Klabin S.A.

completed

This is an equity investment in Klabin SA to support the design, construction and operation of the Puma Pulp Mill (the “Project”), a greenfield mill that will produce 1.5 million tons of softwood and hardwood pulp per year located in a rural area in the Municipality of Ortigueira, Paraná State, Brazil, about 20 km from the cities of Ortigueira and Telêmaco Borba. The Project will consume 2.3 million cubic meters (m3) of pinus and 4.4 million m3 of eucalyptus per year approximately, which will be supplied from Sponsor’s own and leased forest plantations (totaling about 106.494 ha already under production) as well as third party suppliers who will provide about 28% of Eucalyptuswood requirements and approx. 11% of Pinus wood requirements during the first several years of the plant’s operation. The Project will also generate approximately 330 megawatts (MW) of electrical energy output through the plant’s chemical recovery boiler and a biomass boiler that will use pinus and eucalyptus bark as fuel, exporting in excess of 150MW of electrical energy output for use by the Sponsor at its nearest Monte Alegre Pulp and Paper Mill in Telêmaco Borba and for sale to the grid, through a substation located at the Monte Alegre site. To operate, the project will further require the following ancillary facilities some of which are still in the feasibility or pre-feasibility stage as indicated below:Approximate 56,5km of 230-kilo volts (kV) high voltage transmission line;Dedicated water intake and wastewater discharge pipelines from the Project site to the Tibagi River (approximately 4km each); 4 temporary construction worker camps to house about 4500 workers to be located in or immediately adjacent to the cities of Ortigueira and Telêmaco Borba (currently in the feasibility study stage);Approximate 22km railway spur to connect the Project to the Central Paraná Railway system (currently in a pre-feasibility stage);Approximate 37km dedicated main access roads (currently in a pre-feasibility stage)Approximate 22km internal road with bridge over Tibagi River as a dedicated connection between the Project and Klabin’s existing Monte Alegre pulp and paper mill located in Telêmaco Borba (currently in a pre-feasibility stage)Approximate 35km road connection between the municipalities of Telemaco Borba and OrtigueiraThe Sponsor has started first phase of 3-year construction process at the approximate 188,5 ha site of the future pulp mill in Jully 2013, beginning with site clearing and earthworks activities to prepare for the start of civil construction works.