ekopolimer silicopolymer project executive introductory summary 04 05-2011

EXECUTIVE SUMMARY FOR SILICOPOLYMER PROJECT

ENVIRONMENTAL FACTS

ENVIRONMENTAL FACTS

environmental facts

It is estimated that there are around 60 Billion trees in the world.

ENVIRONMENTAL FACTS

300 Million of these trees are being cut and consumed every year by human beings and unfortunately only 30 Million new trees are planted in return.

environmental facts

ENVIRONMENTAL FACTS

60 Million of these trees are consumed only to produce wooden Transport Pallets every year.

environmental facts

?ENVIRONMENTAL FACTS

environmental facts

With these current facts, if no action is taken, within 200 years there will be no trees left in the world.

?!!

ENVIRONMENTAL FACTS

In less than 300 years world could be covered with plastic wastes.

According to a recent article in the San Francisco Chronicle, there is already;

«A heap of debris floating in the Pacific that's twice the size of Texas comprised of literally millions of points of trash»

environmental facts

Every year human beings produce over 2 Billion Tons of garbage. An incredible amount of 200 Million Tons of this amount is Plastic wastes which would not biodegrade for more than 1000 years. 68 Million tons of all these plastic wastes are LDPE film wastes, a.k.a. Plastic Bags.

A PROFITABLE SOLUTION ALTERNATIVE


We are producing

a profitable solution alternative

From

Thus we protect


and help preventing this to happen


roducing transport pallets by,

rocessing waste plastics hence,

rotecting trees and

reventing environmental hazard and,

rofiting through this unique process.



IN SUMMARY OUR UNIQUE «5P SOLUTION» INVOLVES;

SILICOPOLYMER TRANSPORTATION PALLETS

We produce ecofriendly transportation pallets which we have called «Silicopolymer Transportation Pallets»


SILICOPOLYMER (SP) TECHNOLOGY & SP PALLETS

SP Pallet, is the first transportation pallet in the world, produced by SP Technology, which we are holding all the intellectual rights of. This unique technology is the most feasible and low-cost process to produce pallets, compared to any technology used in the sector including processes that use recycled plastics as a raw material in the world.

SILICOPOLYMER (SP) TECHNOLOGY & SP PALLETS

silicopolymer (SP) technology & SP pallets

SILICOPOLYMER is a breakthrough technology, which enables to recycle scrap LDPE films, blended with filler minerals and chemicals to produce various products including transportation pallets.

In summary, this complex technology can be described as reactive-extrusion of scrap LDPE films with minerals and chemicals, to produce a «Dough» which is «Press Molded» to manufacture the desired products.

The LDPE films are not the only scrap plastic type that can be used in our productions. The technology allows all kinds of scrap plastics to be used in the process. We have chosen LDPE films as raw material because they are

1 - The most abundant and lowest cost scrap plastics in the waste stream

2 - LDPE films are the least demanded scrap plastics as there is no other feasible recycling process for them. This makes LDPE films the most harmful scrap for environment.

WHAT IS SILICOPOLYMER TECHNOLOGY


Among the many possible eco-friendly, low cost products which can be produced by the SP Technology, we can count;

WHAT IS SILICOPOLYMER TECHNOLOGY


ManholeCovers

Several EnhanciveMunicipal ProductsTransportation

Pallets

ModularFloorings

TEST STANDARD UNITS RESULTDensity ASTM D1505 g/cm3 0,964 – 1,700Water Absorption ASTM D570 % 0,06Surface Hardness ASTM D2240 Shore D 62Tensile Strength ASTM D638 MPa 21,9Elongation at Break ASTM D638 % 5,3Impact Resistance ASTM D6110 kJ/m2 8,55Bending Resistance ASTM D790 MPa No BreakCompression(Pressure)Resistance ASTM D695 MPa > 58Impact Elasticity ASTM D2632 % 15Heat Transfer Coefficient ASTM C177 W/m.K 0,18Electric Resistivity ASTM D257 MOhm 7,5 Melting PointMelting Point ASTM D3418 C 121

PHYSICAL PROPERTIES OF MATERIALS PRODUCED FROM SP


*These are mean values and they may vary according to the filling material used.

