BlueScope Asia DayIndonesia Business

29 June 2006

Page 2

Indonesia – Our business in context

OwnershipBlueScope Steel 100%

Coated facilities at CilegonMetal Coating Line – 100k tpaCoil Painting Line – 42k tpa

Lysaght facilitiesJakarta (Cibitung)MedanSurabaya

BlueScope Lysaght Indonesia

BlueScope Steel Indonesia (Metallic coating and painting facility)

Page 3

Indonesia – Our business in context (cont.)

Metal coated and paint line facility at Cilegon

Lysaght facility at Cibitung

Page 4

Indonesia – Economy

EconomyLargest South East Asian economy, over US$270bnGDP 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)

Population220 million, 45% aged under 154th largest population in the world, growing at 4 million people per annum

PoliticalFirst directly elected President, elected in 2004Fight against corruption continues

OtherTsunami relief continues in AcehReconstruction will be required in Yogyakarta, Central JavaDevelopment across Indonesia

Real GDP Growth & Interest Rates - % Change

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1999

-0020

00-01

2001

-0220

02-03

2003

-0420

04-05

2005

-0620

06-07

2007

-0820

08-09

2009

-1020

10-11

2011

-1220

12-13

Rea

l GD

P G

row

th

0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%

Inte

rest

Rat

es

GDP Gro wthInte res t Rates

Source: CBS, Castle Asia, BlueScope Steel Economics

Page 5

Indonesia – Our people; culture; safety; communities

Insert picture of people

Page 6

SINDOMALAY management team

BlueScope SINDOMALAY Structure

PA

PresidentBLI

Acting PresidentBSI Steel Coated

VP Finance VP Customer Focus VP Information System VP Marketing & Solution PresidentCoated Steel Malaysia

PresidentLysaght Malaysia Region

PresidentSINDOMALAYRob Crawford

VP Safety, Health and Environment

President Indonesia &

Malaysia

Page 7

Indonesia – Our midstream management team

BlueScope Steel Coated Indonesia

Mgr. Sales Mgr. Logistic & PPIC

Mgr. Commercial Mgr. HR & EA

Mgr. Manufacturing Mgr. Bussines Projects

Marketing Manager IS Manager

Act. President DirectorBSI Steel Coated Indonesia

Page 8

Indonesia – Our downstream management team

HR & Admin Manager National Sales Mgr Project

Channel Manager

Nat Sales Mgr Inds & Comm PEB (PEB Heavy)

(PEB Lite)

Nat Sales Mgr Inds & Comm R/W

Nat Sales Mgr Residential

National Sales Mgr Multi Storys

Manufacturing Manager Techical Services Mgr Business System Manager

Commercial Manager

Marketing Manager

Logistic & Supply Manager

President Director

Page 9

Indonesia – Our performance

FY2003 FY2004 FY2005 FY2006(e)External Despatches (tonnes 000’s)

Domestic 67 79 94Export 17 13 7

Total 84 92 101Sales Revenue (A$m)Total Sales $110.7m $114.8m $149.2mEBIT In the range of(A$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 included in EBIT

- - - approx ($1m)

Page 10

Indonesia – Feedstock sources

Current Source1. CRC from:

80% from Krakatau Steel (located directly next to BlueScope Steel Indonesia operation in Cilegon), who also source slab from PKSW20% from BlueScope Steel and other sources

2. Other materialsZinc from Korea Zinc (Korea)Aluminium from Comalco (Australia)Paint from Azko Nobel and Incote (Indonesia)

Other InfluencesTariff regime

Historically stable tariff regime supports domestic steel makers (12.5% CRC, 15% coated steel ex ASEAN, 5% coated steel intra-ASEAN)

Page 11

Indonesia – Current coating operations

StatusMetal coating line no. 1 (MCL1) and paint line no. 1 (CPL1) at full capacityMCL2 and CPL2 construction on hold- building and equipment design complete. Approximately A$10.0m spent/committed

to April 2006Product being imported from other BlueScope Asian operations to support market

