CONSTRUCTION MATERIALS NANOCENTER SULKHAN DAVITADZE, Director for Infrastructure Programs, Rusnano SERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI

CONSTRUCTION MATERIALS CONSTRUCTION MATERIALS NANOCENTERNANOCENTER

SULKHAN DAVITADZE, Director for Infrastructure Programs, RusnanoSULKHAN DAVITADZE, Director for Infrastructure Programs, RusnanoSSERGEY ERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI TSYBUKOV, Vice-Chairman of the Board, SPb CCI

DARIA LIPATOVA, Project ManagerDARIA LIPATOVA, Project Manager

Rusnano Development WorkshopRusnano Development WorkshopBabson Executive Conference CenterBabson Executive Conference Center

Babson CollegeBabson CollegeNovember 12, 2010November 12, 2010

Project summary: Construction Materials Nanocenter aims to develop the innovation infrastructure in the sphere of nanotechnologies by organization of different types of production and technologies development.

•

Project Team: Institute of Polymers, SPbSU, Krylova and Ioffe Institutes

Market Opportunity: Polymer coating Solutions for Railway transport, Water canals, Housing and communal services, Shipbuilding, Real Estate, other services – total 200 mln $

The Model: Nanocenter will provide services and technology support to customers and will develop and transfer technologies to market through creation 5-7 companies per year and licensing technologies for customers. Rusnano rents scientific equipment to the Company.

Status: Creation of the Companies – Asset Holder and Managing Company and providing services and technology support.

Exit Strategy: sale to big customer (military-industrial complex, shipbuilding, transport, building, research center) or a large-scale producer and/or provider of raw materials


Main directions of the Center’s activities:

1. Technical items for the transport industry

Partner: The Center for Dynamic Testing

2. Nano-coatings for Optoelectronics

Partner: The Center for Prototyping

3. Nano-coatings for transport, Real Estate, Watercanals (green technologies), Shipbuilding and Housing and Communal Services

Partner: The Polymer Cluster



Problems to be Solved:Frequent repair of networks of water, heating and gas supply (Russia and the CIS) Protection of cargo cars and extension of operation life of railroads (OJSC "Russian Railways“)Development of the Arctic Region (Arctic Fleet) Energy saving (housing and communal services)

Solution:Repair of pipes and wells with use of prepregs and special paints Drawing of anticorrosive, waterproofing coveringsDevelopment of anti-icing coverings, replacement of metal items with the polymer onesDrawing of thermo-insulating polymer coverings

Team:The Russian - German Institute of Polymers established within the frameworks of the Transform program under the aegis of the Government of Germany with participation of the “SKZ” Polymer Center, Wurzburg (Germany) and SPb CCI in September 2001. It is one of the leaders in the sphere of R&Ds aimed at introduction into practice of construction polymer materials and a participant of the Polymer Cluster.

Market Strategy:

B2B, OEMDirect marketingCreation of the new markets with our partnersCost reduction (current price for sq.m. is 50-100$ vs. ours 30-70$)

Current Competitive Market:

Companies drawing foamed polyurethane coatingsOrganizations and research institutions offering composite mixes or materials and technologies for drawing of the coatings


Current Status:

Customers: Russian Railways, Vodokanal, Municipalities, Research Institutes Products: Technologies, technical items, R&Ds

Critical Risks:No guarantees from the side of the research institutions for completing obligations on operational development of a nanotechnology to industrial release;

Absence in the enterprise of the whole spectrum of research equipment allowing to perform this operational development independently.


Section of fullerenes and nanocomposites manufacturing

Section of prepreg manufacturing

THE LINE OF BINDING

IMPREGNATINGBY MELT

FILLERS NANOMODIFICATION

Labo

rato

ry C

ompl

ex (Q

uality

Con

trol)

GRINDING THE PREPREGES

Section of composite products manufacturing

SECTION OF NANOMATERIALS RECYCLING:- PRESSURED FOUNDRY;

- PRESS_FORMING;- EXTRUSION;

- COATING DEPOSITION..

SECTION OF WINDING THE TUBULAR PRODUCTS:- HOT FORMING

Section of production of nano-containing polymer materials and

compositions for drawing of coverings

FINISHED PRODUCTION CUSTOMER

Center’s functional scheme:

Funding Requirements:

Financials:


8Total2Equipment for laboratory

2Equipment for a site for prepregs production

4Plant for fullerenes production Sum, mln $

Выручка от реализации, тыс.руб.

