You are on page 1of 33



2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

2LO3DOP(PSW\)UXLW%XQFKHV,Q
0DOD\VLD(QYLURQPHQWDO6FLHQFHV
(VVD\
$%675$&7
*HQHUDOO\ELRJDVFDQEHSURGXFHGE\XVLQJGLIIHUHQWW\SHVRIUDZPDWHULDOVXFKDVSDOPRLOPLOO
HIIOXHQWHPSW\IUXLWEXQFKHVSDGG\VWUDZFRZPDQXUHDQGHWF,QWKLVSURMHFWHPSW\IUXLWEXQFKHV
DUHVHOHFWHGDVWKHUDZPDWHULDOIRUWKHSURGXFWLRQRIELRJDV$VWKHHPSW\IUXLWEXQFKHVIURPDPLOOLV
LQFLQHUDWHGDQGPD\FDXVHVSROOXWLRQWKHSURGXFWLRQRIELRJDVZLWKHPSW\IUXLWEXQFKHVFDQJUHDWO\
UHGXFH
$IWHUWKHVHOHFWLRQRIUDZPDWHULDOVDSUHWUHDWPHQWSURFHVVLVFDUULHGRXWWRRSHQXSWKHFRPSDFW
VWUXFWXUHRIHPSW\IUXLWEXQFKHV7KHUHDUHPDQ\W\SHVRISUHWUHDWPHQWSURFHVVHVDUHDYDLODEOH
VXFKDVPHFKDQLFDOFKHPLFDOELRORJLFDOWKHUPDODQGSK\VLFDOSUHWUHDWPHQWSURFHVV7KHUHDUH
VHYHUDODGYDQWDJHVDQGGLVDGYDQWDJHVIRUHDFKW\SHRISUHWUHDWPHQWSURFHVVLQWKLVFDVHFKHPLFDO
SUHWUHDWPHQWSURFHVVZLWKVRGLXPK\GUR[LGHVROXWLRQLVVHOHFWHG
)XUWKHUPRUHDIWHUWKHSUHWUHDWPHQWSURFHVVWKHUDZPDWHULDOLVVHQWWRDQDHURELFGLJHVWLRQWDQNIRU
GLJHVWLRQSURFHVVWRRFFXU7KHSURFHVVLVFDUULHGRXWXQGHUWKHDEVHQFHRIR[\JHQ$WWKLVSRLQWWKH
ELRJDVSURGXFHGFRQVLVWVRIGLIIHUHQWW\SHVRIXQZDQWHGFRPSRQHQWVXFKDVFDUERQGLR[LGH
K\GURJHQVXOSKLGHDQGZDWHU+HQFHDELRJDVXSJUDGLQJSURFHVVLVUHTXLUHGWRSXULI\WKHELRJDVLQWR
DXVHDEOHELRIXHO7KHZDWHUVFUXEELQJV\VWHPLVXVHGLQELRJDVXSJUDGLQJSURFHVV
/DVWO\WKHSXULILHGELRJDVLVUHDG\WREHXVHG,WFDQEHXVHGLUHFWO\DVWUDQVSRUWDWLRQIXHOEXUQLQJDV
HQJLQHWRSURGXFHHOHFWULFLW\ZDWHUKHDWLQJFRRNLQJDQGHWF

,1752'8&7,21
%DFNJURXQG
%LRJDVLVDW\SHRIFOHDQDQGUHQHZDEOHUHVRXUFHWKDWFDQEHXVHGRQHOHFWULFLW\JHQHUDWLRQIXHOIRU
YHKLFOHVDQGHWF,WSURGXFHVOHVVKDUPRUSROOXWLRQWRWKHHQYLURQPHQWZKHQFRPSDUHWRWKHXVHRI
IRVVLOIXHO,WDOVRUHGXFHVWKHYROXPHRIGLVSRVHGZDVWHSURGXFWV7KHPDLQHOHPHQWVLQELRJDVDUH
PHWKDQH &+ DQGFDUERQGLR[LGH &2 DWZKLFKPHWKDQHLVWKHPDMRUFRQWHQWRIELRJDV%LRJDVLV
