#1BLUESCOPE STEEL BlueScope Asia Day Indonesia Business 29 June 2006#2Indonesia - Our business in context Myariyar Thailand Laps Vietnam (Cambodia) South China Sea „Philippines Malays Indone Jakarta Indian Оседл BlueScope Lysaght Indonesia BlueScope Steel Indonesia (Metallic coating and painting facility) ia Australia Pacific Ocean ▪ Ownership BlueScope Steel 100% ■ Coated facilities at Cilegon ■ Metal Coating Line – 100k tpal - Coil Painting Line - 42k tpa Lysaght facilities Jakarta (Cibitung) ■ Medan Surabaya Page 2#3Indonesia - Our business in context (cont.) INDONESIA CILEGON Overall view looking towards the south west STEEL Metal coated and paint line facility at Cilegon Lysaght facility at Cibitung Page 3#4Real GDP Growth Indonesia - Economy 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Real GDP Growth & Interest Rates -% Change GDP Growth -Interest Rates 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 2012-13 2011-12 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 1999-00 2000-01 2001-02 IIIIIIII Quarterly GDP Growth Trend 2003-2006 T. 43 15 10- Investment Approvals (New Expansion) Domestic Foreign 4.0% 2.0% 0.0% Interest Rates D 1506 1904 1907 155 1999 2000 2001 2002 2003 2004 2005 Economy Largest South East Asian economy, over US$270bn ■ GDP growth slower due to; Higher world oil prices and 100% increase in fuel price in October 2005 as a result of removal of fuel subsidy - Increased inflation rates to approximately 17% GDP per capita US$1,182 in 2004 (increased from US$490 in 1999) Population ■ 220 million, 45% aged under 15 ■ 4th largest population in the world, growing at 4 million people per annum ■ Political First directly elected President, elected in 2004 Fight against corruption continues ■ Other ■ Tsunami relief continues in Aceh ■ Reconstruction will be required in Yogyakarta, Central Java ■ Development across Indonesia Page 4 Source: CBS, Castle Asia, BlueScope Steel Economics#5Indonesia - Our people; culture; safety; communities e OUR BOND Page 5#6SINDOMALAY management team PA President Indonesia & Malaysia VP Safety, Health and Environment President BLI Acting President BSI Steel Coated VP Finance VP Customer Focus VP Information System VP Marketing & Solution President Coated Steel Malaysia President Lysaght Malaysia Region 02 Page 6#7Indonesia - Our midstream management team BlueScope Steel Coated Indonesia Act. President Director BSI Steel Coated Indonesia Mgr. Sales Mgr. Logistic & PPIC Marketing Manager IS Manager Mgr. Commercial Mgr. HR & EA Mgr. Manufacturing Mgr. Bussines Projects Page 7#8Indonesia - Our downstream management team President Director HR & Admin Manager National Sales Mgr Project Manufacturing Manager Techical Services Mgr Business System Manager Channel Manager Commercial Manager | Nat Sales Mgr Inds & Comm PEB (PEB Heavy) (PEB Lite) Nat Sales Mgr Inds & Comm R/W Marketing Manager Logistic & Supply Manager Nat Sales Mgr Residential National Sales Mgr Multi Storys Page 8#9Indonesia - Our performance External Despatches FY2003 FY2004 FY2005 FY2006(e) (tonnes 000's) ■Domestic 67 79 94 ▪ Export 17 13 7 Total 84 92 101 Sales Revenue (A$m) Total Sales $110.7m $114.8m $149.2m EBIT In the range of (A$m) $11.7m $15.1m $17.4m $17m $20m Net Operating Assets (pre-tax A$m) $63.5m $81.6m $85.9m Business development and pre-operating costs approx ($1m) included in EBIT Page 9#10Indonesia - Feedstock sources Current Source 1. CRC from: 2. 80% from Krakatau Steel (located directly next to BlueScope Steel Indonesia operation in Cilegon), who also source slab from PKSW 20% from BlueScope Steel and other sources Other materials Zinc from Korea Zinc (Korea) Aluminium from Comalco (Australia) Paint from Azko Nobel and Incote (Indonesia) Other Influences Tariff regime Historically stable tariff regime supports domestic steel makers (12.5% CRC, 15% coated steel ex ASEAN, 5% coated steel intra-ASEAN) Page 10#11Indonesia - Current coating operations ☐ Status Metal coating line no. 1 (MCL1) and paint line no. 1 (CPL1) at full capacity MCL2 and CPL2 construction on hold building and equipment design complete. Approximately A$10.0m spent/committed to April 2006 Product being imported from other BlueScope Asian operations to support market Issues More light gauge production capability required Imported material Initiatives to improve performance Up-time project (will increase through-put and capacity) Geographic expansion (help capture shift in wealth to the regions) Improvement in market offer with shortened lead times Systematic value improvement program Customer service improvement Page 11#12Indonesia - Current