NOVEMBER 2009 Manaus Free Trade Zone: Business and Investment Opportunities in the Amazon

covers over 59% of the country 5,030 million Km 2 23,596 million inhabitants 20,000 Km of waterways Mineral Resources: Oil, Gas, Bauxite, Cassiterite, Niobium, and others Equivalent to 80% of the South American Amazon total area 1/5 of the world’s primary broadleaf forests Tropical humid climate = 26ºC to 36ºC BRAZILIAN AMAZON

ATLANTIC OCEAN PANAMA CANAL Miami Los Angeles PACIFIC OCEAN LOCATION IN RELATION TO THE MARKETS POPULATION LATIN AMERICA AND CARIBBEAN POPULATION: 574 million inhabitants NORTH AMERICA ASIA CENTRAL AMERICA AFRICA EUROPE Capital Sea route Road route Air routeSea and Air route Manaus Porto Velho São Paulo Belém Tokyo Taipei Taiwan Hong Kong Caracas Fluvial route

(Law no /1957 amended by article 1st. of Decree-Law no. 288/1967) “The Manaus Free Trade Zone is a free import and export trade area where special fiscal incentives apply, set up with the objective of creating in the Amazon Region an industrial, commercial and agricultural center under economic conditions that allow its development, given local factors and the great distance separating it from its markets”. CREATION OF THE MANAUS FREE TRADE ZONE

SUFRAMA - THE GOVERNING BODY OF THE MANAUS FREE TRADE ZONE SUFRAMA is a Public Administration agency affiliated to the Ministry of Development, Industry and Foreign Trade (MDIC). It manages and controls the fiscal incentives granted to the companies established in the Manaus Free Trade Zone, besides promoting development strategies for Western Amazon. It thus has the role of an investment promoting agency for the area.

AREA OF THE MODEL – WESTERN AMAZON AND AMAPÁ AMAZONAS Manaus Rio Branco ACRE SURINAME GUIANA VENEZUELA COLÔMBIA EQUADOR PERU BOLÍVIA Porto Velho BRASIL Free Trade Zones and Manaus Free Trade Zone SUFRAMA Bonfim RORAIMA AMAPÁ Tabatinga RONDÔNIA Cruzeiro do Sul Brasiléia- Epitaciolândia Guajará-Mirim Macapá-Santana Boa Vista

FISCAL INCENTIVES FEDERAL IMPORT TAX (II) - 88% reduction on the inputs of industrial goods. In the case of computer products, reduction is proportional to the national added value. TAX ON INDUSTRIAL PRODUCTS (IPI) – Total exemption. INCOME TAX (IR) - 75% reduction on the income tax. Exclusively for reinvestments. Common to all Legal Amazon Region. SOCIAL INTEGRATION PROGRAM (PIS) and SOCIAL SECURITY FINANCING CONTRIBUTION (COFINS) – Zero-rated tariff for incoming goods and inter- industry internal sales, and an aliquot of 3, 65% (with exceptions) on the finished goods sales to the rest of the country. STATE (IN EACH STATE OF THE UNION) VALUE ADDED TAXES ON SALES AND SERVICES (ICMS) – Incentive credit from 55% to 100%. In all cases there are some contributions to funds for support of high education, tourism, R&D and others.

MANAUS INDUSTRIAL DISTRICT Location Incentives

EDUARDO GOMES INTERNATIONAL AIRPORT CHIBATÃO PORT AURORA EADI PORT AND AIRPORT INFRASTRUCTURE PUBLICLY OWNED PORT: - PORT OF MANAUS Largest floating port in the world Total area: 94,923 m² PRIVATELY OWNED PORTS: - SUPERTERMINALS Storage Area: 8,000 m² - CHIBATÃO Storage Area: 17,600 m² - AURORA EADI Storage Area: 9,000 m² EDUARDO GOMES INTERNATIONAL AIRPORT: - CARGO TERMINAL Total area: 49,000 m² Third largest airport in Brazil in terms of cargo PORT OF MANAUS SUPERTERMINALS

COMPENSATIONS DEMANDED BY THE MODEL In order to obtain the approval of industrial projects with annual limits of import by the Administration Council (composed by members of 10 Ministries of the Brazilian Government) the following items should be observed: Execution of Basic Productive Process; Job creation in the area, with the concession of social benefits to the workers; Compliance with demands of product technology incorporation and of compatible production process with the state of art; Permanent training of the workforce in order to obtain growing levels of productivity seeking increasing competitiveness; Reinvestment of profit in the region; Investment for scientific and technological development.