SURGXFHGWKURXJKWKHQDWXUDOGHFRPSRVLWLRQRIRUJDQLFVXEVWDQFHVRIDQLPDOVRUSODQWVRULJLQGXHWR
WKHDQDHURELFDFWLYLWLHVRIEDFWHULDZKLFKPHDQVWKHSURFHVVLVKDSSHQHGXQGHUR[\JHQDEVHQW
FRQGLWLRQ7KHPRVWFRPPRQVXEVWDQFHVWKDWDUHXVHGIRUSURGXFLQJELRJDVDUHJUHHQFXWWLQJV
PDL]HDQGZKROHSODQWVLODJHKD\VORSVJUDLQWDLOLQJVJO\FHULQGU\SRXOWU\GURSSLQJVSRPDFHDQG
HWF
7KHEDFWHULDQRUPDOO\LQYROYHLQELRJDVSURGXFWLRQSURFHVVDUHPHWKDQRJHQLFEDFWHULD,WFDQEH
EURNHQGRZQLQWRDIHZFDWHJRULHVVXFKDVSV\FKURSKLOLFPHVRSKLOLFDQGWKHUPRSKLOLFVWUDLQV
DFFRUGLQJWRWKHLURSWLPXPWHPSHUDWXUHUDQJH)RUPHVRSKLOLFEDFWHULDLWVRSWLPXPWHPSHUDWXUHOLHV
EHWZHHQR&ZKLOHWKHRSWLPXPWHPSHUDWXUHUDQJHIRUWKHUPRSKLOLFJURXSLVR&7R
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

FDUU\RXWWKHIHUPHQWDWLRQSURFHVVWKHVXEVWUDWHVS+YDOXHPXVWEHZHHNO\DFLGLF S+ RUZHHNO\


DONDOLQH S+ ,WLVQHFHVVDU\WRHQVXUHWKDWWKHUHDUHQRDQWLELRWLFVGLVLQIHFWDQWVRURWKHUFKHPLFDOV
SUHVHQWLQWKHVXEVWUDWHEHFDXVHWKHVHZLOOFDXVHWKHIHUPHQWDWLRQSURFHVVWRVWRSFRPSOHWHO\
$IWHUWKHIHUPHQWDWLRQSURFHVVELRJDVZLOOEHIRUPHG$OWKRXJKELRJDVLVDW\SHRIJUHHQDQG
UHQHZDEOHUHVRXUFHLWFDQFDXVHJUHHQKRXVHJDVHVWKDWEULQJKDUPVWRWKHHQYLURQPHQWLIUHOHDVHG
XQEXUQHGLQWRWKHDWPRVSKHUH%\SURGXFLQJELRJDVWKHXVHVRIIRVVLOIXHOZKLFKLVDQRQUHQHZDEOH
UHVRXUFHFDQEHJUHDWO\UHGXFHG
)LJXUH D 7KHGLDJUDPDERYHVKRZVDVLPSOHSURFHVVRIELRJDVSURGXFWLRQ7KHRUJDQLFUHVLGXHV
DUHVHQWWRWKHELRJDVSODQWDQGJRWKURXJKIHUPHQWDWLRQSURFHVVWRSURGXFHELRJDVDQGVHQGWR
FRQVXPHUV
$ODUJHDPRXQWRIELRJDVLVXVXDOO\SURGXFHGLQDELRJDVSODQWDIWHUJRWKURXJKDOOWKHSURFHVVHV
UHTXLUHG,QELRJDVSURGXFWLRQSODQWWKHZKROHSURFHVVRISURGXFLQJELRJDVLVHOHFWURQLFDOO\
PRQLWRUHG7KHUHPDLQLQJVXEVWUDWHVDIWHUSURGXFLQJELRJDVFDQEHXVHGDVDKLJKTXDOLW\HFRORJLFDO
IHUWLOL]HU

$LPVDQG2EMHFWLYHV
,QWKLVSURMHFWWKHSURGXFWLRQRIELRJDVIURPELRPDVV RLOSDOPHPSW\IUXLWEXQFKHV23()% ZLOOEH
WKHPDLQIRFXV7KHREMHFWLYHRIWKLVSURMHFWLVWRVWXG\RQWKHSURGXFWLRQRIELRJDVIURPELRPDVV
