#1BLUESCOPE STEEL Analyst Site Visit BlueScope Steel Indonesia 27th June 2007#2Important notice THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEEL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR. ' TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FOR ANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS. Page 2#3SINDOMALAY management team President BLI Willius S President BSI Steel Coated Sulfianda S BlueScope SINDOMALAY Structure President Indonesia&Malaysia Rob Crawford PA Murtafiah VP SHE Hanim Abubakar VP Finance Mike Mulcahy VP Information System Yulianto R VP Marketing & Solution Lucia Karina President Coated Steel Malaysia Simon Linge President Lysaght Malaysia Region Chua Soo Keng Technical Service Manager Gary Newby Page 3#4Our Indonesian midstream management team President Director BSI Steel Coated Indonesia Sulfianda Soeleiman VP. Sales Harsono Mintono VP. Supply Chain Iwan Gandamulya Marketing Manager Desiree Hastarina HSE Manager Richard VP. Commercial Gregory Widjaja VP. Manufacturing Abdullah Lubis VP. HR & EA Wahyudi Wibisono VP CS & Quality Penta Priatma Total Number of Employees (256) Page 4#5Our Indonesian downstream management team Surono SHE Manager Rusnina Isfandiari HRD Manager Willius Suwandana President Director Harry Trenggana Manufacturing Manager Vacant 20.11.2006 Petronella Samosir Customer Services Manager & MR Commercial Manager Puspita Sari Elisbeth Okmisila Log & Supply Chain Manager Yustinus Sigit Manager Decking Maman Djajasukmana Manager I &C Solutions Manager Residential Solutions Henry Chia Marketing & KAM Manager Total Number of Employees (218) Page 5#6Our business in context Myanmar Thailand Laos (Vietnam Cambodia South China Sea Philippines Indian Ocean Pacific Осеал Malaysia Indonesia Jakarta Australia BlueScope Steel Indonesia (Metallic coating and painting facility) BlueScope Lysaght Indonesia - Rollforming facilities and Sales Offices BlueScope Steel Indonesia - Sales Offices BlueScope Lysaght Indonesia - Sales Offices Ownership BlueScope Steel 100% ■ Coated facilities at Cilegon ■ Current: ■ Metal Coating Line - 100k tpa Coil Painting Line - 40k tpa Expansion - second metal and coated line, with in-line painting Lysaght facilities ■ Jakarta (Cibitung) ■ Medan Surabaya Page 6#7Our business in context- Midstream Growth Metal coating and paint line facility in Cilegon 0120724654 kon 08/09/2006 '000 MT Domestic Mid Stream Sales Growth 120 100 80 60 40 20 20 2001 2002 2003 2004 2005 2006 2007 Page 7#8Midstream Growth – metal roofing sheets Our largest customer in Indonesia, PT Tatalogam Lestari, produces metal roofing sheets from our products. Classic Royal Source: PT Tatalogam Lestari Elite Stone Prima Page 8#9Metal roofing (cont.) Source: PT Tatalogam Lestari Page 9#10Our Business in Context - Downstream transformation From 1973-2002 To 2002-2007 • 4,000 tpa Losses in 2002 & 2003 Building components . • 20,000 tpa • Profitable every year from 2004 • Building components and solutions: Components Residential PEB Heavy PEB Lite Multi Story Retail SMARTC LYSAGHT NOW OPEN... SAIN SMARTHOME SMARTHOM#11Our Business in context - Financial Performance Prime Total Despatches FY2003 FY2004 FY2005 FY2006 1HFY2007 (tonnes 000's) ■Domestic "Export 167 67 79 94 97 40 56 17 13 7 1 0 Total 84 92 101 98 56 External Sales Revenue (A$m) Total Sales EBIT 110.7 114.8 149.2 160.2 91.4 11.7 15.1 17.4 18.7 9.0 (A$m) Net Operating Assets 74.2 91.1 95.4 133.7 113.1 (pre-tax A$m) Page 11#12History - growing and adapting to the market Midstream Commissioning of BSI Coated; JV with PT Krakatau Steel - Launched of COLORBOND® Steel clean