Press Release

Padaeng announced performance results for 2003

Padaeng Industry Public Company Limited, in its report to the Stock Exchange of Thailand, announces consolidated revenue from sales of 4,835.86 million Baht for the year 2003, an increase of 10 percent over 2002. Revenue was up due to a rise in domestic consumption of zinc metal and a higher world zinc price, which increased 6.29 percent from last year to an average of US$ 828 during this year. Nevertheless, other factors did affect overall profits, including higher costs for imports of raw materials, a 3.43 percent appreciation of Thai Baht over the US dollar and the increase in major operating costs such as electricity and fuel. Bearing these factors in mind, the company reported a net profit of 2,841 Baht compared to the net loss of 29.1 million Baht in 2002.

From the company’s statement of income on equity method, total revenue from sales was 4,827.96 million Baht as compared to 4,380.29 million Baht in 2002 or 10.22 percent increased. There was a net profit of 2.80 million Baht compared to a net loss of 28.5 million Baht in year 2002.

During 2003 the company put forth measures to reduce production costs, specifically by improving production efficiency of equipment and machinery at the zinc smelter and completed construction of the full scale ore flotation plant at Mae Sot mine, which enables the company to cut back on imports of costly zinc sulphide concentrates from overseas and utilize a greater proportion of zinc silicate ore in the smelting process. This year the ratio reached 45 percent, while the proportion for usage of zinc silicate ore is targeted at 50 percent in 2004.

Construction of the ore flotation plant began in 1st quarter of 2003 and was concluded in December of the same year. Commissioning at the facility is currently underway, with annual production capacity set at 60,000 metric tons ore. Through the flotation process, the company will be able to upgrade its large resources of low grade ores into higher quality grade zinc silicate ore for use at the Tak smelter

Sales volume on the year reached a total of 113,941 metric tons, up 7.54 percent from last year, with domestic sales accounting for 80 percent of sales, while exports make up the remaining 20 percent. In addition, because zinc specialty alloys yield higher sales margins, the company pursued expansion of this market by increasing production levels and sales

distribution. Total production capacity share for zinc alloys was extended from 31 percent in 2002 to 39 percent in 2003.

Established in Thailand on April 10, 1981, Padaeng Industry Public Co., Ltd. is the sole zinc mining and smelting company in Southeast Asia, with an annual production capacity of approximately 100,000 metric tons.