Mr. Ching Pong Quek’s Speech on 2009 CITA Annual Meeting

The distinguished Mr. Lu Daming, Chairman of China Industrial Truck Association, the distinguished leaders and guests from all around the world to the 12th AITO Meeting and 2009 CITA Annual Meeting, ladies and gentlemen, Good Afternoon.

On September 15th, 2008, with the fourth-largest U.S. investment bank Lehman Brothers Holdings Inc. declared bankruptcy, the financial crisis generated from credit crisis of world financial center Wall Street quickly swept the world, and triggered the most serious economy recession since World War II. Over the past year, we have experienced an unprecedented baptism. From worrying about spread of the financial crisis to physically experience the crisis of the economic recession, all these changes are the first time we met.

After the outbreak of the financial crisis, various economy-rescue measures were introduced through out the world to alleviate the financial difficulties in financial institutions and stabilize financial markets. The Federal Reserve took an unconventional monetary policy, to inject large scale capital into financial institutions; European countries pulled more than 2 trillion Euro to rescue economy, far exceeding the US$700 billion in the United States; the Japanese government introduced energy-saving appliances green credits, and green cars subsidies and other measures to boost domestic demand. "BRIC" and other emerging economies took drastic measures to implement economic stimulus policies, and won valuable growth in the adversity. China promptly adjusted macroeconomic and monetary policy, the introduction of RMB 4-trillion investment plan; a large-scale implementation of the industrial adjustment and revitalization planning; vigorously development of domestic market, especially in rural market; opening of the RMB settlement business in international trade, to promote the internationalization of the RMB. With promotion of a series of policies, data shows that growth of China Gross Domestic Product in first half of 2009 reached 7.1%, domestic investment and consumption demand growth continue to accelerate and pull economic growth. The Government of Brazil took timely tax cuts, interest rate, and increase consumer loans and other measures to boost production and consumption. In India, due to the Government’s strict control on foreign exchange and foreign investment, the impact of the financial crisis is limited. In addition, ASEAN, Latin America and Central and Eastern Europe and other developing economies have also implemented various forms of economic stimulus program. After crisis, the reproduction of economic prosperity in the developed economies is not easy, but room for growth in emerging markets is still huge, which is becoming the locomotive pulling the world's economic recovery. Among the various economies, China's economy has taken the lead in recovery; the emerging economies represented by "BRIC" will become an important force in stabilizing the world economy.

The impact of the global financial crisis on industrial truck industry is unprecedented. Affected by the global financial crisis, many enterprises are facing difficulties, unemployment is risen and consumer spending is reduced, thus demand for industrial trucks decline sharply. This trend has begun even before the outbreak of the financial crisis. In the first quarter of 2008, worldwide orders for industrial trucks continued to rise, and reached 11.6% in April cumulatively, ranking the highest growth rate throughout the year, after that growth began to slow down and reached 0% in October, when the market demand was maintained at the same level vs. 2007 same period, to the end of 2008 full-year order declined 8.3%. Affected by the orders shrank in 2008, shipment volume fell 0.6%. The United States, Europe, Japan and China's industrial truck markets in the fourth quarter of 2008 fell to the lowest level of the year, while in Russia, Brazil and India, the situation is not yet so serious. At the end of 2008, the impact of financial crisis on industrial truck market did not seem that severe.

In the first month of 2009, the global industrial truck market started with a startling decline of 51%, followed by a slump that can not be stopped. The first quarter of 2009 is the most dismal period for global industrial truck market. In the major industrial truck markets, except for China with 29% decline which is slightly less, others such as Europe, America, Japan, etc. recorded a decrease of about 50%, India, Brazil and Russia's decline was even more severe due to high market base in 2008.

The old Chinese saying goes: A year’s plan starts with spring, and the spring of 2009 started with such a decline, I believe that many of the business leaders survive a lot of sleepless nights just like me. Outside the industry, due to rapid decline of the global material handling demand, and the emergency rescue plan has not yet showing the effectiveness, people began to conserve spending, customers reduced or cancelled orders; Inside the industry, the developed industrial truck markets like Europe, the United States, Japan and others suffered heavy losses, with a substantial reduction in imports from the developing regions; In BRIC, except for China which is in slightly better situation, other countries with less stable industrial truck market were hit even worse than in developed regions. We look forward to the economic rebound. Another quarter has passed, in most parts of the world market did not seem to show signs of recovery, or continue to maintain the decline of the first quarter.

In the depressed market, the Chinese market is vibrant. Although the decline ended in August of this year remained at 19%, the margin has narrowed significantly. In June and July of 2009, China market has been gradually showing signs of warming up, with monthly orders close to or above 10,000 units, in August 2009, China market has shown a positive growth for the first time in the year, and order hit 11,000 units. Taking into account a smaller market base in the fourth quarter of 2008, China's industrial truck market is likely to reach 100,000 units in 2009. Looking around, we are pleased to be in China. With a stable social environment, timely adjustment of monetary policies, 4 trillion plan to stimulate domestic demand, successive introduction of the industrial revitalization plan, and the vigorous infrastructure construction throughout the country, all these presage the gradual recovery of the economy, thus stimulating demand for industrial trucks.

