1. Welcome!!! 10760 South 7E AZ Yuma, AZ 85365 10760 South 7E AZ Yuma, AZ 85365

2. What we want to accomplish. * An informative presentation on the Foreign Trade Zone. * Show how the FTZ can save your clients money and increase your income. * A look at the big picture, how can we build the Southwest area as a Logistic Center Point.

3. Foreign Trade Zone 219 Yuma County Airport Authority, Grantee of Foreign Trade Zone 219 U.S. Department of Commerce Foreign Trade Zone Board Grantee Users and/or Operators utilization of General Purpose or Sub-Zone

4. Who is Desert Depot? Desert Depot is a public warehouse and logistic company operating Foreign Trade Sub-Zone 219b. We specialize in industrial and manufacturing warehousing logistic service.

5. Part of the Gowan Group  Gowan Company – Ag-chemical Specialty Crop  Gowan Milling – Formulation / Manufacturing Customers include, Dupont, Dow, Bayer, BASF  Gowan Seed - Specialty Crop Seed  Dune Company – Full Service Crop Production supplier  Gowan De Mexico – Mexico Chemical Crop Production supplier  Margarita – International

6. Foreign Trade Zone 219b An FTZ is a specific area that is recognized by US Customs as being outside of Customs territory. Some of the benefits that may be gained are: Reduction, elimination or deferral of US Customs Duties. Imports can be stored in the FTZ and gradually removed as needed for JIT (Just in Time).  Improved logistics by being able to sort, mix and consolidate prior to shipping to Mexico.

7. Foreign Trade Zone 219b Ok, but has anyone around here used the FTZ? 1) Importer used FTZ 219b for warehousing raw material from Mexico that was from a foreign supplier to reduce inventory tax in Mexico and U.S. Duty. (Elimination of duty & tax savings) 2) Importer utilized FTZ for warehousing at Desert Depot for export production. The product was held in the warehouse until exported. No Duty paid, No Drawback. (Improved cash flow) 3) Importer used FTZ 219b to apply a US compliant (EPA) label. As the FTZ is outside of Customs territory, they were able to apply a new label without any penalty and have the product at the production site in time for manufacturing. Saved approximately 7 weeks. (Saving time) Yes, and here are some examples of how the FTZ has already been used.

8. Lets look at how it works? The Customs Broker cuts a IT on each container to Yuma Assume that you have a customer that has two containers arriving in Long Beach with a) different parts, b) each container has a value of $200,000, and c) 4%US duty: A 24 hr advance notice is given to the FTZ and Customs. The containers arrive at Desert Depot and are admitted into the FTZ. 12 The containers are then returned with no demurrage.

9. San Luis Mexico Lets look at how it works? Within the Zone they can be inspected, combined, mixed & inventoried. As part of JIT supply chain, the raw materials are sent (TE) to Mexico as needed. For this example we are assume that it is sent for manufacturing over a 6 month period. 1 23456 The number of Customs Broker transactions were increased from 1 to 7.

10. Logistics Applications How does this Save Money in the U.S.? Invoice Value Total Warehouse & FTZ charges Cost of Money Duty Amount US Duty Rate Gross Savings Net Savings

11. Logistics Applications The Combined value of both containers The Tax rate # of pallets at beginning of each month Total monthly savings The Total Savings over 6 months How does this Save Money in Mexico?

12. Other Savings Here is a sample of how working with a manufactures supplier you may gain additional savings for them and increase business for all of us. Same value as used on other examples Used Customers Inventory Carrying Cost Inventory carrying cost savings

13. Recap Savings vs. Cost Let’s recap what all the benefits could be in this example. Mexican Inventory Tax $7,646 US Duty$7,360 Inv. Carrying Cost $26,833 Reduce Demurrage Charges Avoid Mexican or U.S. Customs Penalties The User Benefits The Customs Brokers benefits Better service to your customer Increase the number of billable transactions Use as a sales tool

14. Facility Overview Two buildings totaling 215,500 sq. ft. Building 1 is 103,000 sq. ft. concrete tilt up construction environmentally controlled for hazardous materials Building 2 is 112,500 sq. ft. steel building for general commodities. All buildings are protected by high pressure fire sprinklers. Monitored security system, lighting, fencing and strict security procedures, compliant to US Customs. Hazmat Safety trained Staff. Desert Depot has the ability to expand, or customize our facility and services to include rail.

15. Facility Overview Advanced Warehousing Management Technology. Fully Bar Coded warehouse with lot or serial number tracking. Proprietary on-line EDI capability. Internet inventory reporting at www.desertdepot.com. Customized inventory and logistic reports.

16. Visit our Website at www.desertdepot.comwww.desertdepot.com

17. Pacific Rim Europe & East Coast Produce Market Maquiladora Canadian Market Developing Logistic Center We need to provide Value Added Services Develop a Transportation Interchange point more involvement with the Can/Mex corridor

18. Southwest Arizona Port Users Trucking FTZ/Warehousing Freight Forwarding Customs Broker Air Freight SWAPU ORGANIZATION TO FACILATE ACTION Produce Industry CUSTOMS, GYPA, GYEDC, YCAA AND OTHERS Results Maquiladora Manufacturing

19. Give us a call! Desert Depot Phone 928-344-3272 10760 South 7E Fax928-344-0331 Yuma, AZ 85365 www.desertdepot.com David Mansheim General ManagerMobil 928-920-6817