Europe’s biggest pellet producer

THE BIGGEST wood pellet producer in Europe

200 GWhgreen electricity

production in 2016

2 200 000 tannual production in 2016

Graanul Invest is private company whose head-

quarters is based in Tallinn. Our main fields of

activities include wood pellet production, develop-

ment of heat and energy solutions, trading of solid

biomass products and forestry.

Regardless of the fact that company is quite young,

established in 2003, it has become the biggest

wood pellet producer in Europe, one of the largest

forestland owners in Estonia and one of the

biggest independent renewable energy producers

in the Baltic Sea region.

In 2016 we will produce more than 2.2 million tons

of wood pellets, generate more than 200 GWh of

green electricity, own more than 30 000 ha of

forestland in Estonia and plant more than 1 million

new trees.

We see that together with the general growth of

wood pellet markets worldwide we will also grow

our production volumes in the Baltic Sea region and

internationally at the pace of general market growth.

Graanul Invest is certain that usage of sustain-

able solid biomass for generation of renewable

heat and electricity will be integral part of world

energy future. In order to ensure that we have to

operate bearing in mind long term goals, operate

sustainably, always strive towards higher efficiency

and better quality and do all we can to lower our

greenhouse gas footprint.

Our target and motivation is simple -

we want to be the most reliable wood

pellet supplier in the world.

11 pellet plants

We produce and deliver sustainable wood pelletsOne of Graanul Invest Pellet Plants in Incukalns Latvia

Pellets 270 000 tons Electricity 2x3.99 MWe

Storage for premium pellets

CHP plant Pellet production Raw material, always in stock for at least 2 months

Pellet productionCHP plant

ISO 9001:2015

ISO 14001:2015

Quality-oriented production

Wood pellet production in Graanul Invest group is

divided between industrial and premium pellets.

Our technology and wood supply allows us to

produce around 50% of our pellets in premium

quality.

Our production logic is simple- we are efficient,

focused on quality and are flexible with respect to

raw material supply.

In our production we use as much as possible

green electricity for energy use, all our heat used

is based on forest residues and since 2017 we will

start to use for our coaster vessel business LNG

based vessels that will be specifically designed

and built according to our needs. All this carries

one aim only- to have as little greenhouse gas

footprint as possible.

In combination with our long term relationships

with raw material suppliers and our own forestry

companies we can ensure continuous and sus-

tainable raw material flow to our production units,

which will ensure to our customers that we can

guarantee stable pricing of our products over

longer period of time and we can guarantee the

sustainability of our feedstock.

All our pellets are covered with FSC Controlled

Wood certificate, but we also have PEFC CoC

and FSC CoC certificates for big part of our raw

material supply.

Quality of wood pellets has always been our key

priority and for that reason we operate in site

laboratories in all plants where the tests of raw

material and finished products are done on con-

tinuous basis to ensure that at all times we will

meet the quality requirements agreed with our

customers.

Main part of our industrial pellet production is

covered by long term contracts with major pellet

users and distributors in Europe.

PELLET FACTORIES

OHSAS 18001:2007

ISO 50001:2011in application process

ESTONIA

LATVIA

LITHUANIA

FINLAND

SWEDEN

NORWAY

Reliable consumer trademarks

In premium pellet sector we are using different

trademarks in our markets to separate different

qualities, certification schemes and customer

segments.

As quality is one of the main parameters in the

premium pellet market we are using labeling sys-

tem of the bags according to which we will always

know in what plant and at what exact moment

the bag in question is produced. All our premium

pellets are tested in the factory on hourly basis

against main parameters and both test results

and samples themselves are kept in storage.

All our premium pellets are FSC Controlled wood

certified and have both DIN+ and EN+ certificates.

With bigger customers and on the basis of longer

term arrangements we can also produce pellets

with customer logo bags still using our existing

certificates.

Our Incukalns plant in Latvia is also certified

according to the new certification scheme BSL

for the UK market. That will also enable us to sell

pellets in the UK market for the customers that

are part of the heat incentive program.

As big part of our premium pellets are delivered

in 15 kg sacks then we operate 5 different bagging

lines in our company. In total we can produce 60

truckloads of packed premium pellets per day.

Those pellets are today shipped to different markets

in Europe using trucks and containers. For con-

tainers we use terminals in Klaipeda, Riga and

Tallinn to ship the product with most economical

logistical solutions to our customers.

Big part of our premium pellets is also delivered

by vessels in bulk to the customers. Here we can

use as means of transportation small coasters up

to handy size vessels and since 2017 even up to

handymax vessels. Most of the bulk pellets are

sold CIF basis but also FOB terms can be used.

