Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 1 ROCKWOOL – RUSSIA factory in SEZ ‘ALABUGA’ A Case Study September 17th, 2012

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 2 Rockwool International World No1 manufacturer of stone wool insulation Quoted on the Danish stock exchange Business is Energy Saving, also Fire & Acoustic protection 27 production lines, and businesses in over 40 countries Purchased 1 st factory in Russia in 1999 Now 4 factories and 7 sales offices in Russia

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 3 MURMANSK Rockwool factories approximately 1,000km apart Cities with population more than St.Petersburg N Novgorod Rostov-na-Dony Samara Kazan Yekaterinbourg CheliabinskUfa Novosibirsk Oms k Volgograd Odessa Dnepropetrovsk Kharkov Astana

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 4 Rockwool factory Alabuga SEZ $ 150,000,000 investment 48 Ha (including environmental area) Highest output stone wool line in the world Commissioned Q1 2012

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 5 ROCKWOOL factory in SEZ ‘ Alabuga’

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 6 ROCKWOOL factory in SEZ ‘ Alabuga’

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 7 One of the biggest challenges of investing in Russia is to convince your Head office Supervisory Board

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 8 Nice Tax incentives in Alabuga SEZ No Customs duties on imported machinery when constructing the factory Profit tax reduction from 15.5% to 2% for the first 5 years Profit tax reduction from 15.5% to 7% for the 2 nd 5 years tax concession on property tax during 10 years (0% instead of usual 2.2% of net assets)

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size Support from Business orientated Authorities List of 22 criteria when we Build or Buy a factory

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 10 Why are supportive business like authorities so important ? We are a “white” foreign company with strong Scandinavian values It is inevitable to encounter problems during such a major project.

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 11 Why we chose Tatarstan ? 1/ We have been importing into Russia since the 1970s and already knew the landscape 2/ Spent time meeting short listed Authorities 3/ Personally discussed with General Directors of 9 companies already doing business in Tatarstan

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size Meetings with President Minnikhanov

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 13 Quote from senior Customs Authorities in Alabuga, ”Its our shared goal to commission your factory on time”

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 14 Rockwool factory Alabuga SEZ Whole project delivered on budget …… and 2.5 months ahead of schedule. Run 24 / 7 since start up, Performing ahead of the planned learning curve.

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 15 Official Opening event

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size Support from Business orientated Authorities 2.Proximity to customers and markets 3.Large site to allow expansion (min 20 Ha.) 4.Reasonable price of land 5.Stable soil conditions (for building foundations) 6.No pollution or contamination 7.Railway connection 8.Easy access to Public roads 9.Possible to erect high chimney 10.Airport within reasonable distance 11.No immediate residential neighbours 22 criteria when we build/buy a factory

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size Suitability of any existing buildings 13.Electrical power supply 7 MVA 14.Natural Gas 1,000 Nm3/h 15.Sewerage for 250 employees 16.Availability of raw materials 17.Tax concessions 18.All necessary industrial permissions and approvals 19.Clear ownership of land 20.Suitable hotel accommodation for engineers building the factory 21.Local technical universities (availability of skilled staff) 22.Good availability of local blue collar labour force 22 criteria when we build/buy a factory

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 18 …… finally the Dream becomes Reality

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 19

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 20

Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 21 Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8 Questions?