GOVERNO FEDERAL MANAUS INDUSTRIAL PARK

SOME OF THE OVER 600 INDUSTRIAL COMPANIES ESTABLISHED IN MANAUS SDI

,105 10, , , , , , IN MILLION Source: COISE/CGPRO/SAP – SUFRAMA Growth highlights 2002 to 2008: In real = % In dollar = % 2007 to 2008: In real = 9.29% In dollar = 17.26% Real Dollar SALES EVOLUTION

MAIN SECTORS TWO-WHEELED 25.45% COMPUTER GOODS 13.60% CHEMICALS 9.91% CONSUMER ELECTRONICS 29.69% OTHERS 2. 81% WATCH-MAKING 1.01% MECHANICAL 2.61% DISPOSABLES 2.46% METALLURGY 6.93% THERMOPLASTICS 5.53% Source: COISE/CGPRO/SAP – SUFRAMA Data from 2008

Growth highlights 2002 to 2008: 58.93% 500 thousand direct and indirect jobs Source: AP/CGPRO/COISE/COGEC – SUFRAMA EMPLOYMENT EVOLUTION (DIRECT LABOUR FORCE)

PRODUCTION NATIONALIZATION 10% 20% 30% 40% 50% 60% % 29.24% 50.37% 32.38% 51.96% 32.33% 50.04% 31.98% 51.16% 29.49% 47.77% 27.75% % 25.81% Source: AP/CGPRO/COISE – SUFRAMA NationalizationRegionalization Parts, pieces and components

, ,299 1,157 2,143 1,533 1, ,268 IN MILLION US$ Growth highlights 2002 to 2008: 19.17% 2007 to 2008: 14.54% Source: Sistema Alice / MDIC EXPORTS EVOLUTION

MAIN EXPORTED PRODUCTS Source: SUFRAMA – MDIC/SISTEMA ALICE Data from 2008 CELLULAR PHONES MOTORCYCLES SOFT DRINKS CONCENTRATES NON ELECTRIC SHAVERS TV SETS DIGITAL SIGNAL RECEIVERS-DECODERS COLOR PHOTOGRAPH PAPERS RAZOR BLADES CAR AUDIO 60 VOLTS RELAYS 1 º 2 º 3 º 4 º 5 º 6 º 7 º 8 º 9 º 10 º

4th - COLOMBIA (77,898) 6.14% 3rd - U.S.A (127,078) 10.02% 7th - MEXICO (55,555) 4.38% 2nd - VENEZUELA (181,457) 14.31% 5th - PERU (66,484) 5.24% 6th - ECUADOR (56,0106) 4.42% 9th - PARAGUAY (19,587) 1.54% 1st - ARGENTINA (430,907) 33.98% 10th-URUGUAY (17,387) 1.57% 8th- PANAMA (21,438) 4.38 MAIN EXPORT DESTINATIONS Source: SUFRAMA – MDIC/SISTEMA ALICE In million US$ Data from 2008

EXPORTAÇÕES AMAZONAS - REPÚBLICA TCHECA Fonte: SUFRAMA – MDIC/SISTEMA ALICE Dados de janeiro a outubro de 2009 ITEMDescrição NCM US$ 2008 US$ MAQUINAS E APARELHOS MECANICOS C/FUNCAO PROPRIA OUTRAS OBRAS DE PLASTICOS OUTS.INSTRUMENTOS,APARELHOS E MAQS.DE MEDIDA/CONTROLE OUTROS CONDENSADORES FIXOS C/DIELETR.CERAM.1 CAMADA OUTS.PEIXES ORNAMENTAIS VIVOS OUTROS CONDENSADORES FIXOS ELETRICOS6780

IMPORTAÇÕES AMAZONAS - REPÚBLICA TCHECA Fonte: SUFRAMA – MDIC/SISTEMA ALICE Dados de janeiro a outubro de 2009 ITEMDescrição NCMUS$ 2008US$ CONDENSADOR FIXO ELETR.DE TANTALO,MONTAG.SUPERF.T OUTS.PARTES P/APARELHOS RECEPT.RADIODIF.TELEVISAO,ETC OUTRAS OBRAS DE PLASTICOS PRATA EM OUTRAS FORMAS SEMIMANUFATURADAS APARELHOS INTERRUP.CIRCUITO ELETR OUTS.COPOS D/CRIST./CHUMBO,EXC.VITROCER.C/PÉ PARTES DE OUTS.MAQUINAS E APARS.ELETR.C/FUNCAO PROPRIA OUTS.MÁQS.APARELHOS D/IMPRESSÃO P/OFSET OUTS.CONDENSADORES FIXOS C/DIELETR.CERAM.MONTAG.SUPERF OUTS.PNEUS NOVOS,P/VEICS.CONSTR.ARO>=61CM

