Memorandum Of Understanding

1. INTRODUCTION
The Board of Directors of HG Metal Manufacturing Limited (the "Company") wishes to announce that the Company has on 13th October 2003, entered into a memorandum of understanding ("MOU") with Super Marine Supplies Pte Ltd ("Super") and Lingco Shipbuilding Pte Ltd ("Shipbuilding"), part of Lingco Marine Group of Companies ("Lingco Group") .

Lingco Marine Pte Ltd (the ultimate holding company of Lingco Group) is a substantial shareholder of the Company with 8,000,000 shares. Mr Sia Ling Sing, a non-executive director of the Company, personally holds 2,100,000 shares in the Company. Mr Sia Ling Sing is also a director of Lingco Marine Pte Ltd.

2. TERMS OF MOU
Under the MOU, Super and Shipbuilding intend to purchase steel products of up to S$5,000,000.00 from the Company a year, terms and conditions to be agreed upon at the relevant times. Super and Shipbuilding undertake that they will purchase the steel products from the Company as long as the Company's quotation is equal or less than that quoted by other parties.

3. GENERAL
The MOU sets out the understanding and intention of the parties and will not be contractually binding on any party. The parties will in due course enter into definitive documentation to govern each purchase of steel products.


By Order of the Board