ZKLFKLVHPSW\IUXLWEXQFKHVIURPSDOPRLOLQGXVWU\SHUIRUPHFRQRPLFDQDO\VLVDQGFDUU\RXWSURFHVV
VLPXODWLRQ%LRPDVVLVDW\SHRIUHQHZDEOHVRXUFHDQGLWLVDELRORJLFDOPDWHULDOIURPOLYLQJRUJDQLVPV
%LRPDVVFDQEHXVHGVROHO\RUFRQYHUWVWRRWKHUW\SHVRIHQHUJ\JHQHUDWLQJSURGXFWVVXFKDVELRIXHO
0RUHRYHUELRPDVVFDQEHHLWKHUSODQWPDWWHURUDQLPDOPDWWHUWKDWXVHGWRJHQHUDWHHQHUJ\WKURXJK
FRPEXVWLRQSURFHVV&RPPRQH[DPSOHVRIELRPDVVIRUSODQWPDWWHUDUHIRUHVWUHVLGXHVVXFKDV
GHDGWUHHVDQGSDGG\VWUDZV2QWKHRWKHUKDQGWKHFRPPRQH[DPSOHRIELRPDVVIRUDQLPDOPDWWHU
LVDQLPDOVGURSSLQJ
6LQFH,QGRQHVLDDQG0DOD\VLDDUHWKHPDMRURLOSDOPSODQWDWLRQFRXQWULHVERWKRIWKHFRXQWULHV
SURGXFHODUJHDPRXQWRIHPSW\IUXLWEXQFKHV ()% IURPSDOPRLOSURGXFWLRQ()%DUHWKHPDLQE\
SURGXFWVSURGXFHGE\SDOPRLOSURGXFWLRQ,WLVDQRQZRRGOLJQRFHOOXORVLFPDWHULDODQGFDQEHXVHG
DVDVRXUFHIRUSURGXFLQJELRJDV+HQFHLWFDQEHHDVLO\REWDLQHGWREHXVHGDVWKHVRXUFHIRU
ELRJDVSURGXFWLRQ:KLOHFRPSDULQJZLWKWKHRWKHUHQHUJ\FURSVDQGZDVWHPDWHULDOV()%FRQWDLQV
FHOOXORVHDQGLVQRWHDVLO\GHJUDGDEOHGXULQJDQDHURELFFRQGLWLRQ7RLPSURYHWKHELRGHJUDGDELOLW\RI
OLJQRFHOOXORVLFPDWHULDOVDSUHWUHPHQWVXFKDVPHFKDQLFDOSK\VLFDOWKHUPDODQGFKHPLFDO
SUHWUHDWPHQWLVUHTXLUHG
'HVFULSWLRQHIEMSJ)LJXUH E (PSW\)UXLW%XQFK
7KHFRPSRVLWLRQRIELRJDVPD\YDU\GHSHQGLQJRQWKHRULJLQRIDQDHURELFGLJHVWLRQSURFHVV
%DVLFDOO\ELRJDVLVFRPSRVHGRIPHWKDQHFDUERQGLR[LGHQLWURJHQK\GURJHQK\GURJHQVXOILGHDQG
R[\JHQ)RUELRJDVSURGXFHWKURXJKODQGILOOLQJPHWKDQHFRQFHQWUDWLRQVDUHDSSUR[LPDWHO\
ZKLOHDGYDQFHGZDVWHWUHDWPHQWWHFKQRORJLHVFDQSURGXFHELRJDVZLWKPHWKDQH
FRQFHQWUDWLRQ%LRJDVDOVRFRPSRVHVRIDVPDOODPRXQWRIZDWHUYDSRU
7KHXVHVRIELRJDVEULQJPDQ\DGYDQWDJHVWRKXPDQEHLQJDQGWKHHQYLURQPHQW*HQHUDOO\LWFDQ
JHQHUDWHHOHFWULFLW\WRPHHWXSIHZSHUFHQWRIWKHHOHFWULFLW\GHPDQGLQDFRXQWU\)XUWKHUPRUH
ELRJDVLVYHU\SRWHQWLDOWRKHOSLQUHGXFLQJJOREDOFOLPDWHFKDQJH7KLVLVEHFDXVHWKHELRJDV
UHOHDVHGE\FRZPDQXUHZLOOJHQHUDWHQLWURJHQGLR[LGHDQGPHWKDQHWRZDUPWKHDWPRVSKHUH
