3.Operation

Pato Chemical Industry Public Co.,Ltd.

Product Characteristic

The Agrochemical Industry has played a major role in protecting and
improving the quality of Thailand’s produce since the year 1957 when
there was only a few intonational agrochemical companies. These firms
have introduces and distributed technical know-how. Soon after, there
are many more companies in this business established in Thailand to
serve the increasing demand of agriculturists. In general, there are 2
major types of chemical pesticide (from business aspect)

1. Specialty product : this is proprietary product belonging to a
particular company which has the patent right to produce and distribute
it. It may also refer to a product that is exclusively imported by a
national distributor/formulator. Such product has to go through
phase-registration process required by the Ministry of Agriculture. Such
process usually involves the submission and approval of complete
toxicology dataa experimental trials which can take up to 3-5 year to
complete. Companies with such specialty products can usually set their
prices higher than normal due to their monopoly-like advantage.

2. Commodity product : this is generic product commonly sold and
distributed by many companies. Commodity product can be imported from
many manufacturers around the world. It is usually imported in the form
of technical grade and then formulated into finished products. Such
product is fairly simple to register, requiring only authorization
certificate from the manufacturer. Since there is no significant
difference in the quality and price, brand loyalty and image are very
important factors for commodity products.

Products by types

  -------------------- ---------------- ----------------- ----------------
                       Specialty        Commodity         Total
                       Products         Products          

  Technical Grade      9                55                64

  Finished Products    9                12                21

  Total                18               67                85

  Total Value(Thousand 147,247          321,481           468,728
  Baht)                                                   
  -------------------- ---------------- ----------------- ----------------

  The proportion in terms of the value of imported specialty to
  commodity products in Thailand is 30:70. For Pato Chemical Industry
  Plc, this proportion is about 31 : 69 in 2000. Among all pesticide
  products used by Thai farmers, herbicides have the highest import
  volume followed by insecticides. In the past, most herbicide was
  imported in the form of finished products more than in form of
  technical grade and vice versa for insecticides. At present, however,
  the market situation has changed. More and more herbicides are now
  imported in the form of technical grade due to the increase demand and
  emphasis of farmers on herbicides. Farmers are now more conscious
  about weeds, which naturally grow along with the crops, and take away
  some of the essential water and nutrition leaving a lowered crop
  yield. Herbicide usage is now more frequent and consequently the total
  herbicide usage grew.

From the manufacturers' aspect, herbicide can be produced and
distributed in almost all season despite some uncooperative weather and
climate condition. In severe poor weather condition, such as drought,
herbicide sales are not affected as much compared to insecticide sales,
which is considered more risky. The reason for increasing imports of
herbicide technical grade is because farmers demand the less expensive
locally formulated herbicide in order to reduce their cost to cope with
fluctuations in their crop prices. Since there are no significant
quality difference between imported finished products and locally
formulated ones, price is the main concern for farmers when they decide
on purchases. On the other hand, in the production side, companies need
to be concerned not only about the country's principal corps, but also
the geographic suitability for different types of crop. Moreover,
companies are concerned with the efficiency, productivity, and
environmental impacts of their production facility. Sales breakdown by
region as compared to total sales of the company during 1997-2000 is as
follows :

Proportion of sales breakdown by region

  ------------------- ------------ ------------- ------------ ------------
  Region              1997         1998          1999         2000

  Central             48%          47%           48%          40%

  North               32%          28%           29%          31%

  West                4%           4%            2%           2%

  East                4%           7%            7%           10%

  Northeast           8%           10%           9%           11%

  South               4%           4%            5%           6%

  Total               100%         100%          100%         100%
  ------------------- ------------ ------------- ------------ ------------

Typed of Pesticides Distributed in Thailand

1. Water Dispersible Powder (WDP) or Wettable Powder (WP) is the
combination of active ingredients, carriers or diluent such as white
clay, talc, or other substance, including surface active ingredients
such as wetting agents, dispersing agents.

2. Emulsifiable Concentrate (EC) is the combination of active
ingredients with non-water miscible solvents and emulsifier for water
soluble which will also help the chemical to stick on the leaf or
insect’s body.

3. Solution concentrate (SC) or Water Soluble Concentrate (WSC) or
Liquid concentrate(LC) will look like emulsion and are classified in the
same type. This type of pesticide is the combination of active
ingredients and water miscible solvent without emulsifier.

4. Suspension Concentrate (F) or Flowable Formulation (For FL) is the
combination of well ground active ingredients and the carriers, e.g.,
white clay, and liquid inert ingredients. This F or For FL will be able
to dissolve in water better than the water dispersible powder, thus,
making it more convenient to use. Special additives could be added
during the production process to make this pesticide more soluble.

5. Water Soluble Powder (WSP or SP) is the combination of water soluble
active ingredients in powder, or fine flake, form mixed with surface
active agents or other additives or solvents to make chemical well
dispersed. It will dissolve in water instantly and with no
precipitation.

6. Dust (D) is the combination of well ground active ingredients and
inert ingredient will be the carrier to dilute for lower percentage of
active ingredient. This type of pesticide can be sprayed with the
knapsack sprayer.

7. Granule (G), is made up of carriers or other inert ingredients, such
as sands, coated with active ingredients. This type of formulation is
made for easy direct broadcast and soil burial.

There are many other types of pesticide in the market, but they are not
so widely used, such as baits (B) in liquid or grain for instant use,
ULV which is the combination of active ingredients oil-based solvent and
with low viscosity and volatility to be used with ULV sprayer only.

Pato Chemical Industry Plc can formulate and produce pesticide in
following form; Water Dispersible Power (WDP), Wettable Powder (WP)
Emulsifiable Concentrate (EC) Solution Concentrate (SC), Water Soluble
Powder (WSP or SP) Dust (D) Suspension Concentrate (F) and Flowable
Formulation (For FI) cannot be produced locally but they are imported as
finished products. Water Dispersible Powder can be produced locally but
are quite expensive; they are usually imported as finished product.

