Federal International (2000) Ltd

PRESS RELEASE

Federal International signs JV agreement with PT Jambi Info Trade Centre to jointly promote investment opportunities in Jambi Province

-first Singapore company to promote resource-rich Jambi Province

January 27, 2004, Singapore – Mainboard-listed Federal International (2000) Ltd (“Federal International”), a value-added distributor and provider of turnkey EPC (engineering, procurement & construction) solutions for the energy & infrastructure industries, today announced that it has entered into a joint venture agreement with P.T. Jambi Info Trade Centre (PT JITC), to jointly promote investment opportunities in Jambi Province, Indonesia.

Federal International is the firstlisted Singapore company to be proactively involved in promoting Jambi Province as a place for investors, following the establishment of the Jambi Promotion Office, a government agency, on December 4, 2003.

The joint venture agreement is a follow up to the Memorandum of Understanding which Federal has entered into with PT JITC on December 18, 2003. As part of this agreement, a JV company will be set up with an authorised capital of US$500,000 and a subscribed and paid-up capital of US$125,000. Federal International will hold an equity stake of 50% in the JV company with the balance being held by PT JITC.

The JV company will provide information and advisory support to Singapore companies which are keen to explore the investment opportunities available in Jambi Province, especially for a wide range of activities ranging from turnkey EPC projects for oil and gas, petrochemical and associated industries, supply chain management and logistics, infrastructure development to information technology and marine transportation services.

Said Mr K. K. Koh, Executive Chairman and CEO of Federal International, “Jambi Province provides an attractive outlet for Singapore companies seeking favourable investment opportunities. And Jambi is just like a gem whose beauty has yet to be discovered as it has an abundance of unexploited marketable natural resources.

“This JV signifies a win-win strategic alliance and underscores the growing importance of the private sector in helping to accelerate the development of bilateral collaboration between Singapore and Indonesia. It underscores the point that organizations should play a more active role in spearheading such activities.”

He added, “This strategic alliance will open up a new growth avenue for the Federal International Group which already has business presence in Indonesia, through our associate company, PT Gunanusa Utama Fabricators. We believe that the Group will benefit from the growing interest and participation of Singapore companies in the infrastructure project opportunities offered by Jambi Province.

The signing of the Joint Venture Agreement was witnessed by Mr H. Zulkifli Nurdin, Governor of Jambi, Mr Yew Sung Pei, Director (SEA), IE Singapore, as well as the top management from Plant Engineering Construction, Tiong Woon Corp Holding, Rotary Engineering and Portek International.

This joint venture will be funded by internal resources initially and is not expected to have any material effect on the net tangible assets or earnings per share of Federal for the financial year ending December 31, 2004.

None of the Directors or substantial shareholders of the Company has any interest in the above agreement.

About Federal International (2000) Ltd

Federal is a value-added distributor and provider of turnkey EPC (engineering, procurement & construction) solutions for the energy & infrastructure industries. Currently, the group is principally involved in the distribution of flowline control products (e.g. valves, structural steel, steel flanges/ connectors and pipe fittings) to the oil and gas, power, chemical and pharmaceutical industries.

Federal is also involved in upstream activities such as research & development and manufacturing of valves and valve-related equipment through its wholly owned subsidiary Houston-based HP & T Products, Inc. and KVC Co. Ltd (Japan) and KVC (UK) Ltd, in which it has acquired strategic stakes. By moving upstream into the design and manufacture of specialised valves and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service.

About Jambi Info Trade Centre and Jambi Province

Jambi Info Trade Centre was established in June 2003 and its mission is to promote business investments in Jambi Province through accelerating the use of natural resources in that area. Occupying an area of 53,435 sq km and located in the upstream part of the gas pipeline from Sumatra to Singapore, Jambi Province has a population of about 2.65 million. Strategically located close to Singapore, this province is striving to attract foreign investors with a ‘one-stop service’ policy which includes exemption from income tax and import/export duties.

Press release issued on behalf of Federal International (2000) Ltd

For more information, please contact:

Stratagem Consultants Pte Ltd

Ms Gwen W Ling/Florence Tan

Tel: 62270502Fax: 62275663