WLPHVDQGWLPHVPRUHWKDQFDUERQGLR[LGHGRHV7KXVE\FRQYHUWLQJFRZPDQXUHLQWRELRJDVLW
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

FDQJUHDWO\UHGXFHJOREDOZDUPLQJJDVHV0RUHRYHUWKHDPRXQWRIFRZPDQXUHLQ8QLWHG6WDWHVLV
DEOHWRSURGXFHDURXQGRQHKXQGUHGELOOLRQNLORZDWWKRXUVRIHOHFWULFLW\ZKLFKLVVXIILFLHQWWRVXSSO\
SRZHUWRPLOOLRQVRIKRPHVDFURVVWKH8QLWHG6WDWHV
%LRJDVFDQEHXVHGIRUHOHFWULFLW\JHQHUDWLRQRQVHZDJHZRUNVIRUFRRNLQJVSDFHKHDWLQJZDWHU
KHDWLQJDQGDOVRSURFHVVKHDWLQJ,ILWZDVFRPSUHVVHGLWFDQUHSODFHWKHFRPSUHVVHGQDWXUDOJDVWR
EHXVHGLQYHKLFOHV7KLVFDQKHOSLQUHGXFLQJWKHXVDJHRIIRVVLOIXHOV

/,7(5$785(5(9,(:
2LO3DOP(PSW\)UXLW%XQFKHVLQ0DOD\VLD
2LOSDOPLVWKHPDMRUFURSSODQWDWLRQLQ,QGRQHVLDDQG0DOD\VLD,QWKH\HDUFUXGHSDOPRLO
SURGXFWLRQZDVFRXQWLQJXSWRPLOOLRQWRQVLQZKLFKWKHSDOPRLOSURGXFWLRQLQ,QGRQHVLDDQG
0DOD\VLDGRPLQDWHVWKHYHJHWDEOHRLOPDUNHW,Q0DOD\VLDRLOSDOPLVRQHRIWKHPRVWLPSRUWDQW
FRPPHUFLDOFURSV7KHPDLQZDVWHSURGXFWLQWKHRLOSDOPLQGXVWU\LVRLOSDOPHPSW\IUXLWEXQFK
23()% 
&XUUHQWO\HPSW\IUXLWEXQFKHV ()% DUHLQFLQHUDWHGDQGFDXVLQJDLUSROOXWLRQSUREOHPVDURXQGWKH
SDOPRLOPLOODUHDV7KLVDLUSROOXWLRQSUREOHPLVSRVVLEOHWREHVROYHGE\XWLOL]LQJ()%DVDUHQHZDEOH
HQHUJ\VRXUFHIRUELRJDVSURGXFWLRQ,WLVEHFDXVH()%LVDQRQZRRGOLJQRFHOOXORVLFPDWHULDO6LQFH
()%KDVKLJKFRQWHQWRIRUJDQLFPDWWHULWLVYHU\SRWHQWLDOWREHXVHGIRUELRJDVSURGXFWLRQ

%LRJDV3URGXFWLRQ$QDHURELF'LJHVWLRQ
,QJHQHUDOWKHUHDUHWZRPDLQDSSURDFKHVIRUXVLQJSODQWVIRUHQHUJ\SURGXFWLRQZKLFKDUHJURZLQJ
SODQWVVSHFLILFDOO\IRUHQHUJ\XVHDQGXVLQJWKHUHVLGXHVIURPSODQWVRUZDVWHVSURGXFHG%LRJDVFDQ
EHSURGXFHGWKURXJKDQDHURELFGLJHVWLRQZKLFKLVDELRORJLFDOSURFHVVIURPRLOSDOPELRPDVV
%LRORJLFDOFRQYHUVLRQRIELRPDVVWRPHWKDQHKDVUHFHLYHGLQFUHDVLQJDWWHQWLRQLQUHFHQW\HDUV7KHUH
DUHPDQ\WHFKQRORJLHVIRUSURGXFLQJHQHUJ\IURPVROLGZDVWHV$PRQJWKHPDQDHURELFGLJHVWLRQKDV
EHFRPHDSURPLVLQJWHFKQRORJ\SDUWLFXODUO\IRUUHFRYHU\RIHQHUJ\IURPRUJDQLFIUDFWLRQRIVROLG