Pato Chemical Industry Plc has the highest capacity of granule pesticide
in the country with production level of 4,599 tons in 2000, as compared
with 400-4,000 tons capacity at other factories (Source: Agriculture and
Co-operatives Ministry).

However, the company will still expand the production of granule
pesticide as they are easy to use without the need for need for complex
equipment. Furthermore, the company can produce pesticide products for
many types of crop such as rice, horticultural plant, vegetable, oil
palm, and Para rubber, for example. Well diverses usage of the company’s
products for many types of crop in all region of the country has
significantly reduced the market risk as each crop might not be able to
grow well in some years depending on the season, weather, and price.
Therefore, if any particular crop is adversely affected by those
factors, the company’s business will not be too seriously affected. In
the past, the percentage breakdown in terms of the company’s sales for
the different types of agrochemical are as follows:

- Insecticide accounted for 40% of total sales

- Herbicide accounted for 50% of total sales

- Other pesticide such as Fungicide, Acaricide, Rodenticide and plant
hormones accounted for 10% of total sales. In 2000, sales contribution
of those three types of products were 29 : 64 : 7 respectively.

Proportion of Sales of Product Breakdown by Crop and Planting Area

+--------------+--------------+----------------------------+---------+
| Crop         | Area         | Product                    | Per     |
|              |              |                            | centage |
+--------------+--------------+----------------------------+---------+
| 1.Rice       | North,       | Butachlor 6.8%EC,          | 45      |
|              | Central      | Butachlor 60% EC.          |         |
|              |              |                            |         |
|              |              | Butachlor 27.5% + Propanil |         |
|              |              | 27.5%                      |         |
|              |              |                            |         |
|              |              | Propanil 36%, Fenobucarb   |         |
|              |              |                            |         |
|              |              | 2, 4 - D 79.2 EC.%, 2,4-D  |         |
|              |              | 80% WP.                    |         |
|              |              |                            |         |
|              |              | Carbofuran 3 G.,           |         |
|              |              | Endosulfan 35              |         |
|              |              |                            |         |
|              |              | Fuji-One, Applaud          |         |
|              |              |                            |         |
|              |              | Glyphosate , Paraquat      |         |
|              |              | 27.6%                      |         |
|              |              |                            |         |
|              |              | Methadyhyde 5% GB.,        |         |
|              |              | Carbendazim                |         |
|              |              |                            |         |
|              |              | Chlorpyrifos               |         |
+--------------+--------------+----------------------------+---------+
| 2.Fruit      | East,        | Dimethoate 40%,            | 20      |
|              |              | Methamidophos 60%          |         |
|              | Central      |                            |         |
|              |              | Cypermethrin 10%, 25%,35%  |         |
|              | (Da          |                            |         |
|              | mneonsadeuk, | Malathion 57%, 83%,        |         |
|              | Rangsit)     | Endosulfan 35              |         |
|              |              |                            |         |
|              |              | Metalaxyl 25% WP, Methyl   |         |
|              |              | Parathion 50%              |         |
|              |              |                            |         |
|              |              | Methomyl 18%, 40%,         |         |
|              |              | Tetradifon 7.52%           |         |
|              |              |                            |         |
|              |              | Glyphosate 16%, 48%,       |         |
|              |              | Paraquat 27.6%             |         |
|              |              |                            |         |
|              |              | Profenofos50%, Dicofol     |         |
|              |              | 18.5%                      |         |
|              |              |                            |         |
|              |              | Copper Oxy Chloride62%,    |         |
|              |              | 85%                        |         |
|              |              |                            |         |
|              |              | Folpet, Ortus,             |         |
|              |              | Paclobutrazol 20%          |         |
|              |              |                            |         |
|              |              | Sulfur, Gibberellin        |         |
+--------------+--------------+----------------------------+---------+
| 3.Vegetable  | Central,     | Methamidophos 60%          | 5       |
|              | North        |                            |         |
|              |              | Diclovos 50%               |         |
|              |              |                            |         |
|              |              | Carbendazim                |         |
|              |              |                            |         |
|              |              | Cypermethrin               |         |
|              |              |                            |         |
|              |              | Mancozeb 80%               |         |
|              |              |                            |         |
|              |              | Folpet                     |         |
+--------------+--------------+----------------------------+---------+
| 4.Field      | Central,     | 2, 4 - D 80% WP,           | 20      |
| Crops such   | North        |                            |         |
| as Corn,     |              | 2, 4 - D 79.2% EC          |         |
| Bean, Sugar  |              |                            |         |
| Cane, Cotton |              | Atrazine 80% WP.           |         |
|              |              |                            |         |
|              |              | Ametryn 80% WP.            |         |
|              |              |                            |         |
|              |              | Alacholr 48% WP.           |         |
|              |              |                            |         |
|              |              | Paraquat 27.6%, Glyphosate |         |
|              |              | 16%, 48%                   |         |
+--------------+--------------+----------------------------+---------+
| 5.Oil Palm,  | South        | Glyphosate 16%, 48%        | 10      |
| Para Rubber  |              |                            |         |
|              |              | Paraquat 27.6%             |         |
+--------------+--------------+----------------------------+---------+

Source : Marketing Department: Pato Chemical Industry Plc

Acron Plastic Industry Co.,Ltd.

The acrylic industry is one of the Thermo Plastic Industries for reuse
and recycle. With its special quality i.e. toughness, heat resistance,
acrylic sheets are used in many ways e.g. advertising sign, interior
decorative items, roofing, light opening, tray, picture frames, motorist
helmet mask, and many other creative items in replacement of wood, metal
and glass which are more scarce. Due to these reasons, this industry has
good potential to derive into other integrated industries in the future.
Now, there are 6 acrylic sheet manufacturers with total production
capacity of 25,000 tons per year. Important export markets are the US,
Japan, Australia, China, Saudi Arabia, Dubai, Sri Lanka, etc.

