Skogforum – November 2013Honne

Unleashing the potential of Renewables

En fremtidsmulighet for norsk- og nordisk skognæring?

Stein O. Larsen, CEO

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Vision

To unleash the potential of ecological renewable resources. 

Mission

By making a regulated marketplace for renewable

products we shall:

• Make good solutions for better risk management opportunities.

• Increase attractiveness for trading in financial contracts.

Areas of renewables

Clean Energy- Green certificates

- Carbon offsets

Weather- Rain

- Temperature

Bio-economy and other Ecological

- Pulp - Wood chip

- Pellets- Recovered fibre

- Paper and packaging - Other Biomass

Forestry- Lumber

- Pulpwood- Forest residual

Norexeco - Productplan

Media!

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Product selection from the start

Pulp• NBSK• BHKP

Recovered paper • OCC• ONP /OMP

PIX Wood Chip indexes, planned 2013PIX Forest Biomass Finland Mar 2012PIX Pellet Continental Dec 2011PIX NBSK pulp ChinaPIX Pellet Nordic CIF Nov 2009PIX BHK pulp China 7.1.2009PIX ONP/OMG 1.11 dd 2.1.2007PIX OCC 1.04 dd 2.1.2007PIX US Newsprint 27.7lb 3.1.2006PIX Testliner 3 Europe 3.1.2006PIX White-top Kraftliner Europe 3.1.2006PIX Kraftliner Europe 7.1.2004PIX Testliner 2 Europe 7.1.2004PIX RB Fluting Europe 7.1.2004PIX US NBSK pulp 19.11.2002PIX US Newsprint 30lb 5.6.2001PIX Newsprint Europe 3.10.2000PIX A4 B-copy Europe 3.8.1999PIX CWF Europe 3.8.1999PIX LWC Europe 3.8.1999PIX BHK pulp Europe 11.5.1998PIX NBSK pulp Europe 16.9.1996

1996 1998 1999 2000 2001 2002 2004 2006 2007 2009 2010 2011 2012

7.6.2011

Pulp Paper BiomassRecycledPackaging

Strategic Agreement with FOEX Indexes Oy

FOEX Indexes Ltd is the industry leading independent provider of audited, trade-mark registered pulp, paper, recovered paper and wood based bio-energy/biomass price indices.

FOEX and NOREXECO entered a strategic agreement in 2013 for the future use of PIX indices.

FOEX Indexes Ltd

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Share of recovered paper and Pulp of the papermaking fibre consumption

Source: Pöyry, Management Consulting ,Danish technological Institute & Nordea

Historical price development Pulp

-10,8 in 6 mths

+10,7 in 6 mnths

Source: Pöyry, Management Consulting ,Danish technological Institute & Nordea

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Historical price development recovered paper

Source: Pöyry, Management Consulting ,Danish technological Institute & Nordea

Hvem hva hvor?

Skogeier SkogeierforeningIndustri• Norsk• Utenlandsk

Fysisk handel (innkjøpere, selgere, markedsfolk).

Finansielle kontrakter (Styret, daglig leder og CFO)

PrissikringValutasikringRentesikring

OCC-Supplier Receives 17,25 mill Euro

Physical = 15 mill Financial Contract = 2,25 mill.

Dec. 2015 - FOEX PIX OCC = 100 EUR/TonnesOCC- supplier receives 15 mill EURO

for Physical tradeOCC-supplier receives 2,25 mill

EURO from NOREXECO.

OCC-Supplier – 1. nov 2013Sells 150000 Tonnes at NOREXECO Cal 15 - Price 115 EUR/Tonnes

Example 1 on Recovered paper – OCC (old corrigated container)

OCC-Supplier Receives 17,25 mill Euro

Physical = 18,75 mill Financial Contract = -1,50 mill.

Dec. 2015 - FOEX PIX OCC = 125 EUR/TonnesOCC- supplier receives 18,75 mill

EURO for Physical tradeOCC-supplier pays 1,50 mill EURO to

NOREXECO.

OCC-Supplier – 1. nov 2013Sells 150.000 Tonnes at NOREXECO Cal 15 - Price 115 EUR/Tonnes

Conclusion; The OCC-supplier receives the same price - regardless of actual Spotprice Dec. 2015

Example 2 on Recovered paper – OCC (old corrigated container)

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Forward prices – Set by the market?

Period - Forward

Price NBSK - USD

October 2013 873

November 2013 875

December 2013 880

Q1 2014 890

Q2 900

Q3 910

Q4 920

Q1 2015 930

Q2 940

Q3 950

Q4 960

Q1 2016 970

Q2 2016 990

Q3 2016 1000

okt.13nov.1

3des.1

3

Q1 2014 Q2 Q3 Q4

Q1 2015 Q2 Q3 Q4

Q1 2016 Q2 Q3800

850

900

950

1000

1050

NBSK USD

NBSK USD

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• Compliant with EMIR (and Dodd Frank)• Clearing, margining and reporting.

• Trading in a regulated environment, under supervision of the European Financial authorities.

• Full price transparency, 3-5 months, 4 Q’s, 3 Calendar years.

• Low fees, easy access• Equal access for all  participants• Standardized products.

NOREXECO – Key Benefits

Er dette noe for norsk og nordisk skognæring?

JA ……………., hvis mange nok ønsker det!

Unleashing the potential of renewables

NOREXECO – Exchange solution

Seller BuyerExchange

Sellers Bank /Clearinghouse member

Buyers Bank/ Clearinghouse member Trade-

repository

Reports

Overview of ESMA requirements for non-financial counterparties

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EmployeesCEO

Stein O. Larsen

CFOEsben Jensrud

Head of ITChristopher Rolsdorph

DSMFrederik W.

HusebyeHEO

Tor SletbakkenDesk Manager Nils

Andreas Arnesen