Meanwhile, when looking at the future of China's industrial truck industry, there are still many worrying factors. First, the internal combustion forklift truck market takes the proportion of about 80%, which is against environmental protection and energy saving; second, there are hundreds of large and small forklift manufacturers in China, after the financial crisis strength began to distinguish, the stronger is more strong, and the weaker might gradually phase out, or face a transition in the fierce competition. Even now the total capacity of those who are active in the market is still far more than the market demand; third, domestic demand has been recovering under the economic stimulus plan, but the international demand which account for significant amounts of corporate profits is still weak. Export business is still difficult to grow, affecting the level of corporate earnings. These questions are worth considering. Being the first foreign brand to set up manufacturing base in China, Linde is willing to explore with all the industry partners, to switch “crisis” to “opportunities”, and seek common growth.

Linde (China) Forklift Truck Corp., Ltd., being the only foreign brand both in Vice Chairman and the Manufacturers Committee of China Industrial Truck Association, is built in Xiamen with the most advanced technology and forklift R & D, production, sales, and service bases in China, and most intensive sales and service network in more than 80 cities. Linde hydrostatic transmission technology, LDC Linde digital control system, dual-pedal system, single-joystick system, combined steering axle and the LFM Linde fleet management system, all these innovations have become a milestone in the development of material handling equipment. We have an R&D team in Xiamen with around 5% of total employee number; the main R & D personnel have received training in the headquarter in Germany. In addition to its own independent research and development, the R & D Center also jointly develop new generations of forklifts with Linde Technology Center in Germany on a regular basis, as well as exchanging of new technologies, training and guidance, and learning the forefront of forklift industry technology, which has laid a solid technical foundation for rapid development of Linde (China).

Leading in technology does not just refer to a purely technical level, in addition to the unique technologies, the exploration and practice of care to the environment, human health and the safety through design, shall be recognized as leading in technology. For the Linde engineers, how to protect the environment, protect the driver's health and to ensure safe operation has been a core concept of product design.

We implemented EHS management system, which is environmental protection, health and safety, to efficiently use energy and reduce emissions to protect the environment. Linde is currently the only material handling equipment supplier with application of a hydrostatic transmission technology in internal combustion forklifts. The transmission efficiency is up to 90%, with engine working in the best speed, on-demand for energy, and greatly reduces the movements of forklift within the required logistics cycle; duel pedal and centralized joystick system ensure efficient operating speed and reduce operation fatigue. Linde applies international brand engines on internal combustion forklift; most of the emission models have reached Europe the second phase of emission standards; in 3-ton internal combustion forklifts where China market has largest demand the standard engine Linde applies even meet the third stage of European emission standard. The unique hydrostatic transmission technology has brought no friction braking to avoid health hazards on forklift truck drivers by dust, and pollution to the working environment. Thanks to the unique Linde hydrostatic transmission technology, even forget to pull handbrake on the slop, the automatic braking function on Linde internal combustion counterbalanced forklift trucks can ensure the forklift slip down with very slow peed, and a full braking after the engine stops, to avoid accidents. The Linde electric forklift truck is equipped with an LDC Linde digital control system to closely monitor the operation of forklift, regulate the motor speed, on-demand for energy, and regenerate energy when braking. In 2002 the EU adopted a provision on the vibration, this provision has been enforced in many EU countries. According to this provision, employee must be protected in the work to avoid harm on human body by prolonged vibration. From 20 years ago Linde has considered the design of the damping measures and updated design concepts to improve the technological level of forklifts to reduce vibration. At the beginning of design for each Linde model, we need to do a lot of stability tests, parts are passed to a computer finite element analysis for structural strength tests to ensure the safety of forklift trucks in use.

After coming into China market, Linde forklifts have been well received by customers in various industries. From automotive assembly to the supermarkets, from tobacco and mint factory to military equipment, from warehousing to building materials and furniture, from the airport to the port, as long as material handling is needed, you can always find the red Linde forklift. Many customers can easily recognize Linde forklift simply by glancing at it even far away. Owning the largest customer base in foreign brands, with truck population over 50,000 units, are the fruit of hard work of Linde for more than 16 years in China.

Innovative products, premium quality and service, high-quality and stable customer base are the weapon for any company to survive in the crisis, which are also the consistent pursue for Linde. In future, we will continue to provide premium products and professional services to users with value beyond expected, optimize user's logistics operation process, thus to ensure and enhance the substantial progress of the indicators of production efficiency, operating costs, product life, etc, in China's forklift market, while improving the standard of domestic material handling equipment.

AITO is the organization representing the world's industrial truck manufacturers, and plays an important role in statistics, standards and environmental protection. We are very pleased that China Industrial Truck Association joined the AITO, and hosted AITO Conference in China to provide a valuable opportunity for the world to know China's industrial truck market. We believe that China Industrial Truck Association will take this opportunity to promote China's industrial truck products to the whole world, to greatly improve China's industrial truck technology and manufacturing levels, and promote long-term development and progress of the industry!

Thank you!