15 kg sackspellets are delivered in

OUR TRADEMARKS

BGREEN NATURKRAFT PELLETKRAFT FLEX HEAT

60 truckloadsof packed premium pellets

per day

high-qualityproducts

Graanul Invest’s annual production

88

0

176

261287

410439

396

589

746

854

1500

2200

2500

million tons

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2003

AS Graanul Invest was established

Two first pellet plants started

operations in Estonia and Lithuania

Our heat solutions

company Pelletiküte

started operations

Graanul Invest timeline

Startup of our first pellet plant

in Latvia in Launkalne

Our sales organization in Sweden

Natrurkraft Sverige is established

2004 2005 2006 2007 2008 2009

Acquisition of 50% of Roger Puit shares, our third forestry

company in the group and with that acquisition our forestland

territory reaches above 30 000 hectares in Estonia

Acquisition of Sia Latgran, this acquisition increases our actual

production volume of wood pellets above 2.2 million tons

Startup of our fifth and so far largest highly

efficient CHP project in Imavere with electrical

capacity of 10 MW and heat capacity of 28 MW

Start of construction Broceni project in Latvia,

this will be our 12th pellet mill in the group and

increase our production volumes in 2017 above

2.5 million tons

Graanul Energy is established to develop

CHP based energy projects

Graanul Invest entered forestry sector by

acquiring 50% of the shares of OÜ Valga Puu

Graanul Invest daughter company Graanul Pellets launched

the groups’ biggest pellet plant in Latvia Incukalns

Our first two CHPs in Latvia Launkalne and Estonia Helme

started operations

We acquired 50% of Karo Mets

or second forest management

company in the group

Startup of the biggest pellet mill

in the group in Southern Estonia —

Osula Graanul

Two CHP plants started operations

in Incukalns Latvia

2010 2011 2012 2013 2014 2015 2016

As biggest producer of wood pellets in Europe our

target has always been to develop and operate

energy units working on solid biomass. Since

2010 when we entered that business we have

built 5 CHP plants with total electrical capacity

more than 30 MW and are currently developing

next project to add by the end of 2017 another

10 MW of electricity into that portfolio. The aim

of that program for us is to provide in the future

long term sustainable energy solutions where we

will be able to provide on own and operate basis

long term heat, steam and/or electricity supply

contracts to our customers.

All the energy projects developed have been

greenfield projects for us that we have developed

ourselves since the very start. That has given us

valuable expertise to put those projects together,

to budget, design, procure and build them.

We believe that one of the key potentials for the

solid biomass on long term basis is steam and

electricity contracts with different industrial com-

panies or heat and electricity contracts with local

heat networks or commercial developers. We can

provide to customers full service based solution

that would enable for them to fix their energy

costs over long term, provide to the customers a

potential to decrease their greenhouse gas foot-

print and enable them to use their capital and other

resources in their core business development.

Combination of our expertise in the development

of energy units and our long term fuel supply from

our pellet operations we can provide security for

the customers that our development will be in time

and their energy supply needs will be fully met.

solid biomassenergy units opeating on

40 MWeby the end of 2017

We produce sustainable energy

ESTONIAHELMEElecricity 6.5 MWeHeat 15 MWBuilt 2012

LATVIAINCUKALNS Elecricity 3.99 MWeHeat 11 MWBuilt 2014

GREENFIELD CHP PLANTS

IMAVEREElecricity 10 MWeHeat 28 MWCompl. 2016

OSULAElecricity 10 MWeHeat 28 MWCompl. 2017

INCUKALNSElecricity 3.99 MWeHeat 11 MWBuilt 2014

LAUNKALNEElecricity 6.5 MWeHeat 15 MWBuilt 2012

5 CHP plantstotal capacity of more than 30 MW

ESTONIA

LATVIA

LITHUANIA

FINLAND

SWEDEN

NORWAY

We grow our own raw material supply

Sustainable raw material supply is cornerstone of

modern wood pellet industry. That is the reason

why we stared our forestry business development

in 2010. Mixed forests in the Baltic states have

a lot of low quality wood that can be utilized by

energy sector. We can also utilize in our energy

units forest residues that are created during har-

vesting operations.

Today our forestry companies are providing all

services to the forest owners, we can build forest

roads and ditches and we operate our own quarries

for these purposes, we can provide full set of

forest management services, starting from planting

new trees until harvesting and log trading services.

Combined we are today one of the biggest forest

services groups in Estonia.

We have also become one of the biggest private

forestland owners and own in the group more

than 30 000 ha of our own forestland. Invest-

ments into forestland will ensure that we have

sufficient green stock of raw material to secure

the fulfillment of our wood pellet and log sales

contracts even in difficult market situations.

