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Governor’s Conference on Energy Presentation

Governor’s Conference on Energy Presentation. October 16, 2013. Executive Summary. Table of Contents. 1. Wood Fuel Developers LLC Overview. 2. Domestic Wood Pellet Overview. 3. International Wood Pellet Overview. 4. Wood Supply. Closing- Questions. Executive Summary.

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Governor’s Conference on Energy Presentation

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  1. Governor’s Conference on Energy Presentation October 16, 2013

  2. Executive Summary Table of Contents 1 Wood Fuel Developers LLC Overview 2 Domestic Wood Pellet Overview 3 International Wood Pellet Overview 4 Wood Supply Closing- Questions

  3. Executive Summary • Wood Fuel Developers LLC (“WFD” or “the Company”) is an affiliate of ITAC Engineers and Constructors, a fully integrated EPC contractor with over 300 employees. ITAC has been providing services to support the development of Renewable Fuel projects for the past 8 years, in the Wood Pellet, Ethanol and Biodiesel Industries and 25+ in the Fortune 500 Heavy Industrial Markets • Wood Fuel Developers has identified three market sectors with the immediate potential for significant economic benefit that it intends to exploit in the initial phase of its operations: • International Wood Pellet Market – Already installed wood-burning systems, particularly in Europe and Asia has created a shortage of wood pellets. Growing demand by European utility companies has exacerbated this shortage. • Domestic Residential Wood Pellet Market - Increased demand for both wood pellets and wood pellet stoves, combined with inconsistent supply has created increased demand from “big-box” manufacturers and residential users in the Northeastern U.S. • Domestic Commercial Wood Pellet Market – As the economic and social justification for wood-fueled boilers increases, domestic industrial demand for wood pellets will increase as well.

  4. Wood Fuel Developers LLCMarkets

  5. Domestic Wood Pellet Overview • Consumption Predominately in the North East Markets • Seasonal – August-March (Highest Volume) • Big Box Stores have Credit (Low Price) • Many Outlets have little to no Credit • Credit Card and Pre-Pay? • Expensive to Truck to the North East • Rail has limitations - Increased Transportation Damage Risk • Distributors are Spread out. • 1.5mm tons projected for 2013-2014 Heating Season • Many local “MOM and POP” Manufactures

  6. International Wood Pellet Overview • Consumption Through-out Western Europe • 10 years ahead of the US – ITALY consumes over 2mm tons and produces 30% less • Total European Bag Market is 5+ mm tons pellets • No Government Subsidies – Competes strictly on Price • Seasonal – June-March (Highest Volume) • Seasonal – April-May (Lowest Volume) • Many Distributors - Must go through Agents to supply Big Box Stores • Stand By LC is Difficult with Foreign Distributors • Trade Credit Insurance is Used to Provide Payment Terms • Payments Via International Wire Transfers • Understand Export Documentation • Understand Sea Container Movement

  7. Raw Materials • Operational Threats and Mitigating Factors

  8. Greensville, VA – 100,000 Ton Wood Pellet Plant Permitted and Ready to GoFinalizing Wood ProcurementFinalizing Off-take AgreementsFinalizing Capital Investment Closing-Questions 1 2 3 4

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