The Amazon - An Intro 30% of the world's animal and plant species are found in the Amazon. More than 20% of the world’s oxygen is produced in the Amazon. One-fifth of the world's fresh water is in the Amazon Basin. The Amazon rain forest draws water from the ground and releases the moisture into the atmosphere through a process called transpiration. Water released by transpiration and to the ocean by rivers, influences world climate and the circulation of ocean currents. This works as a feedback mechanism, as the process also sustains the regional climate on which it depends. Over the last fifty years, the forest has lost a total of 800,000 square kilometers, an area the size of the entire US eastern seaboard from South Carolina to Maine. Scientists are noticing something disturbing in the Amazon rainforest: deforestation is leading to the failure of the forest ecosystem. Many scientists believe we are reaching a tipping point, and at current deforestation rates in the Amazon, within five years the Amazon biome may cease to be a rainforest and become savanna-like with semiarid vegetation. Needless to say this will have significant consequences on weather patterns and wreak havoc on agricultural production. The ASF Brazil Model ASF Brazil has developed a model which we believe can help halt deforestation, transform the lives of those living in the Amazon, and provide a generous financial return for our investors. At the core of the model is the idea that in order to preserve the amazon one must extract some economic value from it. And, this must be done in a manner that is environmentally sustainable and that also shares the economic benefits with the surrounding communities. ASF operates two sawmills, a hardwood mill producing flooring, decking, doors and a softwood mill producing plywood. Our finishing plant allows us to produce a high value added product, different from most other mills in the Amazon region that simply produce raw planks. This means we are able to sell our products at a significant premium to those sold by our competitors, which translates to more jobs and higher wages. We also own 40,000 acres of forest. Thus, by controlling the entire value chain - from forest to finished product - we are able to capture more value than most of our competitors. Furthermore, we export our products through the northern port of Manaus rather than the more common route to the south of Brazil via the port of Paranagua, twice the distance, and thus affording us a 30% transport savings versus our competitors. ASF Brazil’s success is predicated upon a multi-pronged strategy of acquiring land at depressed prices; transforming that land through sustainable harvesting and reforestation; integrating these forestry activities with a processing plant; and, grouping land tracts into clusters around a sawmill (thus optimizing operations). Our social commitment ASF is very concerned with giving back to the communities where it operates. Through our sawmill operations we employ over 1,000 people, both directly and indirectly. As we expand into more remote regions of the Amazon we envision revitalizing communities which are living at subsistence levels and also threatening the forest. Upon completion of our baseline cluster of 100,000 ha we plan to have 14,290 indirect and direct employees. ASF is a triple bottom line focused company: (a) we protect the environment by preserving the forest cover and avoiding CO2 release (about 500 tons CO2 per hectare); (b) we create long lasting employment and valuable social services for our local communities; and, (c) we deliver recurring financial returns to our investors. Our interest, ultimately, is to halt deforestation. Brazil has promised the international community that it will halt deforestation by 2030. But, given the pronouncements of the country's newest president, that goal may be a fanciful wish. ASF Brazil has a proven model that can be scaled. It has demonstrated success operating wood processing plants; it has revitalized the communities where it operates; it has successfully harvested trees using guidelines much stricter than those stipulated by the Brazilian forest code; and, it has realized an above average return for its shareholders.