CHEMICALS VERY GOOD GOOD AVERAGE BADMineral Oil XAcetone XAcetic Acid XAmmoniac XDetergents XEthyl Alcohol XMethyl Alcohol XGlycerin XToluene XSodium Hydroxide XHydrochloric Acid XSulphuric Acid XSodium Hypochlorite X

CHEMICAL RESISTANCE OF MATERIALS PRODUCED FROM SP


Silicopolymer Pallet is a new kind of environmental friendly and economically advantageous pallet, which is produced by implementing Silicopolymer Technology that combines the functional advantages of wood and plastic pallets.

It contributes to the solution of the most important problems of our age such as Global Warming, Destruction of Forests and Pollution.

It is very inexpensive in comparison to the plastic pallets, and more durable, highly resistant, with extensive lifecycle in comparison to the wooden and other pallets in the market.

WHAT IS SILICOPOLYMER PALLET?


• SP Pallet can be manufactured in custom size and color, with custom logo use.

• SP Pallet is more durable, resistant against impact and long life compared to wooden and plastic pallets, with higher tonnage capacity.

• SP Pallet is resistant to water, detergent and other chemical fluids. It is moisture and climate proof.

• SP Pallet can be power washed or steam cleaned which is a critical factor in the food industry, such as in poultry and meat processing plants, which must maintain sanitized production areas.

• SP Pallet‘ s physical characteristics are suitable for external conditions. The pigmentation is inherent to its chemical composition, therefore does not fade.

• SP Pallet does not require additional maintenance, repair and cleaning expenses.

• SP Pallet has almost no competition worldwide.

SILICOPOLYMER PALLET ADVANTAGES


The regular chemical and temperature treatment (ISPM 15) requirements for export procedures for wooden pallets are not required for SP Pallet. This advantage will eliminate unnecessary paperwork and bureaucratic processes associated with fumigation or heat treatment hence saves money, time and labor.

Environmental concerns are directly reflected to consumer choice today. (Some countries even prohibit the use of wooden pallets). The use of SP Pallet will create additional export volumes for firms.

SP Pallet does not absorb water as wooden pallets and can be stored outside without occupying expensive indoor space.

SP Pallet is a «Triple Green» product, which is manufactured from recycled materials, and can be recycled in the event they ever wear out, and will help conservation of our nation's forests while solving scrap plastics recycling problems.



SP Pallets meet and way exceed all of the international technical and general market determined requirements of transportation pallets with;

Dynamic Load Capacity of: + 1500 kgStatic Load Capacity of: + 3000 kg

and a useful life more than 20 times compared to wooden transport pallets.



Dynamic load demo with 1500 kg (Market average for wooden pallets)

Dynamic load demo with 4500 kg (300% higher than market average for wooden pallets)

SP WOOD PLASTICReusabilty + - +

Need for Maintanance + - +

Impact Resistance + + -

Loading Capacity + - +

Price + + -

Endurance Aginst Chemicals + - +

Endurance Against Wetting + - +

Emission & Recycling Offsetting + - -

Washable or Not + - +

Dependance on ISPM 15 REGLNS + - +

Ecological Aspect + - -

Advertisabilty of Process + - -

Coherence with Waste packaging REGLNS + - +

COMPARISON OF SP WITH WOODEN AND PLASTIC PALLETS


PLANT & PROJECT FEATURES

As it was explained briefly before, the SP Technology involves extrusion of scrap LDPE film flakes blended with filler minerals and chemicals to produce an SP Dough which later is Molded to manufacture the desired design.

Our first plant which was founded with an investment of more than 5.000.000 Euros after a R&D study of about 7 years, is established in Ankara Turkey. It involves 2 lines and at full capacity every month this plant is capable of;

rocessing-recycling 1200 mtons of plastic waste to,roduce 60.000 Pallets,rotect up to 20.000 Trees from being cut,revent up to 2000 mtons of CO2 emission and rofit up to 500.000 Euros

PLANT & PROJECT FEATURES SUMMARY

plant & project features

These following presentations refer to a plant with 1800 mtons/month output capacity.

