2010 GLOBAL FORECASTING & MARKETING CONFERENCE – Miami, October 21 st , 2010

1. Market Composition & Capital Spending Survey The Latin American Metalworking Industry Focus on Mexico & Brazil Presentedby Strategic Media Partners: 2010 GLOBAL FORECASTING & MARKETING CONFERENCE – Miami, October 21st, 2010

2. Contents Methodology and reach Equipment Scope for this Report Latin American Market Overview Market Trend Evolution Metalworking Equipment Imports 2011 Market Forecast by Category Mexico Demographic Data Imports by Country of Origin Survey findings & Market Forecast Brazil Demographic Data Imports by Country of Origin Survey findings & Market Forecast Summary Appendix Detailed Purchase Intention Results

3. Methodology & Reach Email survey invited 9,221 Latin American subscribers of Metalmecánica magazine; 9,082 metalworking industry subscribers of NEI magazine (Brazil); and 5,146 metalworking industry subscribers of ReporteroIndustrialmagazine(Latin America). Limited to one answer by company. In-depth questionnaire. All participants were validated as qualified readers. The survey obtained 1,106 valid responses from 17 Latin American countries, representing a 4,7% response rate.

4. Equipment Scope for this Report • Metal CuttingEquipment • 8456 - Laser, Ultra-sonic, EDM, Ionic, Plasma arc • 8457 - Machining Centers • 8458 - Lathes (Incl. Turning Centers) • 8459 - Drilling, Boring, Milling Mach. • 8460 - Deburring, Sharpening, Grinding Mach. • 8461 - Planing, Shaping, Slotting, Broaching Mach. • Metal Forming & FabricatingEquipment • 8462 - Presses, Bending, Folding, Punching, Shearing Mach. • 8463 - Draw-benches, ThreadRolling, WireWorking Mach. • 8515 - WeldingEquipment • Parts and Accessories • 8466 - Parts and Accessoriesfor Machine Tools

5. Latin American Metalworking Equipment ImportsMexico, Brazil + Top “ROLA” Countries (Rest Of Latin America) Total ImportMarket: Real ‘09: US$3,07Billion -33.9% comparedto ’08 ‘10 Estimated: US$3,5Billion +13.4% comparedto ‘09 Source: ALADI: Latin American Trade Integration Association. Trend calculation: B2Bportales

6. Market Trend Evolution: Metalworking Equipment ImportsTOP 6 “ROLA” Countries (Mexico and Brazil excluded) ROLA countries Estimated ‘10 Imports: US$636million +8% comparedto ‘09 US$000 FOB Source: ALADI: Latin American Trade Integration Association. Colombia 2009: Estimated on projection of 5 months reported to Aladi

7. Latin American Market OverviewGDP - Mexico, Brazil + Top Rest Of Latin America “Although recovery has been relatively quick, lingering questions and doubts regarding the evolution of the global economy may dampen the regional outlook in the medium-term.” (ECLAC) Growthisexpectedtoslowdownaroundthesecondhalf of 2010. Althoughtheregionwillcontinuetoexpand in 2011, itwill do so at only 3.8% approximately Source: ECLAC, Economic Commission for Latin America and the Caribbean.

8. 2011 Imports Forecast - Metal Cutting $1.68 Billion

9. Metal Cutting Equipment Imports – 2008-2011 Comparison

10. 2011 Imports Forecast - Forming & Fabricating: $1.61 Billion Significantparticipation of ROLA countries, comparedwith 16% in cutting machines

11. Forming & Fabricating Eq. Imports – 2008-2011 Comparison

12. 2011 Imports Forecast: Parts & Accessories: US$723Million 37% of the total investmentisdedicatedtoParts and Accesories 8466- Parts & Accessories

13. Parts & Accessories Imports – 2008-2011 Comparison

14. MEXICO • Factories’ Capacity Utilization • Average age of machines in Plant • Size of Companies by Number of Employees • Main Markets/Sectors Served by Metalworking Plants • Mexican Imports by Country of Origin • Investment trends in 2011 • Equipment imports forecast • 2010 Projected Investment Distribution

15. Mexican Metalworking Plants2009 Capacity utilization 26% report capacity usage of +80% Down -16% from last year 16% report capacity usage of less than 50% Same percentage as last year Base: 287

16. Average Age of Machines in Plant Tremendous opportunity for new Machinery Suppliers Total reported number of machines : 7,230 Average per plant: 25 Base: 287

17. Size of Mexican Plants Included in the SurveyBy Number of Employees (2010) Number of companies with 1 to 10 employees answering the survey is 12% higher than the reported in 2009. 36% of the sample represents companies of 50 or more employees. Base: 287

18. Markets/Sectors Served by Mexican Plants (2010) Base: 287

19. Metalworking Equipment – By Country of OriginMexican Imports 2008 - 2009 Italy, Taiwan & USA wasaffectedthemostwithimportsdecrease in 2009. China isstillsmall in thismarket, butregisteredthelesserreduction in USdollarspercentage. Lastyear, JapanwasthesecondexportertoMexico. ThisyearGermanyreachedthat position. Source: ALADI: Latin American Trade Integration Association.

