(Hong Kong, 17 September 2001) Guizhou TH Cement Group, a member of Shui On Construction and Materials Limited ("SOCAM", stock code: 983), signed an agreement on 14 September with the municipal government of Kaili in Qiandongnan in the southeastern part of Guizhou Province to form the joint-venture Guizhou Kaili TH Cement Company Limited, which will acquire Kaili No. 1 Cement Plant with an annual production capacity of 300,000 tonnes. SOCAM will pay RMB 48 million to acquire an 80% stake in the joint venture with a total registered capital of RMB 60 million.

According to Mr. Lawrence Choi, Managing Director of SOCAM, "Shui On has been focusing on expanding its cement business in Chongqing and Guizhou as we are highly confident of the western provinces’ prospects. Guizhou offers abundant natural resources and low costs, which are highly favorable to our development. Demand for high grade cement will continue to be boosted with the commencement of numerous substantial infrastructure and housing projects in the province."

Guizhou TH Cement, in which SOCAM has a 99% stake, has already acquired two cement plants in Zunyi in the northern part of Guizhou, including a 300,000-tonne cement plant in Honghuagang and Malin Cement Plant in Xishui, with plans to build new dry rotary kilns at both plants. It has also signed a joint venture agreement earlier in Qianxinan to build a high grade cement plant with an annual production capacity of 400,000 tonnes. The completion of the new kilns in the above three plants by the 2002-2003 financial year, together with the newly acquired plant in Kaili, Qiandongnan, will boost Guizhou TH Cement's annual production capacity to 1.9 million tonnes. SOCAM aims to build a sizeable high grade cement group in Guizhou with an annual capacity of three million tonnes over the next three years.

SOCAM also has a 50% stake in the holding company established in 1995 to hold the joint venture Chongqing TH Cement Group, which is now the largest high grade cement producer in Chongqing. With its Hechuan and Jiangjin plants offering a total annual production capacity of around 2.8 million tonnes, Chongqing TH Cement accounts for more than 70% of the local high grade cement market.

SOCAM anticipates that Guizhou TH Cement and Chongqing TH Cement will have a total annual production capacity of close to 5 million tonnes in the western provinces upon completion of the new kilns in the existing plants by the 2002-2003 financial year. To cope with the growing demand for high grade cement in the region, the Group will continue to expand in strategic locations in Chongqing and Guizhou.

SOCAM, a member of the Shui On Group, was listed on the Hong Kong Stock Exchange in 1997 and is engaged in construction, construction materials and property development in Hong Kong and the Chinese Mainland. Apart from SOCAM, the Shui On Group has a separate, non-listed property arm with investments in Shanghai, Hong Kong, Beijing, Guangzhou and New York.