1. INTRODUCTION

We refer to the announcement dated 29 February 2008 wherein Amalgamated Industrial Steel Berhad (“AISB” or “Company”) had on 28 February 2008 entered into a memorandum of understanding (“MOU”) with HG Metal Manufacturing Limited, Singapore (“HGMML”) to explore the possibilities of fostering business working relationship and the synergizing of the respective strengths of both parties by way of strategic alliance.

The Board of Directors of AISB is pleased to announce that the Company’s wholly-owned subsidiary, Amalgamated Industrial Marketing Sdn Bhd (“AIMSB”) had entered into a joint venture agreement (“JVA”) with HG Metal Manufacturing Sdn Bhd (“HGMMSB”) and Foong Lee Heng (“FLH”) for the establishment of a new joint venture company in Malaysia, named Nusajaya Steel Sdn Bhd (“NSSB”) (hereinafter referred to as "Joint Venture").

The details of the Joint Venture are set out under the Announcement Details.

This announcement is dated 27 August 2008.

Announcement Details :

2. INFORMATION ON AIMSB, HGMMSB AND FLH

2.1 AIMSB is a company incorporated in Malaysia and is a wholly-owned subsidiary of AISB. Its registered office is located at 10th Floor, Wisma Havela Thakardas, No. 1, Jalan Tiong Nam, Off Jalan Raja Laut, 50350 Kuala Lumpur. The authorized share capital and paid-up share capital of AIMSB are RM10,000,000 and RM14,003 respectively. The principal activity of AIMSB is trading of construction related materials.

2.2. HGMMSB is a company incorporated in Malaysia and having its registered office at Suite 2, 1st Floor, 2J-1,Jalan Giam, Taman Majidee, 80250 Johor Bahru, Johor Darul Takzim. HGMMSB, is a wholly-owned subsidiary of HG Metal Investments Private Limited, a company incorporated in the Republic of Singapore, which in turn is 100% owned by HGMML. HGMML is listed on the Main Board of Singapore Exchange and engages in the business of manufacturing and trading of steel products.

2.3 FLH (NRIC No. 690820-08-5988) of No. 30, Jalan Buroh, Jurong Town, Singapore 619486, is appointed as the nominee of HGMMSB.

3. DETAILS OF THE JVA

3.1 NSSB is a company incorporated in Malaysia and having its registered office at Lot 8179, Jalan Kangkar Tebrau, Kampung Sri Purnama, 81100 Johor Bahru, Johor Darul Takzim. NSSB is a 66.67% subsidiary of HGMMSB with an initial issued share capital of RM3.00.

3.2 The authorized share capital of NSSB shall be raised to RM25,000,000 divided into 25,000,000 ordinary shares of RM1.00 each.

3.3 The principal activities of NSSB are manufacturing and trading of steel and steel related products/services.

3.4 AIMSB, HGMMSB and FLH agree to hold and maintain the following proportion of the issued and paid-up capital of NSSB as follows:-

3.5 A piece of land located in Nusajaya Industrial Park, Gelang Patah, State of Johor Darul Takzim, will be acquired by NSSB.

3.6 The parties agree to share the rights to participate in the management and operations of NSSB.

4. SOURCES OF FUNDS

AIMSB will fund its share of equity participation in NSSB through financial assistance from its holding company, AISB.

5. FINANCIAL EFFECTS

5.1 Share Capital and Substantial Shareholdings

The Joint Venture is not expected to have any impact on the issued and paid-up share capital of AISB or the substantial shareholders' shareholdings in AISB.

5.2 Earnings Per Share, Net Assets Per Share and Gearing

The Joint Venture is not expected to have any material effect on the earnings per share, net assets per share and gearing of AISB for the current financial year ending 31 December 2008 but is expected to contribute positively to the future earnings of AISB.

6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the directors and/or major shareholders of AISB or persons connected with them has any interest, direct or indirect, in the Joint Venture.

7. APPROVALS REQUIRED

The Joint Venture is not subject to shareholders' approval or any regulatory approval.

8. STATEMENT BY DIRECTORS

The Board of Directors of AISB, having considered all aspects of the Joint Venture, is of the opinion that it is in the best interest of AISB and the Group.

9. COMPLIANCE WITH THE SECURITIES COMMISSION’S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES (“SC GUIDELINES”)

The signing of the JVA does not fall within the ambit of the SC Guidelines.

10. DOCUMENT AVAILABLE FOR INSPECTION

The JVA is available for inspection at the Company's Registered Office at Lot 11A, Jalan Utas 15/7, Section 15, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia, during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.