Reforestation Project Highlights Paulownia Potential

REFORESTATION PROJECT
PAULOWNIA & INTERCROPPING PAULOWNIA
WITH BANANA

www.asiaforests.com

Asia Reforestation Group Inc,. 1

ARG OVERVIEW

Asia Reforestation Group (ARG) – a public
company established in Nevada, US; and
major shareholder of Viet A Joint Stock
Company (VAC) – the first Vietnam private
company specializing in great-scale
reforestation reflected through 1,000 ha of
Acacia with success.

VAC was granted the Certificate of Land Use
Rights for the aforementioned 1,000 ha, and
entitled to expand covering the surrounding
10,000 ha.

ARG management team of totally more than
50 years of experience in afforestation and 8
years fully of experimental research devoted
to Paulownia planting trials across 15
provinces in Vietnam, including the areas
under VAC’s management.


ARG OVERVIEW

ARG is seeking capital to develop via VAC
400 ha of Paulownias (in which 100 ha
intercropped with bananas) for sales of
carbon credits and timber.

The expected 400 ha shall be carried out at
Chu Rcam Commune, Krongpa District, in Gia
Lai Province.

ARG expects to raise USD 2.7 million for 100
ha for private placement from US and Non-
US investors; and USD 9.5 million for the
remaining 300 ha from direct investment,
with a view to profit sharing from sales of
carbon credits and timber for 8-year cycles of
planting and thinning off trees.


ARG AND REFORESTATION PROJECT (1)
ARG takes part in agro-industrial projects involving plantation of Paulownia and
bananas, or other appropriate trees (for the long-term target).

ARG’s objective is to create a platform for investors to directly or indirectly finance
afforestation, which not only generates huge profits but also helps resist the global
climate change.

4,5-year old Paulownias


ARG organises the afforestation
based on the following structure:
1. ARG shall act as a platform
through which capital raising,
carbon credit trading, business
collaboration or indirectly
acquiring land for reforestation,
shall be carried out in Vietnam
and other Asian countries.
2. VAC shall execute afforestation
as well as management of such
process.
3. PHI Group and PHI Vietnam
Holdings shall provide advisory
services as regards financial
structuring, and public listing for
fund raising in the US and
Europe.


ARG features a professionally fully-
fledged management team with
enriched practical relevant experience.

The company is headquartered in Ho Chi
Minh City and has got branch offices in KonTum
Gia Lai, Kon Tum (the Project site), and Gia Lai
the USA.

HCM City


STRATEGIC BACKGROUND
ARG and VAC include expert of high caliber,
led be Mrs Chan Kim Pham and Mr David
Nguyen with more than 30 years of
experience in reforestation. Both of them
have spent plenty of years on planting
Acacia on a 1000ha area, and Paulownias
for trial on 15 sites whose areas totally
amount to 40ha, scattering in many
provinces in Vietnam.

Given the best natural conditions and
especially the staff’s practical experience,
Paulownia plantation is expected to
succeed in the entire south of Vietnam in
general, and in the 400-ha area in Chu
Rcam District in particular.

With the experimental proof success of
Paulownia planting in Vietnam for the past
8 years, the Project shows visible potential
for reaching targeted revenue of the first
carbon credit sale in 2013.


ADVANTAGE PROJECT SITE
ARG, via VAC, has master-planned an initial
400-ha area for Paulownia plantation at Chu
Rcam District with the best conditions as
follows:
The site is located in a region where rain is
not so profuse though, the rain water is well
distributed during the 8-month rainy
season, ensuring sustainable growth for the
trees.

The planting site is situated around springs,
giving the area the ability to effectively
deploy natural watering sources, thereby
minimizing cost of watering.

The watering system for Paulownia in the
first 3 years is also taken advantage of for
the intercropping of 20 ha of bananas of
high quality meeting standard for export.

The team that is currently in charge of
forest management for VAC shall be
deployed to execute the plantation and 4,5-year old Paulownias wood
management of Paulownia and banana.

PAULOWNIA’S CHARACTERISTICS IN VIETNAM

In Vietnam, The Paulownia is big fast growing
deciduous wooden tree, with wide foliage and
rich branching. After one year, a normal tree
can grow up to 6-7 m and more than 10 m
after 2.5 years, with stump diameter of > 25
cm, and after 8 year the respective height of
20m and diameter of >70 cm

Paulownia is a well adaptive type of tree that
can withstand climate harshness of -10oC to
+40oC, and can survive where the annual rain
level is 250 millimetres, and can really
generate economic benefits where rain falls at
800 millimetres per year. Even during lasting
drought, the tree still does not succumb.


