Mario Angel. Woodtech Representative North America. April 2010

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1 Mario Angel Woodtech Representative North America April 2010

2 Content Content 1. Woodtech: Who We Are 2. Woodtech: Clients 3. Woodtech: What We Do 4. Woodtech: How this Technology Works 5. Woodtech: Systems 6. Benefits Logmeter 4000 Berneck mill in Araucaria, Brazil Logmeter Logmeter 4000 Nueva 3000 Aldea Astex mill mill in in Concepción, Lota, Chile Chile

3 Woodtech: Who We Are

4 XL1 Woodtech Automatic Measurement Systems 20 years of experience Experts in 3D laser scanning sensors and image recognition software applications for the measurement of wood and other raw materials Associated with the second largest industrial group of Latin America (sales US$ 13,000 million/year). Presence in 5 countries: Chile, Brazil, Argentina, Ecuador, Germany. Offices in Chile and Brazil. Representatives in the US, Finland-Sweden, Czech Republic and Singapore. Forest, wood product, and coal Industries International network and partnership Partnership with SKS Vision Systems (Finland) Members of the Endeavor network group of 140 high impact innovative companies worldwide

5 Slide 4 XL1 cambio en Associated with the second largest industrial group from Latin America (sales US$ 13,000 million/year). Ximena Lopez, 10/7/2009

6 Clients

7 Our Clients Brazil Ecuador Chile Germany Offices Chile, Santiago Brazil, Itapema Argentina

8 Woodtech in several countries Argentina Brazil Chile Brazil Brazil Brazil Chile Chile Chile Brazil Chile Brazil

9 Woodtech: What We Do

10 XL2 Woodtech Provides: Measurement services along the forestry supply chain from the forest to the mill gate Logmeter 2500 Forest Different services depending on needs: Logmeter 500 Logmeter 500: simple service for the forest. Logmeter 2500: remote load volume measurement. Logmeter 4000: automatic measurement at the mill gate (solid volume and biometric characteristics of the load). Logmeter 4000 Logmeter on the road Saw Mill Pulp Mill Logmeter along the wood chain supply

11 Slide 9 XL2 cambio en "measurements services along the forestry logistic chain from the forest operation to the mill gate Ximena Lopez, 10/7/2009

12 Woodtech Helps Companies to: Measure Wood Correctly Cost of the wood received: 50-60% of total production costs million US$/year The correct measurement of wood is important, even if the mill owns the forest.

13 Criteria for a correct measurement utilized in Woodtech Solutions The unit of quantity must be objective, reproducible, easily and cost-effectively determined, and fair to both the buyer and seller. Measuring pulpwood quantity, Russell Morkel (1998) 1. Objective: Minimal human intervention in the process. 2. Reproducible: The same load s quantity does not vary each time it is measured. 3. Easily and cost-effectively determined: Measurements are quick, automatic, and involve low operational costs. 4. Fair: Incentives to underestimate or overestimate the real quantity of wood should not exist.

14 Sample Scaling System Process All of the trucks are weighed. A small amount are sampled. A weight-to-volume conversion factor is calculated using the samples. The conversion factor is applied to the rest of the trucks.

15 Sampling Scaling Piece Scaling Problems Piece scaling = log by log wood measurement Intense manual labor Low representation of the total: 10% of total Slow process Low reliability: depends on the experience of the scaler; complex process made up of many steps; and the process is not auditable Accuracy depends on the method used

16 Sampling Scaling Weight to Volume Variation of Conversion Factors Variation of about 5% based on pounds per cubic foot and 7.5% for Scribner short log (Lbs per BF) when examining truck loads of logs off a given timber sale with similar characteristics and log manufacturing criteria. Exponential variation by log diameter and length Small End Diameter (Inches) Conv. Factor (Lbs/CF) Conv. Factor (Lbs/BF) Log Length (feet) Conv. Factor (Lbs/BF) Western Larch Logs with small end diameter = 6 Western Larch Logs

17 Weight of Wood Depends on: Moisture Content and Density = + Green wood contains more than 50% water.

18 Moisture Content: Increases the weight transported by 25% Increases the cost of wood delivered to the mill by 7.5 %* Greater moisture content Less solid volume Weight remains constant Lower moisture content More solid volume Drier wood increases the volume that the trucks can transport. 1 week after wood is felled 3 weeks after wood is felled *Assuming that the cost of transport represents one third of the total cost.

