APPLIED ENGINEERING PROJECT

Below we are presenting an outline of the development of our strategy for all those MP Industrial Corporation activities that are not part of Lifts, Valentín de Madariaga-MP Foundation or Real Estate areas.

It was deemed necessary to reorganise these activities and create a heading for them; the name adopted to encompass all of these activities is APPLIED ENGINEERING AREA. This heading will especially work on cooperative and strategic issues and will determine and control openings for new activities, mergers, acquisitions, de-mergers, disinvestments and basically any developments towards the future industrial activities of the MP Group, with the exception of those regarding Lifts which, due to its evolution, size and challenges, makes up a separate Area.

Up until 31.12.2005, these activities were divided into three Business Areas which, within the structure of the MP Group, were at the same level as Lifts.

These areas were:

- Engineering, Services and Environment
- Supplier Industry and Engineering
- Organisation and Systems

This is the structure that is included in our 2005 Annual Report. In the following graph, it appears alongside the area of Lifts and the comparative values for the volume of sales in Millions of euros for Lifts and the total for the three areas mentioned above, both in terms of actual figures for 2005 as well as the estimated figures for 2006.

  


 

   
 

The new approach, the structure of which is presented in graph 2, reorganises the activities into 5 DIVISIONS, each operating independently given the wide variety of products, services, markets and sectors around which their activities develop.

Within the structure of this heading which has been given the name CORPORATE DEVELOPMENT FOR APPLIED ENGINEERING, the growth rates of each one of the Divisions will be regulated and the technological and commercial aspects inherent to some of them will be coordinated.

These five Divisions are:
· CONSTRUCTION, previously included in the area of Engineering, Services and Environment.
· SYSTEMS AND TELECOMMUNICATIONS, included in the former Organisation and Systems area.

   · ENVIRONMENT AND SERVICES, previously forming part of the area of Engineering, Services and Environment.
· RENEWABLE ENERGY, also previously included in the area of Engineering, Services and Environment.
· INDUSTRIAL ENGINEERING, previously forming part of the area of Engineering and Auxiliary Industry.

With this new structure, as well as aiming to improve our efficiency, we also intend to familiarise suppliers, clients, competitors, financial entities, potential partners and the market in general with the extent of that activities that we develop, the synergies between our activities and our determination to grow in this area and all of this headed in such a way that we can intervene in our projects.