Colorbond Pelangi™ Coi nong con pond clean Colorbond Abadi Zincalume® Gemilang Textura TM Coated steel products were imported from Interior® Colorbond Australia Launched of ZINCALUME Ⓡ Steel PT Krakatau Softer Grade 0.2 mm Steel share buy out Line speed increasing MCL & CPL More ideas & innovations 1973 1994 1995 1998 2002 Sold BRC Mesh and BONDEK machine Established Downstream Business Downstream BRC Mesh LYSAGHT YSAGHT BONDEKⓇ 2003 2004 2005 2006 Relocated the building SMARTHOME™ Launch decking Truss PEB Heavy Houseframe PEB Lite Page 12#13Economic Outlook - Indonesia has delivered over last five years, year on year....the best is still to come 6% 4.9% GDP % 5.1% 5.6% 5.5% 4.3% 4%- 2% 0% 2002 2003 2004 2005 2006 Population (million) 223 220 225 218 220 215 215 212 210 205 2002 2003 2004 2005 2006 Government Debt Reduction 64.5% 60.4% 50.7% 100% 83.2% 70.8% 80% 60% 40%- 20% 0% 2002 2003 2004 2005 2006 ■ Economy Largest SE Asian economy ■ GDP expected to increase to around 6% "We expect annual growth to accelerate to...6.3%". (EIU) ■ IMF has pulled out as its help is no longer needed Inflation and interest rates back to single digit Exchange rate stable and strongest in approx 5 years ■ Yet to return to pre crisis FDI levels, but at US$10bpa GDP per head growing ■ Population ■ 230 million and growing around 3-4 million/year Young age distribution - 45% less than 15 years of age ■ 4th largest population in the world 45 $ USS BIO 5252525250 15 n 10 Foreign and Local Investment (USD bn) ■ Political / Social 40 35 30 Domestic Foreign 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Democratically elected Govt. and President (2004) Fight against corruption continues Fight against terrorism continues Politically socially stable since the election. Page 13#14Indonesia Low steel Intensity - Upside opportunity 1,000 Steel Consumption Capita ⚫ Taiwan Koreanada Italy Japan USA Germany O Malaysia Saudia Arab 100 O Thailand O China ◆ S. Africa Egypt 10 100 Sources: SEAISI - 2005 O Philippines ● Indonesia 1000 10000 100000 GDP/Capita ($) Inter-material Share Construction Segment 2005 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 14#15Midstream Coating Business in more detail STEEL Page 15#16Excellent Safety & Environmental Performance • • · . • LTI Free for 4.5 million hours (5 years) Employee audits @ 179% with 539 audits for May 2007 BlueScope Steel Zero Harm - Best Safety Award in 2006 President of Republic Indonesia Zero Harm Award in 2006 100% Environmental Compliance Frequency Rate 360 320 280 240 200 160 120 80 40 43 33 39 320 BlueScope Steel Indonesia LTI, MTI & WI Frequency Rate 51 35 16 15 15 0 1998 1999 2000 2001 2002 15 LTIFR MTIFR WIFR 22 4.3 2.2 2003 2004 2005 2006 May-07 Fiscal Year Page 16#17BSI is the only Zinc/Aluminium coated steel manufacturer in Indonesia STOP PIPO PIP018887C กาย PIPO18889C BLUESCOPE STEEL BLUESCO UES STEEL 0187 P018904CV P1P018902C UES OPE BAVISCOPE STEEL ➤Established in 1994 ➤Well-known product brands: ➤ZINCALUME®, Clean COLORBOND® ; ➤ GALVALUMEⓇ P1P0188 EEL P1P018890C BLUES OP STEE ➤ Other products to adapt to local market needs ➤ PELANGIⓇ, ➤ GEMILANGⓇ, ➤ ABADIⓇ, ➤ INTERIOR®, ➤ INDAHⓇ, ➤ TEXTURA®, PERISAI™ 08/09/2006 Page 17#18Our 260 Midstream Employees Living Our Bond OURBOND We and our cuntcounty Inspiratrength NON M PT. GAM LESSER BLUESCOPE 200 6 21 Page 18#19Our Material flow Locally Produced CRC ex-PT Krakatau Steel Imported CRC ex-BSL Australia Imported Semi-Finished Metal Coated ex- BSM / BSV Note: - BSM: BlueScope Steel Malaysia - BSV : BlueScope Steel Vietnam Current Indonesian Value Chain Imported Finished Metal Coated/ Painted ex-BSM/BSV Metal Coating Painting Indonesian Domestic Customers (incl Lysaght) Industrial & Commercial (Roofing/Walling) Residential (Metal Tiles, Trusses & Framing) Manufacturing (bus panels, stoves) Page 19#20Predominately Locally Sourced Feed Current Source 1. CRC from: 2. 90% from PT Krakatau Steel (PT KS) (located directly next to BlueScope Steel Indonesia operation in Cilegon) 10% imported from BlueScope Steel Australia and other sources. Other materials Zinc from Korea Zinc (Korea) Aluminium from Comalco (Australia) Paint from Akzo Nobel and Inkote (Indonesia) Other Influences Tariff regime Currently 10% CRC, 12.5% coated steel/roll-formed, 5% coated steel intra-ASEAN - Page 20#21PT Krakatau Steel - main CRC feed supplier Long term relationship between BlueScope Steel and PT KS ■ PT KS was a joint venture partner in BSI ■ Modern upgraded CRM facilities (>1 million tonnes per annum capacity) Quality of CRC is excellent ■ Close working relationship - collaborative supply arrangement ■ BSI - KS MOU/Supply agreement in place for continued growth 17 ELEGIR Page 21#22Current coating operations at full capacity, focus on maximizing output by reducing downtime '000 tonnes METAL COATING LINE No. 1 Status 120.0 Metal coating line no. 1 (MCL1) and paint line no. 100.0 1 (CPL1) at full capacity 80.0 Product being imported from other BlueScope Steel Asian operations to support market Challenges More light gauge production capability required Market growth Initiatives to improve performance Up-time project (will increase through-put and capacity) Expansion project Improvement in market offer with shortened lead times Systematic value improvement program 60.0 40.0 20.0 0.0 2002 2003 2004 2005 2006 2007 Prime Product Non Prime Nameplate Capacity '000 tonnes 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 Import coated steel program PAINT LINE No. 1 Page 22#23Records in May 2007 • Highest prime domestic despatch in BSI history • MCL Prime first time 98% - highest achievement in 12 years history and our focus is delivering results Driving Our Future The essential platform that underpins all manufacturing activities. Learning from within, Operating Discipline Fantastic Workforce learning & sharing with others . • CPL Prime first time 97.0% - above target . • MCL Uptime 90% - record & above target • CPL Uptime 80% - record & above target . • The above were achieved while maintaining record SAFETY Performance Plant Reliability / Asset Utilisation Asset Configuration Focus on Prime First Time Maximising asset performance to meet market requirements and growth opportunities "Can-do" adaptive attitude Skill focus ■ Focus on uptime Page 23#24- Manufacturing Excellence – Stunning Uptime Improvement Month S MCL 2006/07 Linear (Month) CPL-2006/07 Month Linear (Month) W % 100 95 90 H M 85 80 75 70 65 60 55 50 886 85 80 80 75 W 70 65 60 F 60 55 JASON D J F M A M J J A S O N D J F M AM Page 24#25Market growth has occurred principally in the residential sector 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1996-97 1998-99 Construction Investment - Constant US$ Million Residential Non-Residential Civil Engineering 2000-01 2002-03 Source: BlueScope Steel Economics 5 years ago (2002) 2004-05 2006-07 2008-09 2010-11 2012-13 Current (2007) 30% 70% 50% 50% I Industrial & Commercial Residential ■ Building & 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 inter-material growth, - ie steel replacing timber trusses and concrete roof tiles. Foreign Direct Investment has yet to return to pre-crisis level, but is growing YOY. Page 25#26Market needs met mostly through local producers Steel component of industrial / commercial construction segment (sales volumes) - indicative relationship between local suppliers vs. imports Product Mix Metal Coated Painted Principal Suppliers Domestic Imports 85% 15% Principal Source Minimal Page 26#27Our Customers are Our "Partners" SPONSORSHIP for BRAND AWARENESS annattan Kuningan, Jakarta BUSCOP AW AECOM SENAYAN CITY MarkPe PRESS CONFERENCE AUSTRALIAN BUILDING EXHIBITION 2006 29 30 AGUSTUS 2006 2006 Со-времен real de CAT BCAST Organised by 9sn A Indonesian Architect Assc. Seminar Australian Building Exhibition CRM (Customer Relationship Management) PEAT LUNS ST Indonesian Product Exhibi 09/08/2006 Product Training Customer Gathering IMPROVED dese Colorbond Long louting beauty Colouring Your Life With Improved Clean COLORBOND deb REFRESHMENT PRODUCT TRAINING Page 27#28End product applications in the local market – some examples - Mobile Box Traditional architecture with style Strength Sumatera Spiro Ducting DITU Products are supported with technical data and test results ACPanel Innovative, well-proven products TEXTURA TM Door Frame TEXTUR Darable and Strong Corrugated Roof umble and Strong Corrugated Roof applied to a unique shopping centre San Miguel factory at Cibitung EB building solutions Page 28#29BlueScope Steel Reconstruction Projects in Aceh and Yogyakarta 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#30Our Expansion Plan Ed STEEL USCOP STIEL ■ Total investment to construct second metallic coating line with in-line painting is US$113 million (US$ 12 million. already spent). ■ The new line will be dedicated to produce BlueScope Steel's thin gauge (0.2-0.4 mm) coil. ■ The existing metallic coating line will consistently process 0.4 - 1.0 mm coil and run at optimal capacity, thus contributing to higher output. ■ The new line is expected to be constructed by end CY2009. Page 30#31The new capacity Metallic Coating Line Painting Line Current Capacity (MCL1) 100,000 tonnes 40,000 tonnes* Incremental improvement 35,000 tonnes 20,000 tonnes through optimising line loadings at no cost Plus new line (MCL2)** Total 130,000 tonnes 100,000 tonnes (Max 170,000 bare tonnes) 265,000 tonnes 160,000 tonnes * Actual output reduced from 50,000 previously announced due to a higher proportion of thin gauge processing. ** Approximately 80% of the MCL2 output will be in line painted Page 31#32Our focus going forward ZERO HARM VOLUME CUSTOMER SERVICE • Grow Sales/Markets Support our customers growth • Introduce new products • Support Government programs . • Intra-material conversion . . O Grow channels Grow Supply Capacity • Import BSL coated products to satisfy market demand • Maximise output from existing facilities - Uptime Construct MCL2 safely & quickly • Import BSL coated products to satisfy market demand • Improve lead time MARGIN MANAGEMENT armet Page 32#33Summary of BlueScope Steel Coated Indonesia ■ During the last 5 years, BSI coated has enjoyed sound year on year growth ■ BSI is now at full capacity in a growing market ■ We have an optimistic outlook with a more robust economy and stable democracy. ■ BSI is the leading coated steel producer in the fourth most populous country in the world, through: ■ strong channel to the market, ☐ loyal customer base, ■ Pull through demand through expanding downstream businesses, supportive "in country" supplier, strong brands and marketing, ■ wide range quality product offer, world class manufacturing, ■ Safe and empowered work force. Expansion plan underway to support our partners and market growth Page 33#34BLUESCOPE STEEL Analyst Site Visit BlueScope Steel Indonesia 27th June 2007