The SIAF APRAS Model A Paradigm Shift in 21st Century Aquaculture

presented by

Anthony C. Ostrowski, Ph.D. Chief Scientific Officer, Sino Agro Food, Inc.

19 May 2016 · IntraFish Seafood Investor Forum · New York, New York

SIAF Overview

Company History:. Incorporated 1974 in Nevada, USA. Corporate HQ in Guangzhou, China since 2007. Quoted on OTCQX, USA and Merkur Market of Oslo Børs, Norway. Revenues = $429 M in 2015.

Divisions: Aquaculture • Plantation • Beef Cattle • Organic Fertilizer & Feed • Corporate

Target Market: Growing middle class in China > ¥60,000 RMB ($9,000) income/year, mainly urban.

Technologies: A-Power re-circulating aquaculture system (APRAS), proprietary enzymes for animal feed and fertilizer.

Competitive Edge: Focused niche products and markets; experienced management; vertically integrated operations; third party certified sustainable production practices; year-round indoor aquaculture; joint ventures; co-operative farming business model, good working relationships with Chinese authorities.

Business Model:. Vertically integrated primary producer and distributor of natural, sustainable protein and plant foods, animal feed, organic fertilizer. Value-added processor. Scalable, modular facilities. Certified & traceable, “Farm-to-Plate” brand objectives.

Strategy: Maximize economic efficiency in the protein food value chain in China.

10%

45%

65%

Why Aquaculture?

Increasing demand Stagnant Wild Capture 70 MMT more by 2050

All from Aquaculture

Aquaculture (% of world seafood production)

70 MMT

Why Seafood?

FCR Cattle 8:1 Swine 4:1 Chickens 2:1 Salmon 1:1 Aquaculture* 0.5:1

Seafood as a Protein Producer (FCR= dry feed fed/wet weight gain)

*www.iffo.net/downloads/100.pdf

+

0

10

20

30

40

50

60

1990 1995 2000 2005 2010 2015 2020 2025 2030

Growth of the Chinese Middle Class*

Urban Rural Total

0

10

20

30

40

50

60

1990 1995 2000 2005 2010 2015 2020 2025 2030

Growth of the Chinese Middle Class*

Urban Rural Total

55.0

1.0

2.1

42.5

19.6

10.1

25.3

37.5

3.4 3.5 7.1

% o

f to

tal h

ou

seh

old

s

~6 MMT more high-

value seafood needed

World Bank : ~13 MMT total more seafood needed in China alone by 2030**

Why China?

*Source: ‘Understanding China’s Middle-Class’, Song &Cui, chinabusinessreview.com, Jan-Feb 2009 **Source: World Bank. 2013. Fish to 2030.

169 m people

50%

Description:

APRAS indoor aquaculture with aquaponic vegetables, land fruit, ornamental & value-added plant production

Strategy:

Sustainable production practices; green, holistic facility management; nutrient recycling & wetland & bird sanctuary

Location:

Strategic prime agricultural land in Zhongshan, Guangdong Province, PRC

Land Area:

3,700 mu (600 acres)

Prawn targets*:

Phase I (10,000 MT) – end 2017

Phase II (70,000 MT) – end 2020

Phase III (130,000 MT) – end 2024

Tech Owner:

11th generation APT, licensed by Capital Award, Inc. (a wholly owned subsidiary)

Holistic approach

Phase I

M. rosenbergii

MegaFarm Overview

* Minimum operational target

THE PARADIGM SHIFT

[PERCENTAGE]

[PERCENTAGE]

[PERCENTAGE]

0.04%

[PERCENTAGE]

Inland & Ponds

Racks (oysters)

Net Pens/Cages

RAS

(45 MMT)

(15 MMT)

(6 MMT) (6 MMT)

(0.025 MMT)

2Data from FAO, 2014. Status of World Fisheries. www.FAO.org/3/a-i3720e.pdf

1Data from Ecoplan International Inc. 2008. Global assessment of closed system aquaculture.79p.

RAS represents only 0.04%1 of world 66.6 MMT2 aquaculture food production

World Aquaculture Methods

Low water consumption Recirculation (<5% loss/d)

Minimal land use Higher densities (50 vs. 15 kg/m3 for salmon pen)

Better hygiene and disease management Eliminates “excludable” diseases & controlled environment reduces stress on animals

Reduces environmental effects Controlled waste management & nutrient cycling

Prevents biological effects No escapees

Reduces visual effects Minimal land use

Reduces carbon footprint Can locate farm close to markets

Advantages of RAS

Indoor RAS

Ponds

Net Pens

So Why Not RAS Everywhere?

Financials (USD)

Net Pen RAS

Revenues $10,478,750 $10,478,750

Gross Profit $ 4,128,260 (39%)

$ 3,243,246 (31%)

Operating Income (depreciation)

$ 2,927,700 (28%)

$ 1,557,802 (15%)

Income (loan interest, private credit)

$ 2,641,147 (25%)

$ 381,467 (4%)

Capital Investment $ 5,000,716 $22,622,885

ROI 53% 2%

Salmon Financials* (3rd year of operation)

*Boulet et al., 2010. DFO. Canada.61 p.