IssuesMore light gauge production capability requiredImported material

Initiatives to improve performanceUp-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 timesSystematic value improvement programCustomer service improvement

Page 12

Indonesia – Current Lysaght operations

StatusAnnual 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

IssuesSourcing of beams and columns for PEB segment

Initiatives to improve performanceMarket development

- Channel management & expansion

- Retail shop fronts (SMARTHOME®)

- Multi-storey; decking machine to be commissioned shortly

Systematic value improvement program

Customer service improvement

SMARTHOME®

SMARTTRUSS® Project

Page 13

BlueScope Lysaght Aceh Projects: 7,130 tonnes

Workshop Donated by IFRC

Terminal Ferry Donated by AIPRD

550 Schools Donated By World Vision

3700 Housing Donated by Yayasan Budha Tzu-Chi

6 Schools Donated by aid 4

3000 Shelter Donated by IFRC

Indonesian President, Susilo Bambang Yudyono inspecting Lysaght product in Aceh

Houses in Aceh

Page 14

Indonesia – Our opportunities

Facilities CapacityFY2003 - 2005 FY2006 FY2007 FY2008 FY2009

MCL 1 100,000 tonnes 87% 98% 100% 100% 100%

CPL1 42,000 tonnes 56% 98% 100% 100% 100%

Capacity Utilisation (% of Prime Product)

Midstream OpportunitiesIndustrial / commercial; Foreign Domestic Investment improvingResidential, roof-tiles, truss and framesIntermaterial growthDeveloping economy

ZINCALUME® coating expansionNew products; TEXTURA®, Blue tinted metal tile

Downstream OpportunitiesTruss, Retail, PEB, Multi-storeyGeographic expansion

PEB fabrication under reviewDecking machine

Market

Production

Market

Production

San Miguel factory at Cibitung; PEB built by Pt. BlueScope Lysaght

A Pt. Tatalogam Lestari building, Bukit Tinggi

Page 15

Indonesia – 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

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2001 2002 2003 2004 2005 2006 (E)

Prime Product Non Prime Nameplate Capacity

0.0

10.0

20.0

30.0

40.0

50.0

2001 2002 2003 2004 2005 2006 (E)

Prime Product Non-PrimeNameplate Capacity

‘000 tonnes ‘000 tonnes

Page 16

Indonesia – Our markets

Construction sector accounts for 99% of sales Approximately 50/50 split between industrial & commercial and residential segmentsMarket share is growing through industry leadership in intermaterial growth, ie steel replacing timber trusses and concrete roof tiles.

Inter-material ShareConstruction Segment 2005

Timber 25%

Other 7% Steel 8%

Concrete 60%

Includes roof cladding, purlins, walling, partitions, cable tray, decking, frames, door/window frame, walling etc.

Construction Investment - Constant US$ Million

0100020003000400050006000700080009000

10000

1996-97

1998-99

2000-01

2002-03

2004-05

2006-07

2008-09

2010-11

2012-13

ResidentialNon-ResidentialCivil Engineering

Source: extrapolated from PT. Data Consult reportSource: BlueScope Steel Economics

Page 17

Indonesia – Our markets (cont.)

Steel component of industrial / commercial construction segment (sales volumes) – indicative relationship between local suppliers vs. imports

Product MixDomestic Imports

Metal Coated 85% 15%

Painted Principal MinimalSource

Principal Suppliers

Page 18

Indonesia – Our markets (cont.)

Current principal markets are located in:Java (direct customers)

Other regional opportunitiesShift in wealth into outer islands (other than Java) due to the governments regional autonomy programThis is creating opportunities in residential and industrial/commercial segmentsOpening sales offices in outer islands to help capture this opportunity

Direct customer base predominately manufacture in Java island

Page 19

Indonesia – Summary

OpportunitiesRelatively 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)

ChallengesSatisfy 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

BlueScope Asia DayIndonesia Business

29 June 2006