Ferrero Group Agricultural Initiatives

Hazelnut Business Development (HBD)

Milano, May 29th 2012

Agenda

Hazelnut market and geographic areas

II Ferrero HBD approach III Ferrero agricultural activities IV Opportunities for development in Canada

Hazelnut market main producing countries at worldwide level (in shell)

US (Oregon) 34.000 tons (4 %)
GEORGIA 25.000 tons (3 %) AZERBAIJAN 30.000 tons (3 %)

SPAIN 25.000 tons (3 %)

OTHERS 4%

ITALY 120.000 tons (13%)

TURKEY 650.000 tons (70 %)

Around 70-75% of actual worlwide production is done in Turkey, followed by Italy with 12-15% Chile and Georgia are the main emerging countries which has experienced a major increase in hazelnut cultivation during last 5 years
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Traditional hazelnut cultivation (Turkey)

Land
Harvest

Storing

Drying

Hazelnut climatic areas suitable for hazelnut production

Actual producers

Potential producers

35 - 45

Suitable climatic conditions for hazelnut cultivation

30 - 45

The most suitable climatic conditions for hazelnut production are between 35-45 latitudes in the Northern Hemisphere and between 30-45 latitudes in the Southern Hemisphere In those areas it is necessary to check in details the pedoIogical/climatic conditions (microclimate, altitude) which allow for a rational cultivation/mechanization
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Agenda

Hazelnut market and geographic areas

II Ferrero HBD approach III Ferrero agricultural activities IV Opportunities for development in Canada

HBD - hazelnut cultivation (Chile)

Land Storing

Harvest

Drying

HBD hazelnut value chain

Planting
Land preparation Planting Fertilizing Irrigating Pruning

Harvesting
Harvest preparation Mechanical harvest Manual harvest Collecting Storing

Drying
Selecting Destoning Drying Calibrating in-shell Sending to cracking

Cracking
Sorting Cracking Calibrating shelled Packing (big-bag) Shipping

Processing
Quality check Receiving / storing Roasting

Processing
Final product

Agenda

Hazelnut market and geographic areas

II Ferrero HBD approach III Ferrero agricultural activities IV Opportunities for development in Canada

Hazelnut Business Development (HBD)

GEORGIA:
ITALY:
On-going projects 3.000 ha already planted Nursery for developments

SOUTH AFRICA:
1.000 ha in progress (Ferrero + local growers)

CHILE:
3.000 ha Ferrero 9.000 ha planted by local growers

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HBD Initiatives CHILE

- Location -

Los Niches

Camarico San Sebastian

Caracas

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Agrichile (Camarico)
The biggest hazelnut orchard in the world (1.400 ha in one block)

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Agrichile (San Sebastian)

The 2nd biggest hazelnut orchard (1.000 ha in one block)

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HBD Initiatives CHILE

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HBD Initiatives CHILE

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HBD Initiatives CHILE (local growers between VII and IX Region)

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CHILE (local growers Curic VII Region)

40 ha, first planting 2004 Varieties: Giffoni, Barcelona

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CHILE (local growers Camarico VII Region)

100 ha, first planting during 2007 Varieties: Giffoni, Barcelona

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CHILE (local growers - Villarica IX Region)

120 ha, first planting during 2005-2006 Varieties: Giffoni, Barcelona, TGL

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CHILE (local growers - Freire IX Region)

45 ha, first planting during 2005-2006 Varieties: Barcelona, Giffoni

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CHILE (local growers - Freire IX Region)

85 ha, first planting during 2005-2006 Varieties: Barcelona, Giffoni

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CHILE (local growers - Freire IX Region)

100 ha, first planting during 2006 Varieties: Giffoni, Barcelona

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CHILE (local growers - Temuco IX Region)

30 ha, first planting during 2005 Varieties: Barcelona

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CHILE (local growers - Temuco IX Region)

240 ha, first planting during 2005 Varieties: Barcelona, Giffoni

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Iniziative HBD - GEORGIA

- Posizione -

25km
5km

Tsalenjika Agrigeorgia

Chitaskari
35km

Akhali Khibula
30km

Gejeti Vediktari- Martvili

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HBD Initiatives Georgia

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Iniziative HBD - Sudafrica

Camballan Springvallei

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HBD Initiatives South Africa

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Agenda

Hazelnut market and geographic areas

II Ferrero HBD approach III Ferrero agricultural activities IV Opportunities for development in Canada

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Canada Hazelnut climatic conditions

Chilling: Chill units (<7C) between 700 and 900 hours

Max Temp: Highest maximum temperatures below 40C (preferably below 35C) Min Temp: Lowest minimum temperature above -10C
Frost: No frost in late spring (April). Lowest minimum temperatures not below -1 to - 2C in spring Wind/Hail: low wind/hail area are preferable Humidity: Average humidity 60-70% from March to October Rain: Ideally 800-1000 mm per annum. Low rainfall in August and September (harvesting time) Rainfall can be replaced by irrigation.

potential areas for hazelnut cultivation

The potential areas and microclimatic situations have to be analyzed on a case to case basis
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Why investing in an hazelnut project?

- Good reasons to invest Attractive return in long term (agricultural investment) Opportunity to diversify (cereals, fruits) for local farmers Reduced amount of work needed for orchard management (easy to mechanize) compared to other fruit crops Crop can be stored for a long period compared to other agricultural fresh fruits and its easy to transport

- What Ferrero is offering 1)Plants from Ferrero nursery at discounted price (best varieties developed in our nurseries)

2)Full availability in sharing technical information and experiences on the field

3)Safe end-market (Ferrero has a strong interest in buying the production)

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The support from Ferrero

Know-how and sharing of experiences
Technical support and expertise Purchasing power in the long-term Common interest to the development of hazelnut cultivation

THANK YOU!

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