(Hong Kong; 18 February 2003) Shui On Cement (Guizhou) Group, a subsidiary of Shui On Construction and Materials Limited (SOCAM; stock code: 983), has recently signed an agreement with Guiyang Cement Company Limited to form Guizhou Guiyang Shui On Cement Company Limited, in which Shui On owns a 90% interest with capital injection of approximately RMB100 million. Shui On, already one of the top three high grade cement producers in China, acquires Guiyang Cement as the company’s seventh and the largest investment in the province. Upon completion of the acquisition and planned expansion of its production facilities, the plant will be capable of producing 1.2 million tonnes of high grade cement per annum, bringing Shui On’s annual production capacity in Guizhou Provice and Western China up to 2.7 million tonnes and over seven million tonnes respectively.

Guiyang Cement, one of the two major cement producers in the provincial capital, is located at Baiyun District, 25 kilometres to the northwest of Guiyang and occupies an area of over 26 hectares. With two clinker production lines, the plant currently produces 450,000 tonnes of cement under the “Jingang Brand” annually. It mainly supplies to the local market and nearby areas. Shui On plans to upgrade the existing production facilities and add a 600,000 tonne dry kiln production line to raise the annual production capacity to 1.2 million tonnes.

“Under the ‘Go West’ policy, Guizhou continued to rank among provinces with the highest year-on-year increases in central government funding in 2002. We are therefore confident of the cement market in the province and are well positioned to capitalise on the vast expansion being planned for the years to come. The successful acquisition of Guiyang Cement allows us to establish leadership in the most important markets in the province and has further strengthened Shui On’s leading position in Guizhou,” said Mr Lawrence Choi, Managing Director of SOCAM.

Shui On started to invest in Guizhou in December 2000 with a goal to develop a sizable high grade cement group in the province. Other than the newly acquired Guiyang Cement, Shui On Cement (Guizhou) Group also owns Guizhou Zunyi Shui On Cement Company Limited, Guizhou Xishui Shui On Cement Company Limited, Guizhou Kaili Shui On Cement Company Limited, Guizhou Xinpu Shui On Cement Company Limited, Guizhou Dingxiao Shui On Cement Company Limited and Guizhou Yuqing T.H. Cement Company Limited. Besides Guizhou, Shui On has been investing in Chongqing’s high grade cement industry since 1995. The Group is now the largest cement producer in Chongqing with an annual production capacity of 4.5 million tonnes.

SOCAM, a member of the Shui On Group, was listed on the Hong Kong Stock Exchange in 1997 and is engaged in construction, construction materials and property development in Hong Kong and the Chinese Mainland. Apart from SOCAM, the Shui On Group has a separate, non-listed property arm with investments in Hong Kong, Shanghai, Beijing, Hangzhou, Guangzhou and New York.