Business WatchAdoption of new Eurocode 2 Standard – Changes to steel reinforcement of importance to the construction industry

• Eurocode standards will become mandatory from 1 April 2015, Eurocode 2 allows up to Grade 600 steel

• The new SS560 standard lays an emphasis on Long Term Quality and third-party certification

• NatSteel products adhere to international standards certified by reputable third-party organisations such as ACRS, BIS, SIRIM, SLS and SNI

• NatSteel is capable of producing and testing Grade 600 steel

With effect from 1 April 2015, the Eurocode standards (SS EN 1992-1-1 (EC 2), SS560 & SS561) will replace the old standards (CP65, BS 8110, SS2, SS18 & SS32) as Singapore’s building codes. The Eurocode standards are considered one of the world’s most advanced. Under Eurocode 2, steel reinforcement has undergone major changes and the highlights are presented as follows:

Eurocode 2 will further enhance the quality assurance process of reinforcement steel. Traceability and fatigue testing of materials will now become requirements. Of note to the industry is that apart from the usual routine testing, the new SS560 product standard also particularly emphasises on Long Term Quality, which needs to be certified under a Third-Party Certification Scheme. The SS560 allows for steel

reinforcement products not covered under a third-party product certification scheme, provided that extensive sampling and testing is done prior to use. The minimum sampling and testing size for such products are 17 specimens per cast, per bar size, per grade, per 100 tonnes. If the testing fails within the set criteria, the sampling size increases to 60 specimens. Such extensive testing is costly and time consuming. It is therefore imperative that reinforcement steel from reputable sources be used for construction projects.Another key benefit of the Eurocodes for the construction industry is the use of superior construction materials, leading to higher quality and productivity. Eurocode 2 permits the use of high strength steel of up to 600MPa (Grade 600), which has been adopted in the Singapore National Annex to Eurocode 2. The use of Grade 600 steel has the potential to bring about multiple benefits:

• Reduce structural member sizes• Increase let-able area• Lower steel consumption• Reduce manpower requirements• Reduce congestion • Reduce crane usage time• Eurocode 2 allows up to Grade 600 steel

As the pioneer, NatSteel has already initiated

a New Work Item (NWI) with SPRING for the adoption of Grade 600 steel and is working closely with the authorities to formulate the necessary product standard for the benefit of the construction industry. The Grade 600 product standard is expected to be published this year.

As for the ductility class, Class B steel is expected to be commonly used in Singapore in the coming years, while Class C steel could be used for special projects which require higher ductility to resist seismic forces.

Overall, the adoption of the Eurocode standards is expected to result in higher construction productivity, quality and sustainability. NatSteel’s products are Eurocode 2 compliant and undergo stringent short and long term quality control procedures, which are certified by reputable third-party organisations such as ACRS, BIS, SIRIM, SLS and SNI for export to numerous overseas markets. The company has also internally developed Grade 600, which is expected to be in the market by this year. This ensures that our customers always receive the best quality products at value prices, with a guaranteed peace of mind.

Item Eurocode Standard Remarks

Long Term Quality Shall conform to third-party product certification scheme

Extensive sampling and testing is needed for products that are not subject to third-party product certification scheme

Traceability Requires traceability Not a requirement under the previous SS2 Part II

Fatigue Testing Requires fatigue testing Previous SS2 Part II allows for fatigue testing if requested by purchasers, but not as a requirement

Steel Grade 400 to 600MPa SS560 has already incorporated Grade 500 steel. Work on incorporating Grade 600 steel is in progress

Mild Steel No Eurocode does not support mild steel

Ductility Class Class A, B & C Class-A: Temporary works, Class-B: Normal applicationsClass-C: Seismic applications

Issue No.05 | Apr 2015

Guest ColumnEnsuring the quality of our products has always been at the core of our business.In this issue, we share with you the highlights of the new Eurocode 2 Standards which further emphasise the stringent quality assurance process that NatSteel goes through. We are also pleased to profile the Marina Wharf section (C481) of MCE, of which we were privileged to collaborate with Hock Lian Seng who has extensive experience in infrastructure projects.As we continue to share our insights to the industry trends, we welcome your feedback on the newsletter.

Mr Clement LimHead - Marketing and Sales

Industry OutlookGlobal Steel Demand and Supply

Special Feature Doing Business the Tata Way

Global market demand in 2015 is forecasted to grow at a rate similar to 2014 of 2% to reach 1,600 million MT. The demand in developed economies is expected to be moderate while growth in emerging and developing economies is projected to pick up. An expected slowdown in demand growth in China in 2015 contributed significantly to slow global growth projection, as the Chinese Government transforms its investment supported economy to a consumption driven economy.