There are 2 types of production process i.e. casting system, and
extrusion system. The type of production process depends on the type of
raw material used. In general, there are 2 types of raw material

1. Monomer or MMA solution : This substance in liquid form Therefore
they are good for casting type of production.

2. Polymer or PMMA Plastic pellets : This substance is the result from
chemical reaction of monomer binding into solid substance or plastic
pellets, so called “Polymerization”. They are good for extrusion
production system.

Acrylic sheets come in various thickness, ranging from 1 to 50
millimeters, the most popular being the 3-6 mm boards, which have the
widest usage. The products have various applications, and are used in a
wide number of industries.

  ---------------------- ------------------------------------------------
  Thickness              Applications

  1 - 2 mm               Visor for safety helmets, lamp tops, and clear
                         roof tiles.

  2 - 8 mm               Commercial billboards, light boxes, display
                         boxes, shelves

  8 – 30 mm              Construction, interior decoration, sanitary,
                         roof tiles and walls

  30 – 50 mm             Furniture, carving, and fish tanks
  ---------------------- ------------------------------------------------

At present, acrylic boards manufactured in Thailand have thickness of
1-30 mm. Both production and marketing are aimed at meeting the demands
of consumers in the commercial billboard, construction and interior
decor industries. The medium and big producers are inclined to
concentrate on the production of the thicker boards, which reap higher
profits.

Privileges or limitations of the operations.

The Board of Investment has promoted the company with following
privileges:

1.Import tax exemption on machinery purchased from abroad

2.Three years' income tax exemption on profit gain from the operation
promoted by BOI. In the case that Acron's performance is still at loss,
the company is allowed to deduct such loss from the profit of the
following 5 years. Deduction can be done within one or more years from
these five years.

3.One year's import tax exemption on raw materials purchased for
exported products.

4. Income tax exemption on dividend gain by operation promoted by BOI

Marketing and Competition

Pato Chemical Industry Public Co.,Ltd.

Market strategy is as follows :

The company’s competitive advantages are

1. Standard quality of product which is well accepted by the customers
for more than 20 years

2. Strategy to specify products for sale by each dealer : Aside from its
financial status, the company will limit the products to be distributed
by each dealer to prevent price cutting of the company’s products among
its dealers in the same area.

3. Production cost advantage as the company will produce from technical
grade chemical.

4. Good relationship with dealers

5. Fast delivery : within the 200 kilometer radius the company will
provide delivery. Dealers outside the radius, the company may deliver
depending on order amount. Agrochemical industry pay much importance on
prompt delivery. In each particular season, the company will have prompt
delivery to meet the demand in time. For example, production and
distribution of herbicide should be able to meet the demand during rainy
season while insecticide should be able

to be delivered promptly during the insects outbreak season.

There are 3 main of distribution channels:

1. Distributors : They are in Bangkok and distribute products under
their own brand to dealers in the upcountry. They will hire a
formulator/manufacturer to produce, pack, and register the pesticide
products with the Ministry of Agriculture.

2. Local Repackers : They are packaging companies who purchase the
products from producer to repackage and distribute under their own
brand. These companies will register the pesticide by themselves by
getting the authorization certificate from the formulator/manufacturer.

3. Dealers or Free Market : They are small dealers or retailers in both
Bangkok and the upcountry who sell pesticide products to the end users.
(They do not have their own factory or brand)

Sales contribution from Distributors : Local Repackers : Dealers at
presents is 28 : 10 : 62

Types of Customers and its Relationships

In the pesticide industry, there are 2 main markets; general customers
market (Free market) which is bigger, and markets for distributors and
market for local repackers which is less important respectively. The
company emphasizes in customers in rural area. By thorough selection of
dealer for each particular area will sell different products to avoid
competition. In doing so, the company will be able to sell variety of
products and to reduce the risk of distributor’s business. However, the
company still needs to check its relationship with the customers to
avoid any possible problems. The company aims to develop new products
and variety, and, at the same time, aims to distribute the information
on proper and efficient use of all pesticides to customers.

Criteria for selection of dealer for each are:

1. Financial status

2. Sales network and its coverage

3. No conflict agreement to sell the same product of different producers

4. Strong intention to commit to the company’s products

Product Distribution of Pato Chemical Industry Plc in 1997 - 2000

+-----------+-----+------+-----+------+-----+------+-----+------+
|           | 1   |      | 1   |      | 1   |      | 2   |      |
|           | 997 |      | 998 |      | 999 |      | 000 |      |
+-----------+-----+------+-----+------+-----+------+-----+------+
| Area      | Num | T    | Num | T    | Num | T    | Num | T    |
|           | ber | otal | ber | otal | ber | otal | ber | otal |
|           |     | Sale |     | Sale |     | Sale |     | Sale |
|           | of  |      | of  |      | of  |      | of  |      |
|           | Cus | Thou | Cus | Thou | Cus | Thou | Cus | Thou |
|           | tom | sand | tom | sand | tom | sand | tom | sand |
|           | ers |      | ers | Baht | ers | Baht | ers | Baht |
|           |     | Baht |     |      |     |      |     |      |
+-----------+-----+------+-----+------+-----+------+-----+------+
| 1.        | 64  | 100  | 67  | 152  | 83  | 156  | 51  | 75   |
| DIS       |     | ,914 |     | ,670 |     | ,717 |     | ,598 |
| TRIBUTORS | 8   |      | 7   |      | 6   |      | 8   |      |
|           |     | 88   |     | 71   |     | 56   |     | 42   |
| 2.        | 387 | ,195 | 398 | ,385 | 416 | ,086 | 413 | ,964 |
| LOCAL     |     |      |     |      |     |      |     |      |
| REPACKERS |     | 220  |     | 301  |     | 330  |     | 350  |
|           |     | ,850 |     | ,801 |     | ,328 |     | ,167 |
| 3. FREE   |     |      |     |      |     |      |     |      |
| MARKET    |     |      |     |      |     |      |     |      |
+-----------+-----+------+-----+------+-----+------+-----+------+
|   Total   | 459 | 409  | 472 | 525  | 505 | 544  | 487 | 468  |
|           |     | ,959 |     | ,856 |     | ,144 |     | ,729 |
+-----------+-----+------+-----+------+-----+------+-----+------+

