Vetorial Group is one of the biggest independent pig iron producers in Brazil with accumulated experience since 1969. Vetorial detain the ISO 9001 certification and is audited by PriceWaterhouseCoopers. The activities of the company are concentrated in Mato Grosso do Sul, where is responsible for more than 1.000 direct jobs.
Vertically integrated with independent businesses: Vetorial Energy: Forestry management and charcoal production. The actual own forests are 40.000ha and its expanding to reach the forest sustainability and the total of 80.000ha in 2017. Vetorial Steel Mill: Pig Iron production with a capacity of 760.000 ton per year shared among the three industrial units. Vetorial Mining: Exportation and production of iron ore with resources estimated in more than 10bi ton. Today its part of VETRIA Holding. Log Brasil: Logistic company with a shared control (50%). 3
CHARCOAL SUSTAINABLE SUPPLY 4
Charcoal Production Flow Eucalyptus forest Wood Harvesting Wood Carbonization Wood Transportation Mechanized Loading Charcoal Cooling
Charcoal Production Sites and Vetorial Pig Iron Mills 7 9 10 8 3 2 1 5 4 6
Harvesting and Charcoal Production by Site Sites Anual Harvesting Charcoal Production (hectares) ( m 3 x 1000) 1 Nova da Mata 1.500 240 2 Verde Mar 1 1.000 132 3 Cabeceira Funda 1.620 240 4 Pantano 1.000 192 5 Yara 536 96 6 Jatobá 964 174 7 Sonora 1.143 246 8 Ribas 1.147 210 9* Sonora II 1.050 210 10*Dois Irmãos 1.715 312 Total 9.960 2.052 * In negotiation
Work Force Productivity (m3/man/month) Productivity improvements with new technologies PROCESS CONTROL PLUS GAS BURNING AND WOOD DRYING PLUS CHARCOL COOLING SYSTEM 1.200 235 242 242 243 248 250 1.000 800 191 201 209 715 719 815 801 225 200 175 600 616 150 400 126 373 372 467 125 200 86 214 293 100 75 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 50 Work Force Evolution Productivity (m3/h/month) Social Contribution: Company will more than double the work force High Productivity means: Lower costs and increase of work force benefits
Production (1000 m3/year) Monthly Production (1000 m3/month) Charcoal Production 2.500 200 2052 180 2.000 160 140 1.500 120 1.000 175 100 80 696 60 500 0 59 174 5 15 322 27 58 40 20 0 2011 2012 2013 2014 2020 Monthly Charcoal Production Yearly Charcoal Production
Brazil s Planted Forest by State Eucalyptus: 4.9 million hectares Pinus: 1.7 million hectares Fonte: AMS e IBGE,2013
Participation of planted forest area by Brazil's States (%) 100% 90% 3% 80% 4% 6% 4% 5% 4% 5% 3% 6% 3% 7% 7% 7% 3% 7% 3% 9% Tocantins, Piauí e outros Mato Grosso 7% 11% 10% 10% 10% 10% 7% 3% Goiás 70% 7% Amapá 60% 11% 11% 10% 10% 10% 50% 14% 14% 14% 14% 13% 10% 9% Maranhão 10% 10% Pará Mato Grosso do Sul 40% 30% 20% 10% 0% 13% 12% 20% 19% 19% 19% 19% 18% 18% 24% 23% 23% 23% 24% 23% 23% 2006 2007 2008 2009 2010 2011 2012 Espírito Santo Rio Grande do Sul Bahia Santa Catarina Paraná São Paulo Minas Gerais Fonte: AMS,2013
Planted Forest Consumption by Sector 37% 51% 12% Cellulose and Paper Charcoal Industrial Wood Total of 163 million cubic meter per year Wood Charcoal: 20 million cubic meter per year Source: AMS, 2010
1,3 1,4 1,4 1,8 2,3 2,1 1,9 1,8 1,9 2,2 2,0 1,9 2,4 2,9 3,0 3,7 3,7 3,7 3,7 3,7 4,0 3,8 3,6 3,6 3,6 4,7 3,7 4,5 4,0 4,1 3,8 4,2 4,0 3,8 3,6 3,6 4,0 3,9 Production (Mton) Native Wood Used (%) Charcoal made by: Planted Forest x Native Wood 10,0 60% 56% 9,0 53% 52% 51% 51% 8,0 45% 50% 7,0 6,0 38% 32% 36% 33% 32% 38% 40% 33% 35% 33% 33% 40% 5,0 25% 27% 30% 4,0 3,0 20% 2,0 10% 1,0 0,0 0% Native Wood Charcoal Planted Forest Charcoal Native Wood (%) 13
