(Hong Kong, 27 August 2002) Shui On Construction And Materials Ltd ("SOCAM", Stock Code: 983) continues to make headway in its property development and construction materials businesses in the Chinese Mainland, which are expected to bring forth long-term, sustainable growth for the company. With two new cement production lines in Guizhou becoming operational in the next two months and the completion of the acquisition of Qujiang Cement in northern Sichuan, SOCAM will have an aggregate production capacity of six million tonnes of quality cement in the central and western provinces. In property development, SOCAM emphasises lifestyle and community environment when designing Shanghai Rui Hong Xin Cheng phase 2 so as to appeal to the fast emerging middle-class buyers in Shanghai.

According to Mr Vincent H.S. Lo, chairman of SOCAM, "Our Mainland businesses are rapidly taking shape. We will continue to focus on high-potential markets in the Mainland and increase our investment in property development and cement production. This strategic repositioning should ensure sustainable growth for SOCAM."

The company has already become a sizeable cement group in the central and western provinces. In Guizhou, construction of a new dry-mix kiln in Xingyi in Qianxinan Autonomous Prefecture, with an annual production capacity of 400,000 tonnes of high grade cement, will soon be completed. It will be the only rotary kiln production line in the prefecture and fill the market niche for high grade cement suitable for constructing large scale infrastructure projects and high rise buildings. Another dry-mix rotary kiln production line with annual capacity of 400,000 tonnes in Xinpu, Zunyi City in northern Guizhou will also be operational in two months’ time. With these two new lines, the company's combined production capacity in Guizhou is expected to reach 1.5 million tonnes per annum. To further expand market coverage, the company is considering prospective acquisition targets in a number of strategic locations in the central and western parts of Guizhou, which will enable SOCAM's operation to encompass most major cities in the province.

The company's joint venture, Chongqing TH Cement, is already the largest high grade cement producer in Chongqing with an annual production capacity of 3.5 million tonnes, accounting for more than 70 percent of the local high grade cement market. In May, a preliminary agreement was signed to acquire Qujiang Cement, which has an annual production capacity of one million tonnes, in northern Sichuan. With this acquisition, Chongqing TH Cement will control three of the four largest cement producers in and around Chongqing City.

In property development, SOCAM's first project in the Chinese Mainland - Shanghai Rui Hong Xin Cheng Phase 2 - includes 13 residential blocks with more than 1,700 units. Pre-sale for the first batch of around 800 units, targeted at the young, well-educated middle class, will start in the third quarter of 2003. The development features well planned facilities to form a self-sufficient community, including an underground car park, a clubhouse and a 30,000-square-metre shopping centre, which will be directly linked to a Metro station due for completion by the end of next year.

Recognising that Shanghai's middle class are placing more and more importance on their children's education, Shui On has signed an agreement with the Hongkou District Government and Education Bureau to move a prestigious school - the First High School attached to East China Normal University - into Rui Hong Xin Cheng. With an area of 40,000 square metres, the school will include modern school buildings, a sports ground with a 400-metre track and an indoor stadium, to be completed by 2004. The sports ground and stadium will be available for use to Rui Hong Xin Cheng residents after school hours. Moreover, the Hongkou District Education Bureau will expand and improve seven schools in the neighbourhood over the next few years, creating a quality school network with kindergartens, primary and secondary schools around Rui Hong Xin Cheng.

Moreover, Rui Hong Xin Cheng Phase 1, which is developed by privately-held Shui On Properties Ltd, has launched "E-learning" through its broadband LAN platform. The E-learning service caters to the education needs of residents of all ages and has helped boost sales. It is also expected to make Rui Hong Xin Cheng Phase 2 more appealing to prospective buyers.

Shui On Construction and Materials Limited (SOCAM), a member of the Shui On Group, was listed on the Hong Kong Stock Exchange in 1997. Apart from SOCAM, the Shui On Group has a separate, non-listed property arm with investments in Shanghai, Hong Kong, Beijing, Guangzhou and New York in the United States.