© Alfa Laval Slide 1 www.alfalaval.com

Alfa Laval in ChinaMarket & Sales Performance

Jan DebruynJan DebruynPresidentPresident

Alfa Laval China Alfa Laval China

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•• China China –– macro viewsmacro views•• Presence and StructurePresence and Structure•• Sales StatisticsSales Statistics•• StrategiesStrategies•• SSummaryummary

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Macroeconomic Indicators

2008f2007f2006f2005e2004

10.1

1,489

1.30

9.9

1,705

1.30

9.3

1,998

1.31

9.4

2,351

1.32

9.5Real GDP Growth (%)

2,761GDP Per Capita (US$)

1.33Population (bn)

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Economic Outlook

China continues to be the fastest growing major economy in the world

Consumption and exports start to contribute more to the overall growth

Continued record levels of Foreign Direct Investments (US$ 60bn in 2004) and growing Outward FDI

Further need to reduce level on non-performing loans in the banking sector

Continues fears that the current high growth rate is unsustainable

Continued pressure on revaluation of the Yuan

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•• China China –– macro viewsmacro views•• Presence and StructurePresence and Structure•• Sales StatisticsSales Statistics•• StrategiesStrategies•• SSummaryummary

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South KoreaSouth Korea19791979

JapanJapan19301930

PhilippinesPhilippines19861986

IndiaIndia19371937

Saudi ArabiaSaudi Arabia19951995

ThailandThailand19831983

SingaporeSingapore19781978

IndonesiaIndonesia19931993

TaiwanTaiwan19861986

MalaysiaMalaysia19691969

PakistanPakistan19871987

DubaiDubai19941994

Presence in AsiaPresence in Asia

ChinaChina19841984

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SalesSalesOfficesOffices

Presence in China

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Legal Structure - Evolution

STATE

OWNED

I/E

FULL

TRADING

RIGHTS

80’s ‘84 90’s ‘94 ‘96 ‘97 2001 2010

JOINTVENTURE

WFOE

REPRESENTATIVEOFFICE

WFO HC

WFOTE

WTO

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Alfa Laval Factory in Jiang Yin

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Product Scope

2004

2005

2006

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• Founded in 1994

• Total site area: 23000 m2

• Total Staff: 210

• Codes & Approvals

• 2005 Production Volumes: appr. 24 M EUR

• 70% Local Market, 30% Export

Factory Area

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Alfa Laval Factory in Kunshan

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Alfa Laval Factory in Kunshan

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Alfa Laval Factory in Kunshan

• Founded in 1997

• Total site area: 15000 m2

• Total Staff: 230

• Codes & Approvals

• 2005 Production Volume: appr. 16 M EUR

• 18% Local Market, 82% Export

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Focus on customer service

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•• China China –– macro viewsmacro views•• Presence and StructurePresence and Structure•• Sales StatisticsSales Statistics•• StrategiesStrategies•• SSummaryummary

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Facts on AL ChinaFacts on AL China

Order intake, MEUROrder intake, MEUR 145145EmployeesEmployees

Sales & ServicesSales & Services 173173Regional supportRegional support 2626

Service centersService centers 22________________________________________________________

Production facilitiesProduction facilities 22EmployeesEmployees 440440

2005

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Orders received by CountryOrders received by Country

China 7%China 7%

L36M Average Annual Growth 14.9%

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Parts & ServiceParts & Service

Process IndustryProcess Industry

Energy & EnvironmentEnergy & Environment

FoodFood

Comfort & RefrigerationComfort & Refrigeration

SanitarySanitary

Marine & DieselMarine & Diesel

OEMOEM

Life ScienceLife Science

Orders received by SegmentChina, April 2005 – March 2006

Fluids & UtilityFluids & Utility

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The markets we are in …a few highlights

• Nuclear Power – China will build 30 more nuclear power units and increase its installed capacity to 40GW by 2020

• Fuel Ethanol – production is expected to increase from 0.4 to 3.5 MTPA over next 10 years

• Refining – By 2020 capacity is expected to be up by 85% to 450MTPA which means 10-12 new refineries and petrochemical facilities

• Refrigeration – Both industrial and commercial refrigeration markets are expected to continue to grow at rates between 15-20%

• Shipbuilding - China is expanding its shipbuilding capacity and is today with 14% the third largest player in the market

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Geographical splitGeographical split

Distribution of shipbuildingDistribution of shipbuilding

0,00,0

20,020,0

40,040,0

60,060,0

80,080,0

100,0100,0

19701970 19751975 19801980 19851985 19901990 19951995 20002000 20052005

Perc

ent

Perc

ent o

fofC

GT

CG

T

JapanJapan

South KoreaSouth Korea

ChinaChinaWestern Europe

Eastern EuropeOther World

Trends and Medium Term Forecast Trends and Medium Term Forecast Source: MSR May 2003Source: MSR May 2003

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•• China China –– macro viewsmacro views•• Presence and StructurePresence and Structure•• Sales StatisticsSales Statistics•• StrategiesStrategies•• SSummaryummary

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V

Priorities within existing strategyPriorities within existing strategy

Profitable Growth

Presence

Aftermarket

Product Management

Time to Market