11:19 ZHEJIANG GLASS<00739> - Announcement & Resumption (4) million sq.m. in the existing factory area of the Company for the production of ultra-thin glass of 0.55 mm to 1.3 mm in thickness applicable to the electronics industry. Investment amount The Company estimates that the total investment in the Ultra-thin Glass Production Line will be approximately RMB212 million, among which approximately RMB140 million will be funded from the net proceeds received by the Company from the A Share Issue. Benefits of the Ultra-thin Glass Production Line The ultra-thin glass produced by the Group under its existing production line, which only commenced production in the fourth quarter of 2003, is of 1.6 mm to 6 mm in thickness. Upon completion of the Ultra-thin Glass Production Line, the Group will be able to produce ultra-thin glass of 0.55 mm to 1.3 mm in thickness, which are mainly used in the electronics industry. The glass manufactured under the Ultra-thin Glass Production Line can also be used in automotive industry. The glass produced under the Ultra-thin Glass Production Line is unprocessed flat glass which will be sold by the Company to some glass processing factory for the manufacturing of glass component for electronic products such as personal computers and scanners. To the best knowledge and belief of the Directors, there are currently few manufacturers in the PRC which are able to manufacture similar products. Currently the Group's flat glass products are mainly sold to the construction sector (approximately 85%) and the automotive sector (approximately 15%). By expanding the production capacity of ultra-thin glass applicable to the electronics sector, the Group will be less affected by any deterioration of demand in either the construction sector or the automotive sector. The Directors believe that the completion of the Ultra-thin Glass Production Line will help to diversify the product range of the Group and to expand the Group's business into different industrial sectors, thereby reducing the impact of any price fluctuation in any one particular industry and increasing the competitiveness of the Group. (c) Ultra-thick Glass Production Line General The Group intends to set up a new production line in Pinghu City of Zhejiang Province for the production of quality ultra-thick glass with a daily melting capacity of 1,000 tonnes, which upon completion will be carried on and wholly owned by Zhejiang Pinghu Glass Company Limited, a wholly owned subsidiary of the Company. Investment amount The Company estimates that the total investment in the Ultra-thick Glass Production Line will be approximately RMB650 million, all of which will be funded from the net proceeds received by the Company from the A Share Issue. Benefits of the Ultra-thick Glass Production Line The existing production lines of the Group can only produce flat glass with a maximum thickness of 19 mm and with a maximum width of 3,660 x 4,500 mm. Upon completion of the Ultra-thick Glass Production Line, the Group will be able to produce quality ultra-thick glass with thickness ranging from 8 mm to 25 mm and with a maximum width of 4,500 x 6,000 mm. With the increased thickness and dimension, the glass manufactured under the Ultra-thick Glass Production Line is more suitable for use as the glass panels on the outer wall of modern buildings. The Directors believe that the completion of the Ultra-thick Glass Production Line will help to diversify the product range of the Group. Furthermore, in view of the higher daily melting capacity of 1,000 tonnes, the production process of the ultra-thick glass produced under the Ultra-thick Glass Production Line requires lesser energy and human resources as compared to that required under two separate production lines each with a daily melting capacity of 500 tonnes. It is thus expected that the average production costs of the Group can be reduced, thereby increasing the competitiveness of the Group. (d) Low-E Glass Production Line General As previously disclosed in the Company's annual report for the year 2003 and the interim report for the six months ended 30 June 2004, the