Planted Forest need to Supply Pig Iron Production Average Pig Iron Production Mton/year 9,51 Blast Furnace Consumption t CH / t PI 0,73 Charcoal Need Mton/year 6,90 Charcoal Production Technology Baseline Wood to Charcoal Conversion - Yield % 29% Forest Planted Need - dry basis mass Mton/year 23,8 Wood Density ton/m 3 0,55 Forest Planted Need - volume Mm 3 /year 43,2 Today Forest Planted available Mm 3 /year 20 Available forest planted area for charcoal kha 805 Area harvested per year (for 7 year cyclo) kha/year 115 Clonal productivity available on market m 3 /ha 280 Potential total volume to be harvested Mm 3 32 Anual wood deficit to produce charcoal Mm 3 /year -11,0 Equivalent area to be planted per year kha/year 39
Carbonization improvements to guarantee wood supply Average Pig Iron Production Blast Furnace Consumption Charcoal Need Mton/year t CH / t PI Mton/year 9,51 0,73 6,90 Charcoal Production Technology Baseline Process Control Metalic Kilns Wood to Charcoal Conversion - Yield % 29% 36% 39% Forest Planted Need - dry basis mass Mton/year 23,8 19,2 17,7 Wood Density ton/m 3 0,55 Forest Planted Need - volume Mm 3 /year 43,2 34,8 32,2 Today Forest Planted available Mm 3 /year 20 Available forest planted area for charcoal Area harvested per year (for 7 year cyclo) Clonal productivity available on market kha kha/year m 3 /ha 805 115 280 Potential total volume to be harvested Mm 3 32 Anual wood deficit to produce charcoal Mm 3 /year -11,0-2,6 0,0 Equivalent area to be planted per year kha/year 39 9 0 15
CARBORAAD SIMULATION SOFTWARE TO CONTROL THE CARBONIZATION PROCESS AND THE CHARCOAL QUALITY 16
CARBORAAD - SIMULATION SOFTWARE TO CONTROL THE CARBONIZATION PROCESS AND CHARCOAL QUALITY Kiln thermal profiles to control the evolution of wood pyrolysis during the whole process;
CARBORAAD - SIMULATION SOFTWARE TO CONTROL THE CARBONIZATION PROCESS AND CHARCOAL QUALITY Integrated management system to control production plans and real results (daily, monthly and yearly) 18
HEAT EXCHANGE SYSTEM TO REDUCE CHARCOAL COOLING Kiln with heat exchange = Taxa de 0,56 oc/hora Kiln without the system = Taxa de 0,20 oc/hora Increase the kiln productivity in about 20% related to total cycle
VETORIAL and its partnership with new technologies Total Production with Carbonization Software Control Development of Wood Drying System together with the MILL Technology Market Players to run together with the LIVEN rectangular kilns DPC Vetorial has rented and it will running by itself a Pilot DPC Plant at Parana State to validate process gains and the business plan
DPC Drying Pyrolysis Cooling 21
RG Wood Charcoal Yield Better Volumetric Wood Chacoal Conversion Yield improvements with new technologies 40% 3,30 38% 3,15 3,10 36% 35,8% 36,0% 36,1% 36,3%36,6%36,8% 34% 32,9% 33,4%33,8% PROCESS CONTROL PLUS DRYING PROCESS 2,90 32% 2,70 30% 29,3% 2,40 2,50 28% 2,30 26% 2,13 2,10 2,08 2,10 24% 22% 20% 22,3% 1,96 1,95 1,95 1,93 1,92 1,91 1,90 1,70 Better 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Gravimetric Yield Volumetric Yield 22
MAIN ENVIROMENTAL IMPROVEMENT WITH THE NEW TECHNOLOGIES TO PRODUCE CHARCOAL Improve the charcoal yield from 22% to 36% means: VETORIAL GAS EMISSION REDUCTION = 780.000 tons of CO2 eq. per year 23
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