Vetorial Group is one of the biggest independent pig iron producers in Brazil with accumulated experience since 1969.

Vetorial detain the ISO 9001 certification and is audited by PriceWaterhouseCoopers.

The activities of the company are concentrated in Mato Grosso do Sul, where is responsible for more than 1.000 direct jobs.

Vertically integrated with independent businesses:

Vetorial Energy: Forestry management and charcoal production. The actual own forests are 40.000ha and its expanding to reach the forest sustainability and the total of 80.000ha in 2017.

Vetorial Steel Mill: Pig Iron production with a capacity of 760.000 ton per year shared among the three industrial units.

Vetorial Mining: Exportation and production of iron ore with resources estimated in more than 10bi ton. Today its part of VETRIA Holding.

Log Brasil: Logistic company with a shared control (50%).

3

CHARCOAL SUSTAINABLE SUPPLY

4

Eucalyptus forest

Charcoal Cooling

Wood CarbonizationWood Harvesting

Wood Transportation Mechanized Loading

Charcoal Production Flow

Charcoal Production Sites and Vetorial Pig Iron Mills

1

3

7

5

6

8

2

9

4

10

SitesAnual

HarvestingCharcoal

Production(hectares) ( m

3x 1000)

1 Nova da Mata 1.500 240

2 Verde Mar 1 1.000 132

3Cabeceira Funda

1.620 240

4 Pantano 1.000 192

5 Yara 536 96

6 Jatobá 964 174

7 Sonora 1.143 246

8 Ribas 1.147 210

9* Sonora II 1.050 210

10*Dois Irmãos 1.715 312

Total 9.960 2.052

* In negotiation

Harvesting and Charcoal Production by Site

Productivity improvements with new technologies

PROCESS CONTROL PLUS

GAS BURNING AND WOOD DRYING PLUS

CHARCOL COOLING SYSTEM

86

214

293

373 372

467

616

715 719

815 801

126

191201

209

235242 242 243

248

50

75

100

125

150

175

200

225

250

0

200

400

600

800

1.000

1.200

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021P

rod

uct

ivit

y (m

3/m

an/m

on

th)

Wo

rk F

orc

e

Productivity (m3/H/month)

Social Contribution:Company will more than double the work force

High Productivity means:Lower costs and increase of work force benefits

Work Force Evolution

5 1527

58

175

59 174322

696

2052

0

20

40

60

80

100

120

140

160

180

200

0

500

1.000

1.500

2.000

2.500

2011 2012 2013 2014 2020

Mo

nth

ly P

rod

uct

ion

(1

00

0 m

3/m

on

th)

Pro

du

ctio

n (

10

00

m3

/ye

ar)

Monthly Charcoal Production Yearly Charcoal Production

Charcoal Production

Brazil’s Planted Forest by State

Fonte: AMS e IBGE,2013

Eucalyptus: 4.9 million hectares

Pinus: 1.7 million hectares

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

24% 23% 23% 23% 24% 23% 23%

20% 19% 19% 19% 19% 18% 18%

14%14% 14% 14% 13% 13%

12%

11%11% 10% 10% 10%

10%10%

11%10% 10% 10% 10%

10%9%

6%7% 7% 7% 7%

7%7%

4%4% 3% 3%

3%3%

3%

3% 4% 5% 5% 6% 7%9%

Tocantins, Piauí e outros

Mato Grosso

Goiás

Amapá

Maranhão

Pará

Mato Grosso do Sul

Espírito Santo

Rio Grande do Sul

Bahia

Santa Catarina

Paraná

São Paulo

Minas Gerais

Fonte: AMS ,2013

Participation of planted forest area by Brazil's States (%)

37%

12%

51%

Cellulose and Paper

Charcoal

Industrial Wood

Source: AMS, 2010

Total of 163 million cubic meter

per year

Planted Forest Consumption by

Sector

Wood Charcoal: 20 million cubic

meter per year

2,3

1,8

1,3 1,4

2,1

1,9

1,8

2,2 2

,4

2,9

4,7

4,5

4,1 4,2

3,8

1,4

1,9 2,0

1,9

3,7

3,7

3,7

3,7

3,7 4

,0

3,8

3,6

3,6

3,6 3,7

4,0

3,8 4

,0

3,6

3,0

3,6

4,0

3,9

38%

32%

25%27%

36%

33% 32%

38%40%

45%

56%

53% 52% 51% 51%

33%35%

33% 33%

0%

10%

20%

30%

40%

50%

60%

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

Nat

ive

Wo

od

Use

d (

%)