PAULOWNIA’S CHARACTERISTICS IN VIETNAM

The tree can grow on terrain with
steepness of up to 30o , on different
sorts of soil including the austerely
depraved ones. It grows best on land
with pH level from 5 to 8; and requires
at least 0.6 metre to sustain against
strong winds or storms.

Paulownia is fast-growing which is
suitable for early logging. Moreover,
the huge biomass created by the tree
makes it ideal for carbon credit sales.

Paulownia’s leaves and flowers are
rich in protein, which can be used as
animal feed.


VALUE CREATED

Sales of bananas (after 12
months) continuously in 3-4
years

Sales of carbon credits (after 24
months) continuously during the
remaining 6 years.

Sales of timber from thinning off
trees (after 4 years) and again
from the re-grown trees after the
following 4 years.

Sales of timber (after 8 years)
with expected average diameter
of 50 cm and timber product of
0.75-cubic meter volume.

Asia Reforestation Group Inc,. www.asiaforest.com

Investing in ARG shares
For US investors

Raising $1 Mn from institutional investors
Expected issued price = $0.1 - $0.3/share
Number of authorised shares: 200,000,000 shares
Upgrading onto OTC Bulletin Board within 3-6 months after completion of capital
raising.

For Non-US investors

Raising $1.7 Mn from individual or institutional investors
Expected issued price = $0.1-$0.3/share
Or
Preference shares with fixed dividend of 10% per annum and convertibility to common
shares upon upgradate onto OTC Bulletin Board; price equivalent to 70%-80% of the
traded market price on OTCBB.

Investing directly in afforestation
Raising capital for planting 200 ha of Paulownia,
100 ha of Paulownia intercropped with banana.

Investors: individual, or institutional.

Minimum level of investment:
1 unit is defined as 1 ha, equivalent to USD
27,000 for investment in Paulownia
plantation only.

1 unit is defined as 1 ha, equivalent to USD
34,000 for investment in Paulownia
intercropped with banana.

(Please refer to Appendix for estimated
investment figures)


1 ha of Paulownia
Investment: 27,000 USD

Return on Investment (ROI) ≈ 515%
Internal Rate of Return (IRR) ≈ 31%

1ha of Paulownia intercropped with
banana
Investment: 34,000 USD

Return on Investment (ROI) ≈ 492%
Internal Rate of Return (IRR) ≈ 39%


Sale Share

+ Exit can be executed through share trading
on OTCBB and NASDAQ and dual listing in
FRANKFURT.

Return (investment in units of forest)
Exit can be done in 2 ways:

Sale of units (each equaling 1 ha) of forest
via OTC mechanism at website
www.asiaforests.com

Direct profit sharing from 1 ha of forest:
sales of carbon credit, sales of timber from
pruning off and logging.


Afforestation process is updated by ARG on a
quarterly basis with satellite images and
information onto the company’s website and
other social network sites.

Afforestation/reforestation and management
activities are updated, recorded in pictures
and video clips, then posted frequently on
the website.

Quarterly report as regards growth status,
size, magnitude, estimated added value, etc.,
for valuating forest units.

Independent auditing shall be conducted
upon profit sharing.


10 Principles of Forest Stewardship Council
(www.fsc.org ; www.findochina.org.vn)

Voluntary Carbon Scheme (www.v-c-s.org)

Standards for forest certification
www.sgsqualifor.com

All ARG’s activities in carbon trading and
timber sales fully satisfy the above mentioned
criteria.


APPENDIX: VAC MANAGEMENT TEAM

Ms.Chan Kim Pham
Chief Executive Officer cum Technical Specialist

Mrs Pham is also Chairperson cum CEO of Viet
A Joint Stock Company – an enterprise
specializing in afforestation and reforestation,
forest management, industrial and agricultural
plantation, cattle breeding, and environmental
treatment.
She has accumulated in her professional
portfolio more than 20 years of practical
experience in carrying out forestry projects of
national level, and has, of late, completed
growing more than 1,000 hectares of forest in
Gia Lai.



David Nguyen
Chief Operating Officer cum Technical Specialist
Having engaged in afforestation for than 15
years, of which 8 were wholly dedicated to
Paulownia trials, Mr Nguyen is certainly a leading
expert of this industry. So far, his experimental
plantation has proved a remarkable success,
resulting in 40 hectares of healthy and fast-
growing Paulownias across 15 provinces in
Vietnam.
For the sake of activeness in planting, Nguyen
also established a nursery facility in District 9,
Ho Chi Minh City, where researches as well as
seedlings propagation and nurturing are carried
out.
The growth stages of trees in all those sites are
coherently documented and pictorially recorded
for extensive research, close monitoring, and
effective planning.


