CGG Project. Kaoru Maeda Senior Vice President Consumer Lifestyle Business Division. September 10 th, 2014

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1 CGG Project Kaoru Maeda Senior Vice President Consumer Lifestyle Business Division September 10 th, 2014

2 Brazil s International Presence in grain trading While global demand for grains stays strong, no country in the world has the land availability to sustain increased production in a way Brazil does. Brazil`s export volume of soybean has been increasing rapidly from 1990 s and achieved approximately 46 million tons, which accounts for 41% of soybean trade market in Brazil is now responsible for supply for demand of grains increasing in the world. Copyright Sojitz Corporation

3 Grain Production Region in Brazil 2000 s 1990 s 1960 s Copyright Sojitz Corporation

4 Traffic congestion in South Corridor Copyright Sojitz Corporation

5 Brazil s New Export Corridor in North Brazil s grain exports are heavily relying on ports in south, such as Santos, Paranaguá and Rio Grande. As a result, constant traffic congestion and shipment delays have long been an issue for importers and exporters of Brazilian grains. New northern grain export corridors are now being developed at ever faster pace with the government support. Most of Brazil s additional grain productions are expected from northern region, called MAPITOBA, and then exported from northern ports. Copyright Sojitz Corporation

6 Sojitz s Participation in CGG Group Sojitz has invested in Brazil s leading agribusiness company, Cantagalo General Grains S.A. and its grain trading & logistics arm CGG Trading S.A. CGG Group maintains a strong position in domestic grain procurement by strategically owning and leasing key grain logistics assets across Brazil. Locations of CGG s Key Logistics Hubs Copyright Sojitz Corporation

7 North Corridor - TEGRAM Project In 2011, CGG Trading S.A. has won a concession bid for building and operation of new grain export terminal in Northern port of Itaqui. The project is called TEGRAM (Terminal de Grãos do Maranhão) and currently scheduled to be in operation from November CGG is one of the 4 concession holders, having exclusive right to export grains through the terminal. TEGRAM includes building of 4 port warehouses, one for each concession holder. Each warehouse has 125 thousand tons of static capacity (total 500 thousand tons). After expansion of terminals to TEGRAM Phase II (currently expected in 2017), the total export volumes will reach as much as 10 million tons. Copyright Sojitz Corporation

8 North Corridor - TEGRAM Project TEGRAM Phase I Terminal s scheduled opening in July 2014 TEGRAM Phase II Terminal s scheduled opening in 2017 BERÇO 106 BERÇO 105 BERÇO 104 BERÇO 103 BERÇO 102 BERÇO 101 BERÇO 100 Comp. 420m Prof. 19m Comp. 280m Prof. 18m Comp. 200m Prof. 13m Comp. 251m Prof. 15m Comp. 236m Prof. 12m Comp. 232m Prof. 9,5m Comp. 320m Prof. 15m Copyright Sojitz Corporation

9 North Corridor - TEGRAM Project Port Warehouses with Total Static Capacity of 500,000 tons (125,000 tons x 4) Copyright Sojitz Corporation

10 North Corridor - TEGRAM Project Copyright Sojitz Corporation

11 North Corridor - TEGRAM Project Copyright Sojitz Corporation

12 Railway Take-or-Pay Agreement with VLI CGG has an existing multimodal Take-or-Pay agreement with VLI, which enables seamless grain logistics by storing grains at inland grain warehouses, delivering via FCA and EFVM railways and exporting from Tubarão port. With the TEGRAM operation starting in 2014, CGG is also preparing to sign a long-term railway Take-or-Pay agreement with VLI for FNS and EFC railways in north. FNS&EFC FCA &EFVM Copyright Sojitz Corporation

13 Rondonópolis Transshipment Terminal Project ALL has extended its Ferronorte railway (260km distance between Rondonópolis and Alto Araguaia), which made possible a direct grain transportation by rail from Rondonópolis to Santos Port. Rondonópolis Terminal, with its full operational capacity, is expected to achieve 15 million tons of annual grain transshipment volume. Copyright Sojitz Corporation

14 Rondonópolis Transshipment Terminal Project Rondonópolis Multimodal Transshipment Terminal Project is led by America Latina Logística S.A. (ALL), one of Brazil s major railway operators. The project will be the largest transshipment terminal in Brazil and aim to meet the transportation demand of agrocommodities, particularly from north and central regions of Mato Grosso. CGG owns a land plot in the project, in which it plans to build grain warehouses in ALL already started operation and expects to handle 10 million tons in The project is currently scheduled to be in fully operational in the latter half of CGG s Landplot (8 acres) Building of 60k Grain Silos are planned. Copyright Sojitz Corporation

15 T-Grão Cargo Terminal T-Grão Cargo Terminal is one of grain export terminals at Santos Port, which currently handles annual transshipment volume of 3 million tons. CGG has recently signed the longterm Take-or-Pay agreement with the terminal. Starting from 2014, the terminal will be used exclusively by CGG and two other exporters, thus expected to achieve great efficiency in terminal operation by avoiding waiting time. By securing export slot at T-Grão, CGG has achieved seamless grain logistics via railway from Rondonópolis to Santos. Copyright Sojitz Corporation

16 Brazilian Soybean and Corn Exports to Asia In 2013, 75% of Brazilian Soybeans were exported to China (10 million tons more than in 2011). Chinese government has policy to prioritize production of rice, wheat and corn for use of its limited farmland. With little land left for soybean domestic production, China has no other way to import more soybeans to sustain its demand for soybeans. Thailand was the second largest importer in Asia of Brazilian soybeans in 2013 with 1.1 million tons., while Japan became the largest importer of Brazilian corn in 2013 Sojitz, with CGG s strong grain procurement network in Brazil, aims to expand its Brazilian grain sales to Asia. Brazil s Soybean and Corn Exports to Asian Countries: (2013) Copyright Sojitz Corporation

17 Copyright Sojitz Corporation