CATERPILLAR SIGNS DEAL WITH SINTERCAST

CATERPILLAR SIGNS DEAL WITH SINTERCAST WORLD LEADING ENGINE PRODUCER CATERPILLAR OF USA AND SWEDISH SINTERCAST SIGN EXCLUSIVE AGREEMENT FOR SERIES PRODUCTION OF LARGE DIESEL ENGINE COMPONENTS IN COMPACTED GRAPHITE IRON. Caterpillar, the world's largest manufacturer of medium speed engines and one of the world's largest manufacturers of high speed Diesel engines, has signed an agreement with SinterCast AB (publ) of Sweden, with the intention to produce engine components, such as cylinder heads and engine blocks, in Compacted Graphite Iron (CGI) using the SinterCast Process Control Technology. Simultaneously Caterpillar has placed an order for a SinterCast System 2000 to be installed in Caterpillar's Mapleton foundry in Illinois, USA. Series production is scheduled to start from the beginning of 1999. The agreement is the result of a thorough two-year evaluation of the SinterCast technology to verify its suitability for volume production of Caterpillar Diesel engine components. Caterpillar has experienced the benefits of Compacted Graphite Iron in limited production since 1985 and has now made the strategic decision to use SinterCast technology for volume CGI production. The agreement provides Caterpillar with the SinterCast Process Control Technology and simultaneously grants SinterCast an exclusive right to supply CGI technologies to the Caterpillar organisation world-wide. Caterpillar, often referred to as the world number one manufacturer of construction-, mining- and agricultural equipment, and proprietor of one of the world's strongest and best known trademarks, reported sales and revenues of $18.9 billion and profits of $1.7 billion in 1997. Caterpillar's Engine Division produces Diesel Engines with ratings from 54 to 13,600 hp, aimed towards a wide variety of applications such as trucks, construction equipment and marine diesels. In-house foundry casting capacity exceeds 150,000 tonnes of grey and ductile iron in addition to which some significant volumes are produced by sub-suppliers. Mr Bertil Hagman, President & CEO of the SinterCast Group, comments: "The contract with Caterpillar, a world leader in this industry segment is a valuable reference for SinterCast and proof of the recognition of the SinterCast Process Control Technology. We know that Caterpillar have reached their decision to select SinterCast after extensive research and evaluation of SinterCast and possible alternatives. This contract is important as the very first commitment from a producer of heavy Diesel engines to use Compacted Graphite Iron on a large scale. The selection of SinterCast as technology supplier verifies SinterCast's position as the industry leader in CGI Process Control Technology. The acknowledgement of Compacted Graphite Iron as a material and the choice of SinterCast as supplier of the manufacturing technology is especially significant as Caterpillar is recognised throughout the world as an industry leader, spearheading new technologies and leading its contemporaries." A large European passenger car producer has - as previously announced - placed an order with the German foundry Halberg Guss for the production of a new passenger car Diesel engine in CGI. SinterCast has completed the installation and actual production is expected to start early 1999. SinterCast has earlier announced two installations at Sakana, Spain and VDP, Italy for the production of large (10-17 tons) engine blocks for stationary Diesel engines produced by Allen Power Engineering Ltd, UK. These installations are now successfully in production. An installation at Cifunsa, Mexico, one of North America's largest foundries supplying engine components to the automotive industry, is currently used for prototype castings awaiting customer orders for actual series production of CGI components. Stockholm 1 October 1998 SinterCast AB (publ) Caterpillar is the world's largest manufacturer of medium speed engines and one of the world's largest manufacturers of high speed Diesel engines. In- house foundry casting capacity exceeds 150,000 tonnes. Quoted from Caterpillar's official Website: "We are a growth-oriented, high- tech global powerhouse - ready for the next century. We're growing the business in new directions, diversifying without straying from core competencies, developing new products, expanding coverage, and offering new and better services to our customers. Our modernized facilities are efficient, employing state of the art processes, and we are exploiting the best of information technology." For further information on Caterpillar: Internet: http://www.cat.com SinterCast is a listed Swedish company which developed and owns the SinterCast Process, a patented on-line Process Control System which enables the production of high quality Compacted Graphite Iron (CGI) components on an industrial scale. CGI is an intermediate form of cast iron which combines much of the castability, thermal conductivity and vibration damping properties of grey iron with the strength, stiffness and fatigue resistance of ductile iron. In Diesel engine block applications, the substantially higher strength, stiffness and wear resistance of CGI relative to grey iron provides new opportunities to increase cylinder pressures, save weight, reduce noise, vibration and harshness (NVH) and increase overall engine performance. CGI also provides improved bore stability thus reducing frictional losses, oil consumption and environmentally harmful blow-by emissions. The SinterCast Process and the use of CGI assist foundries and the automotive industry in achieving higher environmental standards. For further information on SinterCast: Internet: http://www.sintercast.com For further information: Bertil Hagman President & CEO SinterCast AB (publ) Tel: +46-8-660 77 50 or +44-181-891 89 00 Fax: +46-8-661 79 79 or +44-181-891 89 90 E-mail: info@sintercast.com