The Phoenix from New Zealand State Forestry

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2003: Verry family create Red Stag Timber out of

Liquidation

2004: New acoustic grading $0.3 m

2006: State of the art planner mill & additional acoustic

grading $14 m

2006: Large batch drying kiln $3 m

2008: First Radiata 3D scanning technology $1.2 m

2008: New sawmill trimmer, stacker and additional kiln $5.5 m

2010: Upgraded pusher-lug bin sorter $4 m

2012: High tech remanufacturing plant $12 m

2009: First Radiata low pressure treatment plant $4 m

2009: Latest highspeed Metriguard Machine Stress Grader and additional 3D scanning technology $1.8 m

2011: First Radiata Continuous Counter Flow Kiln $3.5 m

2016: New saw mill front end $58 m

2016: New high pressure treatment plant and third Continuous Counter Flow Kiln $4 m

Well over $200 million investment to date (averaging over $13.3 million per annum)

2005: Red Stag Investments

Limited established

2013: Saw mill grade scanning edge trimmer, planer mill grade scanning trimmer, sawmill and second Continuous Counter Flow Kiln $7 m

2013: Red Stag Wood Solutions Limited established

2018: New Planer $12 m

2018: Third boiler and additional turbine $20.6 m

2015: New 33kV Sub Station & 11 kV network upgrade $8.7 m

2015: Established Red Stag Forests Limited

2018: CLT Investment Announced +$35 m

2019: CLT Investment Operational

2019: Advanced Panelisation Plant Scheduled to be Operational +$10 m

Red Stag At A Glance

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FORESTRY

Founding division managing all log breakdown into structural, outdoor and remanufactured solid timber products

Division established in 2015 to internally secure Red Stag Timber with no less than a third (33%) of its annual fibre requirements annual from Red Stag owned/controlled forestry

Division established in 2005 to focus on diversifying Red Stag Group interests in areas outside of the core log break down (Red Stag Timber focus)

Division established in 2013 to focus on factory construction solutions, prefabrication, and Engineered Wood Products

Red Stag Forests

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• Red Stag Forests Limited was established in 2015 to support with integrated fibre supply to Red Stag Timber.

• Red Stag Forests has currently secured 2,300 Ha of structural forests in the CNI.

• The vision is for Red Stag to secure 17,000 Ha of structural forests to provide at least 30% of Red Stag Timbers annualised log supply.

• In parallel Red Stag continues to maintain long term log contracts with both Kaingaroa Timberland and Hancock Forest Management.

Red Stag Timber

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• Site established since 1939 as the foundation processing facility for plantation forestry.

• Red Stag Timber Limited was purchased out of receivership in 2003 by the Verry family.

• Over 90 hectares of industrial and commercial land.

• Largest private employer in Rotorua with ~400 FTE.

• Largest structural saw mill in the Southern Hemisphere.

• Production volumes have grown from 180,000 m3 in 2003 to approximately 650,000 m3 in 2018.

• Capital investment has surpassed well over $200 million over the past 15 years and a further $50 million is scheduled by 2019.

Red Stag Investments

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• Red Stag Investments Limited (RSI) was founded in 2005 to drive group activities beyond log breakdown.

• The focus for RSI is on transitioning timber into non traditional applications, including higher rise and Engineered Wood Products (EWP) to provide superior alternates to steel and concrete.

• RSI has created a show case development at Clearwater in Christchurch and has successfully obtained MPI Primary Growth Partnership funding to establish a showcase hybrid prefabricated higher rise apartment block.

• Under RSI is Red Stag Wood Solutions Limited, providing Research & Development and applied development in the factory based construction sector.

Red Stag Wood Solutions

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• Red Stag Wood Solutions Limited (RSWS) was established in 2013 at Hamilton Airport.

• RSWS initially focused on frame and truss manufacture and expanded into floor cassettes, panelisation and volumetric solutions.

• The division is now focused on expanded timber based factory construction solutions, including the opportunity to integrate Glulam and CLT processing (between Rotorua and Hamilton).

