1. The Manaus Free Trade Zone – Business and Investment Opportunities in the Amazon OCTOBER / 2005

2. MANAUS FREE TRADE ZONE-ZFM CREATION OF THE MANAUS FREE TRADE ZONE (Law nº 3.173/57 altered by art. 1st of Decree nº 288/67) “The Manaus Free Trade Zone is an area of free trade, import and export and of special fiscal incentives, established with the purpose of creating within the Amazon, an industrial, commercial and ranching center endowed with economic conditions to allow its development, in face of local factors and great distances from the centers that consume its products”

3. A Federal Public Administration entity, linked to the Ministry of Development, Industry and Foreign Trade, whose goal is to administer and control the Fiscal incentives granted to companies already installed in the Manaus Free Trade Zone, as well as to promote development strategies for the Western Amazon, taking over the role of Investment Promoting Agency. WHAT IS SUFRAMA

4. DESCENTRALIZED UNITS Free Trade Areas (03) Regional Coordinations (07) OPERATION AREA

5. STATE TAX ON COMMODITIES AND SERVICES (ICMS) - Credit Stimulaton from 55% to 100%. In all cases the companies are obliged to contribute for funds to support high education, tourism and others. FEDERAL IMPORT TAX (II) – Reduction up to 88% on the row material destined to industrialization, proportional to the national aggregate value TAX OVER MANUFACTURED GOODS (IPI) – Exemption INCOME TAX (IR) – Reduction of 75% of the income tax and add not repayable, exclusively for reinvestments. Common in all Legal Amazon SOCIAL TAXES (PIS/COFINS) – Aliquot zero in the entrances and internal sales inter-industrias and of 3,65% (with exceptions) in sales of finished products in Brazil. TAX INCENTIVES

6. MANAUS INDUSTRIAL PARK LOCATIONAL INCENTIVES Expansion area Industrial District 01 Negro River

7. COMPENSATIONS DEMANDED BY THE MODEL Priority criterions for the approval of industrial projects with annual limits of import by the SUFRAMA´s Administration Council (CAS, composed by members of 10 Ministries of the Brazilian Government):  Observance of a Basic Productive Process (PPB);  Job creation in the area, and providing of social benefits to the workforce;  Investment in state of art technology;  Trainning of the workforce in order to obtain growing levels of productivity and competitiveness;  Reinvestment of part of the profit in the region.

8. MANAUS INDUSTRIAL PARK

9. SOME OF THE OVER 450 MAIN CORPORATIONS STABLISHED IN MANAUS

10. Source: SUFRAMA (*) Parcial data until july US$ millions R$ millions SALES EVOLUTION Growth highlights 2000 to 2005: In R$ (162,5%) In US$ (54%) 2004 to 2005: In R$ ( 23,5%) In US$ (15%) 10.000 20.000 30.000 40.000 40.570 25.108 19.074 10.393 13.905 9.911 200020042005*... 16.000 50.000

11. ELECTRONIC PRODUCTS 33% DISPOSABLE 2% WATCHES 0,89% OTHERS 1% TWO WHEELED VEHICLES 18% THERMOPLASTIC 6% METALURGY 3% CHEMICAL PRODUCTS 8% MECHANIC 2% MANAUS INDUSTRIAL PARK TOTAL SALES IN 2004 - USS 13,9 Billion I. T. GOODS 21%

12. DIRECT JOBS EVOLUTION 20.000 40.000 60.000 80.000 100.000 200020042005* 50.215 84.004 87.713 Growth highlights 2000 to 2005: (61,7%) 2004 to 2005: (14,1%) 100.000 Source: AP/CGPRO/COISE – SUFRAMA (*) Partial data until july...

13. EXPORTS EVOLUTION US$ millions 773 1.157 1.390 400 1200 1600 2.000 2.400 200020042005* Source: Sistema Alice / MDIC * Partial data until august... Growth highlights 2000 to 2005: (159%)2004 to 2005: (73%) 2.000 800

14. 1.CELL PHONES 2.MOTORCYCLES 3.TELEVISION SETS 4.CHEMICAL CONCENTRATES FOR SOFT DRINKS 5.VIDEO MONITORS 6.DIGITAL SIGNAL DECODER 7.AIR CONDITIONER 8.RAZOR BLADES 9.NON ELECTRIC SHAVERS 10. COLOURED FILMS MAIN PRODUCTS EXPORTED Source: SUFRAMA – MDIC/SISTEMA ALICE

