PARAGUAY: Investment Opportunities

I. Forestry Development: Activities of the Forestry Company

Investment in own farm, and
Execution of forestry projects on third-parties' farms

a. Investment in Own Farm:

Development of investment project: Management and enrichment of native forest and/or forestry plantations with fast growing species; financing to be provided by the Capitalist Partner (who earns an interest rate and participates in the Company's results in accordance with his shareholding percentage), and/or by external capitalists.

b. Execution of Forestry Projects on Third-Parties' Farms

SILVAPAR takes charge of identifying owners of farms suitable for forestry plantations who are willing to sign partnership contracts.

SILVAPAR designs the forestry plantation and proposes the Investment Project and the Execution Plan.

SILVAPAR carries out the Investment Project with own resources or looks for Investors willing to finance the investment (on the basis of credit lines, and/or as joint venture partners).

Example Uruguay: A high percentage of projects with tens of thousands of hectares of forestation and reforestation have been accomplished trough this Investment Promotion Model (total area covered with forestry plantations during the last 20 years: 950.000 ha).

The basic model: Landowners (mostly cattle raisers and big farmers) contribute 250 to 2,000 ha plots for forestry projects (only land and/or financial means). The Forestry Development Company (SILVAPAR S.A.) proposes the INVESTMENT PROJECT and takes charge of its TECHNICAL IMPLEMENTATION, and offers financing from own resources and / or from third parties: CAPITALIST PARTNERS The CONTRACT between the parties regulates the different forms of participation (contribution of land, services, financing). Typically, a percentage of the forestry production for each of the involved parties (Landowner, Development Company, Capitalist Partner) is contractually agreed upon.

Potential for Forestry Plantations in Paraguay's Eastern Region: existing in the 8 (eight) million hectare extension of land formerly covered by native forests eliminated to make place for agricultural plantations and grassland for cattle rising. The total estimated area of suitable land plots of size: 250 ha to 2500 ha available for forestry projects can be estimated at about 300,000 ha (three hundred thousand hectare).

SILVAPAR could envisage carrying out forestry plantations of 2,500 ha. to 50,000 ha., involving investments in the order of about Euros 15 to 200 million.

The Growing Periods for Forestry Plantations in Paraguay (with exotic trees: Eucalyptus, Acacia, Meliacea species, and native trees: can be estimated at an average of 14 years. For comparison: The average growing period for conifers in the Northern Hemisphere is longer than 50 years! These advantages in growing speed are motivating large international Companies like: Stora Enso, Botnia, Weyersberg and others to invest in the Southern Cone, in land and forestry plantations, as well as in participations in the wood industry.

II. Development of Agricultural Plantations

1. This Company could be developed under a scheme similar to the one outlined above.

Possible investments in existing projects of soybean plantations: a) selling of projects and / or search for joint venture partners; and b) sale offers of land suitable for agriculture, forest land, functioning farms or land suitable for establishing farms.

2. At the same time, the Company could perform as a Consulting Firm dealing with identifying suitable land for plantations, designing the investment project and offering the project as well as its execution to possible investors.

3. The Company could offer credit lines and/or joint venture undertakings to Producers' Cooperatives needing funding sources for operating capital (at short, medium and long term) and also for purchasing/importing input items (seed, fertilizers, machines, etc.) for their members. Repayment of credits to these Cooperatives could be negotiated in money and/or in kind with products such as soybean, rape, maize. In any case, with a bit of time we'll be able to assess the financing needs of some companies, particularly those of the different production cooperatives. The financing needs which could be covered from foreign sources could be estimated from Euros 20 to Euros 70 million, depending on securities demanded, rates of interest, periods, etc.

III. Promotion of Investments in Agroindustry and Biofuel Projects

The Company could work in this sector as an International Consulting dealing with the placing of credit lines and/or selling of joint venture participations.

We are in touch with entrepreneurs and also with cooperatives that are interested in investing in various projects and need medium- and long-term financing.