Pro

du

ctio

n (

Mto

n)

Native Wood Charcoal Planted Forest Charcoal Native Wood (%)

Charcoal made by:

Planted Forest x Native Wood

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Planted Forest need to Supply

Pig Iron Production

Average Pig Iron Production Mton/year 9,51Blast Furnace Consumption t CH / t PI 0,73

Charcoal Need Mton/year 6,90

Charcoal Production Technology Baseline

Wood to Charcoal Conversion - Yield % 29%Forest Planted Need - dry basis mass Mton/year 23,8

Wood Density ton/m3 0,55Forest Planted Need - volume Mm3/year 43,2Today Forest Planted available Mm

3/year 20

Available forest planted area for charcoal kha 805Area harvested per year (for 7 year cyclo) kha/year 115Clonal productivity available on market m

3/ha 280

Potential total volume to be harvested Mm3 32

Anual wood deficit to produce charcoal Mm3/year -11,0

Equivalent area to be planted per year kha/year 39

Average Pig Iron Production Mton/year

Blast Furnace Consumption t CH / t PI

Charcoal Need Mton/year

Charcoal Production Technology BaselineProcess

Control

Metalic

Kilns

Wood to Charcoal Conversion - Yield % 29% 36% 39%

Forest Planted Need - dry basis mass Mton/year 23,8 19,2 17,7

Wood Density ton/m3

Forest Planted Need - volume Mm3/year 43,2 34,8 32,2

Today Forest Planted available Mm3/year

Available forest planted area for charcoal kha

Area harvested per year (for 7 year cyclo) kha/year

Clonal productivity available on market m3/ha

Potential total volume to be harvested Mm3

Anual wood deficit to produce charcoal Mm3/year -11,0 -2,6 0,0

Equivalent area to be planted per year kha/year 39 9 0

9,51

0,73

6,90

20

805

115

280

32

0,55

Carbonization improvements to

guarantee wood supply

15

CARBORAAD

SIMULATION SOFTWARE TO

CONTROL THE CARBONIZATION

PROCESS AND THE CHARCOAL

QUALITY

16

Kiln thermal profiles to control the evolution of wood

pyrolysis during the whole process;

CARBORAAD - SIMULATION SOFTWARE TO

CONTROL THE CARBONIZATION PROCESS AND

CHARCOAL QUALITY

Integrated management system to control

production plans and real results (daily,

monthly and yearly)

CARBORAAD - SIMULATION SOFTWARE TO

CONTROL THE CARBONIZATION PROCESS

AND CHARCOAL QUALITY

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Kiln with heat exchange = Taxa de 0,56 oC/hora Kiln without the system = Taxa de 0,20 oC/hora

HEAT EXCHANGE SYSTEM TO REDUCE CHARCOAL COOLING

Increase the kiln productivity in about 20% related to total cycle

VETORIAL and its partnership with new technologies

Total Production with Carbonization Software

Control

Development of Wood Drying System together with the

Technology Market Players to run together with the

rectangular kilns

Vetorial has rented and it will running by itself a Pilot DPC Plant at Parana State to

validate process gains and the business plan

MILL

LIVEN

DPC

DPC – Drying Pyrolysis Cooling

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22,3%

29,3%

32,9%33,4%

33,8%

35,8%36,0%36,1%36,3%36,6%36,8%

3,15

2,40

2,132,10

2,08

1,96 1,95 1,95 1,93 1,92 1,91

1,70

1,90

2,10

2,30

2,50

2,70

2,90

3,10

3,30

20%

22%

24%

26%

28%

30%

32%

34%

36%

38%

40%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Vo

lum

etri

c W

oo

d C

hac

oal

Co

nve

rsio

n

RG

–W

oo

d C

har

coal

Yie

ld

Gravimetric Yield Volumetric Yield

Better

Bet

ter

PROCESS CONTROL

PLUS DRYING

PROCESS

Yield improvements with new technologies

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MAIN ENVIROMENTAL IMPROVEMENT WITH THE NEW TECHNOLOGIES TO

PRODUCE CHARCOAL

Improve the charcoal yield from 22% to 36%

means:

VETORIAL GAS EMISSION REDUCTION =

780.000 tons of CO2 eq. per year

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Thank you for your visit.