SPECTR (LLC) Creation of an enterprise for the collection and processing of Sphagnum (peat) moss Project manager: Vladislav L. Malugin

Priority objectives of the project Finding investors for the creation of the enterprise for the collection and integrated-processing of sphagnum moss Organization of an extremely-profitable production enterprise to guarantee a rapid return on investment Tasks: Creation of new economic potential for Ugra in the collection and processing of moss The development of export-oriented industries through the creation of the enterprise for the collection and processing of sphagnum moss and exporting finished products overseas Formation of new environmentally-friendly products in the industries : oil-extraction, medicine, construction, horticulture and gardening, beekeeping and animal husbandry

The uniqueness of the Company In Russia today, there are no companies that specialize in the bulk-harvesting of industrial resources from sphagnum moss. Moss is produced per unit volume. Here are some of the countries where there are industries involved in the bulk-harvesting of sphagnum moss - Peru, Chile, New Zealand, Australia, Canada. It was only in the 1990s that Germany was able to supply countries in the European Union with more than 1.7 million tonnes of peat moss to carter for their medical, agricultural and livestock requirements..  More than 500 million tons of sphagnum moss grows in the Khanty-Mansiysk Autonomous Region– Ugra, which will be able to sustain the enterprises’ production operations for over 10 years. Seasonal harvesting of sphagnum is carried out up to 115 days a year, and in the cold periods, sphagnum is then processed into finished products. Under the above-stated conditions, the company created can generate revenue of up to 2.5 billion. rubles. This revenue-indicator certainly points to a high earning potential, and as a consequence, an ultra-high-profit business venture.

The product’s eco-friendliness Sphagnum moss is a source of peat, which is widely used in the industry. Across the country, peat swamps take up an area of more than 150 million hectares - more than in any other country in the world. Sphagnum moss is an environmentally-friendly vegetable raw material that grows in natural marsh conditions. The total quantity of moss that grows in the Khanty-Mansiysk Autonomous Region — Ugra accounts for over 15% of the total quantity of moss that grows all over our planet. By using an eco-friendly plant element in the production of finished products, the product quality is much more superior than the products obtained through alternative means from semi-finished products or artificially produced analogs.

Properties of sphagnum Absorbability It allows the absorption of 20-25 times more moisture than cotton, due to the unique cellular structure of the moss, and this property allows the use of this product as a dressing medium Air-permeability Dry moss is filled with air through its special pneumatic cells. Sphagnum has high air-permeability as compared to cotton Antibacterial properties Phenol-like substances, including ‘sfagnol’ and humic ‘sphagnum acid’ which contains moss, allow the quick treatment of different levels of injury and disease

An excellent product Within the context of the economy of Western Siberia, the harvesting and processing rate of sphagnum moss species is extremely low, and accounts for barely 0.2% of the market. However, from an economic and environmental point of view, sphagnum moss harvesting has several advantages. First of all, sphagnum moss belongs to a category of rapidly-renewable natural resources. After selectively harvesting raw materials, vegetation cover of moss swamps is fully restored in the third year. The use of only one type of raw material can produce a whole range of products that are in high demand on the market, as in the following: - the production of thermal acoustic insulation panels with natural antiseptic properties, used in the construction of residential buildings; - bioactive sorbents for elimination of oil spills and oil products; - manufacture of bakery products; - Insoles from moss; - Natural cosmetics, etc.

Manufacturing process Moss made by hand – plucking out the turf, or cutting it with a special knife, depending on the type of moss and gathering places. Moss is collected into a container. After the container has been filled with moss, a porter carries it to a transporting container, where the collected moss is stored. After being filled with moss, the container is hauled by a special swamp-buggy to a pre-selected site where the moss is overloaded into a shipping container mounted on a truck, which is delivered to the drying and processing area. Processing of sphagnum moss is carried out on a conveyor belt, where impurities are removed, which may include leaves, fir-needles, blades of grass. The impurity content is no more than 3%.

Sales markets for products The creation of an enterprise for the production of sphagnum moss is more oriented to the external market, where the product will be more highly appreciated and in demand. Target audience is state enterprises and specialized commercial enterprises with access to: 1. the domestic market for the preservation and maintenance of ecosystems, the production of oil sorbent to prevent oil spills. 2. the external European market to meet the needs of medical, agricultural and livestock needs. 3. an external Asian market for agricultural purposes associated with vertical and horizontal landscaping; There is an agreement for the supply of reinforced sphagnum blocks for vertical landscape gardening in the United Arab Emirates

Project implementation period February - December 2016 - Acquisition of land, coordination, the construction of production facilities in accordance with the requirements of the Russian legislation; January - December 2017 - Purchase of required tools, equipment and materials for the production cycle; January - December 2018 - The collection, production of finished products, the organization of a cycle of delivery and sale of finished products. At the end of 2018, the reimbursement of attracted investments amounting to 14.0 million euros; January - December 2019 - The work of the production cycle, manufacture and supply of finished products for export, the reimbursement of attracted investments amounting to 19.0 million euros. January - December 2020 - The work of the production cycle, the company's output to the maximum capacity, output on the stock exchange.

Investment proposal The total volume of investment for the project - 2.8 billion rubles. ($ 36 million): - Including 1,386 billion rubles. ($ 18 million) from investment fund by foreign partners (as per the co-financing agreements); The launch date of the start of production is in 2 years and 1 month; Payback period - 3 years and 4 months; The volume of finished product - 5 000 tonnes per year; Average price for 1 tonne of finished product on the domestic market - 339 000 thousand rubles.. (4 300 USD); Average price for 1 ton of finished product on the foreign market - 95 000 thousand rubles.. (1228 dollars); Average expected profit in the first year of production will amount to 2.35 billion rubles. (30,2 million dollars); Access to full capacity - 01/10/2017 implementation of the investment project.

Thank you for attention Khanty-Mansiysk, Khanty-Mansiysk Autonomous Region — Ugra , Russia Phone: 8-950-50-11-659; E-mail: vm-club@mail.ru