ZDVWHV
$QDHURELFGLJHVWLRQLVDSURFHVVLQZKLFKWKHPLFURRUJDQLVPVEUHDNGRZQELRGHJUDGDEOHPDWHULDOLQ
WKHDEVHQFHRIR[\JHQ,WLVFRPPRQO\XVHGIRULQGXVWULDORUGRPHVWLFSXUSRVHVWRPDQDJHZDVWHDQG
UHOHDVHHQHUJ\7KHUHDUHIRXUPDLQELRORJLFDODQGFKHPLFDOVWHSVRIDQDHURELFGLJHVWLRQSURFHVV
ZKLFKDUHK\GURO\VLVDFLGRJHQHVLVDFHWRJHQHVLVDQGPHWKDQRJHQHVLV,QWKHEHJLQQLQJRIWKH
SURFHVVEDFWHULDK\GURO\]HWKHLQSXWPDWHULDOVWREUHDNGRZQERWKLQVROXEOHRUJDQLFSRO\PHUVDQG
KLJKPROHFXODUZHLJKWFRPSRXQGVLQWRVROXEOHRUJDQLFVXEVWDQFHVDQGPDNHWKHPDYDLODEOHIRURWKHU
EDFWHULDH[DPSOHIRULQVROXEOHRUJDQLFSRO\PHULVFDUERK\GUDWHVZKLOHWKHH[DPSOHVIRUKLJK
PROHFXODUZHLJKWFRPSRXQGVDUHOLSLGVSRO\VDFFKDULGHVSURWHLQVDQGQXFOHLFDFLG
$IWHUWKDWDFLGRJHQLFEDFWHULDZLOOFRQYHUWWKHVXJDUVDQGDPLQRDFLGVLQWRFDUERQGLR[LGHK\GURJHQ
DPPRQLDRUJDQLFDFLGVK\GURJHQVXOSKLGHDQGRWKHUE\SURGXFWV,QWKHWKLUGVWHSDFHWRJHQLF
EDFWHULDWKHQFRQYHUWWKHVHUHVXOWLQJRUJDQLFDFLGVLQWRDFHWLFDFLGDORQJZLWKDGGLWLRQDODPPRQLD
K\GURJHQDQGFDUERQGLR[LGH)LQDOO\PHWKDQRJHQVFRQYHUWWKHVHSURGXFWVWRPHWKDQHDQGFDUERQ
GLR[LGH7KHPHWKDQRJHQHVLVSURGXFHVPHWKDQHE\WZRJURXSVRIPHWKDQRJHQLFEDFWHULDLQZKLFK
WKHILUVWJURXSVSOLWVDFHWDWHLQWRPHWKDQHDQGFDUERQGLR[LGHDQGWKHVHFRQGJURXSXVHVK\GURJHQ
DVHOHFWURQGRQRUDQGFDUERQGLR[LGHDVDFFHSWRUWRSURGXFHPHWKDQH7KHPHWKDQRJHQLFDUFKDHD
SRSXODWLRQLVXVHGDVSDUWRIWKHGLJHVWLRQSURFHVVWRWUHDWELRGHJUDGDEOHZDVWHDQGVHZDJHVOXGJH
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

$QDHURELFGLJHVWLRQLVZLGHO\XVHGDVDVRXUFHRIUHQHZDEOHHQHUJ\7KHGLJHVWLRQSURFHVVZLOO
SURGXFHELRJDVZKLFKFRQVLVWVRIPHWKDQHFDUERQGLR[LGHDQGWUDFHVRIWKHRWKHUFRQWDPLQDQW
JDVHV%LRJDVFDQEHXVHGGLUHFWO\IRUFRRNLQJIXHOLQFRPELQHGKHDWDQGSRZHUJDVHQJLQHVRU
XSJUDGHGWRQDWXUDOJDVTXDOLW\ELRPHWKDQH,WFDQUHSODFHWKHXVHRIIRVVLOIXHOV7KHQXWULHQWULFK
GLJHVWDWHOHIWDIWHUWKHSURFHVVFDQEHXVHGDVIHUWLOL]HU0LFURRUJDQLVPVWKDWLQFOXGHLQWKHGLJHVWLRQ