0

100 000

200 000

300 000

400 000

500 000

600 000

2011 2012 2013 2014 2015 2016

EBITDA, тыс.руб.

0 50 000 100 000 150 000 200 000 250 000

2011

2012

2013

2014

2015

2016

Чистая прибыль, тыс.руб.

-100000

-50000

0

50000

100000

150000

200000

2010 2011 2012 2013 2014 2015 2016

Sales proceeds, thousand rbl. EBITDA, thousand rbl. Net profit, thousand rbl.

Economics of the project: • Planning horizon – 6 years• IRR 37%• NPV 4 576 thousand doll. at the rate of discounting of 22%• Period of recoupment 4 years and 8 months • Discounted period of recoupment 5 years and 5 months

15 51811 1048 2066 1744 7422 968-Proceeds, thousand dollars

41 1203 2752 0891 312371-259-7 912Joint money flow, thousand dollars

5 2393 2752 0891 312371-259-7 912

Free money flow of the company, thousand dollars

-119-74-52-36-45-670NWC, thousand dollars

-462-539-629-734-856-461-6 452Capex, thousand dollars

7 1764 7453 1982 0821 272268-1 461EBITDA, thousand dollars

2016201520142013201220112010

Value and prognosis of the main financial indexes


THANK YOUTHANK YOU

SULKHAN DAVITADZE, Director for Infrastructure Programs, RusnanoSULKHAN DAVITADZE, Director for Infrastructure Programs, RusnanoSSERGEY ERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI TSYBUKOV, Vice-Chairman of the Board, SPb CCI

DARIA LIPATOVA, Project ManagerDARIA LIPATOVA, Project Manager

APPENDIXAPPENDIXTHE SUPPLEMENTAL INFORMATIONTHE SUPPLEMENTAL INFORMATION

The project “Creation of the construction materials nanocenter” is included in the list of strategic projects of development of St. Petersburg and presented during the following international visits:

•Visit of the Delegation of St. Petersburg led by the Governor of St. Petersburg V.I. Matvienko to the South America, April 2010;

•Visit of the Delegation of St. Petersburg led by the Vice-Governor of St. Petersburg R.E. Filimonov to Ukraine, April 2010;

• International Forum “Effective Cooperation in Europe”, Belgium, June 2010;•Round Table on Effective Cooperation in the Baltic Sea Region, Finland, September 2010.

INNOVATION POLYMER CENTERINNOVATION POLYMER CENTERON THE PLATFORM OF THE POLYMER CLUSTERON THE PLATFORM OF THE POLYMER CLUSTER

•Building of the Innovation Polymer Center is planned in St. Petersburg, Vyborgskaya emb., 41A.

•This Center supports the whole cycle of innovative activity from the projecting stage to the introduction of the new companies and products to the market.

•On the platform of the Polymer Cluster which includes the “Institute of Polymers”, the project of construction of a building for the specialized Center for 15 thousand m2 is planned.

•The Center of collective access can become the anchor tenant in this building.

INNOVATION POLYMER CENTERINNOVATION POLYMER CENTER

Index Basic rates in 2010

Total area of the Center, sq. m. 15 014,5

Area of the Center, sq. m. 13 812

Area for rent, sq. m. 12 371,1

Area for offices, sq. m. 11 287,6

Area for parking, sq. m. 1 083,5

Cost of building of the Center + decorating, $ 1 700

Exploitation costs, sq. m., month, $ 40

Rent for offices, sq. m., month, $ 50

Rent for parking, place, month, $ 25


Index Basic rates in 2010

Building costs, $ 31 692 834

Projection costs, $ 1 000 000

Concerned period of the project development including:

9

- building, years 2

- exploitation, years 7

Period of recoupment, years of exploitation 3,8

Net profit for 7 years of exploitation, $ 67 265 739

Discounting rate, % 15

Discounting period of recoupment, years of exploitation

5,3

NPV for 7 years of exploitation, $ 11 466 800

IRR, % 22,7


Documents

CONSTRUCTION MATERIALS NANOCENTER SULKHAN DAVITADZE, Director for Infrastructure Programs, Rusnano SERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI