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Opportunity Day Presentation 20 May 2013

A World Leading Natural Rubber Player


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Disclaimer

Certain forward looking statements may be made in the course of the presentation. These forward-

looking statements generally can be identified by use of statements that include words or phrases such

as STA or We or our management “believe”, “expect”, “anticipate”, ”intend”, ”plan”, ”foresee”, ”project”,

”may”, “will”, “shall”, or other similar words or phrases. Similarly, statements that describe STA’s

objectives, plans or goals also are forward-looking statements. These statements involve known and

unknown uncertainties and risks that could differ materially from actual results, performance or events.

The forward-looking statements contained in the slides are not and should not be constructed as

representations of the future performance of STA and that such statements are an expression of the

Company’s reviews based on its current view and certain assumptions including, but not limited to,

prevailing economic and market conditions and currently available information. The reader or the

listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any

duty to publish any update or revision of any forward-looking statements.

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Our Executive Directors

Dr. Viyavood Sincharoenkul

Chairman & Managing Director

Kitichai Sincharoenkul

Executive Director

Paul Sumade Lee

Executive Director

Founding member of Sri Trang and

appointed as Chairman in 2010

26 years of experience in the natural

rubber industry

Joined Sri Trang in 1988 and has served

as a Director since 1995


rubber industry

Joined Sri Trang in 2004 and appointed

as a Director in 2010


rubber industry

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Chaiyos Sincharoenkul

Executive Director

Prasit Panidkul

Executive Director

A Director since our inception

43 yrs of experience in natural rubber

industry

A Director since our inception

26 yrs of experience in natural rubber

industry

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I. Sri Trang Business Highlights

II. Natural Rubber Industry Snapshot

III. Financial Highlights

IV. Growth Strategy

AGENDA


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9% world market

share contributed by

STA

Fully Integrated and Globally Natural Rubber Supply Chain

Upstream Midstream

Finished Products Plantation Procurement Processing

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31% of natural

rubber production

come from Thailand

Sales & Distribution

RSS

TSR

Con. Latex

Unsmoked

sheets

Fresh

Latex

Cup Lump

Hydraulic Hoses

Examination gloves

Downstream

Thailand is the world

largest natural rubber

supplier

Thailand and Indonesia control more than

half of world supply

China is world largest

natural rubber

consuming country

Produced from

Thailand and

distributed worldwide

57% of world

supply come from

Thailand and

Indonesia

13% market share

of China import

contributed by STA

4th ranked of world

largest glove

manufacturing

Escalator Handrail

http://www.sritranggroup.com/eng/02_products/02_finish_03.php


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(By tonnage) (‘000 tons)

(By tonnage)

Sri Trang9%

Rest of the world91%

Sri Trang 18%

Rest of Thailand

82%

795

913

932

955

976

3,015

3,522

0 1000 2000 3000 4000

PRC (#6)

India (#5)

Malaysia (#4)

Vietnam (#3)

Sri Trang

Indonesia (#2)

Thailand (#1)

Sri Trang 13%

Others 87%

Sri Trang - Dominant Natural Rubber Processors

Global NR market share Sri Trang vs. leading natural rubber producing

countries

Thailand NR production share China NR imports 2012

(By tonnage)


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World Largest Midstream Natural Rubber Producer

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Concentrated

Latex

Ribbed Smoked

Sheet (RSS)

Technically

Specified Rubber (TSR)

Existing plants

Plants under construction

23 factories, 21 in Thailand

and 2 in Indonesia

1.2 million tons per

annum for production capacity

61 procurement units,

40 in Thailand and 21 in Indonesia


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Our Midstream Business Strategy

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TSR RSS Con. Latex

Full range of natural rubber products

• Serve all downstream businesses & capture all

possible market segments

• Create production efficiency

• Excellent diversification

• More than sufficient raw material to secure from

world largest Natural Rubber producing

countries

• Well-balanced seasonal management

Thailand Indonesia

Strategic Production base

Type of Product No. of plant Total production capacity

TSR 12 828,850

RSS 5 206,392

LTX 6 191,488

Total 23 1,226,730


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Thailand as our focus for upstream

Strategic Expansion to Upstream Business

> 4,700 hectare rubber

plantation in Thailand

> 60% with an average

gestation period of 2 years

Will mature for first commercial

tapping from 2016 Tapping

Under gestation

Land development

Chiang Mai Chiang Rai

Lampang

Utaradit Sukhothai

Pitsanulok Pichit Sakon Nakhorn

Surat Thani

Krabi Songkhla

Petchaboon

Sakaeo

Prae

Chumporn


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Income Diversification through Investment in Downstream Business

Latex / nitrile examination gloves for medical and industrial purposes

Operated through 40.2% owned associate SSC

World top four and Thailand largest glove manufacturer

Production capacity of 14 billion pieces per annum

Operated through 42.5%-owned associate in Thailand and 50%-owned associate in PRC

Largest hydraulic hoses producer in Thailand

Production capacity of 42.5 million meter per annum

10%-owned entity in PRC

Production capacity of 1.4 million meter per annum

Examination Gloves High-pressure

hydraulic hoses Escalator handrails


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Plantation

Procurement

Processing Finished products

Sale & Distribution

Gain direct access to supply

information

Ability to control the quality of

supply

Reduce purchasing volumes to

transact with intermediaries

Minimise operating cost

Ability to control the quality of supply

First-hand

understanding of

customer

requirements

Quick access to

reliable market

information

Be flexible to any market

conditions and able to manage

production and position

efficiently

Distinctive Advantage - Capture Value throughout the Supply Chain

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IV. Growth Strategy

AGENDA


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Natural Rubber Industry Supply Chain

NR supply by type of plantation

Estates 22%

Small Holdings

78%

Source: IRSG,

NR demand by end use

Latex

13%

Other

uses

17%

Tyre

70%

Replacement market 70%

Original equipped market 30%

Market Segmentation


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World Major NR Producing and Consuming Countries

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7.6 7.9

8.7 9.2

9.7 10.2 10.2

9.3

10.8 11.0

10.9 11.6

7.3 8.0

8.7 8.9

9.8 9.9 10.1 9.7 10.4

11.0 11.4 11.8

(0.25) 0.07 0.03 (0.30) 0.14 (0.29) (0.05) 0.36 (0.38) 0.05 0.46 0.18

(2.0)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F

Demand Supply Supply surplus/(deficit)

Indonesia 26%

Thailand 31%

China 7%

Malaysia 8%

Vietnam 8%

India 8%

Others 12%

China 34%

North America

10% Europe 10%

India 9%

Japan 7%

Thailand 5%

Others 25%

Unit : million tons

(by tonnage) (by tonnage)

25%

35%

45%

55%

65%

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Advanced¹ Emerging

Overall NR demand and supply Demand trend moves to emerging market

Source: IRSG and LMC 1 Advanced markets include USA, Canada, Western Europe and East Asia

Major suppliers of Natural Rubber Major consumers of Natural Rubber


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Supply Limited in Equator Countries

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1,274

795

913

932

955

3,015

3,522

Others

China

India

Malaysia

Vietnam

Indonesia

Thailand

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2,814

2,000

640 607 506 504

55 101

670

785

434 470 405 255

225 27

3,484

2,785

1,074 1,077 911

759

280 128

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000 Immature area (Hectares)

Tapped area (Hectares)

Yield per hectare (Kg.)

Unit : ‘000 tons

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020

Malaysia Indonesia Thailand India

PRC Vietnam Other

Unit : ‘000 tons

Rubber tree grows well in tropical area Thailand - the world largest NR supplier

Area for rubber plantation Global natural rubber production by country


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-15%

-10%

-5%

0%

5%

10%

15%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

USA

EU

Brazil

China

Japan

Indonesia

Russia

India

Others

Total

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

-1%

0%

1%

2%

3%

4%

5%

6%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f

GDP (LHS) NR consumption (RHS)

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

200

400

600

800

1,000

1,200

1,400

1,600

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

PC LCV M/HCV

PC (% growth) LCV (% growth) M/HCV (% growth)

2,789

502

740

1,001

1,058

1,092

3,765

Others

Thailand

Japan

India

Europe

America

China

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

China – world largest NR consumer

Forecasted growth of NR demand by country

NR Demand mainly driven by world activities

Global vehicle growth trend (Million units)

Demand Driven by Tyre Industry

Unit : ‘000 tons


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Consistent Demand for Natural Rubber

Source: IRSG

20

30

40

50

60

Jan

-07

Ap

r-0

7

Jul-

07

Oct-

07

Jan

-08

Ap

r-0

8

Jul-

08

Oct-

08

Jan

-09

Ap

r-0

9

Jul-

09

Oct-

09

Jan

-10

Ap

r-1

0

Jul-

10

Oct-

10

Jan

-11

Ap

r-1

1

Jul-

11

Oct-

11

Jan

-12

Ap

r-1

2

Jul-

12

Oct-

12

Share of natural rubber in rubber consumption (%)

39-49%

Synthetic Rubber

Natural Rubber

Heat

resistance Elasticity

Resilient demand for natural rubber

-100%

-50%

0%

50%

100%

150%

200%Brent Crude oil Butadiene-Rubber Natural Rubber

Price movement

• Natural rubber and synthetic rubber are substitute and

complimentary products

• The substitution between synthetic rubber and natural rubber is

limited (less than 10%)


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Natural Rubber Price Interaction

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(400)

(300)

(200)

(100)

0

100

200

300

0

1,000

2,000

3,000

4,000

5,000

6,000

Ja

n-0

7

Ap

r-0

7

Jul-07

Oct-

07

Ja

n-0

8

Ap

r-0

8

Ju

l-0

8

Oct-

08

Ja

n-0

9

Ap

r-0

9

Ju

l-0

9

Oct-

09

Ja

n-1

0

Ap

r-1

0

Ju

l-1

0

Oct-

10

Ja

n-1

1

Ap

r-1

1

Ju

l-1

1

Oct-

11

Ja

n-1

2

Ap

r-1

2

Ju

l-1

2

Oct-

12

Supply surplus / (deficit) (RHS) SICOM price (TSR20) (LHS)

0

500

1,000

1,500

2,000

2,500

0

2,000

4,000

6,000

Ja

n-0

7

Ap

r-0

7

Jul-07

Oct-

07

Ja

n-0

8

Ap

r-0

8

Ju

l-0

8

Oct-

08

Ja

n-0

9

Ap

r-0

9

Ju

l-0

9

Oct-

09

Ja

n-1

0

Ap

r-1

0

Ju

l-1

0

Oct-

10

Ja

n-1

1

Ap

r-1

1

Ju

l-1

1

Oct-

11

Ja

n-1

2

Ap

r-1

2

Ju

l-1

2

Oct-

12

Total stock (RHS) SICOM price (TSR20) (LHS)

(US

D p

er

ton

s)

NR price VS. fundamental demand/supply

(Un

it : ‘00

0 to

ns)

NR price VS. global stock

(US

D p

er

ton

s) (U

nit : ‘0

00

ton

s)

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IV. Growth Strategy

AGENDA


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Financial Highlights

A record sale volume

Revenues & ASP

Net Profit improvement

Continue business

expansion

• Achieved 975,604 tons sold in FY 2012, 3% increase from

FY 2011

• 269,706 tons sold in Q1 2013, up 2% YoY and 6% QoQ

• Total revenue of THB 99,639 mm in FY 2012, down 26% YoY

due to downward movement of NR price

• Average selling price decreased by 28% from FY2011

• Total revenue of THB 24,240 million in Q1 2013, down 17% YoY but up 6% QoQ

• Net profit of THB 1,379 mm for FY 2012, up 6% YoY

• Net profit of THB 850 million for Q1 2013, up 114% YoY and

34% QoQ

• Achieve optimum capacity of 1.1 mm tons at the end of 2012

• Current optimum capacity of 1.2 mm tons

• Aim to achieve optimum capacity of 1.5 mm tons per annum

by the end of 2014


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Revenue Breakdown by Product

Yearly (THB mm) Quarterly (THB mm)

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-17.2% +6.3%

-25.5%

13,591

77,500

6,436

2,386

2,112

24,943

96,139

10,236

133,704

99,639

FY 2011 FY 2012

RSS TSR Con. Latex Others

2,750

18,070

1,4621,568

517598 512

3,6672,6003,3314,909

21,940

19,23618,254

18,299

1,5081,534

1,932

706

485

29,266

24,61822,960

24,24022,794

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

RSS TSR Con. Latex Others


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Revenue Breakdown by Geography


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-17.2% +6.3%

-25.5%

10,720 9,057 9,809 11,851 12,355

12,309

10,999 9,033 7,865

8,396

3,882

2,636 2,337 1,744

2,020

2,222

1,781

1,699 1,282 1,370

133

145

82 53 99

29,266

24,618 22,960 22,794

24,240

Q1 2012 Q2 2012 Q3 3012 Q4 2012 Q1 2013

PRC ASIA (Ex. PRC) USA Europe Others


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Adjusted GP and GPM*

Margin % THB mm Margin % THB mm

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+109.4% +11.3%

-39.5%

* GP and GPM after adjusting for (reversal) allowance of inventory and realised forex gains / losses

4,318

7,139

4.3%

5.3%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY 2011 FY 2012

0%

2%

4%

6%

8%

10%

763

1,168

950

1,436

1,598

4.1%

4.7%

2.6%

6.6%

6.3%

0

200

400

600

800

1,000

1,200

1,400

1,600

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

0%

1%

2%

3%

4%

5%

6%

7%



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SICOM Price and F/X

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TH

B/U

SD

Mo

ve

me

nt

SIC

OM

Pri

ce M

ovem

en

t

297

275

386

370

359

330

310

288 316

296

RSS TSR

Avg. price

29.0706

Avg. = 29.5710

(US cent / Kg.)


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Net profit and Net profit margin

Quarterly (THB mm) Yearly (THB mm)

Net profit Net profit margin %

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+5.6%

Net profit Net profit margin %

+113.9% +33.8%

1,306

1,379

1.0%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0

200

400

600

800

1,000

1,200

1,400

FY 2011 FY 2012

398

-441

787

636

850

1.4%

-1.8%

3.4%

2.8%

3.5%

(4)%

(3)%

(2)%

(1)%

0%

1%

2%

3%

4%

-500

-300

-100

100

300

500

700

900

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013


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Return on Assets and Return on Equity

ROA ROE

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EBITDA (THB mm)

3,883

5,579

3,311 2,840

FY 2009 FY 2010 FY 2011 FY 2012

EBITDA margin

8.4%

6.7%

2.5% 2.9%

FY2009 FY2010 FY2011 FY 2012

11.74% 12.59%

3.36% 3.59%

FY2009 FY2010 FY2011 FY 2012

36.08%

43.21%

9.19% 7.46%

FY2009 FY2010 FY2011 FY 2012


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Healthy leverage and coverage ratios

Debt / equity Net debt / equity

2.16

2.62

1.22 0.94

FY2009 FY2010 FY2011 FY2012

2.03

2.45

1.10 0.86

FY2009 FY2010 FY2011 FY2012

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Debt = Total liabilities

Equity = Total equity

Assets = Total assets

Net debt = debt – cash

Cash = cash and cash equivalents + fixed deposits at financial institutions

Interest Coverage = EBITDA/finance costs

Interest Coverage

18.85

10.90

3.74 4.00

FY2009 FY2010 FY2011 FY2012

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IV. Growth Strategy

AGENDA


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2013 Target & Future Growth Strategy

2013 2014 2015

Rubber plantation: Achieve 50,000 rai

(approx. 8,000 hectares)

Midstream business: Achieve production

capacity of more than 1.5

million tons per year

Target Capacity : 1.2 mil tons

Sale volume : 1.15 mil tons

Gross profit : 5-7%

Net profit : 2-3%

Dividend policy : 30% of net profit


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Upstream strategy update

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Enhance profitability and

reduce volatility in earning

Create procurement

networks for potential raw

material from neighboring

area

Pinpoint strategic locations

for midstream factories in

the future

Ability to procure raw

material at appropriate

price

10,600

17,300

29,385

50,000

Mar'11 Mar'12 Mar'13 Dec'14 (f)

Land development Gestation Tapping area

Achieve 50,000 rai of rubber plantation

• Balance location mix for long-term management

• Ensure sufficiency of saplings from both suppliers and

in-house development

• Synergise across natural rubber value chain

Unit :Rai


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Midstream strategy update

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Capacity expansion to increase market share

tons p.a.

• Thailand & Indonesia are primary countries for expansion with

focus on diversification to new territories

• Explore new potential country to establish footprints of crumb

rubber plant

• Seek for M&A opportunity for a leap-frog growth at reasonable

cost & return

4%

6%

8%

10%

12%

14%

-

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

RSS Latex TSR Market share

Increase profitability

Maintain world largest

fully-integrated Natural

Rubber processor

position

Benefit from economies

of scale

Balance the bargaining

power with suppliers and

customers

Enhance accessibility to

different sources of fund

to support our operation

and expansion


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Sale & Marketing Strategy

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Well-balanced portfolio of customers worldwide

Japan

France

USA

Germany

Italy Korea

Taiwan

China

Finland

India

Goodyear Tire & Rubber Co.

Coopper Tire & Rubber Co.

Group Michelin

Nokian

Tyres

P.L.C

Pirelli & C.S.p.A

Continental A.G.

Hangzhou Zhongce Rubber Co. Ltd.

Double Coin Holdings Ltd.

Shandong Linglong Rubber Co. Ltd.

JK Tyres

MRF Ltd.

Apollo Tyres Ltd.

Giti Tire Co. Ltd.

Hankook Tire Co. Ltd.

Kumho Tire Co. Ltd.

Toyo Tire & Rubber Co. Ltd.

Bridgestone Corp.

Sumitomo Rubber Industries Ltd.

Yokohama Rubber Co. Ltd.

Maxxis International /

Cheng Shin Rubber Singapore

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

1,000

2,000

3,000

4,000

2005 2006 2007 2008 2009 2010 2011 2012

NR Import by China (LHS) %Contribution by STA (RHS)

• Increase sales team to capture demand growth.

• Create “Sri Trang” standard to meet all

requirements from customers

• Maintain and further improve the reputation of

“most trusted” partner with all tyre makers

Increase coverage of customers in China

• Cover all classes of more than 250 customers to

serve all demand from every corner of the word.

• No single customer accounts for more than 6% of our

total sales.

• Get direct access to end-users to gain demand flow

and market sentiment.

Contribution of STA on China NR Import


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Our Vision

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Green Rubber Product

Green Company

Green Supply

Green Factory

Passionately, we drive possibilities

>> the green rubber company >>


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Q&A

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opportunity day presentation 20 may 2013 a world … day presentation 20 may 2013 a world leading...

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