Lysaght operations Status Annual volume approximately 20,000 tonnes Largest steel truss supplier across BlueScope Steel Asia network Business has been segmented into the following areas; pre-engineered buildings (PEB), residential, multi-storey, industrial & commercial, retail, Aceh Issues Sourcing of beams and columns for PEB segment Initiatives to improve performance Market development SMARTHOME® Channel management & expansion Retail shop fronts (SMARTHOME®) Multi-storey; decking machine to be commissioned shortly SMARTTRUSS® Project Systematic value improvement program Customer service improvement Page 12#13BlueScope Lysaght Aceh Projects: 7,130 tonnes Indonesian President, Susilo Bambang Yudyono inspecting Lysaght product in Aceh Terminal Ferry Donated by AIPRD 3700 Housing Donated by Yayasan Budha Tzu-Chi 3000 Shelter Donated by IFRC Workshop Donated by IFRC 6 Schools Donated by aid 4 Houses in Aceh 550 Schools Donated By World Vision#14Indonesia - Our opportunities Facilities Capacity Capacity Utilisation (% of Prime Product) FY2003-2005 FY2006 FY2007 FY2008 FY2009 MCL 1 100,000 tonnes 87% 98% 100% 100% 100% CPL1 42,000 tonnes 56% 98% 100% 100% 100% Midstream Opportunities Market Industrial/commercial; Foreign Domestic Investment improving Residential, roof-tiles, truss and frames Intermaterial growth Developing economy Production ZINCALUMEⓇ coating expansion New products; TEXTURA®, Blue tinted metal tile Tatalogam Lestari building Bukit Tinggi Downstream Opportunities Market Truss, Retail, PEB, Multi-storey Geographic expansion San Miguel factory at Cibitung; PEB built by Pt. BlueScope Lysaght Production PEB fabrication under review Decking machine Page 14#15Indonesia - Metal coating line and paint line production profiles Over the last 5 years the effective tonnage capacity has reduced as levels of thin gauge products have increased significantly. This has been partially offset by line speed increases and improvements in downtime. METAL COATING LINE PAINT LINE '000 tonnes '000 tonnes 120.0 50.0 100.0 40.0 80.0 30.0 60.0 20.0 40.0 10.0 20.0 0.0 0.0 2001 2002 2003 2004 2005 2006 (E) 2001 2002 2003 2004 2005 2006 (E) Prime Product Non-Prime Prime Product Non Prime Nameplate Capacity Nameplate Capacity Page 15#16Indonesia - Our markets ■ Construction sector accounts for 99% of sales ◉ Approximately 50/50 split between industrial & commercial and residential segments ■ Market share is growing through industry leadership in intermaterial growth, ie steel replacing timber trusses and concrete roof tiles. Inter-material Share Construction Segment 2005 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Construction Investment - Constant US$ Million Residential Non-Residential Civil Engineering 1996-97 1998-99 Source: BlueScope Steel Economics 2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 Concrete 60% Other 7% Steel 8% Timber 25% Includes roof cladding, purlins, walling, partitions, cable tray, decking, frames, door/window frame, walling etc. Source: extrapolated from PT. Data Consult report Page 16#17Indonesia - Our markets (cont.) Steel component of industrial / commercial construction segment (sales volumes) - indicative relationship between local suppliers vs. imports Product Mix Metal Coated Painted Principal Principal Suppliers Domestic Imports 85% 15% Minimal Source Page 17#18Indonesia - Our markets (cont.) Thailand Vietnam (Cambodia) South China Sea Philippines Indian Ocean Malays Indonesi Jakarta Australia Pacific Ocean Direct customer base predominately manufacture in Java island ■ Current principal markets are located in: ■ Java (direct customers) ■ Other regional opportunities Shift in wealth into outer islands (other than Java) due to the governments regional autonomy program ▪ This is creating opportunities in residential and industrial/commercial segments Opening sales offices in outer islands to help capture this opportunity Page 18#19Indonesia - Summary Opportunities Relatively high GDP percentage growth and inter-material growth potential Productivity improvements, cost reductions and general improvement in manufacturing excellence Largely unexplored manufacturing segment opportunities, but new products in the pipeline will help penetrate this segment Reconstruction in Aceh (Tsanami) and Yogyakarta (Earthquake) Challenges Satisfy market growth and maintain / increase our market share Potential increase in imports due to regional competitor activity and China supply growth. Sourcing of structural components for PEB Protecting BSI's leading coater position Page 19#20BLUESCOPE STEEL BlueScope Asia Day Indonesia Business 29 June 2006