Dung Viet Luu – Chief Technical Officer
Mr Luu is a Master Degree holder specializing in fertilizer, with more than 10 years of experience
in Paulownia plantation. He has successfully test-grown such tree in many regions within 5
provinces in West Highland.
Hai Son Nguyen – Chief Financial Officer
Given a solid background in accounting and auditing including his bachelor degree and CPA
certificate, Mr Nguyen has rendered his service as a senior auditor to many major corporations in
Vietnam for several years before joining ARG. Simultaneously, he is also Financial Controller cum
Project Manager at PHI Vietnam Holdings, where he is in charge of M&A transactions, corporate
restructuring deals, as well as listing advisory services focusing on the US and German stock
exchanges.
Nhien An Thi Le – Senior Technical Specialist
A Master Degree holder in Plant Physiology, Ms Le has demonstrated an impressively brilliant
academic and research track record in biotechnology and bio-engineering related fields. She has
received several highly specialized training courses and seminars both onshore and overseas
over the years as well, in addition to taking part in and leading many significant national projects.
Le is also well-known for her expertise in insect and pathogenic fungi for which she has been
kindly employed by ARG to make sure that the company’s Paulownias get taken good care of for
healthy growth.


David Nguyen
Chief Operating Officer cum Technical Specialist

Chan Kim Pham – CEO


400 ha Paulownia


400 ha of Paulownia of which 100ha intercropped with Banana


APPENDIX : Cost of investment in 100 Ha

Paulownia +
Item Paulownia
Banana
Seed 300,000 400,000

Fertilizer & Pesticide 1,100,000 1,400,000

Planting & care 700,000 920,000

Infrastructure cost 400,000 500,000

Administration cost 200,000 180,000
Total (USD) 2,700,000 3,400,000

Paulownia: Investing in plantation of 108,000 Paulownias, equivalent to 1.080
trees/ha.

Paulownia + Banana: Investing in plantation 66,000 Paulownias intercropped
with150,000 banana trees equivalent to 660 Paulownia trees/ha and 1.500 banana
trees/ha.

APPENDIX :Pro-forma Profit and Loss
(100 ha of Paulownia)
Unit USD 1,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
INVESTMENT CAPITAL (2,700)
B. REVENUES
1 Carbon trading
Carbon credit 31 31 31 31 31 31 31
Unit price (USD) 22 25 27 30 32 33 35
Total 679 771 833 926 987 1,018 1,080
2 4-year old timber - - - 1,182 - - - 1,182
3 8-year old timber - - - - - - - 11,550
C. GROSS PROFIT (2,700) 679 771 833 2,108 987 1,018 1,080 12,732

D. PLANT CARE COST - (221) (225) (229) (252) (240) (245) (181) -
- - - - - - - - -
E. NET PROFIT (2,700) 458 546 604 1,855 748 773 899 12,732

F. PROFIT DISTRIBUTION
1 ARG (20%) - 92 109 121 371 150 155 180 2,546
2 Success fee for ARG 992
2 INVESTOR (2,700) 366 437 483 1,484 598 618 719 9,194
IRR 31%
ROI 515%


APPENDIX: Pro-forma Profit and Loss
(100 ha of Paulownia intercropped with Banana)
Unit USD 1,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
A. INVESTMENT (3,400)
B. REVENUES
1. Carbon trading
Carbon credit - 19 19 19 19 19 19 19
Unit price (USD) - 22 25 27 30 32 33 35
Total - 415 471 509 566 603 622 660
2. 8-year old timber - - - - - - - - 14,117
3. Banana - 1,587 1,587 1,587 1,587 - - - -
C. GROSS PROFIT (3,400) 2,002 2,058 2,096 2,153 603 622 660 14,117
D. PLANT CARE COST - (371) (378) (386) (250) (244) (255) (139) -
E. NET PROFIT (3,400) 1,631 1,680 1,710 1,903 359 367 521 14,117
D. PROFIT SHARING
1. ARG (20%) 0% 400 412 419 431 121 124 132 2,823
2. Success fee for ARG 1,111
3. INVESTOR (3,400) 1,305 1,344 1,368 1,522 287 294 417 10,183
IRR 39%
ROI 492%


THANK YOU

WWW. ASIAFORESTS.COM

Contact Person
Asia Reforestation Group Inc. Mr. David Nguyen
#1101 Waseco Plaza, 10 Pho Quang, Tan Binh Chief Operating Officer-
District, Ho Chi Minh City, Vietnam Cellphone: (+84) 908 897 682
Tel: (+84.8) 38446181 Email: david@phiholdings.com
Skypechat: paulowniaworld
Fax: (+84.8) 38446211

Reforestation Project Highlights Paulownia Potential

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