• RSWS has purchased a further hectare of land (~2 Ha total) to expand and develop more advanced factory based construction capabilities with a focus on Auckland, Hamilton and Bay of Plenty.

Missing Opportunity

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• The changing ratio - Traditional detached low rise to densified building.

• Steel & concrete versus timber – Opportunity gap. Can timber compete?

• What are the competitive advantages of timber:• Seismic resistance• Reduced mass loading/foundations• Reduced build times• Use of traditional building labour• Physiological and phycological well being• Renewable• Reduced net carbon emissions – Sequester versus emitter• Reduced costs• Higher returned on developments

Capturing the Opportunity

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• Is Frame & Truss (F&T) sufficient for the future?

• If not, can F&T facilities make the transition to higher value?

• What are the capital requirements and does it generate an ROI?

• Will a shift beyond F&T unsettle customers or be seen as an advantage?

• Who is the customer – Builder or developer? What are the driving differences? Are stick framing solutions sufficient or is the future in mass timber?

• If mass timber is the solution – How do F&T manufacturers integrate more?

• Will advantaged timber systems disrupt my business or add to my business?

Red Stag’s Pathway

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• F&T was a mechanism to understand the market and product requirements.

• To take factory manufacturing beyond F&T superior timber performance and stability are essential:• High density log selection• Superior milling – Super mill• Superior drying – CFK• Superior planing and scanning• Superior treatment

• EWP are the next iteration – GLT & CLT.• EWP are more expensive, therefore fibre needs to be optimised to add

value – Hybrid Timber Solutions.• Remove the pain – Provide a system that simplifies customers

requirements by providing a more complete package – ADD MORE VALUE.

Red Stag’s Investment into Advanced Timber Construction

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• Expansion of F&T – Additional framing line & sawing capacity.

• Procurement of land to support scale panel & cassette manufacturing.

• Planned integration of European wall/panel lines.

• CLT plant planned to go live in 2019:• 55,000 m3 - Phase 1 (0.9 Ha of building on 2.5 Ha of land) + $35 million

• 105,000 m3 - Phase 2 (1.5 Ha of building on 3.5 Ha of land) + $60 million

• Automatic reman line

• Complex 5 axis scale high speed CNC machining

• GLT plant scheduled to piggy back CLT plant.

Wood First & Market Development

Timber Higher Rise

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• Rotorua (RLC) was the first council to adopt a Wood First Policy.

• Red Stag supporting in drafting a federal Wood First Procurement Policy.

• Red Stag has successfully secured MPI PGP funding with a five storey timber higher rise building in Christchurch.

• Red Stag has developed a hybrid timber design, incorporating Cross Laminated Timber (CLT), Glulam posts and beams and factory constructed panels using structural timber.

• The project will provide the first detailed showcase for the economic, structural engineering, speed, and sustainability of utilising timber systems for higher rise apartment, hotel and office structures.

• All project information will be third party audited and open sourced to provide developers, specifiers and consumers with tangible frame work for why timber systems are more economically viable and structurally superior to historical alternates.

Opportunities for Red Stag Customers

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• RST SG8 & SG10 for stable solutions required for panelisation.

• RST SG10 more cost effective solution to LVL with comparable stability.

• Matched gauged one piece solid lintel solutions.

• CLT floor panels for sub and mid floor systems – designed and supplied or supplied as ship lapped blanks.

• One piece drop in CLT stairs.

• Complete CLT load bearing systems allowing for stick infill framing/panels.

• Future one stop supplier for Structural, Outdoor, CLT, and GLT as raw materials or partial or complete engineered systems to F&T/merchants -Capture the opportunity.

Superior Treatment

Red Stag – Superior, Trusted, Sustainable

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Superior Drying (CFK)

Inline Machine

Stress Grading

Superior Milling

Superior Scanning

Quality Structural

Logs

Red Stag – Superior, Trusted, Sustainable