20. Increase 48% Increase average: 32,6% No change47% Decrease average: 44,3% 5% Decrease 2011 Expected Investment Trends DIRECTION PERCENTAGE This expected trend represents a potential increase of 13,4% in total investments Base: 287 20

21. 2011 Expected Investment Trends "Production of vehicles in theperiodJanuary-July 2010 grew 78.8% overthesameperiod in 2009". "Comparedwiththesameperiod in 2008, itstillrepresents a fall of 27.8%" (Eduardo Solís, President, AMIA, MexicanAssociation of AutomotiveIndustry). "Themetalworkingindustryreported a decline and stood at -14.3% in 2009, but a growth of 12.3% isexpectedbytheend of 2010". (Marco Herrera, Chairman of theMetalworking Sector, CANACINTRA, MexicanChamber of TransformationIndustries). 21

22. 2011 Expected Investment Trends "Thisyear, companies in theaerospaceparts sector haveplannedinvestments of approximatelyUS$1.2billiontomodernizeitstechnology and productionprocesses". “Thesize of the sector isexpectedtodoublein thenextfiveyears. Thecomponentdesignindustryareawillhaveover 400 specializedcompanies". (Mario Martínez, Technology Director, ITESM, InstituteforTechnologyStudies in Monterrey). "Wedependontherecovery of the U.S. market: we hope toreachproductionlevels of 2008 in 2012 or 2013". (Agustín Ríos, president, INA, NationalAutopartsIndustry) 22

23. Mexico - Metal CuttingInstalled Equipment 2010 vs. Buying Intention 2011 Base: 236

24. 2011 Metal Cutting Equipment Imports Forecast: $658 Million(2008-2011 Comparison)

25. Mexico - Metal Forming and FabricatingInstalled Equipment 2010 vs. Buying Intention 2011 Base: 110

26. 2011 Forming & Fabricating Equipment Imports Forecast:$685 Million(2008 – 2011 Comparison)

27. Mexico – 2011 Projected Investment Distribution New Equipment participation is similar to last year Refurbished UP from 14% last year Used DOWN from 24% last year Base: 245

28. BRAZIL • Factories’ Capacity Utilization • Average age of machines in Plant • Size of Companies by Number of Employees • Main Markets/Sectors Served by Metalworking Plants • Mexican Imports by Country of Origin • Investment trends in 2011 • Equipment imports forecast • 2010 Projected Investment Distribution

29. Brazilian Metalworking Plants2009 Capacity Utilization 34% report over 80% of installed capacity; 13% reports less than 50% Capacity utilization is lower than that reported for 2008. Base: 278

30. Average Age of Machines in Plant Significant opportunity for new Machinery Suppliers Total reported number of machines : 5,676 Average per plant: 20.4 Base: 278 30

31. Size of Brazilian Plants in the Survey By number of employees (2010) Number of companies with 1 to 10 employees answering the survey is 8% higher than the reported in 2009. 29% of the sample represent companies with 50 or more employees. Base: 278

32. Markets/Sectors Served by Brazilian Plants (2010) Base: 278

33. Metalworking Equipment – By Country of OriginBrazilian Imports 2008 - 2009 Despite a decrease in total imports in 2009, USA grew its market share in 2.4%. Contrary to the situation observed in Mexico, China was affected the most during the crisis, with 40% reduction in total exports to Brazil, and 2% reduction in market share. Source: ALADI: Latin American Trade Integration Association.

34. Increase 57% Increase average: 34,9% No change42% Decrease average: 33,3% 1% Decrease 2011 Expected Investment Trends DIRECTION PERCENTAGE This expected trend represents a potential increase of 19,4% in total investments Base: 278 34

35. 2011 Expected Investment Trends "I have a hunch that the turnover of 2011 will be 20% higher than it has been in 2010. Therefore, it will virtually reach the same exceptional level as it did in 2008." "The metalworking sector was negatively affected during the last quarter of 2008 and the first half of 2009. Starting in July, companies gradually returned to buy”. (Thomas Lee, director, GrupoMegga, Sao Paulo) “Hiring in the machine building sector increased in May 2010. It went up 4.4% compared to May 2009, from 232,200 to 242,331 employees. By October 2008, the month prior to the crisis it had felt down to 3.15%”. (Abimaq, July 2010 Report) 35

36. 2011 Expected Investment Trends “We believe that the outsourcing manufacturing market was one of the sectors that was hurt the most during the 2009 crisis. Some of our customers said that their own clients stopped outsourcing their projects and went back to manufacturing them on their own. In my opinion, manufacturers of elevators, steel furniture, electrical cabinets, air conditioners, refrigeration, power generation, industrial ovens, among others, are the most active thanks to the increasing expansion of the construction sector". (FerriAmilson, Director General - Salvagnini do Brasil) 36

37. Brazil - Metal CuttingInstalled Equipment 2010 vs. Buying Intention 2011 • As in Mexico, high interest in Machining Centers. For this year significantly increased buying intention for transfer machines. Base: 156

38. 2011 Total Metal Cutting Equipment Imports Forecast: $761 Million(2008-2011 Comparison)

39. Brazil - Metal Forming and FabricatingInstalled Equipment 2010 vs. Buying Intention 2011 As in Mexico, Laser Cutting has a high installed/intention ratio Base: 241

40. 2011 Metal Forming & Fabricating Eq. Imports Forecast: $586.5 Million(2008 – 2011 Comparison)

41. Brazil - 2011 Projected Investment Distribution New Equipment DOWN from 79% last year Used UP from 12% last year Refurbished UP from 8% last year Base: 193

42. Summary Afterconsultingseveralsources, including the results of the Capital Investment Survey and industry experts opinion across the region, theMetalmecanica’s 2011 forecastfor capital investment in importedequipmentissummarized as follows (US$ Millions):

43. Thank you! www.metalmecanica.com www.reporteroindustrial.com www.nei.com.br Miguel Garzón, Editorial Director mgarzon@b2bportales.com Teri Rivas, Associated Publisher trivas@metalmecanica.com Eduardo Tovar, Editor etovar@metalmecanica.com

44. Mexican Buying Intentions by Investment Amount, 2010 1. Machining Centers See Appendix for detailed report by country by segment Base: 154