PSE Circular for Brokers No. 2873-99

November 11, 1999 PSE CIRCULAR FOR BROKERS NO. 2873-99 November 10, 1999 Philippine Stock Exchange, Inc. Exchange Road, Ortigas Center Pasig City Attention: Ms. Grace B. de Guia Asst. Manager, Disclosure Department Gentlemen: In response to your fax message of November 9, 1999, we present below the official clarification of MVC in so far as our relationship with National Steel Corporation (NSC) is concerned: "NSC used to be one of MVC's biggest customers in their use of hydrochloric acid (HCI) for metal pickling (surface preparation). In 1997, they commissioned a newly-installed (albeit expensive) Acid Regeneration Plant (ARP) which allowed them to recover and re-use their spent acid. Aside from reducing pollution from their acid wastes, the ARP allowed NSC to substantially reduce their HCI purchase from MVC. LibLex This ARP project was anticipated early enough by MVC and marketing efforts were rewarded with sales to new markets like, geothermal wells acidizing projects, as well as increase in market share to traditional markets. Total HCI volume even went up. Since NSC enjoyed preferential pricing from MVC due to their large volume of purchases, the diversion of the "lost" volume from NSC to other markets increased the average HCL price as shown on the following tables. LexLib As of October 31, 1999, the total accounts receivable from NSC is only P600,337.08 of which P36,344.00 is past due. llcd The closure therefore of National Steel has minimal impact on our sales volume and financial condition." LibLex We hope the foregoing will properly appraise both the member brokers and the investigating public. Very truly yours, (SGD.) DIOSDADO T. DELA CRUZ Vice-President, Finance HISTORICAL HCI SALES TO NATIONAL STEEL CORPORATION 1995 TO 1999 Sales Volume LMT (32%) Net Sales Amount Unit Selling Price P000 1995 8,877 25,082 2,825 1996 7,084 21,301 3,007 1997 5,641 19,782 3,507 1998 2,659 12,789 4,809 End of Sept 1999 579 2,741 4,736 HISTORICAL SALES HCI SALES NATIONWIDE 1995 TO 1999 Sales Volume LMT (32%) Net Sales Amount Unit Selling Price P000 1995 27,738 114,175 4,116 1996 28,455 126,304 4,439 1997 29,720 146,061 4,915 1998 29,174 166,333 5,701 End of Sept. 1999 22,222 123,021 5,536