As a company which develops green technologies, we also may define our capacity in terms of amount of Scrap Waste We Recycle, which would be 1200 mtons/month, with fillers and additives used the overall output tonnage of product for this plant is around 1800 mtons/month.

In calculations, current market prices and unit costs for Turkish market are used.

PLANT & PROJECT FEATURES SUMMARY


FLOW SHEET FOR AN SP PLANT


SCRAPPLASTIC TROMMEL CRUSHER

WATER

SCRAPPLASTIC

SOLID IMPURITIESSTONE, METAL etc

DIRTY WATER

PLASTICFLAKES

PLASTICFLAKES

FLOAT-SINKWASHING

TANK

FLOAT-SINKWASHING

TANKDRYER

DIRTY WATER

PLASTICFLAKES

PLASTICFLAKES

PLASTICFLAKES

SILO

COMPACTORDRYER

WATER VAPOUR

PLASTICFLAKES STOR-

AGESILO

PLASTICFLAKES

WATER

REACTOREXTRUDER

MINERALAND

CHEMICALS

PLASTICFLAKES

DOUGH

MOLDINGCOOLINGFINISHED PRODUCT

Buy SmartDraw!- purchased copies print this document without a watermark .

Visit www.smartdraw.com or call 1-800-768-3729.

PLANT LAYOUT FOR AN SP PLANT WITH 2 EXTRUSION LINES WITH 1800 mton/month OUTPUT CAPACITY


Plant Video 1.wmvPlant Video 2.wmv

FINANCIAL ANALYSIS FOR POTENTIAL OUTPUT OF AN SP PLANT WITH 2 EXTRUSION LINES WITH 1800 mton/month OUTPUT CAPACITY


A - INVESTMENT

Typical Plant requires overall funds of a total of 6.000.000 EUROS. Funds required: SC Line Equipment, w-know-how transfer 4.000.000 EUROSLand, Building and Utilities 1.100.000 EUROSInstallation, Training, Commisioning, Start-Up expenses 500.000 EUROSWorking Capital at the start up 400.000 EUROS TOTAL INVESTMENT FUND REQUIREMENT 6.000.000 EUROS



B - UNIT COSTS

B-1 Direct Production Costs

Plastic scrap 75 EUROS/tonFillers and additives 40 EUROS/tonElectric 20 EUROS/tonDirect labor cost 35 EUROS/ton

TOTAL DIRECT PRODUCTION COSTS 170 EUROS/tonUNIT DIRECT PRODUCTION COSTS 4 EUROS/pallet

Note : These calculations are based on current market prices and unit energy and labor costs in Turkey, for a typical plant with 1800 mtons/month capacity working with 85% capacity and a pallet unit weight of 24 kg.


Note : These calculations are based on current market prices and unit energy and labor costs in Turkey, for a typical plant with 1800 mtons/month capacity working with 85% capacity.


B-2 Fixed Costs

Office and Operation Employee 40.000 EUROS/monthSales Operation Costs 10.000 EUROS/monthOffice and other Operation Costs 10.000 EUROS/month

TOTAL MONTHLY FIXED COSTS 60.000 EUROS/monthUNIT FIXED COST 1 EUROS/pallet

TOTAL UNIT COST 5 EUROS/PALLET



C - POTENTIAL GROSS PROFIT PER PLANT

Unit Cost of a EuroPallet (**) app. 5 EUROS/palletWholesale price of a EuroPallet app. 14 EUROS/palletGROSS PROFIT app. 9 EUROS/pallet

