ООО “Vyisky DOK" Nizhniy Tagil 2006 г.

UNIVERSAL WOOD PRODUCTS, INC. 836 Hempstead Avenue West Hempstead, NY Phone: Fax: ООО “Vyisky DOK" , Nizhniy Tagil, Serebryansky road,15. Phone./fax: (343) Park Ridge Lane, White Plains, NY Project of a Woodworking Enterprise Establishment on the Territory of Sverdlovsk Region (Nizhni Tagil) Sverdlovsk region in the North of the Russian Federation due to severe weather has a good source of raw materials. As to the Forestry of Sverdlovsk region preparation plan per year is 18 million m³ of green lumber but in fact only 4-5 million is prepared. A new woodworking plant is being built on the territory of Sverdlovsk region with the processing of 65,000 m³ per year. The project stipulates building of a new modern woodworking complex in Nizhni Tagil, Sverdlovsk region, mastering of new technologies concerning advance wood processing for the purpose of manufacturing export-oriented products, manufacturing organization and realization of the products produced at the North American market.

One of the most successful engineering companies of the USA in the field of wood processing UNIVERSAL WOOD PRODUCTS, INC. acts as a chief- consultant of the project. Their 40-years' experience in the wood industry and the working knowledge of modern wood processing technologies combined with the knowledge of the North American market and significant experience in starting of launch manufactures in different regions of the world guarantee the success of the project. The Company “Vyisky DOK” drew up a detailed Business-Plan for creation of a modern woodworking facility on the territory of Sverdlovsk region capable of processing up to 65,000 cubic meters of green lumber per year (first stage) including the list of machines and devices, sale and production schedule of the enterprise and the cash-flow schedule for the period of four years. For the stage in question, the main production of the enterprise will be molded products (moldings glued or jointed) furniture beam glued and jointed and glued furniture plates made of pine (24%) and Russian birch (76%) according to the specifications approved by the American consumers, on basis of the Russian raw materials purchased at the open market. A unique combination of advanced technologies and raw materials available with relatively low salary level are at the basis of the manufacturing process. To increase the output a modern technology is applied, which enables to execute the complete range of orders of American, Canadian, European, Far Eastern consumers of our products. The participants of the project

The Information on the Project Participants This is a joint Russian and American project. The main participants and organizers are: ООО “Vyisky DOK” - the owner of the land and the manufacture organizer; Universal Wood Products, Inc. (UWP) - the engineering and consulting firm with over 40-years' experience in the woodworking industry on the territory of the USA – is responsible for the whole arrangement of the manufacturing process and selection of the equipment. Atlantis Wood Company LLC – the structure established by the incorporators of ООО “Vyisky DOK” on the territory of the USA and dealing with marketing of the products at the North American market. In accordance with the agreement between UWP and ATLANTIS WOOD Company, UWP is responsible for the complex design works, provision of detailed drawings and outlines of buildings required to accommodate all the equipment. The drawings and outlines will include all the necessary technical information needed for the infrastructure systems. UWP undertakes as well to install, adjust and ensure operation of each unit of the equipment needed for operation of the complex. UWP carries out staff training, as well as provides client base for the product marketing.

Brief description of the equipment used in the manufacturing cycle Log receiving and Storage Area (manufacturer: “Lesmash”, Russia, Yekaterinburg): The acceptance and unloading of logs delivered by railway or truck is effected by Crane and Log Handler Machine. Then the logs are piled and sorted by types and sizes on the sorting line and transported to the timber pockets. At the same time the logs are counted automatically. The log handler machine transports sorted logs from this area to the Saw Mill complex, where the logs are cut into lumber. The Saw Mill Complex (manufacturer: Ustunkarli - Turkey) consists of Debarking Machine System, Vertical Band Saw Mill system, Circular Sawblade Saw Mill System input: log (softwood and hardwood); due to circular and band technologies of sawing the complex can process the logs with diameter of 14 cm to 1.2 m with maximum length – 6 m output: edged green board, 50-70% from the log depending on its diameter the complex processes 65,000 m³ of logs per year.

Dry kiln complex(manufacturer: Inkoplan- Italy) consists of 12 Kiln Dry Cameras 100 m³ each and is able to dry up to 45,000 m³ of green board per year input: edged green board output: edged dry board maximum drying losses 2 % strict (automated) quality control at all drying stages Energy complex (manufacturer: Uniconfort - Italy) the heat for the operating of the Kiln Dry Complex and heating of the Saw Mill is processed in the Energy Complex, consisting of 2 Dual Fuel Hot Water Boilers with the power of 5 Gkal/ hour and Screw Air Compressors which work on gas and wood waste processed while sawing and wood processing. input: gas, saw-dust output: heat Processing area Manufacturers: Lesmash (Russia, Yekaterinburg) Cozolini (Italy) Mida (Portugal) Ireblock (Germany) Stromab (Taiwan) Pioneer (Taiwan) Carpenter (Taiwan) Boarke (Taiwan)

After drying edged board is transported by Forklift to the area of manufacturing of furniture components and finishing material: input: edged dry board output: furniture components (furniture plate, saw timber, etc.) and finishing material (base molding, plain flat strip molding, frames, door and frame packaged units) flexibility, versatility and high quality due to the choice of machinery the output of ready production from edged dry board is approximately 70% The ready – made production is packed, shipped and transported by delivering companies. Transportation: Delivery of the actual production will be performed using external transport companies in 40-feet shipping container transportation en- route Yekaterinburg-New York through St. Petersburg.

Plan of the intensive development of the enterprise “Vyisky Dok” After the products (blanks) satisfy the consumer completely, the additional equipment is purchased (approximately $ ) to produce finished furniture components from the blanks, which will considerably improve the economic performance. Every year there is 13 million m³ of unexercised raw. 30% is working lumber (8-12 m from the ground), that is used for furniture production; it will be used in our project, 3,900,000 m³. If to transform in money it is 1 billion $ as to the prices on USA markets. The other 9,100,000 m³ (up to the top of the tree) should be processed too. It can be transformed into cellulose (markets are unlimited both in Russia and outside the country) or in OSB panels. According to the prices in USA 9,100,000 m³ of logs is 4,550,000 m³ of OSB×350 $/m³=1,592,500,000$. Best regards,Operating director of OOO “Vyisky DOK” and Atlantis Wood Company LLC Saitov R.S.

Plan of the facility

Types of production Edge-glued panels Molder to pattern dimension Stair treads and risers Kitchen cabinets door components Kiln-dried and planed grade lumber Drawer components The production in plan Face- laminated squares