Percentage of 10 major customers in 1997-2000

(Unit : %)

  ------------------ ------------- ------------- ------------- -------------
  Customers          1997          1998          1999          2000

  10 Major Customers 29.46         25.65         24.77         26.47

  Others             70.54         74.35         75.23         73.53

  Total              100.00        100.00        100.00        100.00
  ------------------ ------------- ------------- ------------- -------------

Note : There is no customer whose accounts of greater than 10%. Most
customers are of long connection and of good payment. However, new
customer is strictly selected to avoid bad debt.

Pricing Policy

In general, the company will set the price at the level, which is
slightly higher than average price of its local competitors and slightly
lower than average price of the international market, of the same
product. Other factors for the price consideration are:

1. If the product already exists in the market, the company will set its
price within that product market price range.

2. If the product does not yet exist in the market, the company will
conduct research on quality; the amount used and instruction for use to
determine the efficacy of its product to determine the price in
comparison with the pesticide farmers are currently using.

Competition

There are 2 major types of chemical pesticide companies:

1. International Companies. These companies have their own products or
buy few products from other companies. Most of them, either, imports
finished products for repackaging by local repackers, or import
technical grades for resell to local companies eg,

Novartis (Thailand) Co.,Ltd., Hoechst Sherring Agivo (Thailand)
Co.,Ltd., Bayer (Thailand) Co.,Ltd. Dupont (Thailand) Co.,Ltd. Monsanto
Thailand Co.,Ltd., F.E.Zueligue Co.,Ltd.

2. Local Companies. There are 4 groups as follows :

2.1 Formulators and distributors : These companies have their own
factory for formulating and reprocessing, and their own sales and
promotion team. Most of them imports technical grade products.

eg, Pato Chemcial Industry Plc., Ladda Co.,Ltd., Superior Co.Ltd.

2.2 Formulators : These companies have their own factory for toll
formulating and reprocessing, but do not have their own sales and
promotion team eg, Sharp Formulator Co.,Ltd., S&P Formulator Co.,Ltd.,
Tep Siam Co.,Ltd.

2.3 Repackers : These companies have their own packaging facilities.
They do not formulate or reprocess products.eg, RO Co.,Ltd., Hitech
Group Co.,Ltd., Small Pack Co.,Ltd.

2.4 Distributors : These companies only have their own sales and
promotion team eg.

Thai Central Chemical Co.,Ltd., Pitsulin Co.,Ltd., P.Suntornpatana
Co.,Ltd.

The company has policy to gain more market share from the multinational
or local companies in order to strengthen its competitiveness as
follows:

1. As compared with other formulators, the company’s factory in Bangpoo
Industrial Estate is well equipped with modern machinery for higher
capacity. Moreover, the company has sufficient trucks for quick delivery
to serve customers better.

2. As compared with repackers and distributors, the company’s advantages
are shown below :

2.1 Lower costs of production from the use of technical grade

2.2 Extensive marketing team with experience and expertise

2.3 Wider coverage of area all over the country

2.4 More product variety of various agrochemical types and uses

3. As compared with multi-national companies, the company’s advantages
over these companies are the same as those over the repackers and
distributors. Moreover, the company has strategy to gain market share
by:

3.1 Adding more products of comparable quality to those of the
multi-national companies. With lower costs of production. It is expected
that the company will be able to achieve more market share, initially,
by 5-10% of total sales of such product, and will increase gradually.

3.2 Penetrating into new area i.e. area in the Northeast region, or in
developing area of the country which is accounted for 60% of total area
of Thailand. The company will send promotion team to the area to
introduce the proper the quality of its produce to serve the demand in
the market. By this way, farmers will also earn higher income.

To fulfill the special needs of the agricultural sector, the
agricultural chemical industry must supply a wide range of products.
These can be divided into four main categories: Herbicides,
Insecticides, Fungicides, Acaricides & Hormones. Diversification,
therefore, is vital to the success and growth of the agricultural
chemical industry. Other factors contributing to the success of the
industry include:

1. Range of products

Production must include herbicide, insecticide, fungicide and acaricide
categories, according to the market share ratio.

2. Products

Selection of products depends on the company's policy and the
fluctuating price of crops.

3. Market distribution

Nationwide distribution is essential, as the type of crops grown varies
from region to region. Regional productivity is also effected by
rainfall, irrigation and even the demand for pesticide products.

4. Rainfall

The amount of land allotted to agricultural purposes has a direct impact
on the growth of the agricultural chemical industry. The amount of
rainfall also plays an important role in influencing the success, or
otherwise, of land cultivation. If there is an abundant supply of
rainwater, agricultural activities can be carried out throughout the
country. Conversely, when rainfall is in short supply, land cultivation
can only be done successfully in irrigated areas. Accordingly, during a
drought, agricultural sector profits shrink drastically, and the overall
economy is badly effected.

The demand for pesticides is also largely influenced by rainfall. When,
in 1995, the water supply was good, the demand for herbicides grew to
such an extent that a significant volume had to be imported, at great
expense. In 1997, however, when rain water was scarce, an insect
epidemic occurred, resulting in large imports of concentrated
insecticides, known as "Technical Grade", which had to be reformulated,
before they could be sold on the domestic market.

5. Price of crops

As crop prices are so heavily influenced by importing opportunities and
global prices, figures on each serve as indicators for industry trends.

Acron Plastic Indsutry Co.,Ltd.