Number of Pallets produced per Month app. 60.000

GROSS PROFIT app. 540.000 EUROS/month



- €

2 €

4 €

6 €

8 €

10 €

12 €

14 €

costsales

profit

COST SALES PROFIT



- €

2.000.000 €

4.000.000 €

6.000.000 €

8.000.000 €

CUMMULATIVE PROFIT FIRST 12 MONTHS



- €

20.000.000 €

40.000.000 €

60.000.000 €

80.000.000 €

1 2 3 4 5 6 7 8 9 10 11 12 YEAR

CUMMULATIVE PROFIT YEARS BASIS



-6.000.000 €

-4.000.000 €

-2.000.000 €

- €

2.000.000 €

INVESTMENT AND RETURN FIRST 12 MONTHS



-20.000.000 €

- €

20.000.000 €

40.000.000 €

60.000.000 €

80.000.000 €

INVESTMENT AND RETURN YEARS BASIS



D - DISCUSSION and INTERPRETATION OF PREVIOUS FINANCIAL FIGURES and CALCULATIONS

Previous calculations are rough «Order of Magnitude» calculations. The study may not be accepted as a perfect financial analysis of the project, but as an «Executive Summary» of a far detailed analysis.

It is very important to remind once again that, the calculations do not depend on estimations and/or empirical studies, but on real life figures based on current Turkish market prices and unit costs. Our plant is currently working with these figures and these high profit margins.

The previous analysis show us that our plant is capable of generating a total of 540.000 EUROS/month gross profit with a capacity utilization of 85%.

This incredible rate of return depends only on success on selling of pallets produced. So it would be useful to go over market information for transport pallets, to estimate whether it is possible to maintain estimated sales figures.

TRANSPORTATION PALLETS MARKET

The market for transport packaging is seeing many changes. Trends currently towards sustainable reusable systems. Up until about ten years ago disposable pallets made of a variety of materials were predominant, but meanwhile reusable pallets are fast gaining ground. The total number of pallets is reckoned to be about four billion worldwide, 90% of which are made of wood. Annual production of new pallets is estimated at 850 million, some 18 million of which are plastic.

THE PALLET MARKET IN EUROPE

Over the past ten years, the total number of reusable pallets circulating in Europe has increased by 25% from 280 million to about 370 million. Here the EuroPallet is most widely used with a share of over 300 million. Plastic pallets account for about 6% of the market. Every year around 36 million new Pallets are produced throughout Europe to replace damaged ones. In total some 50 million new reusable pallets are manufactured annually, three million of which are made of plastic. Given the excellent properties of plastic pallets and the export regulations governing wooden pallets, the market for plastic pallets is constantly growing. The growth potential for plastic pallets is between 3-5%.


transportation pallets market

THE PALLET MARKET IN THE UNITED STATES

The total number of pallets in North America is around two billion, with about 90% wood and 2% plastic. Annual production of new pallets lies in the region of 1,2 billion pieces, 96 % of which are wood and % 3 plastic. The annual growth rate for plastic pallets is 3-5%.

THE PALLET MARKET IN CHINA

In China, annual production of new pallets is roughly 1 billion pieces. Plastic pallets account for 3 % with the figure increasing by 5% annually.

DISCUSSİON ON THESE MARKET FIGURES

Of the 2,5 billion new pallets produced per year in these regions only 5 % are plastic and a very small portion of these pallets are from recycled plastic. Relatively high prices of plastic pallets prevent higher market penetration for these products although they have respectively better technical properties w.r.t wooden pallets. SP Technology enables to produce Transportation Pallets with features similar to plastic ones, with almost the same price of wooden pallets, so one can conclude currently there is almost no limitation for our innovative product SP Pallets in Transportation Pallets Market.


transportation pallets market

SWOT ANALYSIS FOR OUR PROJECT


swot analysis for our project

STRENGTHS :

• Our company is pioneer in the industry and holder of intellectual know-how. • There is endless and cheap supply of raw material.• Product is superior to wooden alternative which is the market leader product.

