Investment Opportunities in Paraguay

I’m considering an investment scheme to be carried out by several different companies dealing
respectively with one of the following sectors: I) Forestry Development, II) Development of
Agricultural Plantations, and III) Development of Investment in Agroindustry and Biofuel
Projects.

I. Forestry Development
1. The investors buys a strategically located forest plot: (a 500 hectare parcel, belonging to my own
Farm; valued to Euros 1,5 Million), and starts the development of the existing forest resources using
state-of-the-art technology as a demonstrative model. Additional investment for Management and
enrichment of native forest and /or plantations with fast growing species about Euros 0, 9 Million. The
Farm is located in the region Alto Parana, in Paraguay, at a distance of about 90 km. from the “Three
Country Border”, where Brazil, Argentina and Paraguay meet, in the area of influence of Ciudad del
Este, and Foz do Yguazu, and near Itaipu, the world’s biggest hydroelectric power station
A Company is formed which buys the forest plot: For example a public Company named:
SILVAPAR S.A.
PARTNERS: I would personally be one of the Partners and MANAGER and could start the company
together with the initial Investor (Capitalist Partner - your client), who would buy a shares percentage,
for example 30 % to 60 %, that means Euros 0,5 Million to Euros 1,1 Millions Investment. Another
Partner would be a parquet flooring plant, and some other representative local entrepreneurs.
Participation percentages to be established in accordance with what we deem best suitable for the
project.

2. Activities of the Forestry Company

a. Investment in own farm, and

b. Execution of forestry projects on third-parties’ farms

a. Investment in Own Farm:

Development of investment project: Management and enrichment of native forest and/or forestry
plantations with fast growing species; financing to be provided by the Capitalist Partner (who earns an
interest rate and participates in the Company’s results in accordance with his shareholding percentage),
and/or by external capitalists.

b. Execution of Forestry Projects on Third-Parties’ Farms

SILVAPAR takes charge of identifying owners of farms suitable for forestry plantations who are willing
to sign partnership contracts.

SILVAPAR designs the forestry plantation and proposes the Investment Project and the Execution Plan.

SILVAPAR carries out the Investment Project with own resources or looks for Investors willing to
finance the investment (on the basis of credit lines, and/or as joint venture partners).

Example Uruguay: A high percentage of projects with tens of thousands of hectares of forestation and
reforestation have been accomplished trough this Investment Promotion Model (total area covered with
forestry plantations during the last 15 years: 750.000 ha).

The basic model: Landowners (mostly cattle raisers and big farmers) contribute 250 to 2,000 ha plots
for forestry projects (only land and/or financial means). The Forestry Development Company
(SILVAPAR S.A.) proposes the INVESTMENT PROJECT and takes charge of its TECHNICAL
IMPLEMENTATION, and offers financing from own resources and / or from third parties:
CAPITALIST PARTNERS
The CONTRACT between the parties regulates the different forms of participation (contribution of
land, services, financing). Typically, a percentage of the forestry production for each of the involved
parties (Landowner, Development Company, Capitalist Partner) is contractually agreed upon.

Potential for Forestry Plantations in Paraguay’s Eastern Region: existing in the 8 (eight) million
hectare extension of land formerly covered by native forests eliminated to make place for agricultural
plantations and grassland for cattle rising. The total estimated area of suitable land plots of size: 250ha to
2500 ha available for forestry projects can be estimated at about 300,000 ha (three hundred thousand
hectare).

SILVAPAR could envisage carrying out forestry plantations of 2,500 to 50,000 ha, involving
investments in the order of Euros 15 to 200 million.

The Growing Periods for Forestry Plantations in Paraguay (with exotic trees: Eucalyptus, Acacia,
Meliacea species, and native trees: Yvyrayu) can be estimated at an average of 14 years. For
comparison: The average growing period for conifers in the Northern Hemisphere is 60 years!
These advantages in growing speed are motivating large international Companies like: Botnia,
Weyersberg and others to invest in the Southern Cone. The Swedish-Finnish Company “Stora Enso” has
recently sold about 3 million hectares of natural forest in Scandinavia, and is currently investing about
Euros 5.000 million in land and forestry plantations in Southern Brazil and in Uruguay, as well as in
participations in the wood industry.

II. Development of Agricultural Plantations

1. This Company could be developed under a scheme similar to the one outlined above.

Possible investments in existing projects of soybean plantations: a) selling of projects and / or search for
joint venture partners; and b) sale offers of land suitable for agriculture, forest land, functioning farms or
land suitable for establishing farms.

2. At the same time, the Company could perform as a Consulting Firm dealing with identifying
suitable land for plantations, designing the investment project and offering the project as well as
its execution to possible investors. I know some offers for sale of farmland and also forestland
(different sizes and also different locations).

3. The Company could offer credit lines and/or joint venture undertakings to Producers’
Cooperatives needing funding sources for operating capital (at short, medium and long term) and also
for purchasing/importing input items (seed, fertilizers, machines, etc.) for their members.
Repayment of credits to these Cooperatives could be negotiated in money and/or in kind with products
such as soybean, rape, maize.
In any case, with a bit of time we’ll be able to assess the financing needs of some companies,
particularly those of the different production cooperatives. The financing needs which could be covered
from foreign sources could be estimated from Euros 20 to Euros 70 million, depending on securities
demanded, rates of interest, periods, etc.

III. Promotion of Investments in Agroindustry and Biofuel Projects

The Company could work in this sector as an International Consulting dealing with the placing of credit
lines and/or selling of joint venture participations.

I am in touch with entrepreneurs and also with cooperatives that are interested in investing in various
projects and need medium- and long-term financing.
For instance: 1. Sugar Cane Plantation and Alcohol Refinery Project; 2. Setting up a Oil Mill for
soybeans and other oilseeds, etc.; 3. The execution of a Biodiesel Project will make it possible to think
about the installation of a Coconut Oil Mill and about investing in Coco Plantations.

rafael@carlstein1.com

Paraguay
A country situated in the heart of Mercosur, a South American trade block

„SILVAPAR“ Forestation and Natural Forest Conservation Project

Production of precious woods from fast growing trees

(A Joint Venture Project with International and Paraguayan partners)

Paraguay
 A country situated in the heart of Mercosur, a South American trade block

„SILVAPAR“ Forestation and Natural Forest Conservation Project

Production of precious woods from fast growing trees
(A Joint Venture Project with International and Paraguayan partners)

There is worldwide concern over the continuing „Green“ investments showing concern about
destruction of tropical and subtropical rain forests sustainability are at present the most profitable ones
and its consequences for the future of the planet. in the world’s leading stock exchanges.

We are taking practical measures to improve this

situation. Wood is the only raw material which over the last
decade has not lost value, but in fact has shown a real
We would like to present you with the details of our increase in value.
project, a unique combination of private enterprise in
an ecological sound environment. The beauty of the setting and the proximity of three
international airports make the area an ideal tourist
The project is situated in the fertile Parana basin, destination.
where the borders of Argentina, Paraguay and Brazil
meet. It is near the Iguazu falls and the largest Paraguay has a system of democratic government and
hydroelectric dam in the world.
has a relatively small population, given the size of the
The project is based on the most up-to-date scientific
methods and aims for the sustainable exploitation of country (6,2 million people in 406.000 km2). The
existing wooded areas, partly through forestation
with fast growing valuable species of trees (cedar country is free from serious social tensions and people
substitute, and Eucalyptus grandis), and partly
through management and enrichment of the native are traditionally well disposed to foreign investors. In
forest.
addition to all these advantages, the constitution of
This project allows for a secure and profitable
investment in wood production through participation the country, as well as international bilateral
in a joint-venture. The minimun individual
investment is 100.000 Euros. agreements, provide protection to all foreign
For the development of each 500 ha individual plot
(land plus forestry development) is required an investments.
investment of about 3 million Euros . The fast
growing species of trees we plant are ready for felling
after only 12 years and guarantee a 15% anual
If you are looking for a secure investment based on
return.
sound ecological principles for you and your family in
The project is structured so that the investor becomes
future generations, please request detailed
owner of the land, some of the most fertile in the
information from our contact addres
world. Rising land prices and the increase in market
value of wood guarantee the security of the
investment

SILVAPAR Consulting
Asunción-Paraguay:
prewood1@tigo.com.py
Some good reasons to invest in forestry in Paraguay

1. Paraguay’s soil is extraordinary fertile and its
clima is excellent for forestry.
2. These favourable conditions allow for the
production of precious wood from fast growing
species of trees in a very short time.
6. Paraguay is a full member of Mercosur (an
economic and political association made up by
Argentina , Paraguay Uruguay and Brazil – Chile
and Bolivia are associate Members). Mercosur is
the third largest economic block in the world and
is also linked to the European Union.

3. Favourable tax conditions. The government offers 7. Increasing world population, the destruction of
tax incentives for investments in the forestry forests in the developing world and growing
sector, so that the investor earns the entire return scarcity of land for new plantations guarantee
on his investment. secure markets for valuable woods.

4. Our partners in Paraguay are land owners with 8. These investments in the forestry sector are our
proven experience in forestation and timber contribution to the protection of the environment.
processing and marketing (for example of Sustainable forestry will in turn bring us profit
parquet floors). and stimulate Paraguay’s social and economic
development.
• Forestation in Paraguay has a proven track
record: Investors and developers are planting the
same species of trees we are planting.
• Local land owners have begun forestation
projects.

• FEPAMA (the Paraguayan private sector wood

processing industry association) has set up a tree
nursery and a pilot foerestation.

5. Overall favourable conditions in the country: an

area of 406.000 km2 (appr. the size of Germany)
populated by only 6,2 million people; a
population free from serious social tensions; a
flexible legislation free from excesive state
intervention in the economy or in citizens’s
private affairs; plentiful supply of labour, and
abundant supply of power generated by
hydroelectric dams.
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