Company History/Summary of E & C Trading Ltd., Rotkreuz, Zug/Switzerland

E & C Trading Ltd., an international raw materials marketing company specialized in iron ore trading, was established in the year 1984 as Swiss limited company in Zug/Switzerland, by a group of six senior traders under the leadership of the late Dr. h.c. Michael Floersheim, formerly general manager of the Zug headquarters of Philipp Brothers, then the most diversified and largest international commodities trading company worldwide.

Initially, the company handled a variety of commodities: Iron/manganese/chrome ores, ferro alloys, moly, vanadium, coal and coke, pig iron, HBI and other raw materials. Subsequently, as of 1987, the management decided to concentrate exclusively on the field of the longstanding expertise of its senior executives, namely on iron ores and related raw materials for the steel industry and E & C Trading further enhanced its rôle as major market factor in the international iron ore business.

In the decade elapsed since its establishment, the company has continually sold a variety of iron ores from almost all proveniences to the tune of 4-6 million tons p.a. in shiploads ranging from the handy size vessel of 30'000 MT to vloos of 250'000 MT. The iron ores coming from Australia, South Africa, South Americas, India, the CIS states and many more proveniencies. Sales were made to the majority of the European steel producers.

However, the scope of the company's activities is not limited to traditional trading alone. Project finance, long term contracts, barter deals, mine development, relocation of equipment and installations, conversion agreements, hedge instruments etc., form part of the overall engagement.

The company works in close association with an experienced bulk cargo ship broker hereby closing charters, long term contracts of affreightment, swapping, selling freight space, reletting vessels chartered etc. The freighting/vessel chartering side of its activities forms an integral and profit sensitive part of its business.

The company has also developed sales into industries with non-metallurgical applications of iron ores, such as pipe coating, ballasting, offshore projects, hydropower dams and other heavy aggregate applications.

Cooperation Agreements and worldwide relations with agents and stevedoring companies, R&D departments of steel mills and other industrial entities, are very strong and many business possibilities are hereby developed.

A very important aspect of its business philosophy is the servicing function of the trader. The steel mills know that even for small tonnages of "exotic" ores, they can turn to the company who will do its best to come up on very short notice, with the required quality. Hereby, the company is also serving the special requirements of the industry.

Although the company does not have subsidiaries or foreign offices, it avails, nevertheless, over a worldwide network of commercial agents with whom it cooperates under longterm agency agreements or on a case by case basis.

The company has been for a decade since its inception, the European sales organisation for 3-4 million tons p.a. of the Australian iron ore mine, Robe River Ltd. This arrangement has been amicably terminated per end 1994 with the opening by Robe River of their own European Sales Office. Meanwhile Robe River has been taken over by the Rio Tinto Group and the sales have been merged into Rio Tinto's operations.

Since then the company had on the iron ore side an exclusive marketing agreement with Shougang Hierro Peru to market their products in Europe, Middle East and India and is currently engaged in the development of COMISA mine in Minas Gerais, Brazil. Furthermore the company has returned in Ferro-Alloys trading. New product lines, Graphite Electrodes, Tantalite and Columbite, were also sucessfully introduced.

Besides routine business, the company is presently working on a number of projects such as mine development with the pertaining marketing, developing projects in the CIS countries (financing for retrofitting programmes, quality improvement schemes to render production feasible for Western European markets, coordination between producers and end users, organization of technical assistance programmes, etc. etc.).

The company closely monitors the technological innovations in its field and it has been one of the pioneers of HBI marketing. Further diversification is being undertaken into commodities such as pig iron, metallurgical coke and manganese ores.

The company has at its disposal, besides its own financial means, ample credit lines with major international banks, servicing the financial requirements for its trading activities. Presently, the company's sales are focussed on the European and Chinese markets. However, efforts are being made to also penetrate other Asian countries and the former East Bloc.

In its credit policy, the company is very conservative. Although open payment is accepted in the steel industry at large, the individual financial situations of the consumers are constantly monitored and payment terms and -instruments are carefully and discriminately administered.

Although the traders enjoy quite some freedom and flexibility in the mounting of their transactions, nevertheless, the management exerts a tight regimen as to risk reporting and evaluation, payment security and avoidance of lump risks. It is the company's policy to lay off some financial risk with banking institutions or insurance companies. Still, an important part of its business is obviously handled on its own risk.

The shares of the company are held by a rather small group of investors, some of them actively acting as directors and/or traders. The shipment administration, management information and communication system etc. are supported by an advanced computer network. The accounting is done by outside professionals; same is the case for legal services, tax advice etc.

Rolf Fölmli

We look forward to receiving your inquiries.

E&C Trading Ltd., Allrüti 18c, CH-6343 Rotkreuz / Switzerland

Tel. +41 41 790 60 90
Fax +41 41 790 72 92

E&C Trading Ltd.

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