P resentation Creating colors for the world

1. Presentation Creating colors for the world Shenghua Group Deqing Huayuan Pigment Co., Ltd. http://www.hyrox.com.cn

2. Outline • Mission • History • Status • Sales network • Manufacturing & QC • Sustainable development • Product highlight • Our customers

3. Mission • Supply iron oxide pigments with stable quality, competitive price and excellent service.

4. History • 1993: Establishedwith 50 employees

5. History • 1994: the first red line started to operate

6. History • 1995: the first yellow line started to operate

7. History • 1998: Certified by ISO9002 (converted to 9001:2008 in 2010)

8. History • 1999: start to produce iron oxide black

9. History • 2001: transformed to share-hold company

10. History • 2002: acquired Hangde Chemicals

11. History • 2003: set up independent blending plant

12. History • Setting up thermo electrical power plant in early 2004

13. History • Certificates: ISO14001(2004), CE(2010)

14. Status • Area: 233,000m2 • Employees: 1053 • 3 Production plants: Huayuan, Hangde, Dechang • Turnover 2010: USD115 million • Largest iron oxide manufacturer in China & Asia

15. Status • Overview

16. Status • Numbers of Chinese iron oxide producers: 140 • Hyrox capacity:120,000mts

17. Status • Hyrox Export in 2009: 88080mt • Represents 21% of Chinese IO export

18. Status • Turnover

19. Sales network • Sales department in China

20. Sales network • Sole distributors in each specific marketwith sub-distributors network • Close to end users • Ready-to-ship stock system by distributors • Frequent joint visit to end users • Easy-to-access local website

21. Manufacturing • Total production line: 17iron oxide red: 8iron oxide yellow: 6ironoxide black: 1compound ferric green: 2 • Total annual capacity: 120,000mtiron oxide red 77,000mtiron oxide yellow 35,000mtiron oxide black 8,000mt

22. Manufacturing

23. Manufacturing • Blender for color consistency

24. Manufacturing Iron oxide red (Basic types): 101, 110, 120, 130, 140, 160, 180, 190 Iron oxide yellow (Basic types): 311, 313, 586, 810 Iron oxide black (Basic types): 318, 330, 740, 750

25. Manufacturing Iron oxide brown (Blended colors): 600, 610, 663, 686, 841 Iron oxide orange (Blended colors): 960, 2040 Compound ferric green (Blended colors): 5605, 835

26. Manufacturing • Micronized iron oxide red/yellow • Heavy density iron oxide yellow • Tobacco grade iron oxide red/yellow • Customized service: • Customized blending available • Minimum blending quantity: 4mt

27. Manufacturing

28. Manufacturing

29. QC • Standards • Raw material control • Production control • Color control • Consistency assurance • Identification & tracing back

30. QC • Quality assurance system: ISO9001:2008 • Product standard according to ISO1248 • Test method according to ISO787 for paint & coating application • Test method according to EN12878 for construction application • Customized test methods available: i.e. pigment dispersion

31. QC • Raw material control • Raw materials/subsidiary materials suppliers control process: File HY.CX82005, process 4.6 • Qualified contractor/subcontractor control process: File HY.82005-A, process 4.6 • Purchasing control process :File HY.82006, process 4.6 • Raw materials/subsidiary materials inspection rule: File HY.QB9807-A

32. QC • Production control • Raw material ratio • Reaction condition • Inspection • Intermediary inspection • Semi-finished products • Final inspection for finished products

33. QC • Color control: • Each lot of semi-finished products are marked and recorded into computer • Blending ratio is suggested by computer and determined by qualified inspector • Blending volume: 5~20mt per batch • Colour difference report / Strength report of each batch by spectrophotometer

34. QC • Consistency assurance (1): • Administration evaluation process • Administration planning process • Contract evaluation process • Files and data control process • Raw materials/subsidiary materials suppliers control process • Qualified contractor/subcontractor control process • Purchasing control process • Product identifying and traceability • Working procedure control process • Technology and technique control process • Equipment control process • Inspecting and testing control process

35. QC • Consistency assurance (2): • Inspecting/measuring/testing equipment control process • Inspecting and testing status control process • Off-grade product control process • Rectifying and preventing method control • Conveying, storage, shielding, packaging and delivery control process • Quality record control process • Inner quality system verify process • Training process • Service control process • Statistics control process

36. QC • Identification & tracing back • Principle: Product identifying and traceability (HY.CX82007, process 4.8) • Samples from customers will be kept forever • Samples of each shipment will be kept for 12 months

37. QC • Quality Center

38. Sustainable development • Sewage system (US$4.5million investment)

39. Sustainable development • New technology waste water treatment

40. Sustainable development • Safety policy • Offer safe working environment • Safety rules and regulations • Committee for safety • Employee safety training • Emergency system

41. Sustainable development • Social accountabilitycertificateSA8000(GB/T 28001)

42. Sustainable development • Favorable environment • Stable political situation • Strong support from local government • Ideal geographic location • No natural disaster • Convenient transportation • Abundant raw material

43. Product highlight • Color consistency • Improved physical and chemical properties • Batch-to-batch reports • Customized test method applicable

44. Our customers • Monier (Roofing) • PPG (Paint & Coating) • CPS (Universal tinting system) • Clariant (Leather & Plastic) • Mundat (Tipping paper) • ITACA (Ceramic) • Parex Davco (Color concrete) • Natural Reflection (Mulch)

45. Thank you • Please kindly accept our gratitude for your valuable timey. It will be our greatest honor to be at your service.