Vietnamese Woodchips andPellets import Business to Japan
ＡＲＲＯＷＦＩＥＬＤ Co., LTD.
5-16 Honjo, Koyoen, Nishinomiya,Hyogo, Japan
TEL: ＋81-798-75-1100
Email：biomass@arrowfield.co.jp

Outline
We have 5 affiliated companies with below descriptions:– Acacia (about 90%) and Eucalyptus (about 10%)
– Woodchips and Pellets can be produced– Available for both papermaking and biomass fuel– Compliant with chip and pellet standards for Japanesecompanies– Up to 1.2 million BDMT can be exported annually– Factory distribution and large carriers available throughout
Vietnam• Basically have plantation ownership• Afforesting is done at the same time as logging which allows
permanent supplement

Our approach to Vietnam•June 2016: Established a joint venture with a capital of 90,000 dollars (AFVN with 99% stakein Japan) to contribute to agricultural development in Vietnam, entered the agricultural market.
•May 2017: Signed a memorandum on agricultural cooperation with the Vietnam Farmers
Association (VNFU)'s Chairman, who is also a member of the Communist Party. Our company
is helping Vietnam to produce safe and reliable fruits and vegetables, export organic farming
materials to foreign countries (plant activators, organic calcium preparations, etc.) and provide
Japan seeds to Vietnamese agricultural producers, along with other agricultural technicalguidance.
•April 2018: When Mr. Phuc - the Vietnam Prime Minister visited Hai Duong Process Center(agricultural product processing, packaging and shipping factory), we had the opportunity toexchange opinions about agriculture in general. Our company's efforts were evaluated, and ourchairman was directly received encouragement gift from Mr. Phuc.
•From 2019 till now: Began exporting vegetables to Japan consigned to VIN group subsidiary(VinEco), the largest conglomerate company in Vietnam. In order to cultivate safe and reliable
vegetables to the world, our company created “quality standard table”, “product shipment
standard table” for each crop, together with supplying Japanese seeds, and farming withGlobal-GAP standards.
➔ Along with above activities, in 2019 we launched a business to supply woodchips andpellets using our human resources and knowledge related to agriculture and forestry.
We also know best about the distribution of exports in Vietnam, and we found a way toimport biomass fuel or raw material for papermaking to Japan, so we are currently
expanding our business in this field.

Memorandum of Understanding signed withFarmers Association in June 25, 2017

Our Activities
 Cooperation withFarmers Association
New chairman of the Farmers Association's Courtesy Visit

Farmers Association President Thào Xuân Sùngpresented gift to Chairman Yano

Interview with Chairman Yano and Farmers AssociationPresident Thào Xuân Sùng (May 21, 2018)

Greeting to Mr. Phuc the Prime Minister of Vietnam at Hung Viet Inc. in April 9, 2018

About Biomass Fuel ①
Woodchips and pellets we are handling are biomass fuels madefrom acacia wood. They are having attracted attention because they
have low impact on the environment and can provide highly efficientheat generation.
In addition to EU countries, demand for biomass power generation
is increasing so that demand for woodchips and pellets is also
expected to increase in Japan and other Asian countries.
Especially in Japan, they are focusing on improving power
generation efficiency by configurating power mix (energy mix) for
2030 which was formulated by the government in 2015.
We established a Vietnam subsidiary company in 2016 and started
import business with Japan customers. Promoting the developmentof several stable sources from northern and southern Vietnam tocomplement domestic biomass fuels, establishing a long-term andstable supply system for wood chips and pellets, and We willcontribute to promote disseminating renewable energy.

About Biomass Fuel ②
Wi t h i n 0 3 years of Vietnam's domestic agricultural support
activities and the promotion of exports of agricultural products toJapan, our relationship with the Vietnamese government, thecentral government of the Communist Party, and several large
corporations has deepened, and we have been able to build
business network in Vietnam.
Among them, there was a request from the government source
for Vietnam Economic development as part of the developmentof forestry in parallel with agriculture, as soon as we proceededwith the commercialization of woodchips and pellets for export toJapan.
During this period, we conducted a survey about domestic
demand and obtained information that there is a demand forwoodchips and pellets for biomass power generation, so that weare expanding our business to related companies.1) Overview of T company•Established date: May 2012
•Capital stock: 50 million yen•Activities:
1) Production, import, export of Acacia paper chip2) Production, import, export of Biomass fuel chip3) Import, export of Fuel Pellet
4) Own afforestation place•Shipping port: Mainly at CAI LAN Industrial Park in Quang Ninh province•Export history:
From 2012: Started shipping papermaking chips to Paper Manufacturing Co.,Ltd.
From 2014: Started shipping papermaking chips to Japanese companies inVietnam
From 2015: Started shipping Biomass Fuel chips to Korean company
From February 2016~ April 2017: Started constructing new factory in SouthVietnam
At present: Producing, importing, exporting Papermaking chips and Biomass
fuel chips; New factory of papermaking chip is under construction.

