VLI Project. Tatsuo Yasunaga. Managing Officer, Chief Operating Officer Integrated Transportation Systems Business Unit Mitsui & Co., Ltd.

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1 VLI Project Tatsuo Yasunaga Managing Officer, Chief Operating Officer Integrated Transportation Systems Business Unit Mitsui & Co., Ltd. September 10 th, 2014

2 Importance of Brazil as world class food exporter in the world Brazil plays an important role as principal exporter of various agricultural products to the world. Brazil ranks among the largest exporters in the World And grain export growth is also remarkable (MMton) 1º Coffee Orange Juice Sugar Exports Domestic Market 2º Soybean Corn % 4º 5º Milk Cotton /07 12/13 21/22 Sugar export growth is remarkable (MMton) And the agricultural activity demand fertilizer Imports (MMton) Consumption Exports Deficit Imports Projection Source: USDA, Conab, Secex

3 Arable lands to the future needs Brazil has arable lands mainly in middle and northern regions to increase their capacity up to 4 times bigger than current capacity and has the key to keep feeding to the world. Brazil has competitive advantages to become the Global Supplier (Arable Lands in Good Conditions MM ha) Brazil s most potential areas are covered by VLI assets (MATOPIBA, Maranhão, Tocantins, Piauí, Bahia,; Mato Grosso e Goiás ) Brazil 39 70% 30% Brazil Rest of Latam North Northeast MATOPIBA Mato Grosso e Goiás Around 13.0% of Brazil s Around 40.0% of Brazil s Center-West Soybean production. Soybean production. From 00/01 to 09/10 increased its production Southeast From 00/01 to 09/10 increased its production around 13.0% yoy around 8.0% yoy South 36% 64% Brazil Rest of World Source: FAO, Secex, Campo Consulting 2

4 Unbalanced agricultural production & export flow in Brazil 54% of area for agricultural production (soybeans + corn) is covered by north and 46% by south, however, only 13% of export is covered by north and 87% is made by south. 3

5 Unbalanced transportation mode in Brazil In general, Truck has more competitiveness for the transportation of product up to 400km, Train between 400-1,500km and Ship over 1,500km. Highway Railway Waterway Brazil is far from other continental countries in terms of suitable transportation mode Government announced the plan of railway network expansion to solve Brazil Cost 4

6 Key words for Mitsui participation in VLI Key words Necessity of VLI s capacity increase driven by: High production growth especially in the northern region VLI covers by own infrastructure Brazil Cost caused by unbalanced transportation model Support to the development of efficient logistics infrastructure and optimization of railway transportation from the experiences and knowledge of; Rolling stock leasing, logistics management and maintenance in Brazil, USA, Europe and Russia (MRC group), Port terminal operation business (Portek) Further strengthening of partnership with Vale Creation of synergy in other business fields in Brazil, such as the agricultural production and grain distribution Support to economic and social development of Brazil 5

7 VLI summary & expansion plan Summary Establishment: December 2010 Main Business: Integrated freight transportation service HQ location: Sao Paulo, Brazil Employees: Approx. 8,000 Total asset (2013): Approx. R$ 8 billion Rail concessions: 10,700km 4 main ports and integrated ground terminals Rolling stock: 758 locomotives & 17,782 wagons Shareholder: Vale 37.6%, Brookfield 26.5%, Mitsui 20%, FI-FGTS 15.9% Expansion plan Duplication of cargo handling volume through the investment of approx. R$ 9 billion in the coming 5 years New rolling stock: locomotives & wagons Rail network capacity expansion: Sidings etc Port & terminal capacity expansion: TIPLAM etc 6

8 Contribution to Japan s stable procurement of food In terms of grain import, Japan shifts from dependence on USA to diversification of suppliers and increase the import rate from Brazil. VLI s capacity increase and the development of efficient logistics infrastructure in Brazil will contribute to Japan in ensuring a stable procurement of food. Soybean Corn 7

9 End of presentation Muito Obrigado. 8