ARVI project:

NPK FERTILIZER PLANT

2013

SPECIFITY

• Shareholders – actively participating in business.

• Business sector: agribusiness, food production.

• Employees ~ 1.000.

• Turnover - 250 m€.

• Countries: Lithuania, Latvia, Russia, Ukraine, Romania, Belarus.

ARVI GROUP

Fertilizers business 60%

Turkey business 7%

Sugar business 20%

Animal by–products processing

5%

Social projects

Business consultations

Hotel

% - estimated in 2013 y.

Salt business 3%

Implemented project – NPK fertilizer plant

Fertilizer plant (Arvi fertis) in Lithuania

Production capability 130 thousand tonnes per year

Implemented project – NPK fertilizer plant

Fertilizer plant (Arvi NPK) in Kaliningrad (Russian Federation)

Production capability 240 thousand tonnes per year

Objects of project

Investments:

Buildings + infrastructure + land clearing + technological equipment + transport + other machinery

Investment size:

25,2 million EUR

plant capacity: 140 000 t per year

Buildings and infrastructure

12,5 million EUR

Technological equipment and

transport

12,7 million EUR

Investment size:

37,7 million EUR

plant capacity: 245 000 t per year

Buildings and infrastructure

18,7 million EUR

Technological equipment and

transport

19,0 million EUR

NPK fertilizer plant – project

NPK fertilizer plant – project

NPK fertilizer plant – project

Schedule and size of investment

NPK fertilizer plant – 140 000 tonnes per year

Implementation of project – 24 months:

Manufacturing non-standard equipment up to 12 months

Installation and adjustment of production up to 12 months

Is planned to reach 70-80% of productive capacity at the first year of production.

INVESTMENT, million EUR 1 year 2 year TOTAL

Buildings and infrastructure 3,1 9,4 12,5

Technological equipment 2,4 7,1 9,5

Transport 0,0 1,2 1,2

Other 1,3 0,6 1,9

Schedule and size of investment

NPK fertilizer plant – 245 000 tonnes per year

Implementation of project – 24 months:

Manufacturing non-standard equipment up to 12 months

Installation and adjustment of production up to 12 months

Is planned to reach 70-80% of productive capacity at the first year of production.

INVESTMENT, million EUR 1 year 2 year TOTAL

Buildings and infrastructure 4,7 14,0 18,7

Technological equipment 3,6 10,7 14,3

Transport 0,0 1,8 1,8

Other 2,0 0,9 2,9

Information about NPK plant

Territory:

Total area 3,8 hectares

Built-up area 0,9 hectares

Travel paths and storage area (10 000 tones packaged products) 1,2 hectares

Existing railway line and additional branch for importation and uploading of raw materials, as well as for export of bulk and

packaged products.

Parameters and the need for energy :

natural gas – 16 m3/tone (max. – 1000 m3/hour)

or LPG – 10 kg/tone (max. – 500 kg/hour)

technical water – 0,19 m3/tone (max. – 10 m3/hour)

steam (saturated) – 0,1 tone/tone (max. – 4,0 tone/hour)

air (compressed to 8 bar) – 40 m3/tone (max. – 20 m3/minute)

electricity – 34 kWh/tone (max. – 2,0 MW)

Description of planned production

Fertilizers (complex) NPK, with a high content of potassium (K2O), brands:

NPK 8-20-30+S;

NPK 8-15-30+S.

It is planned that 80 percent fertilizer production will be with a similar content of potassium (K2O).

Fertilizers (complex) NPK, with the addition of trace elements, brands:

NPK 17-10-14 +S;

NPK 17-6-11+S+Mg+B;

NPK 15-15-15+S;

NPK 8-24-24+S

In addition to these products (brands) a company can produce (on request) more than 40 different fertilizers (complex) NPK brands.

Suppliers of raw materials: the producers of CIS countries.

Description of planned production

For production of fertilizers (complex) NPK is supposed to use modern technological equipment for automated dosing and blending,

granulation, as well as filling and packaging of finished products. Such a fertilizer plant will ensure not only its high efficiency

(minimal operating costs and losses), but will be able switch types of fertilizer production, from one to another.

Leaves of finished product from the plant are assumed as bulk (railway transport) and packaged form (in soft containers with a

capacity of 500 and 50 kg). It is planned that packaged products will be 40% of the total production.

Technological process

Equipment supplier for the plant – «The Sackett & Sons Co» (USA)

Technology: granulation of NPK fertilizers carried out by irrigation, steaming (steam granulation) and neutralization (pipe reactor)

processes.

Project is environmentally safe. Technological process and equipment meets all environmental requirements. Waste-free process.

Initial calculations

140 000 tonnes

per year

245 000 tonnes

per year

Production volumes:

NPK 8-20-30 + S 29,0 50,8 ,000 tonnes per year

NPK 8-15-30 + S 30,0 52,5 ,000 tonnes per year

NPK 17-10-14 + S 13,0 22,8 ,000 tonnes per year

NPK 17-6-11 + S + Mg + B 13,0 22,8 ,000 tonnes per year

NPK 15-15-15 + S 25,0 43,8 ,000 tonnes per year

NPK 8-24-24 30,0 52,5 ,000 tonnes per year

Number of workers: 50-60 90-100

Average salary: 650-750 650-750 EUR/month

Energy resources:

Gas 2.240,0 3.920,0 ,000 m3 per year

Electricity 4.760,0 8.330,0 ,000 kWh per year

Prices of materials:

Ammonium sulfate 150,00 EUR/ton

Potassium chloride 340,00 EUR/ton

Phosphorus components – MAP 430,00 EUR/ton

Phosphorus components – DAP 430,00 EUR/ton

UREA 360,00 EUR/ton

Project results:

Discounted payback period 8-9 6-7 years

IRR 6,8% 9,7%

NPV 2.078,6 8.674,2 million EUR

Factors affecting increase of fertilizer demand

World's population:

According to the World Bank, world's population increases every year by 75 million people. Agricultural producers must continue to

increase production volumes and fully improve its effectiveness in addition to meet this growth and fulfill its needs.

Changes in diet:

Eating habits has been changed during the years of economic growth (particularly in emerging markets). As a result, a need for food

per capita increased. According to the World Economic Forum in 2050, demand for food will increase by 70-90%. More than a quarter

of growth in demand for cereal crops will be caused not so much by population growth, how much by changes in diet.

Arable land:

The area of land, suitable for food supply (to ensure needs of food caused by growing number of public) is limited. Between 1961 and

2007, world population grew by 115%. The area of arable land increased only by 10%. If in 1961, one acre of land can feed 2.4 people,

now days same acre – 4.7 person.

Needs of fertilizers to produce alternative fuels.

Contacts:

UAB „ARVI“ ir ko

J. Basanavičiaus a. 8, Marijampolė, LT – 68308 Lithuania

Phone: +370 343 97 767 / +370 343 31 020

Fax: +370 343 51 576

E-mail: arvi@arvi.lt