World crude steel output in 2014 grew at 1.2% to 1,662 Million MT. Steel production in China of 823 million MT contributed to 50% of total global output. However, the national environment measures enforced by the Chinese Government to control pollution have resulted in the shut down of over 50 mills. The tightening of credit to steel mills and their continued losses have also forced many mills into bankruptcy. As a result, over 80 million MT in production capacity is expected to be taken out of market this year. Weaker internal consumption in China due to a lower GDP growth of 7.4% in 2014 has fueled steel exports by Chinese mills, hitting a historic high of 94 million MT. However, exports from China are projected to slow down by more than 12% this year.

Annual crude steel productionSource: worldsteel

China import iron ore price from March 2014 to April 2015

International scrap price from March 2014 to April 2015

RAW MATERIAL- IRON ORES AND SCRAPThe demand for feed material has been depressed by poor growth in demand of finished steel products globally. China – the biggest importer – has drastically reduced iron ore consumption due to lower output, contributing to the collapse in price of raw materials including iron ore, coal and scrap. The glut in iron ore supply from newly developed mines and expanded production capacity of major suppliers continue to weigh on prices. The volume-growth strategy of the three major iron mining companies – Rio Tinto, BHP Billiton and Vales – has dragged down ore prices to below US$50, a drop of 60% from a year ago. Meanwhile, many mining companies in China, which produce low grade iron ore, have also shut down as they became uncompetitive. Many high cost producers outside China may accelerate cutbacks in production amid deteriorating cash flow and limited revenue potential. It is believed that iron ore prices may soon find its resistance level, as excess stock is reduced and steel mills act to restock their depleted inventory.

Scrap has seen its price drop to a six-year low post the economic crisis. Lower demand internationally and poor affordability of mills because of depressed finished steel prices accounted for the price collapse. The growing internal scrap generation in China has reduced its dependency on the international market, which has also resulted in a huge loss for major global scrap players.

STEEL PRICES OUTLOOKPrices of steel have been continuing to slide since two years ago, after Chinese mills started their aggressive export strategy as internal consumption growth fell below capacity expansion. Unfair export rebates enjoyed by Chinese exporters for “alloy steel” have resulted in an overflow of low price, poor quality steel into other regional markets and continents. The weak raw material prices have also enabled Chinese mills to drop prices to secure export orders. However, the majority of these mills are bleeding from huge losses due to competition and low margin spreads. With the draining of cash flow, the affordability to sustain such losses is weakening. In view of these developments, any downside correction will be smaller than upward correction going forward.

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• Customer centricity is a key in Tata group operations

• NatSteel is committed to doing business with the highest level of integrity, as outlined in the Tata Code of Conduct (TCoC)

As a Tata group company, customer centricity is intrinsic to our culture. NatSteel aims to develop a deep understanding of the unique needs of our customers, deliver pioneering products and services of outstanding quality and value, as well as delight our customers at every touch point.

NatSteel is also committed to doing business with the highest level of integrity. The company adopts the Tata Code of Conduct (TCoC), which is based on 5 core values of Integrity, Understanding, Excellence, Unity and Responsibility.

The TCoC touches every aspect of a Tata group entity’s operations, in particular:

ETHICAL CONDUCT: NatSteel is committed to conduct our business with the highest level of integrity to build trust with our stakeholders. We conscientiously ensure that employees conduct themselves professionally at all times.

INTEGRITYConduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.

UNDERSTANDINGCaring, show respect, compassion and humanity towards our stakeholders. Work for the benefits of the countries that we operate in.

EXCELLENCEStrive to achieve the highest possible standards in our day-to-day work and in the quality of goods and services we provide.

UNITYWork cohesively with our stakeholders. Build strong relationship based on tolerance, understanding and mutual co-operation.

RESPONSIBILITYBe responsible and sensitive to countries, communities and environments in which we work. Ensuring what comes from the people goes back to the people many times over.

Exhibition booth & games to promote TCoC

Successful CollaborationGreater Connectivity via the Marina Coastal Expressway (MCE)

Site map for C481

• Hock Lian Seng Infrastructure was the leading contractor for the Marina Wharf section (Contract 481) of MCE, the last of six major civil contracts called and awarded

• NatSteel is proud to have collaborated with Hock Lian Seng on the project, in ensuring efficient and timely delivery of reinforcement bars and offsite prefabrication solutions like Cut-and-Bend, Welded Mesh and Bored Pile Cages

ABOUT HOCK LIAN SENGHock Lian Seng was established in Singapore in 1969 as a construction company with a focus on infrastructure projects. It converted into a public limited company with the name Hock Lian Seng Holdings Limited on 3 December 2009, followed by listing on SGX Mainboard on 21 December 2009. The principal activity of the company is that of investment holding. As a group, the company manages its core business activities which include Civil Engineering & Construction, Building Construction, Property Development and Investment.