Marketing and Competition

Marketing Strategy

The company mainly emphasizes on good service to the customers including
punctual delivery and offer standardized quality products at the amount
required by the customers. Moreover, the company’s price of acrylic
sheet is lower than that of their competitors in the market. And, during
promotion period, the company will promote sales by offering discount or
award to customers whose purchase met the target.

Distribution and distribution channels

Since its inauguration, the company only has local sales. Until the end
of 3rd quarter of 1993, the company received huge orders to buy acrylics
sheets. Therefore, since the beginning of 1994, the company has started
its export market to customers in many countries such as Australia,
Taiwan, India, Pakistan, Myanmar, the UK, Sweden, Italy, Syria, the
United Arab Emirates, Lebanon, the Philippines, New Zealand and
Singapore. At present, the ratio between the two markets’ sales is as
follows:

1997 1998 1999 2000

Local Market 59.39% 58.23% 47.35% 47.50%

Export Market 40.61% 41.77% 52.65% 52.50%

Total 100% 100% 100% 100%

For export markets, the company sells through its agents in each country
to many types of manufacturers for reprocessing. For this market, there
has been very strong growth potential due to the decreasing number of
acrylic sheets manufacturers in the area who turned to be importer of
acrylic sheet instead. This was the result from shortage of labor and
very high wage rate, since this industry is a labor-intensive industry.
In 1998, the company successfully increased its export sales from 10% to
40%. It is expected that the company will be able to increase its export
market to reach 80% because the company has been promoted by Board of
Investment (BOI).

For domestic market, there are 2 distribution channels

1. To distribute through agents or dealers who distribute to retail
customers or to other shops and factories. The company has been trying
to reduce number of middleman by appointing more representatives in the
area who has close relationship and has the shop in the area nearby the
shops or factories. Appointment of representatives does not concentrate
in the Bangkok area only. but disperses to area in the major provinces
such as Chiangmai and Suratthani to penetrate into the market in
upcountry. Such a strategy will encourage in company to understand the
problems and needs of customers rapidly and continuously. Consequently,
prompt and effective response and problems solving should be better than
that of its competitors. This channel distributes about 30% of total
domestic sales.

2. Another 70% of domestic sales are from the direct sales to factories
or customers who would reprocess acrylic sheets into other consumer
products for sale.

Types of Customers

Shareholders and management team has experience in acrylic field both in
Taiwan and Thailand for over 20 years. The product has been standardized
to meet the demand. Punctual delivery is the strategy for Acron to
gradually gain more market share. Most of the company’s customers are
retail customers whose orders are not large but made regularly showing
good relationship and high product loyalty. Moreover, existing customers
frequently introduce new customers to the company. At present, total
number of the company’s customer is 126.

Types of customers by their nature of business

+-----+----------------------------------+-----------------------------+
|     | Customer Group                   | Percentage                  |
+-----+----------------------------------+-----------------------------+
| 1.  | Dealers                          | 15%                         |
|     |                                  |                             |
| 2.  | Advertising Sign Makers          | 40%                         |
|     |                                  |                             |
| 3.  | Lamp Makers                      | 15%                         |
|     |                                  |                             |
| 4.  | Motorist Helmet Front Cover      | 15%                         |
|     |                                  |                             |
| 5.  | Interior Decorative & Sanitary   | 5%                          |
|     |                                  |                             |
| 6.  | Other Makers                     | 10%                         |
+-----+----------------------------------+-----------------------------+
|     | Total                            | 100%                        |
+-----+----------------------------------+-----------------------------+

Ratio of Major Customers from 1997 - 2000

  ------------------- ------------ ------------ ------------ ------------
  Customers           1997         1998         1999         2000

  10 Major Customers  48.67        55.34        47.24        67

  Others              51.33        44.66        52.76        33

  Total               100.00       100.00       100.00       100.00
  ------------------- ------------ ------------ ------------ ------------

Note : There is no customer whose accounts of greater than 10%. Most
customers are of long connection and of good payment. However, new
customers are strictly selected to avoid bad debt. The company is a
medium sized manufacturer. The approximated market share and
distribution for each market are as follows:

Approximated distribution to each market segment of Acron Plastic
Industry Co., Ltd.

+--------------------------------------+-------------------------------+
| Upper Market                         | 23%                           |
|                                      |                               |
| Middle Market                        | 57%                           |
|                                      |                               |
| Lower Market                         | 20%                           |
+--------------------------------------+-------------------------------+
| Total                                | 100%                          |
+--------------------------------------+-------------------------------+

Source: Acron Plastic Industry Co Ltd.

(3) Production and Produce Procurement for Sale

Pato Chemical Industry Plc’s factory is located at 569 Soi 12, Bangpoo
Industrial Estate, Sukhumvit Road, Tambon Praksa, Amphur Muang,
Samutprakarn Province. Part of the old factory is turned into warehouse
rented to Anglo Thai Chemical Supplies Co Ltd.

