Special Brazilian

Tabacos
Feedback on Activities
 General Information’s
Cost of Production (CoP)
• Annually surveys on Cost of Production have been made by:
Suppliers Association (SINDITABACO), Farmers Association
(AFUBRA) and International Suppliers.
• Tobacco price CAN be discussed between COMPANY and
suppliers ENTITIES to reach agreements.
• From the last three years it has been normal procedure each
COMPANY practicing own prices, due to law suites against
Tobacco Companies related to labor issues.

• Special Brazilian Tabacos being family business doesn’t make

cost surveys however follows the market according to local
suppliers.
 General Information’s
Farmer’s Recruitment
• Farmers are familiar to register the tobacco production with
more than one Company (2 to 3) due to different buying
polices / criteria practiced by suppliers.
• Each Company has a preferred style / quality and pay
“plus” to farmers for these qualities and are not much
interested in others.
• Example: PMB prefers orange. JTI prefers ripe and over
ripe. CHINA prefers CLEAN ORANGE.
• Farmers to maximize the value of his crop will sell to 3
companies without any problem because this situation is
well known by the Companies.
 General Information’s
Farmer’s Recruitment
• Each Company supplies crop inputs according to the
registered area, however the number of farmers that are
buying crop inputs by them selves with Farmers
Association (AFUBRA) is increasing at yearly bases.
• Due to litigations with Labor Laws farmers have the
obligation to sell tobacco to the registered Company to
cover debits only.
• AFUBRA provides only recommended crop inputs.
 General Information’s
Special Brazilian Tabacos
• Special Brazilian Tabacos has the policy to buy
tobaccos with his own cash flow, reason why the
Company is making satisfactory profits.
• Actually scheduled volumes of tobaccos with own
cash flow is for buy green 2.500 tons.
• More tobacco will be bought and sold green to
OTHER COMPANYES
 General Information’s
Special Brazilian Tabacos
• Under actual circumstances Special Brazilian
Tabacos has the possibility to buy up to 5.000
tons, however needs to borrow money from
banks.
• Banks interest are high and are not feasible for
the family business.
• Special Brazilian Tabacos is looking for a partner
to get a stronger financial capacity to increase the
business and consequently profits.
 Information’s
Special Brazilian Tabacos
• Special Brazilian Tabacos in this document is
sharing some confidential information’s.
• In the mean time the Company is ready to open
more information’s with open books.
• Since the proposal to have a partnership with GPI
is in the very beginning the Company before open
the books would like to hear from GPI the real
possibility to have this agreement.
 Information’s
Special Brazilian Tabacos
• Or: Have a previous agreement of confidentiality.
• Special Brazilian Tabacos would like to invite GPI
team to visit the Company and check the
feasibility by inspecting all activities, by looking
books and whatever needs to be inspected without
sending out confidential information’s.
• Once the possibility will be feasible the Company
will be keen to provide all required information’s
documented.
 Farmers Recruitment

2015 2016 2017

Total Farmers 2550 3.020 3850
Total ha 1254 2012 2275
Total Volume (Ton) 2810 3900 5028
Yield / ha 2241 1938 2210
Aver. farmer’s RS 7.13 RS 9.96 RS 8.90
price U$ 1.98 U$ 2.88 U$ 2.85
Exchange rate 1 ; 3.60 1 : 3.45 1 : 3.12
 Packing Cost &
Sales Price
Grade BO3 – (FCV) Cost / Kg CY 2015 CY 2016 CY 2017
Currency: U$ Up to March 31

Volumes sold (Ton) 81 92 70

Tobacco Cost 3.99 4.62 4.51
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 4.46 5.09 4.98

Sales price 5.90 6.30 6.20
Profit 1.44 1.21 1.22
Threshing yield 63.51% 63.25% 63.42%
Exchange rates (Average) 1 : 3.60 1 : 3.45 1 : 3. 12
 Packing Cost &
Sales Price
Grade BGO – (FCV) Cost / CY 2015 CY 2016 CY 2017
Kg Up to March 31

