COSCO (H.K.) GROUP

COSCO (HONG KONG) GROUP LTD.

9 Sep 2010

Production and Sales Of Coating Business
COSCO International Holdings Limited has developed its coating business since 2003. Currently, it owns 64.71% equity interest in Zhuhai COSCO Kansai Paint &Chemicals Co., Ltd., an aggregate 63.07% equity interest in each of Shanghai COSCO Kansai Paint & Chemicals Co., Ltd. and Tianjin COSCO Kansai Paint & Chemicals Co., Ltd. (collectively known as "COSCO Kansai Companies") and 50% equity interest in a jointly controlled entity of Jotun COSCO Marine Coatings Co., Ltd ("Jotun COSCO").

The principal business of COSCO Kansai Companies is the manufacture and sale of container coatings, marine coatings and anti-corrosion coatings. Its coating products manufactured adopts the same standards as those of Kansai Paint Co., Ltd., the largest paint manufacturer in Japan, in aspects including paint technology formulae, raw materials adoption, manufacturing arts, products index and customer service. COSCO Kansai Companies successfully passed the regular appraisal test of ISO9000 conducted by China Classification Society in 2004. Currently, COSCO Kansai Companies ranks among the top in the container coatings market in China, and have been awarded as the best foreign investment enterprises for years.

To further expand the business scale, COSCO International set up a joint venture named Zhuhai COSCO Kansai Paint & Chemicals Co., Ltd ("Zhuhai COSCO Kansai") in the end of 2005, in which 64.71% owned by COSCO International. Zhuhai COSCO Kansai has commenced to build a coating production plant in the Zhuhai Harbour Industrial Zone, a heavy chemical production base in Guangdong Province. The plant is expected to be completed in July 2007 with a designed production capacity of 24,000 tonnes, which could reach a maximum of 36,000 tonnes.

Jotun COSCO is a jointly controlled entity between COSCO International and the internationally renowned Norwegian coating manufacturer Jotun A/S. Jotun COSCO is responsible for the production of marine coatings business, including production and sales of coatings for new ship building, dry docking and sea stock, in various regions in the China Mainland. It has a manufacturing plant in Guangzhou and sales offices in places such as Shanghai, Dalian, Chengdu and Hong Kong.

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