Capacity and Actual Production Liquid Unit : Thousand Litres

Granule Unit : Ton

Powder Unit : ton

+---------+------+-------+-------+------+-------+------+------+------+
| Product | Capa | A     | Cap   | Ac   | Cap   | Ac   | Capa | Ac   |
|         | city | ctual | acity | tual | acity | tual | city | tual |
|         |      |       |       |      |       |      | 2000 |      |
|         | 1997 | 1997  | 1998  | 1998 | 1999  | 1999 |      | 2000 |
+---------+------+-------+-------+------+-------+------+------+------+
| Inse    | 2    | 739   | 2,612 | 894  | 2,612 | 1    | 2    | 830  |
| cticide | ,050 |       |       |      |       | ,190 | ,612 |      |
|         |      | 2,918 | 7,200 | 3    | 7,200 |      |      | 954  |
|   -     | 7    |       |       | ,180 |       | 2    | 7    |      |
|         | ,200 | 1.8   | 1,500 |      | 1,500 | ,760 | ,200 | 11   |
|  Liquid |      |       |       | 25   |       |      |      |      |
|         | 1    | 637   | 1,000 |      | 1,000 | 44   | 1    | 1    |
|   -     | ,500 |       |       | 452  |       |      | ,500 | ,413 |
|         |      | 3,031 | 1     |      | 1     | 899  |      |      |
| Granule | 1    |       | 9,800 | 3    | 9,800 |      | 2    | 3    |
|         | ,000 | 1,024 |       | ,468 |       | 4    | ,000 | ,623 |
|   -     |      |       | 2,000 |      | 2,000 | ,021 |      |      |
|         | 19   | -     |       | 22   |       |      | 19   | 424  |
|  Powder | ,800 |       | -     |      | -     | 294  | ,800 |      |
|         |      | 36    |       | -    |       |      |      | 10   |
| He      | 2    |       | 500   |      | 500   | -    | 2    |      |
| rbicide | ,000 | 107   |       | 16   |       |      | ,000 | 36   |
|         |      |       | 270   |      | 270   | 47   |      |      |
|   -     | -    | 22    |       | 66   |       |      | 500  | 92   |
|         |      |       | 20    |      | 20    | 81   |      |      |
|  Liquid | 500  | -     |       | 16   |       |      | 500  | 16   |
|         |      |       | -     |      | -     | 15   |      |      |
|   -     | 270  | 34    |       | -    |       |      | 270  | 22   |
|         |      |       | 60    |      | 60    | -    |      |      |
| Granule | 5    | 1,505 |       | 19   |       |      | 20   | 1    |
|         |      |       | 3,902 |      | 3,902 | 23   |      |      |
|   -     | -    | 5,949 |       | 1    |       |      | 100  | 2    |
|         |      |       | 2     | ,428 | 2     | 2    |      | ,361 |
|  Powder | 60   | 1,0   | 7,000 |      | 7,000 | ,185 | 60   |      |
|         |      | 95.80 |       | 6    |       |      |      | 4    |
| Fu      | 3    |       | 4,060 | ,648 | 4,060 | 6    | 5    | ,599 |
| ngicide | ,325 |       |       |      |       | ,781 | ,402 |      |
|         |      |       |       | 82   |       |      |      | 472  |
| -       | 27   |       |       |      |       | 408  | 27   |      |
| Liquid  | ,000 |       |       |      |       |      | ,100 |      |
|         |      |       |       |      |       |      | 4    |      |
|   -     | 4    |       |       |      |       |      | ,060 |      |
|         | ,060 |       |       |      |       |      |      |      |
|  Powder |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| Ac      |      |       |       |      |       |      |      |      |
| aricide |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|   -     |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|  Liquid |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| Others  |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| -       |      |       |       |      |       |      |      |      |
| Liquid  |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| -       |      |       |       |      |       |      |      |      |
| Granule |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| -       |      |       |       |      |       |      |      |      |
| Powder  |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| Total   |      |       |       |      |       |      |      |      |
| C       |      |       |       |      |       |      |      |      |
| apacity |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|   -     |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|  Liquid |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|   -     |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
| Granule |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|   -     |      |       |       |      |       |      |      |      |
|         |      |       |       |      |       |      |      |      |
|  Powder |      |       |       |      |       |      |      |      |
+---------+------+-------+-------+------+-------+------+------+------+

Note: The factory is working 1 shift for 8 hours.

Raw Material and Suppliers

Major raw material is chemical of technical grade. Normally, the company
will buy active vs inert ingredients at the ratio of 95:5 respectively
by direct order from abroad and via local agent. Table showing types,
suppliers and price. There is no substitute substance for technical
grade chemical, However, there are substitutions for other inert
ingredients such as emulsifiers, solvent, auxiliary materials for
solvent, but these substitute substance will have to pass laboratory
test before use. There are many suppliers of raw materials for those
imported and purchased locally. Diverse group of raw material suppliers
will create bargaining power for the company to set a more reasonable
price, higher quality products, and prompt delivery. However, there are
certain substances that the company buys from a sole supplier under
special condition to benefit the company such as no sale to other
company of the same productions. Price of raw material depends on the
world price which is the same as other commodity.

Average Consumption and Price of Raw Material 1n 1996 - 2000

  -------------------- ----------------- ------------ ------------ -------------- -------------- --------------
  Raw Material :                         1996         1997         1998           1999           2000
  Source                                                                                         

  SILICA               Quantity(Kg)      243,480.00   257,400.00   242,660.00     261,698.00     176,109.00

  Thailand             Price(Baht/Kg.)   23.54        25.30        29.79          28.85          28.80

  2.4-D ISO BUTYL      Quantity(Kg)      356,000.00   187,000.00   150,500.00     177,500.00     152,000.00
  ESTER TECH                                                                                     

  Australia            Price(Baht/Kg.)   85.84        111.50       127.18         115.19         114.39

  Austria                                                                                        

  ENDOSULFAN 94-96%    Quantity(Kg)      66,000.00    115,500.00   99,000.00      189,000.00     -
  TECH                                                                                           

  Israel               Price(Baht/Kg.)   210.96       303.07       327.26         258.47         -

  India                                                                                          

  DIMETHOATE 96% TECH  Quantity(Kg)      24,000.00    36,000.00    20,000.00      20,000.00      5,000.00

  China                Price(Baht/Kg.)   93.27        108.70       142.67         97.76          91.07

  DIKONIRT/2,4-D       Quantity(Kg)      597,560.00   701,620.00   600,080.00     699,900.00     200,220.00
  SODIUM SALT 80%                                                                                

  Hungary              Price(Baht/Kg.)   53.69        70.63        90.11          70.60          70.69

  BUTACHLOR TECH       Quantity(Kg)      122,536.94   128,916.72   127,634.48     175,332.03     164,232.58

  Thailand             Price(Baht/Kg.)   120.01       125.00       144.42         120.94         115.00

  AMETRYN 80% WP       Quantity(Kg)      320,170.00   186,560.00   13,423.00      3,653.00       30,000.00

