TECKWAH ACQUIRES SPECIALIZED LOGISTICS SOLUTIONS PROVIDER

This move provides the Group with immediate niche competencies, a customer base and a regional network ready to serve the specialized logistics requirements of the Infocomm Technology industry

SINGAPORE, 18 October 2004 – Mainboard listed Teckwah Industrial Corporation Ltd ("Teckwah" or "the Group") today announce that it has entered into a Sale and Purchase Agreement ("S&P") with Mr. Peter Tan Chiang Heng and Mr. Tan Eng Kiat (the Vendors) to acquire the entire equity interest in JNE Logistics Singapore Pte Ltd ("JNE") for a total consideration of $5.4million. The shares would be acquired through its wholly owned subsidiary, Teckwah Logistics Pte Ltd (TWL).

The transaction will be completed in two phases commencing with the immediate acquisition of 70% of the equity interest for a consideration of $3.78million. The balance of the 30% equity interest is tied to a two years put and call option. The acquisition will be funded from internal source.

Under the terms of the sale, the Vendors would continue to manage JNE's business for two years under a Service Agreement and they have given an undertaking that the net profit after tax of JNE shall not be less than $1.35million per year for financial year ending 31st July 2005 and 31st July 2006 respectively.

About JNE
JNE Logistics Singapore Pte Ltd, a privately owned company, is a specialized logistics solutions provider that provides mission critical inventory and time sensitive delivery services for MNCs in the infocomm technology industry. Its scope of services include storage under environmentally controlled conditions, special delivery, customs clearance and duty/tax solutions and emergency hand-carry of components and spare parts for hardware products used in the industry. Geographically, JNE's service network presently covers 10 countries in Asia and Australia.

A niche player in the logistics industry, one of JNE's strongest competencies lies in its ability to provide just-in-time response to customers who require immediate delivery of spare parts and components to different countries to meet their hardware maintenance and repair requirements.

Operating amid the keen competitive environment in the logistics industry, JNE has successfully expanded its business due primarily to its ability to structure itself to meet the stringent needs of its customers for just-in-time response. This capability, coupled with the company's track record and strong customer relationship established over the years have enabled it to raise the entry barrier into its business.

THE RATIONALE
The acquisition of JNE is synergistic with Teckwah's strategy to expand its fee-based business. This move will give TWL immediate access to JNE's specialized knowledge and process, a ready customer base that will yield an immediate revenue and profit stream as well as a ready regional logistics services network ready to cater to similar needs of customers from the infocomm technology industry. In addition, JNE is a healthy and profitable business concern.

Commenting on the acquisition, Mr Thomas Chua, Chairman and Managing Director of Teckwah said: "This is a strategic acquisition for Teckwah and it corresponds to our objective to grow our non-print related business. JNE's business model is inline with our third party logistics business, and the new knowledge; ready customer base and established regional network are both important and necessary to help us grow our existing logistics business."

In August 2004, Teckwah raised a total of $28million approximately in cash from the sale and leaseback of the company's building, TIC Tech Centre at Pandan Crescent. A part of the proceeds have been used to expand the Group's non-print related business. The two projects that have benefited are Teckwah Online Pte Ltd, which has recently ventured aggressively into building up its capabilities in the digital content distribution services via NoriBox - an online digital distribution platform, and the acquisition of JNE by TWL today.

"The sale and leaseback exercise that we undertook earlier helped us free up cashflow from the building so that they may be put to better use to improve shareholders' value. It helped us strengthened our balance sheet and build a war chest for our acquisitions. Our objective is to acquire non-print related businesses that are niche business with high entry barriers and good growth potentials. These acquisitions should also help us develop new capabilities that can pave the way for Teckwah's growth and expansion. Our investments into NoriBox and JNE are only initial steps and it is our intention to search for similar opportunities upon which we can further grow our business." Mr Thomas Chua added.