US Export Markets For Wood Chips & Biomass Present and Future. Presented by Brad Orwig. Peeples Industries, Inc. East Coast Terminal Co.

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1 US Export Markets For Wood Chips & Biomass Present and Future Presented by Brad Orwig. Peeples Industries, Inc. East Coast Terminal Co.

2 Call It The Boise Dome: Dawgs Rocked, 35-21

3 PEEPLES INDUSTRIES, INC. PII is a vertically integrated asset based maritime logistics company recognized as a leader for both outstanding customer service and innovation in bulk materials handling. Our range of experience includes bulk, break-bulk, and container stevedoring, terminal operations, warehousing, vessel chartering, inland logistics (truck & rail), materials handling engineering, industrial marine construction and dredging. PII s origins date back to 1964 when Frank K. Peeples, Sr. founded Southeastern Maritime Co., a regional vessel agency and stevedoring services provider based in Savannah, Georgia with operations from Canaveral, FL to New York, NY. In 1977, SEMCO was merged into PII forming a financial holding company with several operating subsidiaries providing a wide range of marine terminal and logistic support services for its growing customer base in the US South Atlantic market. In its 50 year history in the transportation business, PII remains firmly focused on its core bulk marine terminal operations capable of handling all of a customer s transportation logistics needs from the marine terminal gateway to inland facilities and destinations around the world. Today, Peeples Industries, Inc. affiliate companies operate terminals in Morehead City, NC and its home port in Savannah, GA.

4 East Coast Terminal Co: 1982, 1995, Present

5 50 years experience warehousing, handling and stevedoring bulk, breakbulk and containers in multiple US SE Ports, union and non-union Peeples Industries, Inc. 50 Years of Innovation 40 years developing, owning and operating vertically integrated marine terminals in US SE including facility and berth maintenance, dredging, hydrographic surveying, marine construction, in-house 3 rd party logistics. Designed, built and operate the first dedicated non-union export wood chip marine terminal on the U.S. East Coast in continuous operation since 1978 serving markets in Europe, Asia, Eur-Asia. Designed, built and operated the first dedicated non-union export bulk kaolin marine terminal servicing the Mid-Georgia kaolin mining industry (Southern Bulk Industries, Inc.). Designed, built and operate one of the world s largest wood pellet export facilities at our private non-union facility in Savannah, Georgia serving the 2 nd largest power utility in Europe.

6 Current Wood Fiber Export Market Woodchips Turkey Wood Pellets (Industrial & Home Heating) UK (Drax) Sweden, Belgium, Netherlands, Germany, Italy, Korea, Japan

7 Historical Perspective of Wood Fiber Export 1978 ~ 1984 First export shipments of SYP wood chips from US South to Sweden 1985 ~ 1999 Export shipments of Mixed Hardwood chips to Japan, Korea, Taiwan Late 90 s / Early 2000 First Wood Pellet Exports from Canada to Sweden 2002 First Biomass in Bulk Shipments to Italy 2004 ~ Present First export shipments SYP wood chips from US South (Savannah) to Turkey 2006 First large scale exports of SYP wood pellets from Gulf to Europe (Green Circle) 2011 First Wood Pellet Vessel from East Coast Terminal Savannah(M/V BlueBird)

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15 Available production to Date: 7,464,000 MT

16 Future planned tonnage: 6,410,000 MT

17 13,000,000 residential

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21 The Future of the US Export Wood Fiber Market? Foreign Exchange Head Winds Global Environmental Trends Political Risks Ocean Freight Rates Historically low rates from 2011 through 2017 are increasing considerable. Without long term contracts in place with ocean provider freight rate could exceed allowable margins

22 Conclusions Exporters looking to source fiber will face increased competition domestically (increased fiber cost) Coastal Markets seeing the greatest impact due to new export projects (container board, paper, chips and wood pellets). Woodchip Export market to decline or be flat for the foreseeable future Wood pellet Export market increase 5~10% in the next 5 years then flat or fall after 2027 when subsidies run out in UK.