19 Moisture Content Variation in the moisture content of wood received at the mill Beech Oak December October November August July June May September April March February January

20 Wood Density It depends on different variables Variación de la densidad con la Altura Basic density kg/solid m Variation of the density with height Height (m) 30% Variation of the density among locations on the same tree Requires many conversion factors. Locations Among origins Green density kg/solid m % Variation of the density among origins Origins Samples Among suppliers Suppliers 0 Green density kg/solid m Suppliers 32% Variation of the density among suppliers In practice: requires a high sampling rate. Source: Pulp mill in Argentina.

21 Density also Varies with Age: Young wood 30-year-old wood

22 Effect of Age on Weight

23 Weight Scribner Volume Relationship It is not accurate to estimate board foot volume for the truckload as a function of green weight. Vol (mbf) = Weight (lbs) R 2 = 0.29 Vol (mbf) = Weight (lbs) (number of logs on truckload) R 2 = 0.58

24 Woodtech Solutions

25 XL15 Woodtech Solutions HIGH-PRECISION LASER SYSTEMS FOR THE MEASUREMENT OF MEDIUM AND LARGE MILLS WOOD LOADS Measures: Solid volume and biometric characteristics of the wood. For pulp and sawmills logs Automatic operation MOBILE LASER SYSTEM FOR THE MEASUREMENT OF SMALL MILLS AND FOREST OPERATIONS WOOD LOADS Measures: Volume of wood loads Easy to install and relocate

26 Slide 23 XL15 cambio en Easy to install and move Ximena Lopez, 10/7/2009

27 Woodtech Solutions: other products HIGH-PRECISION LASER SYSTEMS FOR THE MEAUSUREMENT OF CHIPS AND BIOMASS Measures: Volume of chips and biomass Automatic operation LASER SYSTEM AND CAMERAS HW FOR CONTROL OF TRUCKS COMING IN AND OUT OF WOOD DEPOSIT. VERIFICATION OF LOAD, WITH AUDITING AND SURVEYING SYSTEM.

28 How Woodtech s Technology Works

29 Measurement Process Stage 1: Capture Captures the truck in movement. 30 seconds per set of scan. * Capacity of more than 800 trucks per day. The image and data are stored automatically for auditing. As the truck passes, profiles are captured. As low as 1 mm separation between scans. For standard load more than profiles are generated. High resolution and precision in millimeters Berneck installation, Brazil * Source: Nueva Aldea Mill, Pulpmill Arauco, Chile

30 Measurement Process Stage 2: Segmentation The limits of the load are automatically detected. Unwanted elements, such as the truck wheels, cab, draw bars, and platform, are eliminated. Identification of the limits of the load Elimination of the unwanted elements

31 Measurement Process Stage 3: Biometric variables Identification of each external log. Each external log is modelled as an individual 3D object. This allows the calculation of biometric variables: length diameter crookedness Lengths Diameters Curvature Stacking taper, etc.

32 Measurement Process Stage 4: Solid volume Identification of the characteristics for each external log. The solid volume is calculated with a mathematical model using the aforementioned variables. Height An individualized model is calibrated for each species in each mill in order to ensure accuracy. These models can be updated periodically. Width Length

33 Measurement Process Stage 5: Results and auditing Results are sent to the mill s ERP (including pictures and 3D images). All data is accessible through Internet. The Logmeter 4000 Auditing System allows users to filter the data by certain criteria and even electronically re-measure a truck. Report available in Auditing System

34 Logmeter 4000 Back Lasers To obtain characteristics of the internal logs, lasers at the sides and cameras (oblique) are used. This can be done at the front and back of the truck load.

35 Logmeter 4000 Hardware

36 Logmeter 4000 Real scans Log identification

37 Logmeter 4000 Actual Image

38

39

40

41 Chipmeter 4000 for Chip and Biomass : how does it work?

42 Chipmeter 4000 Characteristics 3D laser technology Frame volume of the load Length and width of the load Volume of the empty container Loads of chips and biomass on trucks Advanced auditing system Integration with the mill s ERP system Easy-to-use and modern user interface

43 Measurement process Stage 1: Capture Captures the truck in movement. 30 seconds per capture. * Capacity of more than 600 trucks per day. The picture of the truck is automatically stored in the auditing system. Nueva Aldea installation in Chile *Source: Nueva Aldea Mill, Celulosa Arauco, Chile

44 Measurement process Stage 2: Profiles As the truck passes, profiles are captured. Approx. 7 cm separation between scans.* Approx. 300 profiles are generated for a standard load. Millimetric precision high definition. * Approximate separation when truck is passing at 5km/hr.