Data Source: 1SIAF (May 2016, Phase II) 2 Swedbank, 2015 (10K MT)

Net Pen A. Salmon (S. salar)

RAS A. Salmon (S. salar)

APRAS Prawn

(M. rosenbergii)

Culture space (m2)

9,000 (1,250 MT/yr)

13,928 (1,250 MT/yr)

25,000 (10,000 MT/yr)

Capital Costs (Capex) (USD/kg)

$2.00 $9.05 $4.001 - $6.002

Turnover Rate (MT/m3/yr)

0.14 (15 kg/m3)

0.12 (50 kg/m3)

0.42 (<50 kg/m3)

FOB Sales Price (USD/kg)

$5.05 (fresh)

$5.05 (fresh)

$15.00 (live)

Production Costs (USD/kg)

$3.06 (61% of FOB)

$3.48 (69% of FOB)

$5.20 (37% of FOB)

ROI (% Capex)

53% 2% 163%2

The APRAS Paradigm Advantage

THE COMPETITIVE EDGE

SIAF RAS

Seed

Feed

Mortality

Gross Profit 15%

9%

16%

Open Ponds

Seed

Feed

Mortality

Gross Profit

26% 25%

9%

60%

40%

0.1-0.5 ha/1.5-7.5 mu

Asian Outdoor Open Ponds

SIAF Indoor APRAS

FCR = 0.9

FCR = 2.0

FCR = dry feed fed/wet weight gain

Year-round, reliable, consistent production

Seasonal, unpredictable, variable production

Efficient Production

21.6 M seed/cycle

High Turnover

600K (x 36 tanks)

270K (x 36 tanks) 272K

(x 48 tanks) 1,280K

(x 3 tank)

Indoor RAS (24 mu) (phased growout, partial harvest)

Outdoor Open Ponds (216 mu) (all in/all out)

10% mortality

2% mortality

2% mortality 1% mortality

6 gm

(66 gm) (17 gm) (10 gm)

4 wk 4 wk 4 wk 3 wk

114 x’s greater yield

14 cycles/yr

52 MT/c 253 MT/c $ $

273 MT/mu/yr

105 day cycle

M. rosenbergii

6,552 MT/yr

400K (x 54 ponds)

@ 150/m2

240K (x 54 ponds)

21.6 M seed/cycle

90-120 day cycle

40% mortality

20 gm

(4 mu = 2,667 m2)

518 MT/yr

2 cycles/yr

$

2.4 MT/mu/yr

L. vannamei

163 MT/c

270K (x 36 tanks)

6 gm

$

13 times greater production (MT/yr) 114 times greater yield (MT/area/yr)

APRAS Strategy =

Small APRAS Footprint

Asian 4 mu open ponds at 2 cycles/yr

30 ponds 120 mu 2.4 MT/mu/yr 288 MT/yr

SIAF RAS at 14 cycles/yr vs.

1.1 mu

Small MegaFarm Footprint

Vietnam 2015 L. vannamei production = 300,000 MT

Area is 0.2% of Tra Vinh Province

MegaFarm 2025 = 300,000 MT*

Mekong Delta Provinces = 9.6 million acres

*Master Plan theoretical maximum. Operational minimum based on historical production is 130,000+MT/yr

(¥238/市斤 = $73/kg)

(¥60/市斤= $18.50/kg)

King Crab (3-5 kg)

Giant prawn M. rosenbergii

(¥368/市斤 = $113/kg)

(¥72/市斤 = $22/kg)

Large Groupers (3-5 kg)

White shrimp L. vannamei

High Price

Pearl River Delta = 120M people eating 4 MMT seafood/yr

Sustainability Sweet Spot

Environmental Decreased pollution

Decreased land use Decreased water use Decreased fishmeal use Decreased carbon footprint Third party certification & traceability

Economic Efficient protein producer Yield maximization High gross profits High ROI

Social Heart healthy seafood

Low carbohydrate & fat Omega 3 fatty acids

Jobs creation 8,000 x 10

SIAF APRAS

Social

Environmental Economic

*Tom Vilsak, USDA 2015 Dietary Guidelines “sustainable diet” = promotes: health & well-being; food security; preserves human & natural resources

Sustainability Triad*

SIAF = 21st Century Aquaculture

THANK YOU!

Sustainable Intelligent Aqua Farming

General

This presentation has been prepared by Sino Agro Food, Inc. (“SIAF” or “the Company”) solely for informational purposes. The information contained herein has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions in this presentation. SIAF makes no representations (expressed or implied) regarding information contained in, or any omissions from, this presentation or any other written or oral communications transmitted to the recipient. Neither SIAF nor any of its affiliates, advisors or representatives, will be liable for any loss arising from any connection to, or use of, this presentation or its contents.

This presentation does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

The Company undertakes no obligation or responsibility to update any of the information contained in this document. Nothing contained in this document shall be relied upon as a promise or representation as to the past or future performance of the Company.

Forward-Looking Statements

This presentation may contain forward-looking statements relating to the business of SIAF and its subsidiary companies. All statements other than historical facts are forward-looking statements. These include statements about future results of operations and capital plans. We caution investors that these forward-looking statements do not guarantee future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties, including those described in filings we make with the SEC.