SURFHVVDUHDFHWLFDFLGIRUPLQJEDFWHULD DFHWRJHQV DQGPHWKDQHIRUPLQJDUFKDHDZKLFKDOVR
NQRZQDVPHWKDQRJHQV7KHVHRUJDQLVPVDUHIHHGXSRQWKHLQLWLDOIHHGVWRFNDQGXQGHUJRGLIIHUHQW
SURFHVVHVWRIRUPLQWHUPHGLDWHPROHFXOHVZKLFKLQFOXGHVXJDUVK\GURJHQDQGDFHWLFDFLGDQG
ILQDOO\FRQYHUWWRELRJDV
0HWKDQRJHQVFRPHIURPWKHGRPDLQRIDUFKDHD7KLVDUFKDHDSRSXODWLRQFDQJURZLQKRVWLOH
FRQGLWLRQVRIK\GURWKHUPDOYHQWVPRUHUHVLVWDQWWRKHDWDQGLVDEOHWRRSHUDWHDWKLJKWHPSHUDWXUHV
,WVSURSHUW\LVXQLTXHWRWKHUPRSKLOHV
,QDQDHURELFV\VWHPVR[\JHQLVSUHYHQWHGWRHQWHUWKHV\VWHPWKURXJKSK\VLFDOFRQWDLQPHQWLQ
VHDOHGWDQNV0LFUREHVDFFHVVR[\JHQIURPVRXUFHVRWKHUWKDQWKHVXUURXQGLQJDLUZKLFKFDQEHWKH
RUJDQLFPDWHULDOLWVHOIRUPD\EHVXSSOLHGE\LQRUJDQLFR[LGHVIURPZLWKLQWKHLQSXWPDWHULDO:KHQWKH
R[\JHQVRXUFHLQDQDQDHURELFV\VWHPLVGHULYHGIURPWKHRUJDQLFPDWHULDOLWVHOIWKHLQWHUPHGLDWH
HQGSURGXFWVDUHSULPDULO\DOFRKROVDOGHK\GHVDQGRUJDQLFDFLGVSOXVFDUERQGLR[LGH,QWKH
SUHVHQFHRIVSHFLDOL]HGPHWKDQRJHQVWKHLQWHUPHGLDWHVDUHFRQYHUWHGWRWKHILQDOHQGSURGXFWVRI
PHWKDQHFDUERQGLR[LGHDQGWUDFHOHYHOVRIK\GURJHQVXOILGH,QDQDHURELFV\VWHPWKHPDMRULW\RI
WKHFKHPLFDOHQHUJ\FRQWDLQHGZLWKLQWKHVWDUWLQJPDWHULDOVLVUHOHDVHGE\PHWKDQRJHQLFEDFWHULDDV
PHWKDQH
$QDHURELFGLJHVWHUVFDQEHGHVLJQHGWRRSHUDWHXQGHUGLIIHUHQWSURFHVVFRQILJXUDWLRQVZKLFKDUH
EDWFKRUFRQWLQXRXVSURFHVVPHVRSKLOLFRUWKHUPRSKLOLFKLJKVROLGVRUORZVROLGVVLQJOHVWDJHRU
PXOWLVWDJH,QDEDWFKV\VWHPELRPDVVLVDGGHGWRWKHUHDFWRUDWWKHVWDUWLQJWLPHRIWKHSURFHVV7KH
UHDFWRULVWKHQVHDOHGWKURXJKRXWWKHSURFHVV,QWKHVLPSOHVWIRUPRIEDWFKSURFHVVLQRFXODWLRQZLWK
SURFHVVHGPDWHULDOVLVQHHGHGWRVWDUWWKHDQDHURELFGLJHVWLRQ7KHQELRJDVZLOOEHIRUPHGZLWKLQD
QRUPDOGLVWULEXWLRQSDWWHUQRYHUWLPH$VEDWFKGLJHVWLRQUHTXLUHVOHVVHTXLSPHQWDQGORZHUOHYHOVRI
GHVLJQZRUNLWLVFRQVLGHUHGDVDFKHDSHUIRUPRIGLJHVWLRQ%\XVLQJPRUHWKDQRQHEDWFKUHDFWRU
FRQVWDQWSURGXFWLRQRIELRJDVFDQEHHQVXUHG
