business opportunities and finding new markets
• Developing new products and services (i.e. HR-PO and tolling)

PLANT UPGRADE & EXPANSION
‣ Installation of new facilities
–Tension leveller, Skinpass
mill and additional
Annealing equipment.
Capex RM120 million.
+45%
‣ Upgrade will improve product quality of high grade CRC which
gives better margins.
‣ Also add increased capacity from 180,000 t/yr to 260,000 t/yr (i.e.
+80,000 t/yr capacity or +45% capacity).
‣ Higher profit margin due to economies of scale.

SITE PHOTOGRAPHS

SITE PHOTOGRAPHS

SITE PHOTOGRAPHS

SITE PHOTOGRAPHS

CRC TECHNICAL SERVICE WITH JFE JAPAN
‣ First Technical Service Agreement signed in April 2006.
JFE to provide technical assistance in producing thin-gauge
CRC (

CRC TECHNICAL SERVICE WITH JFE JAPAN

CRC PARTNERSHIP - BLUESCOPE
‣ In 2007, signed off-take agreement with
Bluescope (Malaysia) Sdn Bhd, part the
largest steel group in Australia, to supply
up to 60,000 t/yr for next 3 years.
‣ Pi Prior to this Bluescope was importing the
CRC from overseas.
‣ HRC supply for this contract will be from Bluescope Australia.
‣ HRC supply for this contract will be from Bluescope Australia.
MITI has approved the import as exempt from the standard
40%:60% (local:import) quota, due to the resultant CRC being a
substitute to imported CRC.

CRC PARTNERSHIP - BLUESCOPE

PRODUCT DEVELOPMENT – AUTO GRADE CRC
Proton Persona
• 7 Parts ( Including a JFE transfer parts)
• 40.9 Kg per car
• Latest Proton production figure is 3500 per month
• Total material consumption 143 ton per month
Proton Saga
• We supply material for 9 parts
• 30.29 Kg per car
• Latest Proton production per month is 7000 cars
• Total material consumption is 212 Ton per month

PRODUCT DEVELOPMENT – AUTO GRADE CRC
Proton MPV Exora
• We will supply material for 10 parts
• 26kg per car
• 9 parts transfer from JFE but pending testing
• 30kg per car
• Total 56kg per car
• Latest production per month 2500 cars
• Material consumption per month is 140 ton per month
Perodua
• Several meeting has been conducted
• We are ready to provide material for trial test
and are still waiting for their confirmation.

THANK YOU