I. Product is relatively at same price level w.r.t . Wooden pallets.II. Product has better physical properties and longer life cycle w.r.t wooden pallets.III. Product may be delivered in different colors and even engraved logo of the

customer. • Product costs significantly cheaper than plastic pallet alternatives, which could be the

only substitute for SP Pallets in terms of technical specifications..I. Product is more than 70% cheap w.r.t pallets produced from injection molded

plastics via virgin plastics.II. Product is more than 40% cheap w.r.t pallets produced from injection molded

plastics via recycled plastics.III. Investment of a plant with 700.000 pallets/year with our Silicopolymer technology

is 90% cheaper than a plant that uses injection molded plastics technology via virgin and/or recycled plastics.

IV. Our Raw material LDPE Films is 80% cheaper than the other plants using recycled plastics like HDPE, PP as a raw material.

WEAKNESSES :

• Although there are other products manufactured from recycled plastics by injection molding tech., this particular product is new to the market, so may need extensive marketing and/or promotional work.

• Like Plastic Pallets, for every different type and/or dimension of pallet a new set of molds is needed which require investment and production time, where as wooden pallets need no such preparation work.

• Our current financial structure is limiting us from additional investments which slows down our market penetration.



OPPORTUNUTIES:

• There is an increasing awareness of environmental concern, which would make our product more and more attractive everyday.

• We are recycling plastics and saving trees, as a result we can take part and profit in Carbon Emission Market for;

I. Plastics RecyclingII. Protection of trees.

• World’ s greatest supplier of wood used in wooden pallets; Siberia, Russia is affected by radiation from Fukushima disaster, which would cause new regulations and limitations worldwide on wood market.

• Some of the biggest customers for transport pallets are consumer goods producers (like Coca-Cola, PepsiCo, Lever, P&G, Siemens, Bosh, Heineken, Nestle, etc.). There is a new trend in such companies to shape their advertisement policies on their ecofriendly features as a company, which would make such companies prefer our products.

• Companies buying our pallets will be fulfilling their Recycling-Offset Obligations, which they have to according to government enforced recycling regulations.



THREATS:

• Although we are holding the intellectual rights and production secrets to the process, there is always a possibility of being copied.

• Although plastic pallet products are highly priced w.r.t our pallets recently, there may be alternative products in the future manufactured from plastics and recycled plastics.



SUMMARY AND FINAL DISCUSSIONS


summary and final discussions

This presentation was designed as an introductory summary of our SP Products Project for investor eyes.

It should be reminded here that although this presentation gives it’ s emphasis on SP Pallets, this sector is not the only field which our technology can generate successful business opportunities and profit. We already started to produce different products from our SP Dough. Our R&D department works on further products which can be produced from SP Dough, each capable of being successful and profitable products.

Furthermore, we have received many proposals from many local and foreign companies, for know-how transfer. We believe establishing Turn-Key SP Plants or know-how transfer for other parties, could be another very profitable area of interest.


summary and final discussions

We have a Vision of being «A Major Global Player in the field of Recycling and Green Technologies». We define our Mission as «Working hard on developing and implementing Eco-Friendly processes to reach a Cleaner-Greener-Better World to leave to future generations».

We already have taken a major step. We have established an SP Plant in Ankara-Turkey with an investment of more than 5.000.000 Euros after a R&D Study of about 7 years. We have started pilot scale production by the beginning of this year (2011). As the technology and the products are for the first time ever made at the present time we are engaged in evolution of our products to their final form and optimizing our production processes and equipment.In the meantime we are selling our pilot products and get feedbacks from the buyers which helps us to finalize the product designs.We are launching a completely new product to the market, but our upto date finalized sales figures and forecasts show that, we will be reaching an output of at least 6000 mtons this year. This means we will be recycling over 4000 tons of LDPE Film garbage, and saving over 40.000 trees; a medium sized forest.

We will be starting our full scale production by 1 January 2012.

THANK YOU

Our current success encourages our desire and excitement to spread our activities. We plan to increase our production in our current plant and establish plants Globally.

For Supporting us to Fullfill our Mission to CREATE A BETTER WORLD.

ekopolimer silicopolymer project executive introductory summary 04 05-2011

Business

sp chemicals

plastic pallets

unique technology

woodentransport pallets

complex technology

breakthrough technology

silicopolymer technologythat

environmental factswith