MARINA WHARF SECTION (CONTRACT 481) OF MARINA COASTAL EXPRESSWAYThe dual five-lane Marina Coastal Expressway (MCE) is a strategic underground east-west transport link that comprises of a 3.5 km long underground tunnel and a 1.5 km above ground/depressed road structure. It stands as an interchange with KPE/ECP and connects toMarina and Central Boulevard, Prince Edward Road and Maxwell Road.

In 2009, LTA awarded Contract 481 for construction of the Marina Wharf section of MCE to Hock Lian Seng Infrastructure, the civil engineering arm of Hock Lian Seng Holdings who met the stringent safety, engineering and budget requirements set. It was the last of six major civil contracts called and awarded for construction of the MCE.

The Marina Wharf section was constructed partially on existing land and partially on reclaimed land in central Singapore, adjacent to the PSA port. The total length of this section of MCE under C481 is 950m, comprising 4 main structures, namely, cellular pipe-pile seawall to retain reclaimed land, modified South Quay Viaduct bridge to connect existing ECP to MCE, new proposed viaduct and at-grade piled road way built on reclaimed land.

NatSteel is proud to have collaborated with Hock Lian Seng on the project, in ensuring efficient and timely delivery of reinforcement bars and offsite prefabrication solutions like Cut-and-Bend, Welded Mesh and Bored Pile Cages customised to the project blueprints.

Since April 2014, Hock Lian Seng has been working on the Maxwell Station, a part of the Thomson-East Coast line. They have also partnered NatSteel to provide offsite fabrication of Diaphragm Walls and delivered on a just-in-time basis due to limited space on site.

EQUAL OPPORTUNITIES: We treat our employees equally regardless of race, religion, gender, marital status, age.

CORPORATE CITIZENSHIP: As a good corporate citizen, NatSteel complies

with the laws & regulations and actively assists in improving the quality of life in the communities that we operate.

The TCoC guides NatSteel as we serve our customers, to demonstrate leadership with trust.

QUALITY OF GOODS & SERVICES: We are committed to supply goods and services of the highest quality standards and after-sales services that are consistent with the requirements of our customers to achieve customer satisfaction.

HEALTH, SAFETY & ENVIRONMENT: NatSteel is committed to providing each employee a safe and healthy work environment. We also work to protect the natural environment and the health and safety of the communities in which we operate.

OUR PURPOSE

At the Tata Group, we are committed to improving the quality of life of the communities we serve. We do this by striving for leadership and global competitiveness in the business sectors in which we operate. Our practice of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. We are committed to protecting this heritage of leadership with trust through the manner in which we conduct our business.

SITE PLAN FOR MCE C481

Marina Wharf at MCE

We advocate the use of environmentally friendly products

NatSteel NewsImproving the lives of the community through SPD

• Since 2009, NatSteel has partnered with SPD in volunteering at its centre and sponsoring its education programme

• NatSteel commits $210,000 at the SPD Charity Show 2015, which will go towards the SPD Bursary Award and Youth Aspiration Award for the next two years

Since 2009, SPD has been one of NatSteel’s key partners in its community involvement programme. NatSteel employees are privileged to have the opportunity to volunteer regularly with SPD, and the organisation has also been supporting SPD through sponsoring its education programme.

At the biennial SPD Charity Show on 22 March 2015, NatSteel was one of the corporate sponsors acknowledged for its strong support towards SPD. On behalf of NatSteel, Mr Yeoh Choon Kwee, Senior Vice President and Head of Building Solutions, presented a mock cheque of

$210,000 to SPD President Ms Chia Yong Yong, witnessed by Dr Ng Eng Hen, Minister for Defence.

The $210,000 will go towards supporting the SPD Bursary Award and Youth Aspiration Award for the next two years. The bursary awards provide financial assistance to needy students, while the aspiration award is meant to recognise youths with achievements outside the academic arena. Through this partnership with SPD, NatSteel aims to live to its corporate philosophy of improving the lives of the community in which it operates. Mr Yeoh Choon Kwee receiving a token of appreciation from Dr Ng Eng Hen,

Minister for Defence