45 Measurement process Stage 3: Segmentation The number of vehicles and the limits of the container are automatically detected. The dimensions of each container are verified against the recorded database dimensions. Automatic detection of the limits of the container

46 Measurement process Stage 4: Calculation Container level Formula used to calculate the frame volume of the load. VA VDB VB VDB Vcalculated = Volume = VBD +VA recorded -VB in the database

47 Measurement process Stage 5: Results and auditing The results are sent to the mill (including pictures and 3D images). All of the data is accessible by Internet. The Chipmeter Auditing System allows for users to filter the data by certain criteria and even to electronically measure a truck (in the case of doubts). Report available in Auditing System

48 Chipmeter 4000 The Chipmeter measures chips and biomass with maximum precision. The mill only pays for the volume received. The Chipmeter eliminates human intervention, thereby minimizing operational costs and the risks for operators.

49 Chipmeter 4000 Real scan It is possible to scan empty containers to obtain the database value.

50 Chipmeter 4000 Real scan

51 Logmeter 2500 Mobile and Fixed

52 Logmeter 2500 Characteristics Two versions are available: fixed & mobile Fixed version of Logmeter 2500 Mobile version of Logmeter 2500 Mobile version comes with a prefabricated, autonomous, mobile office unit, which does not require foundations and is set up for easy connection to a generator System scans upper and lateral view Calculates length and height of the load Results, 3D images, and pictures are stored in the auditing system Measures the truck as it passes by at an average speed of 5km/h Measures longitudinal and transversal loads Quick installation 3D image created by Logmeter 2500

53 Logmeter 2500: Components Upper laser for load measurement Electronics cabinet Lower laser for speed measurement Levelled and/or paved measurement area Measurement area guides

54 Logmeter Control, Security & Auditing System

55 Logmeter 500 Woodtech Solutions It provides solutions to the logistic and control of the resource from the forest to the mill. Logmeter 2500 VS Number of logs Logging Landing Logmeter 500 is utilized to: Assure that forestry operations are better managed and controlled. Audit the movement of trucks Logmeter 4000 at a stand along log yard Logmeter 500 Protect logs during the trajectory. It reduces the opportunities of theft and fraud. Verify the measurements provided by the Logmeter 2500 and VS Number of logs Logmeter 4000 at the Mill

56 Logmeter 500 Characteristics Frontal view Logmeter 500 Lateral view Automatic detection of the flow of trucks and other selected vehicles. Automatic detection of the direction of the flow and log trucks entering and leaving the forest. Complete lateral image (Stitching algorithm) Time and day of trucks coming in and out. Pictures of truck front, load and license plate. Auditing system. Reports. Data transfer to other systems (SAP, SISCOM) Structure and hardware easy to assemble and dissemble.

57 Logmeter 500 Logmeter 500 Profile of truck loads Measure profile of each truck Capable of comparing measurement s between Logmeter 500 and Logmeter 2500 or Automatic detection of missing logs on each truck. Load profile Log 500 Banco Faltante Load profile Log 4000 WARNING: **Significant Missing Volume**

58 Logmeter 500 Logmeter 500 Remote connectivity, Safety and Upgrades Remote connectivity of all Logmeters 500. Data backup, alarm activation and online auditing. Data transfer between Logmeters 500 and central offices. Surveillance camera that operates with batteries in case of power failure up to 12 hours. Internet Enlace VPN Red Planta Router celular Cliente VPN Woodtech Router Servidor VPN Red Logmeter

59 Logmeter Images Profile

60 Logmeter 500 Pictures of the front and back of trucks.

61 Logmeter 500 Operator Interface

62 Logmeter: Outputs, Performance and Precision

63 XL12 Logmeter Output: per truck For each truck and bundle, Logmeter provides: Number of logs per truck Solid volume Diameters and Length Sweep/crook and taper Green Density With this information the mill can estimate the value of the load. Results by Truck Estimated number of Log per Truck Visibility (External Log / Q. of Log) Estimated Solid Volume (i.e. Scribner Rule) Diameter Distribution (i.e.: inch) Results examples 34 53% 5,2 MBF # Length Distribution (i.e.: meters) Sweep/Crook 3,1 of 10 Taper 4,3 of 10 Green Density (Kg/M 3 ) 1001,1 Kg/M 3 Dollar Value TruckLoad US$ 1,523

