EFTA01115337.pdf

Project Puma Investment Opportunity June 2012 Confidential EFTA01115337  Executive Summary ■ One of the largest Pulp and Paper companies in Brazil (the "Sponsor") plans to raise US$850 million in equity (the "Transaction") to fund the construction of a pulp mill to produce 1,500k tons per year of hard and softwood (fluff) market pulp ("Project") The capital structure of the Project will be comprised of: The Sponsor will contribute 107k ha of planted forest and US$ 150 million in cash for 51% of the Project; Investors will contribute US$850 million for 49% of the Project A non-binding agreement has been reached with a well-known sovereign wealth fund for an indicative commitment of US$300 million ("Anchor investor") The terms of this agreement grant investors will have significant governance rights and a well defined exit path US$1.8 billion in financing from the Brazilian National Development Bank (BNDES) ■ The plant to be build in the South of Brazil is expected to be best-in-class among other global pulp mills as a result of: (i) Proximity of plant to one of the best eucalyptus and pine forests in the World; (ii) High forest productivity (iii) Efficient in and outbound logistics; and (iv) State-of-the-art industrial facility ■ The Sponsor is widely recognized for its deep local market knowledge and unique expertise in forest management, built over 112 years of experience in the sector ■ Further information on the opportunity will be made available following the execution of a Confidentiality Agreement The Project will be the most competitive pulp mill in the World Confidential EFTA01115338  Project at a glance f ormed forest base and pulp mill to produce hardwood and softwood for both domestic and international marketsl Wood supply Logistics Pulp mill ■ 106,500 hectares of forest ■ Inbound: Average distance from ■ State-of-the-art technology ■ Highly productive eucalyptus and the forest to the mill of 75km, ■ Location strategically selected pine plantation forest in the State significantly lower than local ■ Production capacity of 1,100kt of Parana. Current Mean Annual peers of hardwood, 50kt of softwood Increment (MAI) of: ■ Outbound: Access from the mill and 350kt of fluff - 54 and 42 m3 per hectare per to the port through railway - Flexibility to change the year for Eucalyptus and Pine, - The Company already mix of production respectively(1) owns an area of 40,000 m2 ■ 150MW of energy surplus in the port - 100% from biomass and cogeneration Project Highlights ■ Exposure to domestic and international markets The demand for high-value-added Fluff products in Brazil is currently supplied by imported products New plant is expected to supply most of the domestic demand for Fluff The hardwood pulp sales will be sold to the tissue and packaging segments, which are less volatile ■ Brazil has the most competitive pulp production in the World - Cost advantage stems mainly from: - Lower fiber cost, given forestry productivity; and - Access to efficient logistics ■ Company is well positioned to reap the benefits of a highly attractive opportunity - Large experience in forest management and up-to-date capabilities - Historic relationship with equipment suppliers and customer base - Proven track record in the execution of large scale projects NOW: (1) Clebatked wood EFTA01115339 Project at a Glance (cont.) N Expected mix of sale (% of production) Project potential capacity (Mtpy) 350 1,500 North 50 America 1,100 7% Asia 26% Brazil) 43% Hardwood Softwood Fluff Puma Cash Cost FOB (US$ /tonne) Eucaliptus Pine 1A 500 403 =Ni 0 v c <0 FrafAusiGer A L O I, 00 2 cco Vc c E a S O co a ccg 0 it z •R i E O a, A V O A 00 LL • 0 0 K LL Ca . Y. co tai Source: Sponsor and Hawkins Wright. July 2011 — FOB - Hardwood 1O11 Estimates 7 Softwood 2O11 Estimates 4 EFTA01115340  / Investment highlights \ I Exposure to domestic and international attractive markets Undisputable competitiveness with the lowest cash costs in the World Formed forest base with unmatched productivity Project Puma Unparalleled logistics — plant close to forest and linked to port High flexibility to change product mix aiming to leverage on market opportunities Strong margins and stable cash generation allowing for consistent and attractive returns IIIP S trong sponsorship and seasoned management team Confidential EFTA01115341