Vale Florestar SA 0 Forest Plantations Growth Opportunities
- Slides: 23
Vale Florestar S/A 0
Forest Plantations – Growth Opportunities in Brazil Distribution of commercial forests across the world Land use in Brazil 206 million ha Pasture 18. 6% Other 17. 1% Native Forest 56. 5% Forest Plantations 0. 8% Agriculture 7. 0% Fonte: Silviconsult Other 25. 7% China 31. 7% India 10. 0% USA 10. 0¨% Russia 7. 0% Sweden 5. 8% Poland 3. 3% Sudan 3. 3% Brazil 3. 2% Source: IBGE Source: Silviconsult 1 Fonte: ABRAF
Forest Plantations – Growth Opportunities in Brazil Ø Brazil currently has 4. 26 million hectares of eucalyptus plantations, with annual growth of 4. 6% since 2000 SUBSTITUIR VÍRGULAS COM PONTOS Million há Source: ABRAF, SBS, adapted by Silviconsult 2
Brazilian Forestry Market – Diversified Internal Consumption Ø Eucalyptus timber consumption in Brazil: around 114 million m³/year Other 2. 8% Pulp 32. 8% Planks/boards 5. 1% Plywood 3. 6% Sawed wood 19. 7% Charcoal 13. 4% Firewood 22. % Source: Diverse – Adjusted by Silviconsult 3
Brazilian Forestry Market – Higher Demand Than Supply Ø Annual consumption of eucalyptus logs outstrips supply by 2 million m³ SUBSTITUIR VÍRGULAS COM PONTOS Million m 3 Supply Demand Balance Source: Silviconsult 4 Annual deficit
Productivity – Commercial Advantage in Brazil ØEucalyptus Plantations: ØHigh productivity (Mean Annual Increment > 30/40) and short production cycle (7 years) MAI (m 3/ha/year) Cycle (years) Brazil Uruguay Indonesia Chile Portugal USA Canada Source: Diverse, adapted by Silviconsult 5
Expansion Opportunities at New Frontiers Area of Forest Plantations 2008 (1000 ha) Total in 2008 = 6. 6 million ha Growth opportunities: - High productivity - Large areas of degraded land - Developing market 87% of planted area 6 Source: Abraf Annual Report (2009)
Vale Florestar today Ø Vale Florestar was created as a Vale project in 2005 and came into operation in 2007 Ø Over the past three years, 24. 5 million trees have been planted on 41 leased farms Ø Area: approximately 70, 000 hectares Ø Vale has invested around R$230 million* in the project – more than one-third of the total planned amount Ø Vale Florestar currently employs 1, 500 people (*) As of March 2010 7
Partnership for Forest Projects Investment Fund R$ 605. 04 million Vale Florestar S/A 8 leasing licensing planting monitoring sapling production sales
The Future: Vale Florestar S/A Ø Vale Florestar will operate across a total area of approximately 450, 000 ha: ü 300, 000 ha to protect and restore native forest ü 150, 000 ha to develop commercial eucalyptus plantations Ø The project will require total investment of R$605 million* by 2014, generating 4, 000 jobs during peak production Ø By restoring degraded areas, Vale Florestar S/A will promote carbon capture Ø The project will have its own tree nursery to grow saplings, with capacity to produce 28 million saplings per year. It will be able to supply saplings to other projects in the region Ø It will help attract forestry-related industries to the region, instigating a multiplier effect (*) Adjusted for inflation 9
Operational Area 10
Area Planted by Vale Florestar Area planted (1000 hectares) Breakdown by farm SUBSTITUIR VÍRGULAS COM PONTOS 11 Total: 20, 000 ha Breakdown by municipality
Vale Florestar Restoration of Natural Habitat Planting of native species – Preciosa Farm November 2007 12 March 2010
Vale Florestar Process of Restoring Degraded Areas Surpresa Farm BEFORE November 2007 13 AFTER March 2010
Vale Florestar Process of Restoring Degraded Areas Surpresa Farm November 2007 14 Watercourse
Vale Florestar Process of Restoring Degraded Areas Surpresa Farm March 2010 15
Vale Florestar Process of Restoring Degraded Areas Santa Fé Farm 2007 2008 16 2010
Vale Florestar – Commercial plantations combined with preservation of environmental protection areas Arizona Farm – April 2007 17
Vale Florestar – Commercial plantations combined with preservation of environmental protection areas Arizona Farm – March 2010 18
Vale Florestar S/A aims to reverse this trend. . . 19
Vale Florestar S/A aims to reverse this trend. . . 20
A new reality 21
Thank you Arizona 22 Farm – March 2010
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