  Thailand             Price(Baht/Kg.)   180.81       220.82       238            245.00         198.15

  Israel                                                                                         

  TOLUENE              Quantity(Kg)      20,000.00    29,000.00    13,000.00      15,980.00      3,000.00

  3 Companies in       Price(Baht/Kg.)   10.06        12.33        12.89          10.87          13.38
  Thailand                                                                                       

  EMULSIFIERS          Quantity(Kg)      35,549.50    54,270.50    38,854.50      81,960.50      104,430.00

  3 Companies in       Price(Baht/Kg.)   92.57        125.74       133.13         125.50         91.61
  Thailand                                                                                       

  SAND                 Quantity(Kg)      5,874,000    5,518,500    6,593,000.00   5,833,000.00   4,214,500.00

  6 Companies in       Price(Baht/Kg.)   0.65         0.69         0.68           0.68           0.68
  Thailand                                                                                       
  -------------------- ----------------- ------------ ------------ -------------- -------------- --------------

Note: There is no supplier whose business accounts for more than 30% of
the company’s total raw material purchase. Most of the raw material can
be bought from many sources. However, the company may buy a material
solely from a supplier under special condition such as quality, price or
delivery, etc.

Local Purchasing Ratio of 1997-2000

Value of Purchasing Ratio (Unit : Thousand Baht)

  -------------------- -------- ------- --------- ------- -------- ------- --------- -------
  Raw Material         1997     %       1998      %       1999     %       2000      %

  1.Technical Grade    48,437   18.41   101,813   28.04   40,516   9.99    80,031    23.58

  2.Solvent            8,553    3.25    9,844     2.71    10,819   2.67    11,948    3.52

  3.Emulsifiers        4,803    1.83    5,433     1.50    4,107    1.01    3,621     1.06

  4.Auxiliary          9,253    3.52    10,750    2.96    10,576   2.61    6,601     1.95

  5.Others             4,115    1.56    4,667     1.28    4,312    1.06    47,414    13.97

  Total Amount         75,161   28.56   132,507   36.49   70,329   17.35   149,615   44.08
  -------------------- -------- ------- --------- ------- -------- ------- --------- -------

Import Purchasing Ratio of 1997- 2000

Value of Purchasing Ratio (Unit : Thousand Baht)

  -------------------- --------- ------- --------- ------- --------- ------- --------- -------
  Raw Material         1997      %       1998      %       1999      %       2000      %

  1.Technical Grade    186,836   71      229,484   63.19   330,323   81.48   182,844   53.87

  2.Solvent            -         -       167       0.05    -         -       278       0.08

  3.Emulsifiers        963       0.37    995       0.27    4,775     1.18    6,123     1.81

  4.Auxiliary          193       0.07    -         -       -         -       -         -

  5.Others             -         -       -         -       -         -       539       0.16

  Total Amount         187,992   71.44   230,646   63.51   335,098   82.65   189,784   55.92
  -------------------- --------- ------- --------- ------- --------- ------- --------- -------

Local and Import Purchasing Ratio of 1997-2000

Value of Purchasing Ratio (Unit : Thousand Baht)

  ---------------- --------- -------- --------- -------- --------- -------- --------- -------
  Raw Material     1997      %        1998      %        1999      %        2000      %

  1.Technical      235,273   89.41    331,297   91.23    370,838   91.47    262,875   77.45
  Grade                                                                               

  2.Solvent        8,553     3.25     10,011    2.76     10,819    2.67     12,226    3.60

  3.Emulsifiers    5,767     2.19     6,428     1.77     8,882     2.19     9,744     2.87

  4.Auxiliary      9,445     3.59     10,750    2.96     10,576    2.61     6,601     1.95

  5.Others         4,115     1.56     4,667     1.28     4,312     1.06     47,953    14.13

  Total Amount     263,153   100.00   363,153   100.00   405,428   100.00   339,399   100
  ---------------- --------- -------- --------- -------- --------- -------- --------- -------

Acron Plastic Co.,Ltd.

Production

Factory is located at 526 Soi 9, Bangpoo Industrial Estate, Sukhumvit
Road, Tambon Praksa, Amphur Muang, Samutprakarn province.

(1) Production level and capacity

  ----------------------------- ---------- ---------- ---------- ----------
                                1997       1998       1999       2000

  Capacity (Unit:Ton)           2,550      3,600      4,000      7,800

  Actual Production (Unit :     2,100      3,000      3,550      5,935
  Ton)                                                           

  Actual Production Level (%)   82.35      83.33      88.75      76.09
  ----------------------------- ---------- ---------- ---------- ----------

(2) Raw Materials & Suppliers

Main raw material are MMA solution and other chemicals such as dye and
catalyst which need to be imported from abroad via its agents in local
and foreign countries, or from Taiwanese manufacturer directly.
Substituted substances can replace only chemical catalyst (ABNR).
However, substituted substances are not popular due to its lower quality
in chemical reaction. Change in technology will not have impact on the
type of raw material used.

Local Purchasing Value 1996-2000

(Unit : Thousand Baht)

  ------------ -------- ------- -------- ------- -------- ------- -------- ------- --------- -------
  Raw Material 1996     %       1997     %       1998     %       1999     %       2000      %

  1. Scrap     10,231   14.12   13,096   8.02    7,474    2.76    5,896    2.43    11,441    2.70

  2. MMA       22,860   31.55   5,860    3.59    35,507   13.11   69,170   28.56   173,207   40.98

  3. Other     2,860    3.95    10,542   6.46    7,026    2.59    7,309    3.03    35,191    8.33
  Chemical                                                                                   

  Total        35,951   49.62   29,498   18.07   50,007   18.46   82,375   34.02   219,839   52.01
  ------------ -------- ------- -------- ------- -------- ------- -------- ------- --------- -------

Import Purchasing Value 1996-2000

(Unit : Thousand Baht)

