Rotary Engineering secures S$110m worth of contracts from July to September 2011; wins include a major deal to build chemical plant in Singapore“Despite the pall cast by recent economic uncertainties, projects that have been committed earlier will still proceed. We are participating in several tenders and are also involved in negotiations with various parties,” said Mr Chia Kim Piow, Chairman and Managing DirectorSINGAPORE, 19 September, 2011 – IT STARTED with a small contract for early works such as temporary facilities, ground preparation and civil works for a chemical plant. Following that initial assignment, mainboard-listed Rotary Engineering Limited (Rotary) has reeled in a multi-million contract to undertake construction of the chemical plant, based in Jurong Island.

The project, contracted with CCD (Singapore) Pte Ltd, relates to Taiwan-based Chang Chun Group’s initial investment of S$500 million to build a petrochemical plant on Jurong Island.

In addition, Rotary announced a slew of contracts of varying values that it has amassed over the months of July through September 2011. For confidentiality and competitive reasons, the Group is unable to provide a breakdown of the

transactions that involve work across different disciplines, including engineering,

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procurement and construction (EPC), maintenance and electrical and instrumentation services.

Rotary is a leading provider of engineering, procurement, construction and maintenance services serving the oil and gas and petrochemical sectors.

Chang Chun Group’s Chemical Plant in Singapore

Rotary will be involved in the construction of the allyl alcohol and vinyl acetate monomer (VAM) plant. Allyl alcohol is a starting material for a variety of speciality monomers and polymers (plastics) while VAM is used in paints, adhesives and textiles. Rotary’s scope of work also includes equipment installation as well as electrical and instrumentation.

Chang Chun Group through its subsidiaries engages in the production of chemicals, circuit boards, and petrochemical-derived specialties. The company was founded in 1969 and is based in Taiwan. According to media reports, the company wants to capture the thriving demand for downstream products; and specifically, the new plant in Singapore will source ethylene and propylene from Shell Eastern Petroleum. Chang Chun Group through its subsidiaries engages in the production of chemicals, circuit boards, and petrochemical-derived specialties. The company was founded in 1969 and is based in Taiwan.

Rotary’s Chairman and Managing Director Mr Chia Kim Piow was delighted to have landed this deal. He said: “We are thrilled to have been awarded this contract and honoured to be associated with this project and this client.”

Other Singapore wins

Over the last three months, Rotary has managed to rack up about 10 contracts, excluding the Chang Chun deal, in Singapore. Of note would be a S$13 million EPC tankage project undertaken for Samsung C&T Corporation relating to a

power plant project by GMR Group, which is a Bangalore-headquartered global

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infrastructure major with interests in the airports, energy, highways and urban infrastructure. The power facilities are being designed and constructed by a Siemens/Samsung Consortium.

Rotary’s has also secured a number of maintenance contracts including works for Chevron Singapore amounting to some S$3 million over three years; a two- month turnaround maintenance project for United States-based energy conglomerate Invista (Singapore) Pte Ltd worth some $3 million; and some work for Germany-based speciality chemical manufacturer Evonik Rohmax Asia- Pacific Pte Ltd. Other Singapore wins include a number of electrical and instrumentation contracts.

Saudi Arabia

An interesting and strategic project win that the Group has sealed recently involves erecting tankage for Bechtel Corporation at the Ras Az Zawr Aluminium Smelter Project in Jubail, Saudi Arabia. This is Saudi Arabia's first ever aluminium smelter at the Ma’aden minerals industry complex at the Ras Az Zawr Minerals Industrial City. The industry complex is being developed by the Saudi Arabian Mining Company Ma’aden and will also house an alumina refinery and a rolling mill.

As Rotary is currently executing two EPC contracts in the Middle East: a US$745 million EPC contract from Saudi Aramco Total Refining and Petrochemical Company (SATORP) in Saudi Arabia, and a US$250 million contract for Fujairah Oil Terminal in the United Arab Emirates, the bulk of its resources are now deployed there. The Group intends to capitalise on its presence in the region to deepen and widen its reach.

“As we continue to build our reputation and track record in Saudi Arabia, we are confident that we will be able to convert tenders into contracts over time,” said Mr

Chia.

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Thailand

The Group continues to make inroads in the Thai market with several recent wins. Its clients include PTT Aromatics and Refining PCL and Thai Paraxylene Company Limited.

Mr Chia said that Rotary will persist and pursue new business opportunities relentlessly, both in Singapore, the region and further afield. “Despite the pall cast by the current economic uncertainties, projects that have been committed earlier will still proceed. We are participating in several tenders and are also involved in negotiations with various parties.” Rotary had said earlier that it was open to take equity stakes in oil terminals and other potentially viable projects.

Rotary’s growth over the years has seen it extending its footprint beyond Singapore to China, India, Indonesia, Malaysia and Thailand. Not surprisingly, in FY2010, it derived 64% of its overall revenue from the Middle East, with ASEAN accounting for the rest.

Earlier this year, it announced a S$14.6 million EPC contract to build a new plant and to upgrade and expand existing facilities on Jurong Island for chemicals company Stepan Asia Pte Ltd. The contract involved the construction of a four- storey 50,000 tons per day Fractionated Methyl Ester Plant as well as the upgrading of the existing plant on Jurong Island.

For the half year ended 30 June 2011, the Group registered a profit after tax attributable to parent of S$20.2 million over revenue of S$283.8 million. As at 4

August, its order book stood at S$756.9 million with projects targeted to be completed and delivered progressively, up to end-2012. Of this, about 90% of the contracts originated from overseas.

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About Rotary Engineering Limited (www.rotaryeng.com.sg.)

Rotary Engineering Limited (