Currency: U$
Volumes sold (Ton) 51 55 40
Tobacco Cost 2.27 2.71 2.89
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 2.74 3.18 3.36

Sales price 4.65 5.50 4.70
Profit 1.91 2.32 1.34
Threshing yield 63.40% 63.25% 63.42%
Exchange Rates (Average) 1 : 3.60 1 : 3.45 1 : 3. 12
 Packing Cost &
Sales Price
Grade BR2– (FCV) Cost / Kg CY CY 2016 CY 2017
Currency: U$ 2015 Up to March 31

Volumes sold (Ton) 183 232 220

Tobacco Cost 3.48 4.57 4.80
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 3.95 5.04 5.27

Sales price 5.70 6.30 6.10
Profit 1.75 1.26 0.83
Threshing yield 63.35% 63.20% 63.40%
Exchange Rates (Average) 1 ; 3.60 1 : 3.45 1 : 3.12
 Packing Cost &
Sales Price
Grade C10– (FCV) Cost / Kg CY CY 2016 CY 2017
Currency: U$ 2015 Up to March 31

Volumes sold (Ton) 185 215 200

Tobacco Cost 3.83 4.64 4.73
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 4.30 5.11 5.20

Sales price 6.10 6.40 6.20
Profit 1.80 1.29 1.00
Threshing yield 62.50% 62.20% 62.42%
Exchange Rates ( Average) 1 : 3.60 1 : 3.45 1 ; 3.12
 Packing Cost &
Sales Price
Grade CGO– (FCV) Cost / CY CY 2016 CY 2017
Kg 2015 Up to March
31
Currency: U$
Volumes sold (Ton) 50 43 25
Tobacco Cost 2.25 2.63 3.17
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 2.72 3.10 3.64

Sales price 4.50 5.15 4.90
Profit 1.78 2.05 1.26
Threshing yield 60.50% 60.00% 60.30%
Exchange Rates (Average) 1 : 3.60 1 : 3.45 1 : 3.12
 Packing Cost &
Sales Price
Grade X10– (FCV) Cost / Kg CY CY 2016 CY 2017
Currency: U$ 2015 Up to March
31

Volumes sold (Ton) 63 55 40

Tobacco Cost 3.35 3.64 3.58
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 3.82 4.11 4.05

Sales price 5.10 5.80 5.65
Profit 1.28 1.69 1.60
Threshing yield 60.30% 60.10% 60.50%
Exchange Rates (Average) 1 : 3.60 1 : 3.45 1 : 3.12
 Packing Cost &
Sales Price
Grade – X3O (FCV) Cost / CY CY 2016 CY 2017
Kg 2015 Up to March 31

Currency: U$
Volumes sold (Ton) 68 61 50
Tobacco Cost 2.84 3.09 3.09
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 3.31 3.56 3.56

Sales price 4.75 5.10 4.65
Profit 1.44 1.54 1.09
Threshing yield 58.00% 57.80% 58.10%
Exchange Rates (Average) 1 : 3.60 1 : 3.45 1 : 3.12
 Packing Cost &
Sales Price
Grade – BYB12 (BU) Cost / Kg CY CY 2016 CY 2017
Currency: U$ 2015 Up to March
31

Volumes sold (Ton) 263 287 235

Tobacco Cost 3.56 4.56 4.67
Threshing Cost 0.28 0.28 0.28
C 48 Cost 0.09 0.09 0.09
Transport to shipping port 0.10 0.10 0.10

Total cost 4.03 5.03 5.14

Sales price 5.90 6.10 6.30
Profit 1.87 1.07 1.16
Threshing yield 60.10% 60.00% 60.15%
Exchange Rates (Average) 1 : 3.60 1 : 3.45 1 : 3.12
 Taxes Issues
• Government taxes are included on: Tobacco
Cost
• Zero taxes when packed tobacco is sold FOR
EXPORT
• 34% of taxes will be charged on Net Profit.
 Customer Base
Special Brazilian Tabacos
• Local Markets in Brazil.
• Several Countries in South America.
• Middle East (Emirates).