1. Project Name: Large-size H-shape Steel Production Line and Its Supporting Project

2. Project Unit: Laiwu Iron and Steel Group Company Ltd.

Laiwu Iron and Steel Group Company Ltd. Is a large state-owned Iron and Steel Enterprise with a total assets of US$1.43 billion. Recent years it had produced annually 4 million tons of steel, 2 million tons of iron and 4 million tons of steel products. Among them the chain steel is a product of famous national grade brand. With its abundant funds and rich technical resources, this group's annual sales revenue reached nearly US$ 1 billion, and import and export volume reached US$ 0.12 billion.

3. Project Content:

Intending to introduce foreign investment to construct a large-size H-shape steel production line and its supporting project to produce annually 1 million tons of carbon structural steel. Low-alloy structural steel, mine steel and weathering resistant steel. Investors can choose single project or several combined projects.

4. Total Investment: US$0.342 billion

5. Cooperative Way: Joint Vesture

6. Market Analysis:

Hot-rolled H-shape steel is currently in good demand in China, especially the following projects will bring greater demand for it: China's lengthened east-west gas pipeline project, west-east electricity transmission line project, south-north water transfer project and the on-going constructions for 2008 Olympic Games. According to the experts' forecast, the nation's total consumption of hot-rolled H-shape steel will be 4 million tons accounting for 2% of the total nation's steel consumption in 2005, and will reach 3% in 2010 with total consumption of 6.6 million tons. Therefore, to construct this project to meet the market demand will bring investors considerable economic benefits.

7. Economic Benefits:

The construction cycle expected to be 1.5years. After this project is completed and put into operation, the estimated annual sales revenue will reach US$0.39 billion, profit US$68.50 million and the investment pay off period 5 years.