,QFRQWLQXRXVGLJHVWLRQSURFHVVRUJDQLFPDWWHULVFRQVWDQWO\DGGHGLQVWDJHVLQWRWKHUHDFWRUDQGWKH
HQGSURGXFWVDUHFRQVWDQWO\RUSHULRGLFDOO\UHPRYHGUHVXOWLQJLQFRQVWDQWSURGXFWLRQRIELRJDV$
VLQJOHRUPXOWLSOHGLJHVWHUVLQVHTXHQFHPD\EHXVHG([DPSOHVRIDQDHURELFGLJHVWLRQLQFOXGH
FRQWLQXRXVVWLUUHGWDQNUHDFWRUVXSIORZDQDHURELFVOXGJHEODQNHWVH[SDQGHGJUDQXODUVOXGJHEHGV
DQGLQWHUQDOFLUFXODWLRQUHDFWRUV
7KHUHDUHWZRFRQYHQWLRQDORSHUDWLRQWHPSHUDWXUHOHYHOVIRUDQDHURELFGLJHVWHUVPHVRSKLOLF
GLJHVWLRQDQGWKHUPRSKLOLFGLJHVWLRQZKLFKDUHGHWHUPLQHGE\WKHVSHFLHVRIPHWKDQRJHQVLQWKH
GLJHVWHUV7KHPHVRSKLOLFGLJHVWLRQWDNHVSODFHRSWLPDOO\DURXQGR&RUDWDPELHQW
WHPSHUDWXUHVEHWZHHQR&DQGR&ZKHUHPHVRSKLOHVDUHWKHSULPDU\PLFURRUJDQLVPSUHVHQW
)RUWKHUPRSKLOLFGLJHVWLRQLWWDNHVSODFHRSWLPDOO\DURXQGR&RUDWHOHYDWHGWHPSHUDWXUHVXSWR
R&ZKHUHWKHUPRSKLOHVDUHWKHSULPDU\PLFURRUJDQLVPVSUHVHQW$WDWHPSHUDWXUHOHVVWKDQR&
DQDHURELFSURFHVVLVYHU\VORZLWWDNHVPRUHWKDQWKUHHWLPHVWKHQRUPDOPHVRSKLOLFWLPHSURFHVV
(YHQWKRXJKPHVRSKLOLFVSHFLHVFDQWVXUYLYHXQGHUKLJKWHPSHUDWXUHLWLVPRUHWROHUDQWWRFKDQJHV
LQHQYLURQPHQWDOFRQGLWLRQVWKDQWKHUPRSKLOHV7KH\DUHPRUHVWDEOHWKDQWKHUPRSKLOLFGLJHVWLRQ
V\VWHPV2QWKHRWKHUKDQGDOWKRXJKWKHUPRSKLOLFGLJHVWLRQV\VWHPVDUHOHVVVWDEOHWKDQWKH

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

PHVRSKLOLFV\VWHPVLWUHPRYHVPRUHHQHUJ\IURPWKHRUJDQLFPDWWHU7KHLQFUHDVHLQWHPSHUDWXUHV
FDQIDFLOLWDWHIDVWHUUHDFWLRQUDWHVDQGJDV\LHOGV0RUHRYHURSHUDWLQJLQKLJKWHPSHUDWXUHFDQ
IDFLOLWDWHJUHDWHUVWHULOL]DWLRQRIWKHHQGGLJHVWDWH
%\XVLQJDQDHURELFGLJHVWLRQWHFKQRORJLHVWKHHPLVVLRQRIJUHHQKRXVHJDVHVFDQEHUHGXFHLQD
QXPEHURINH\ZD\VZKLFKLQFOXGHWKHUHSODFHPHQWRIIRVVLOIXHOVUHGXFLQJRUHOLPLQDWLQJWKHHQHUJ\
IRRWSULQWRIZDVWHWUHDWPHQWSODQWVUHGXFLQJPHWKDQHHPLVVLRQIURPODQGILOOVGLVSODFLQJLQGXVWULDOO\
SURGXFHGFKHPLFDOIHUWLOL]HUVUHGXFLQJYHKLFOHPRYHPHQWVDQGUHGXFLQJHOHFWULFDOJULGWUDQVSRUWDWLRQ
ORVVHV