  ------------ -------- ------- --------- ------- --------- ------- --------- ------- --------- -------
  Raw Material 1996     %       1997      %       1998      %       1999      %       2000      %

  1. Scrap     -        -       -         -       -         -       -         -       -         -

  2. MMA       32,439   44.77   124,660   76.39   191,961   70.87   134,748   55.65   155,907   36.89

  3. Other     4,074    5.61    9,041     5.54    28,903    10.67   25,030    10.33   46,895    11.10
  Chemical                                                                                      

  Total        36,513   50.38   133,701   81.93   220,864   81.54   159,778   65.98   202,802   47.99
  ------------ -------- ------- --------- ------- --------- ------- --------- ------- --------- -------

Local and Import Purchasing Value 1996-2000

(Unit : Thousand Baht)

  ------------- -------- ------- --------- ------- --------- ------- --------- ------- --------- -------
  Raw Material  1996     %       1997      %       1998      %       1999      %       2000      %

  1. Scrap      10,231   14.12   13,096    8.02    7,474     2.76    5,896     2.43    11,441    2.70

  2. MMA        55,299   76.32   130,520   79.98   227,468   83.98   203,918   84.21   329,114   77.87

  3. Other      6,934    9.56    19,583    12      35,929    13.26   32,339    13.36   82,086    19.46
  Chemical                                                                                       

  Total         72,464   100     163,199   100     270,871   100     242,153   100     422,641   100
  ------------- -------- ------- --------- ------- --------- ------- --------- ------- --------- -------

In 1997 Acron increased its capacity thus the import quantity of MMA is
raised due to lower cost.

Average Consumption and Price of Raw Material 1n 1995 - 2000

  ----------------- ----------- ------------ ----------- ----------- ----------- -----------
  Raw               1995        1996         1997        1998        1999        2000
  Material/Source                                                                

  1.Scrap                                                                        

  -Quantity         670,910     994,553      957,043     649,875     512,702     920,103

  -Price (Baht/Kg.) 12.35       10.50        10.55       11.50       11.50       13.80

  2. MMA                                                                         

  1 Taiwanese                                                                    
  Company                                                                        

  2 Japanese                                                                     
  Companies                                                                      

  -Quantity         1,366,009   35,640,411   1,857,934   4,882,014   3,826,984   7,983,359

  -Price (Baht/Kg.) 57.61       38.80        70.25       39.32       35.21       50.39

  3.Acrylic Color                                                                
  Toner                                                                          

  2 Taiwanese                                                                    
  Companies                                                                      

  -Quantity         3,527.34    3,851        7,956       93,934      8,017       22,727

  -Price (Baht/Kg.) 290         305          675         378         691.46      826

  4.ABNR                                                                         

  3 Thai Companies                                                               

  2 Taiwanese                                                                    
  Companies                                                                      

  -Quantity         725.34      1,280        22,045      33,665      32,782      4,313

  -Price (Baht/Kg.) 420         430          623.50      441         135.35      270
  ----------------- ----------- ------------ ----------- ----------- ----------- -----------

  Note None of the suppliers have their contribution by more than 30% of
  Acron Plastic's total raw material purchased. Most of the raw material
  can be sourced from many different vendors. However, the company may
  place order specifically for a particular vendor under special sales
  condition such as quality, price, and delivery.

Main problems of raw material sourcing is the rapid increase in the
price of MMA solution. Especially after the use of currencies floating
system in the latter half of 1997, price of imported raw material was
extraordinary high by almost 50% resulted in finished product's price
hike proportionally. The company's sale had not been impacted from the
increase in the price of acrylic sheet which was increased due to the
cost plus pricing policy. Minimum impact on sales from the
manufacturers' price adjustments proved that the role of acrylic sheet
as a substitution of other materials is very important and the customers
understand and accept the increase in the price of all plastic products.

Competition

To analyze the acrylic sheets industry, one needs to consider the
petrochemical and plastic industry together with is impacts since main
raw materials used in the production of acrylic sheets are from
petrochemical industry. The petrochemical industry in Thailand is the
industry which will change according to the world petrochemical
situation. Price fluctuates in response to the world demand and supply
of the products. The business cycle is around 7-9 years on average. In
the latest cycle, price peaked in 1988 and gradually came down to hit
the bottom in 1994. Afterward, the price has been increased. Especially
when the government uses currencies floating system in July 1997
resulting in Baht devaluation, selling price was adjusted up to the new
Baht value. However, the increase in price did not have much of the
impact to the industry showing that such price adjustment is normal
course of business. It is predicted that the demand for petrochemical
product in the world market will rise further at the rate of 5% per
annum. Most of this demand expansion will be from the countries in the
Asia Pacific region which will be at the rate of 5-7% per annum.

In the past few years, plastic industry has the highest growth rate in
both domestic and foreign markets due to the fact that plastics are
widely used in many related industries and it is highly responsive to
the overall economic growth. Demand for the use of plastic in Thailand
during the years 1983-1993 has growth rate of 14-20% per year as the
result from economic boom. Moreover, Thailand has low plastic
consumption per capita at 16.1 kilogram per year as compared with 50-90
kilogram per capita per annum in many developed countries such as Japan,
Taiwan, Korea and the US. The plastic production was made to serve the
demand for domestic consumption by 60-70% and to serve the demand for
exports by 30-40% of total production in Thailand. Evidently, plastic
product industry in Thailand has prosperous future in response to the
growing economic situation at present.

Currently, there are 2,500-3,000 plastic product factories in Thailand.
About 80% of these factories are rather small as the capital investment
and technological requirement for this business is fairly low. The rest
of the factories are medium to large scale with investment promotional
privilege. In early stage, all of raw material had to be imported. Now,
there is the national petrochemical industry project producing some of
the raw materials locally.

Legal Case against Environmental Misconduct

PATO and ACRON have never been sued against environmental misconduct.

(4) Non-Delivery Goods

There is no non-delivery goods as of 31 December 2000 for PATO and
ACRON.