Ann: Diggers & Dealers - MD Presentation, page-40

Sure thing...quantity shipped was achieved through pricing only, not on quality as SYR had to make significant revenue and margin concessions to meet their production targets...price is driving the company's strategy to achieve the quantities indicated in their presentation...keep in mind there are less than 10 production operations producing more than 50,000 MT per annum, not including SYR, two of those operations are not in China. There are several producers in China that have excess capacity greater than 350,000 MT, so it begs the question, what would happen to SYR should those operations decide to increase production? Low prices will not save SYR as their production costs are higher than their ASP now and for the foreseeable future.

Market penetration achieve solely on pricing will eventually lead to excessive capital burn (high management salaries, high fixed & variable costs, etc.) leading to survival mode and inevitable loss of sustainability as a company. There is only so much capital investors will be will to provide to keep a cash burning company afloat without significant transition away from below market price point strategy to quality & sustainability strategy.