All our forestland and forest management opera-

tions are covered by our strict internal rules and are

certified with PEFC CoC certification. That ensures

for us and also third parties that our practices are

sustainable and we carry out all our operations with

long term future of the forestry in mind.

Sustainable forest operations have also one very

visible result - the forest territory as well as the

green stock in the forest is growing in the Baltic Sea

region. That shows that there is no conflict between

sustainable bioenergy and environment. In fact for

the forestry and woodworking industry in the Baltic

Sea region it is imperative that there is also customer

for lower quality products of forestry operations

and pellet industry is the leading driver today in

that field.

with PEFC CoC certification

forest management is certified

30 000 haof our own forested land

1 000 000new trees planted in 2015

We produce heat for local communities

Since 2008 we have developed in Estonia modern

and highly efficient heat energy systems. We are

currently operating 14 heat solutions that are based

on wood pellets. Our customers in this segment

are mostly municipal heat networks or commercial

customers with bigger heat needs. We build, own,

maintain and operate those installations ourselves,

so that customers have long term fixed heat con-

tracts where their only obligation is to pay for the

heat according to the metering system.

We have also developed efficient and modern

logistical system do deliver wood pellets to those

boiler houses. In order to secure in time delivery

of the fuel we own the trucks that deliver pellets

to the energy units. With the same trucks we also

service other customers that enable us to increase

efficiency in our delivery program and promote

usage of pellets in the market.

One of the key benefits of that solution is that we

can ensure our customers long term energy pricing

long term ahead (up to 10 years), which creates

security to some of our industrial customers and

stabile pricing of energy to the heat customers in

the local municipalities. It is also noteworthy that

all of those installations replaced fossil fuel based

systems and all those systems provided better

heat price to the customers compared to what

they had before.

So we have accomplished three aims at once: we

have increased the efficiency of the heat systems,

we have replaced fossil fuels with renewable fuel

source and we have provided savings to all our

customers compared to their existing heat solu-

tion and on top of that we have fully developed

and financed all those solutions.

So win-win-win!

savingsfor all of our customers

only renewablefuel source

increased efficiencyin heat systems

Global network for a global business

Wood pellet in our mind can mostly be described

as a homogeneous logistical unit of biomass. The

main reason of the process of converting virgin

wood fiber into wood pellets is to enable our

customers to use it more easily and save energy

and cost in the logistical system of transporting,

storing and handling.

Quickly developing wood pellet market has a lot of

challenges, dependency of weather, seasonality

of some big industrial customers, low level of

market liquidity and on top of that market issues

related to technical problems of both suppliers

and customers.

For that reason energy efficient and flexible logis-

tical solutions are key for servicing our customers

and their needs. We have put a lot of emphasis

and energy into developing logistical solutions

that would fully satisfy changing needs of our

customers and at the same time ensure that we

can efficiently operate our production operations.

We ship today wood pellets from 7 different

terminals in 4 harbors and rent warehouses in the

harbors to store more than 370 thousand tons of

pellets at the same time, we can load vessel with

capacity from 1 000 tons to 30 000 tons (in 2017

up to 50 000 tons).

All our winter shipments are secured with ice

classed vessels in order to ensure security of supply

to our customers also in the periods of ice in the

Baltic Sea.

As sustainability and greenhouse gas emissions

are our key priorities we have signed an agree-

ment to build 3 new LNG vessels to service our

coaster traffic. Vessels will be very efficient, have

very low emissions and will have high ice class to

operate also in difficult ice conditions.

50 000 tonsvessel capacity up to

TERMINALS

7 terminalsat 4 ports

370 000 tonsstorage capacity in terminals

ESTONIA

LATVIA

LITHUANIA

FINLAND

SWEDEN

NORWAY

Business with love for local communities

As sustainable company in the long term busi-

ness we are taking care of the communities we

operate in. It has been our operating policy since

the beginning to support local initiatives in the

areas where we have operations. Those initiatives

include cultural events important for the local

communities, sports activities of local athletes

and youngsters.

Recently we have also picked out two sports that

we will support on countrywide federation level.

Since 2015 we are the main sponsor of the

Estonian Cross Country Skiing Federation and

also a sponsor of Estonian Volleyball Association.

Both these sports are popular and important for

our community and we feel proud that we can

contribute to their achievements.

Working together with local communities, local

businesses and local cultural society is for us part

of our sustainable future.

supportlocal initiatves

main sponsorof the Estonian Cross Country

Skiing Federation

sponsorof the Estonian Volleyball

Association

AS Graanul InvestHumala 2 10617 Tallinn Estonia

www.graanulinvest.com