EXPORTAÇÕES BRASIL - REPÚBLICA TCHECA Fonte: SUFRAMA – MDIC/SISTEMA ALICE Dados de janeiro a outubro de 2009 ITEMDESCRIÇÃO NCM US$ 2008 US$ MINERIOS DE FERRO NAO AGLOMERADOS E SEUS CONCENTRADOS EXTRATOS E SUCOS,DE CARNES,DE PEIXES,DE CRUSTACEOS,ETC RADIADORES P/TRATORES E VEICULOS AUTOMOVEIS OUTS.COUROS/PELES,INT.BOVINOS,PREPARS.ETC FUMO N/MANUF.TOTAL/PARC.DESTAL.FLS.SECAS,TIPO "BURLEY" PEDACOS E MIUDEZAS,COMEST.DE GALOS/GALINHAS,CONGELADOS OUTS.ANTENAS EXC.P/TELEFONES CELULARES CAFE NAO TORRADO,NAO DESCAFEINADO,EM GRAO OUTRAS PARTES E ACESS.P/TRATORES E VEICULOS AUTOMOVEIS LAMIN.DE OUTRAS LIGAS ACOS,L>=600MM,GALVAN.ELETROLIT

IMPORTAÇÕES BRASIL - REPÚBLICA TCHECA Fonte: SUFRAMA – MDIC/SISTEMA ALICE Dados de janeiro a outubro de 2009 ITEMDescrição NCMUS$ 2008US$ OUTROS MOTORES DE EXPLOSAO,P/VEIC.CAP.87,SUP.1000CM BOMBAS INJETORAS DE COMBUSTIVEL P/MOTOR DIESEL/SEMI CAIXAS DE MARCHAS P/VEICULOS AUTOMOVEIS TRILHOS DE ACO,DE PESO LINEAR SUPER.OU IGUAL 44.5 KG/M PARTES DE MAQUINAS E APARELHOS DE AR CONDICIONADO CONTROLADORES ELETRON.P/SIST.DE INJECAO,AUTOMATICOS OUTROS ANTIBIOTICOS VIRABREQUINS (CAMBOTAS) COLETORES DE ADMISSAO OU ESCAPE,P/MOTORES DIESEL/SEMI MOTOR ELETR.CORR.ALTERN.TRIF.750W<P<=75KW,ROTOR GAIOLA

CONSOLIDATED INVESTMENTS IN MANAUS INDUSTRIAL PARK Growth highlights 2002 to 2008: % 2007 to 2008: 18.01% IN MILLION US$ Source: AP/CGPRO/COISE – SUFRAMA ,089 2,759 3,448 4,565 5,548 6,703 7,910 9

Source: INPE NINETY-EIGHT PERCENT OF THE AMAZONAS STATE FOREST PRESERVED

STRATEGIC PROJECTS MANAUS INDUSTRIAL PARK SCIENCE, TECHNOLOGY AND INNOVATION CENTER (CT-PIM) AMAZON BIOTECHNOLOGY CENTER (CBA ) COMPETITIVE INTERNATIONAL INSERTION OF THE MODEL REGIONAL POTENTIALITIES

Mission Promote the generation, dominion and application of advanced and innovative scientific and technological knowledge, in association with local, national and international institutions, thus contributing to the sustainable economic, environmental and social development of Western Amazon, specially Manaus Industrial Park. Objectives Create and consolidate a Technological Center for MIP, with two fundamental objectives: 1 – Contribute towards strengthening the Regional Science, Technology and Innovation System 2 – Generate Microsystems competences Science and Technology Cooperation Agreements

AMAZON BIOTECHNOLOGY CENTER Biotechnology Biodiversity Bio-industry Food and Nourishment Biotechnologically relevant enzymes Bio-insecticides BIO-INDUSTRIES Cosmetics

Cassava Starch Fish Farming Guarana REGIONAL POTENTIALITIES PRODUCTS OF AMPLE MARKET Peach Palm Heart of Palm Tropical Fruits Sustainable exploitation of wooden products Ecological Tourism Palm oil

INTERNATIONAL INSERTION OF MANAUS FREE ZONE MODEL 1.Participation in international negotiations; 2. Commercial Promotion of Manaus Free Zone Model through: - Commercial Missions and Events such as Seminars, Congresses, Meetings, etc. - Holding of the Amazon International Fair – AIF and its promotion by means of Preceding Missions.

AMAZON INTERNATIONAL FAIR FIAM 2009 November Studio 5 Convention Center Manaus – Amazonas – Brazil

Come to Manaus Amazonas - Brazil THANK YOU (92) OLDEMAR IANCK Deputy Managing Director of Projects at SUFRAMA