64 Slide 60 XL12 cambio en negrita estimate the value of the load. Ximena Lopez, 10/7/2009

65 XL13 Performance - Precision Results by Truck Results examples Precision *, ** Estimated Log Quantity per Truck 34 >95% Visibility (Log Periphery / Q. of Log) 53% >95% Estimated Solid Volume (i.e. Scribner Rule) 5,2 MBF Average error < 1% < 4% (per truck*) Diameter Distribution (i.e.: inch) # Avg. Error < 0,5% < 3% (per bundle**) Length Distribution (i.e.: meters) Avg. Error < 0,5% < 3% (per bundle**) Sweep/Crook 3,1 of 10 To be calibrated Taper 4,3 of 10 To be calibrated Green Density (Kg/M 3 ) 1001,1 Kg/M 3 To be calibrated Dollar Value TruckLoad US$ 1,523 To be calibrated * Based on more than MBF measured by the Logmeter installations worldwide. ** Source: more than logs compared between Logmeter results and individual LogScanner. Tests done in an Arauco Sawmill (1,2 million cubic meter per year).

66 Slide 61 XL13 Formato título a Lucida Sans Ximena Lopez, 10/7/2009

67 Accurate Measurement of Biometric variables Diameter Length Group 2,65 5,00 13,5-16,5 Group 2,65 5,00 13,5-16,5 Average error (%) 0,12% 0,29% 0,86% Average error (%) 0,00% 0,01% 0,02%

68 External Log Representation Sawmill logs : The external logs of a bundle represent near 50% of all logs. This is a great sample for statistical analysis. Bundles External Logs Total Logs % external Logs( by N ) % of the volume % 50% % 51% % 50% % 47%

69 External vs. Whole Load Volume Representatively Study of representatively performed by the Forest Research Institute in Finland, in which a correlation was demonstrated between the external log parameters and the total bundle s parameters. R R = R R = R R = 0.920

70 Does the Logmeter work for the U.S. conditions? Conclusions after visiting several U.S. sawmills Available space for installation Log dimensions & characteristics (increasing second growth timber) Number of log loads/day Yes Yes Yes

71 Log Load Pictures

72 Log Characteristics

73 Log Images

74 Log Images

75 Log Images

76 Benefits

77 Benefits 1. More efficient wood purchasing. 2. Better wood reception and production planning. 3. Lower log handling costs. 4. Better Information about the most valuable resource. 5. Lower possibility of log damage, machinery breakdown and accidents.

78 1. Efficient wood transactions With Logmeter the value of each load is accurately determined Companies can analyze which sites, species, etc. provide better value-for-money Mills can select or favor better-quality wood Suppliers can sell logs to the most convenient mill Improves the management of wood received (sorting) and final product Improves the value of logs $

79 2. Better Log Reception & Production Planning Company Logs (50%) Outside Logs (50%) Logmeter 4000 Weigh Scales Company loads are not sample scaled and go directly to the specific decks: -Mill -Size category -Winter Outside logs are 100% scaled (until suppliers validate the Logmeter 4000) Outside logs are handled to the specific decks: -Mill -Size category -Winter

80 3. Log Handling Cost Reduction Fee logs can be purchased using the Logmeter 4000 without doing manual scaling to save time and money. Because the Logmeter 4000 can measure accurately the length and diameter of the external logs of each load at the gate (about 50% of logs) mills use this information to distribute each load to the appropriate log deck and reject unwanted loads reducing log handling costs. Reducing log handling saves labor, maintenance and other costs related to this operation. Furthermore, it reduces the possibility of log damage, machinery breakdown and accidents.

81 4. Better Information about the most valuable resource Logmeter 4000 not only generates savings in the purchase of wood. The information Logmeter generates creates benefits for other areas of the company as well: Wood Purchase Better relationship with suppliers Greater transparency Better product received Final Product Better information about the mill s most important cost Inventory Greater certainty about the inventory level Reduction in the risk of running out of stock Reduction in Safety Stock costs Production Marketing & Sales Better Product Recognition Finances Increased revenue Better margins Better information about the quality of the wood received Greater efficiency

82 5. Other Benefits 5.1 Savings in administrative times Logmeter 4000 stores a great quantity of data automatically: Date, hour of entry, truck data (license plate number, supplier, etc.) Measurement results Register of operator intervention The Auditing System allows for quick revision of all of the results and the generation of automatic reports Administrative hours dedicated to the input and processing of data are significantly reduced. 5.2 Other unquantifiable benefits of the Logmeter 4000 Increases image of company as a technology user improves relationship between suppliers and buyers. Consistency in the supply chain easy reconciliation between log incoming and used by the mill volumes.

83 Thank You Mario Angel Woodtech Representative North America

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