History

Our Group commenced operations in 1971 when we started our steel trading business as a partnership under the name Hock Guan Hardware & Company ("HGC"). The partners then were our founders, Messrs Tan Chan Too, Tian Chye Heng, Tan Ah Bee, Kuah Kian Leng and Tan Teng Hian, who started the partnership with a capital of $150,000. HGC was then a small retailer of steel products which included secondary pipes, flat bars and hollow sections. The business was carried out from a temporary retail space of 5,000 sq ft at 471 MacPherson Road. Being in the business of trading in steel products, HGC did not carry excessive stocks but purchased steel products from steel stockists. HGC's customers included mainly small local iron foundries, window grill factories, iron fencing manufacturers and furniture fabrication factories. In 1972, Mr Kuah Kian Leng left HGC, leaving the other 4 partners to manage the business.

In March 1973, after having successfully established itself as a steel retailer, the 4 partners decided to expand the business of HGC from steel retailer to a stockist by importing steel products from Thailand and the PRC.

Over the next 1 0 years, HGC's stockist business continued to grow and expand. In order to cope with the increase in the volume of business, the company expanded its storage capacity for steel products by acquiring Almech which owned a 60,000 sq ft warehouse in Pioneer Sector 2, Tuas for a purchase price of $850,000 in 1984. In the same year, with the expansion in its carrying capacity and the flourishing economy in South East Asia, the founders saw an opportunity for HGC to expand its business by exporting and supplying steel products to neighbouring countries including Malaysia and Indonesia. HGC successfully captured these new markets and HGC's annual sales increased to more than $10 million in the 1980s.

In 1988, our Group underwent a major restructuring when one of our founders, Mr Tan Teng Hian, left our Group. At the same time, Mr Tan Teng Hian acquired all of the shares in Almech and took over control and management of Almech. Consequently, due to the expansion of the business of HGC, the remaining 3 founders, Messrs Tan Chan Too, Tian Chye Bee and Tan Ah Bee took the opportunity to incorporate HG to take over the business of HGC. HG was therefore incorporated on 4 August 1988 with an initial issued and paid-up capital of $3 which was subsequently increased to $1.5 million on 22 August 1988. In November of the same year, we further expanded our warehouse space by purchasing 100,000 sq ft of warehouse space at 5 Liu Fang Road for $450,000. With the bigger premises, we were able to further expand the product range we carried to include ship plates, deformed bars and H-beams.

In 1998, due to the compulsory acquisition of our premises by the JTC for redevelopment, we moved to our current premises at No. 30 Jalan Buroh.

In December 1999, our management made the decision to move our business activities further up the steel supply chain by venturing into steel product manufacturing. To achieve this, our Executive Chairman, Mr Tan Chan Too, together with 3 individuals, namely, Messrs Lee Leng Loke, Lau Eng Tiong and Ang Kim Soon acquired OMP, a company which carries on the business of manufacturing MSLC.

The change in ownership and control brought significant synergies to OMP. The new management of OMP, led by Mr Tan Chan Too and Mr Lee Leng Loke, contributed to the growth and further development of OMP and successfully transformed the Company from a family-run business into a modern and professionally managed operation.

In March 2000, OMP commenced the manufacturing of flat steel bars in addition to MSLC.

In 2000, OMP commenced the construction of a new 3-storey factory cum warehouse at its existing premises at No. 28 Jalan Buroh with the intention of housing all its administrative and manufacturing activities and also to serve as its operating headquarters. The total development cost of the new factory and warehouse amounted to $3.2 million and construction was completed in January 2001. It was also intended that the new factory would have the capacity to house a new production line that produces steel pipes.

In August 2000, OMP acquired a 59.2% stake in JHL from KHL Holdings Pte Ltd (28.4%) and our Executive Chairman, Mr Tan Chan Too (30.8%). JHL is also a trader and stockist of steel products based in West Malaysia. HG acquired the 59.2% stake in JHL from OMP in June 2001 in order to consolidate and expand our business operations in Malaysia. The consideration of $362,085 paid to OMP for the 59.2% stake represents the initial cost of investment by OMP in JHL.

In March 2002, HG Metal Manufacturing Limited is listed on the SGX-Sesdaq.

Other significant developments included the commencement of full operations of the company's second steel manufacturing plant costing approximately S$2 million in May 2003 and three rounds of share placements in May and September 2003 as well as in April 2004 that raised total net proceeds of S$9.6 million to meet increasing demand for HG Metal shares. To reward shareholders, in December 2003, it declared a bonus issue of 22,832,500 new ordinary shares of S$0.20 each on the basis of one new ordinary share of S$0.20 for every four existing ordinary share of S$0.20 each.

In the year ending October 2003, the Group's Full Year revenue crosses S$100 million. In May 2004, the Group is upgraded to the Main Board of the Singapore Exchange.