15. USA (335.163) 31,4% MEXICO (38.707) 3,6% CHILE (72.713) 6,8% ARGENTINA (157.206) 14,7% COLOMBIA (49.747) 4,7% GERMANY (59.939) 5,6% HUNGARY (82.824) 7,7% FINLAND (30.457) 5,8% Source: SUFRAMA – MDIC/SISTEMA ALICE * Until June 2005 MAIN DESTINATION OF EXPORTS IN 2005 * (US$ MILLIONS)

16. MEDIUM INDUSTRIAL PRODUCTION GROWTH (AMAZONAS STATE X BRAZIL) Amazonas StateBrazil Source: IBGE * Partial data until july 13% 8,30% 19% 4,30% 0% 4% 8% 12% 16% 20% 20042005*

17. 186 39 35,4 32,4 31,4 30,7 22,2 16,7 16,3 8,4 5,2 5,1 -9,4 -50 0 50 100 150 200 Amazonas Paraná Espírito Santo Goiás Santa Catarina Ceará Minas Gerais Brasil Bahia São Paulo Pernambuco Rio Grande do Sul Rio de Janeiro TRANSFORMING INDUSTRY PERFORMANCE Source: IBGE 1994/2002 (%)

18. 98% of the original forest area in the State of Amazonas has been kept intact during those 38 years of existence of the Manaus Free Trade Zone model.

19. CENTER OF SCIENCE, TECHNOLOGY AND INNOVATION OF THE MANAUS INDUSTRIAL PARK - CT-PIM

20. Mission To promote the generation, the domain and the application of advanced and innovative scientific and technological knowledge, in partnership with local, national and international institutions, contributing to the sustainable, economical, environmental and social development of the Western Amazon and, in particular of Manaus Industrial Park. Goals CT-PIM To create and consolidate a Technological Center for Manaus Industrial Park two fundamental goals: 1 – Contribution for the strenghtening of S&T&I Regional System 2 – Microsystems competence generation

21. CENTER OF BIOTECHNOLOGY OF THE AMAZON (CBA) Biothecnology Biodiversity Bio-industry Food And Nutrition Cosmetics Enzymes of Biotechnological interest Bio-insecticide BIO-INDUSTRIES

22. Administration Area

23. 12 joint laboratories – Microrganisms 4 joint laboratories –Analitic Center 4 joint laboratories – Animal Products Viarium 4 joint laboratories – Vegetable Products

24. Enterprises Incubators Extract Production Center Industrial Process Plant Magnetic Resonance Laboratory

25. RESEARCH & DEVELOPMENT FRONTIER EXPECTED IN THE MANAUS INDUSTRIAL PARK TECHNOLOGICAL CONVERGENCE BIO-MICROTECHNOLOGY

26. BIOINDUSTRIES OF THE MANAUS INDUSTRIAL PARK Products by CRODAMAZON: Essential Oils Crodamazon Cupuaçu Crodamazon Buriti Crodamazon Brazilian Nuts Crodamazon Andiroba Crodamazon Passion Fruit Crodamazon Babaçu www.croda.com.br Products by MAGAMA: Oil Açaí Andiroba CupuaçuBuritiBrazil Nut Essences Guaraná Camu-camu Urucum magama.com.br

27. Division of the sub-regions per State Acre = 3 Amapá = 1 Amazonas = 9 Rondônia = 4 Roraima = 2 Total = 19 PERÚ BOLIVIA COLOMBIA VENEZUELA GUAYANAS REGIONAL POTENTIALITIES PROJECT

28. Manioc Starch (all States) Fish Farming (all States) Guaraná (Amazonas e Roraima) PRODUCTS OF AMPLE MARKET Palm heart from pupunheira (all States) Tropical Fruits (all States) Sustainable exploitation of wooden products (all States) Ecological Tourism (all States) Palm oil (Amapá, Amazonas e Roraima)

29. Manaus, August 30 th to September 2 nd 2006 www.expoamazonia.com.br

30. aristides@suframa.gov.br (92) 3614-7007 ARISTIDES OLIVEIRA JÚNIOR TECHNICAL ADVISER

31. Manioc Starch (all States) BACK

32. Palm heart from pupunheira (all States) BACK

33. Fish Farming (all States) BACK

34. Guaraná (Amazonas e Roraima) BACK

35. Tropical Fruits (all States) BACK

36. Sustainable exploitation of wooden products (all States) BACK

37. Ecological Tourism (all States) BACK

38. Palm oil (Amapá, Amazonas e Roraima) BACK