investing in agarwood

2012AS IA FORES TRY

Forestry Investments - An Asset that keeps on growing

The Asia Forestry Group is engaged in forestry management in Thailand. The group is focusing on Aquilaria plantations and distillation divided into 2 key business units, Asia Forestry Management Co., Ltd. and Asia Forestry Distillery Co., Ltd.,

ASIA FORESTRY MANAGEMENT (‘AFM’)Plantation Management specialists focusing on Aquilaria tree species.The fastest growing forestry management company in South East Asia with 59 plantations in management and planning, AFM’s expertise in producing high quality trees for harvesting for their luxury aromatic oil is unrivalled.

ASIA FORESTRY DISTILLERY (‘AFD’)The leading luxury aromatic oil and high value woodchip manufacturer and distributor in Middle East and Europe. Oil and woodchip is derived from Aquilaria tree species.The AFD manufacturing facility boasts ‘traditional’ distilling methods as well as future complementary plans to add the latest distilling technology. Robust best practice QA procedures ensure that high-end quality products are delivered – every time. Products are CITES certified for worldwide distribution.

Market demand dictates a requirement to supply, guaranteed volume levels of consistently high quality products. Sourcing its raw material supply from our managed plantations, AFM & AFD together have gained a competitive advantage via its guaranteed production and distribution by controlling the complete value chain from raw material creation and supply to end-product.

Asia Forestry is currently in an expansion phase and will in 2012 have the largest Oud oil manufacturing facility in Thailand and the first factory in the industry to attain ISO-9001 accreditation with plans to expand further in 2013 to become S.E. Asia’s largest producer of Oud Oil

Recent significant certifications include a recognised‘Worldwide Islamic Halal Accreditations Certifi-cate’ – providing another competitive advantage over our competitors in accessing Islamic-based markets.

Business Overview

1

Asia Forestry Management www.asiaforestry.com

PART OF THE TREEDOM GROUP

Plantation: AFM

Initial plantation: AFM invests in both corporate owned plantations and farmer contracts.

Inoculation - the trees on maturity, will be inoculated with our own techniques.

Resin development: 1-2 years after the inoculation process, dark resin is developed as an antibody to the inoculation material

Distillation: AFD

Harvesting: the wood is cut and transported to our factory.

Wood chip preparation: the logs are chopped and grinded, then fermented enter a 10 day fermentation phase

Distillation: the prepared mix raw material is distilled for 10 days to extract the Oudh oil.

Oil grading & Stocking: After Inspections, our oil is classified into quality grades. The bottled oil is then stored in secured locations due to its high value.

Group Operation

2


Harvest & Cutting

Planting/Buying

AFD

AFM

Distillation

Inoculation

Stocking

Resin Development

Send to AFD


All AFM plantations are located in Trat province, next to the Cambodian border providing perfect growing conditions for aguilaria and agarwood inoculation.

40 plantations currently able to supply more than 60,000 trees and the inoculated trees account for 40% of total trees.

Trat is also known as the ‘Fruit capital’ of the world. The 380 kilometer stretched forest grounds, the very fertile soil and the rainy climate make Trat the most perfect place for our plantations. The best Agar oil from Thailand comes from this region. Trat is situated near the Cambodian border.

3

Plantation

What is Aquilaria?


Agarwood is a precious resinous wood forming in Aquilaria trees, native to the Southeast Asia region. The dark resin is formed as an antibody for healing after injury or fungus infection. The agarwood is widely used in perfume and cosmetic industry, and religious activities.

Agarwood trees are registered as an endangered species by CITES due to its precious value, causing illegal wood smuggling. AFM is supporting the regeneration of this species from its managed plantations.

Thailand has been recognized worldwide as a source of premium quality agarwood; however, most of the current agarwood supply is derived from the wild cutting due to illegal logging.

In respect of tree conservation, the concept of Aquilaria plantations was initially developed in Thailand, with inoculation techniques, capable of providing premium quality agarwood comparable to the natural source.


Plantation Operation

4


Nursery Stage Site Preparation 2 year old 6 year old

Inoculation Individual ID Infected Wood


AFD Factory is located close to the raw material supply via AFM plantations, to minimize our logistic cost.

AFD currently operates 59 stills which is capable to produce Oudh oil of approximately 4,500 - 5,000 tolas/year or 54 -60 kgs./year.

Asia Forestry is currently in an expansion phase and will in 2012 have the largest Oud oil manufacturing facility in Thailand and the first factory in the industry to attain ISO-9001 accreditation

5

Our FactoryAsia Forestry Management www.asiaforestry.com


Distillation Process

6


PHASE l : From the tree to pot - Preparation

Extracting the oil from the tree

PHASE ll : Fermentation

PHASE lll : Distillation

PHASE lV : QA

PHASE V : Testing

Factory Storage Preparation Preparation

Mash Distillation Room Filling 10 days Oil


Oud al Seyufi Cambodia

Oud al Seyufi Trat

Oud al Safii Cambodia

Oud al Safii Trat

Oil Powder

7

Oud Oil Product

Oud Oil Product

Asia Forestry produces four types of High Quality Grade Oud Oil:



The Middle East Market

The Middle East market is the main market for Oudh Oil, mainly the Muslim community, as this is the world’s most popular region for using oudh.

The needs of the target group can be divided into different parts:

Andrew Steel (CEO) discussing our products with buyers from MOELLHAUSEN

Religious: The needs of the Muslim community are related to religiousaspects. They highly cherish the oudh and use it for ceremony purposes.

Cultural: oudh oil is often used as special gifts and as a welcoming fragrance in their houses.

Esthetical reasons: Oudh oil is has a very strong and distinct smell and is hardly used anywhere outside the Arabian Peninsula. This distinct smell is adored by both men and women and stands for wealth.

The Middle East market uses Oudh oil for the following end products:

Perfumes Incense Medicines

8



CSR & Marketing Activities


9


Mr.Arnfinn Oines, Social & Environmental Conscience, Six Senses Resorts & Spas has worked with the PATT Foundation to create one of the largest reforestation projects in South East Asia by planting over 200,000 trees per year under the “Six Senses Forest Restoration Project” in Doi Pa Ma National Park, Chiang Mai region of northern Thailand.

Arnfinn

Asia Forestry Management Co.,Ltd. (AFM) 54 B.B. Building, 7th Floor, Office # 3705, Sukhumvit 21 Road (Asoke),

Klongtoey-Nua, Wattana, Bangkok 10110 Thailand Tel : +66 2 259 6455 Fax : +66 2 259 6456

Email : [email protected] Website : www.asiaforestry.com

investing in agarwood

Investor Relations