Production output of T company
1) Number of Acasia Chip manufactured: 1,2 million BDMT annually＋Shipment from South Vietnam (Phu My Port): 400,000 BDMT＋Shipment from middle of Vietnam (Dung Quat Port): 400,000 BDMT＋Shipment from North Vietnam (CAI LAN Port): 400,000 BDMT
2) Number of Pellet manufactured: 300,000 BDMT annually＋Shipment from Cat Lai Port, Phu My Port of South Vietnam: 200,000
BDMT (Bulk pile and Container loading) ➔ Holding 2 Factories＋Shipment from Da Nang Port of Middle Vietnam: 50,000 BDMT (Bulkpile and Container loading) ➔ Holding 2 Factories＋Shipment from Hai Phong Port of North Vietnam: 50,000 BDMT (Bulkpile and Container loading) ➔ Holding 3 Factories

Chips Specification of T company1) Specification of Papermaking Chip2mm～28.6mm:
CommonOver 28.6mm:
less than 5% in total
Smaller than 2mm:
less than 3% in total
Mixed skin and bark:less than 2% in total2) Specification of Biomass Fuel Chip
0.5mm～40mm:
CommonOver 40mm:
less than 10% in total
Smaller than 0.5mm:
０％Mixed skin and bark:less than 8% in total

ChinaNorthern area development mapof T company
China

LaosNorthWest Area
NorthEast Area
Hong River Area
North Central Area

Southern area development map of T company

Acacia planting Place of T Company

Acasia Wood log of T company

Acacia chip making machine of T company

Acacia chip deposit site of T company

Acacia chip deposit site of T company

2) Overview of H company
Established date: March 2000
A large company that constantly won the title of Top 500 Largest
Enterprises in Vietnam from 2012 to 2017.
They are also the largest in the wood chip and pellet Industry.
Shipping port: at multiple locations throughout the country
Mainly at CAI LAN Industrial Park in Quang Ninhprovince
Activities:– Production and export of woodchips for papermaking and biomass
fuel using acacia and eucalyptus wood as raw materials– Provision of shipping services by their own carriers– Own 03 woodchip carriers• Own multiple factories throughout Vietnam• Own preferential use of shipping port for large vessels– Own afforestation places

Shipping port size of H Company• Quang Ngai Province Port:
Total area: 23ha
Water line depth: 12.4m
Vessel received: 50,000 - 70,000DWTExploitation capacity: 12,000,000MT / year
• Hue City Port: started running from 2019
Total area: 12ha
Water line depth: 14m
Vessel received: 50,000 - 70,000DWTExploitation capacity: 10,000MT/day

Production capacity andspecification of H company
1) Production Capacity• Woodchips: 2,000,000～2,200,000 BDMT / year
• Pellets: 1,300,000 BDMT/year• Main export country: China, Korea, Japan,...
2) Product Specification
Over 40mm:
less than 4,5% intotal
9,5mm～40mm:
more than 77% in total
4,8mm～9,5mm:
less than 15% in total
Smaller than 4,8mm: less than 4,5% in total
Mixed skin and bark: less than 1% in total

Afforestation Place andit's License of H company• Afforestation Place:
Ca Mau: 7,300ha
Quang Nam: 10,000ha
Quang Ninh: 3,520ha
Ha Giang: 30,000ha• Afforestation License:
FSC-COC and FSC-CWFSC-COC and FSC-CWof H company

Cutted wood logs of H Company

Chip deposit site of H company

Chip deposit facility of H company

3) Overview of N company•••

Headquarters: Hanoi, Vietnam
Branch office in Quang Ninh Province, Vietnam
Activities:
Producing Acacia woodchips and pellets, exporting to China and Japan
Production capacity: 10,000 BDMT chips per month (can increase
production capacity anytime)➔ Up to 120,000 BDMT wood chips annually➔ 350,000 ~ 400,000 BDMT pellet production (including tree
branches and skins)
Acacia's owning plantation area: 3.4 ha•

Acacia chip quality and specification:
Moisture varies depending on season, average about 55%Over 40mm:
less than 5% in total
40mm～4,8mm:
more than 91% in total
Smaller than 4,8mm: less than 2% in total
Mixed skin and bark: less than 0,4% in total

4) Overview of D company•Location: Vinh Phuc province of North Vietnam•Capital stock: about 500 million yen (Zaibatsu company)•Owning 2 factories (planing to build new factory)–Production capacity of 500,000 tons / year when diverting
the entire Bao Bang factory for Japan customers.
–500,000 tons of capacity available in Hoa Binh factory forJapan customers (10ha of lot size).
•Acacia raw material supply capacity: 2 million tons per year
•Area: About 50,000ha throughout the country•Factory equipment: Chip drying equipment can be installed(20% moisture target)•Although there is a system for securing raw materials andplanting trees•It is necessary to construct new factory that matches theexport volume (no financial problems).

5) Business alliance with
Cao Bang Province
In Vietnam, local governments are governed by the chief who has theauthority to approve the decision. For overseas companies to enter
Vietnam, cooperation with local governments is essential for businesspromotion.
We have partnership with General Secretary of Cao Bang Province.
In woodchip export business, the General Secretary strongly hoped tocooperate with us as a recommended project, and requested to sign amemorandum.
Logistics will be transported by truck on land, which can be dealt with byincreasing the number of units and loading capacity, but there are somedifficulties in terms of cost.
Cao Bang Province has a depopulated but high quality forest resource, andthe forestry is making a tremendous effort. For new businesses such asexporting woodchips, the ministry is working on sustainability and legalityof forests.

5) Overview of Cao Bang Province• Total area: 670,000 ha (Forestry 90%, Agriculture 10%)
• Near Chinese border (the northernmost part of Vietnam)• Annual budget: 45 billion yen• Overview of forestry:- Neither forestry nor agriculture uses pesticides.
- Acacia afforestation land:
17,000ha- Reforestation plan:
5,000ha- Eucalyptus afforestation plan: 1,000ha- Other surplus land:
10,000ha• There are 02 sawmills that are producing woodchips on asmall scale. Can produce about 2 million tons / year
• Truck transportation only to Hai Phong Port (ship and traintransportation not possible)

Sales Distribution
Due to the laws and regulations in Vietnam, thebasic business flow is a direct contract between a local
company (or Cao Bang Provincial Government) and aJapanese customer.
Our company, including our local subsidiary inVietnam, will be working as an intermediary agency
and as pipe and monitor between the local company.
In addition, it is our responsibility to provide
quotation and negotiate the amount of wood chips andpellets to be export.
.End.