'LJHVWDWHLVWKHVROLGUHPQDQWVRIWKHRULJLQDOLQSXWPDWHULDOWRWKHGLJHVWHUVWKDWWKHPLFUREHVFDQQRW
XVH7KHVROLGILEURXVFRPSRQHQWRIWKHGLJHVWHGPDWHULDOFDQEHXVHGDVDVRLOFRQGLWLRQHUWR
LQFUHDVHWKHRUJDQLFFRQWHQWRIVROLGV7KHGLJHVWHUOLTXRUFDQEHXVHGDVDIHUWLOL]HUWRVXSSO\YLWDO
QXWULHQWVWRVRLOVLQVWHDGRIFKHPLFDOIHUWLOL]HUVWKDWUHTXLUHODUJHDPRXQWRIHQHUJ\WRSURGXFHDQG
WUDQVSRUW7KHRXWSXWRIDQDHURELFGLJHVWLRQV\VWHPVLVZDWHUZKLFKRULJLQDWHVERWKIURPWKH
PRLVWXUHFRQWHQWRIWKHRULJLQDOZDVWHWKDWZDVWUHDWHGDQGZDWHUSURGXFHGGXULQJWKHPLFURELDO
UHDFWLRQVLQWKHGLJHVWLRQV\VWHPV7KLVZDWHUPD\EHUHOHDVHGIURPWKHGHZDWHULQJRIWKHGLJHVWDWH
RUPD\EHLPSOLFLWO\VHSDUDWHIURPWKHGLJHVWDWH7KHWKUHHSULQFLSDOSURGXFWVRIDQDHURELFGLJHVWLRQ
DUHELRJDVGLJHVWDWHDQGZDWHU

$QDHURELF'LJHVWLRQSULRUWR3UHWUHDWPHQW
3URFHVV
%LRJDVFDQEHSURGXFHGIURPHQHUJ\FURSVDQGZDVWHPDWHULDOVVXFKDVPXQLFLSDOVROLGZDVWH
PDQXUHZDVWHZDWHUVOXGJHDQGHWF+RZHYHUWKHELRGHJUDGDELOLW\RIGLIIHUHQWNLQGRIZDVWHPDWHULDOV
LVGLIIHUHQWGHSHQGLQJRQWKHLUFRPSRVLWLRQ7KHKLJKHUWKHOLJQLQDQGFHOOXORVHFRQWHQWWKHORZHUWKH
ELRGHJUDGDELOLW\ZDVREWDLQHG'XULQJDQDHURELFFRQGLWLRQVXJDUVDQGVWDUFKDUHHDVLO\GHJUDGDEOH
OLSLGVDQGSURWHLQVDUHLQWHUPHGLDWHO\ZKLOHFHOOXORVHLVQRWHDVLO\GHJUDGDEOH7KHUHIRUHWRLPSURYH
WKHELRGHJUDGDELOLW\RIOLJQRFHOOXORVLFPDWHULDOVDSUHWUHDWPHQWLVUHTXLUHGWRRSHQXSWKHFRPSDFW
VWUXFWXUH
7KHUHDUHVHYHUDOPHWKRGVWREHLQYROYHGLQWKHSUHWUHDWPHQWSURFHVVZKLFKDUHPHFKDQLFDO
SK\VLFDOWKHUPDOFKHPLFDODQGELRORJLFDOPHWKRGV)RUPHFKDQLFDOSUHWUHDWPHQWLWZLOOUHVXOWLQQR
LQKLELWRUVDQGE\UHGXFLQJWKHSDUWLFOHVL]HRIWKHVXEVWUDWHVXVXDOO\OHDGWRLQFUHDVHLQPHWKDQH
SURGXFWLRQ0HFKDQLFDOSUHWUHDWPHQWSOD\VDQLPSRUWDQWUROHEHFDXVHLWIDYRUVVROXELOL]DWLRQRI
SDUWLFXODWHPDWWHUVLQOLTXLGSKDVH7KHPRVWIUHTXHQWXVHGWHFKQLTXHVIRUPHFKDQLFDOSUHWUHDWPHQW
DUHXOWUDVRQLFDWLRQJULQGLQJDQGKLJKSUHVVXUHKRPRJHQL]DWLRQ%\XVLQJWKHVHPHWKRGVWKH
GHJUDELOLW\RIRUJDQLFPDWWHUVFDQEHLQFUHDVHGE\GLVUXSWLQJWKHIORFVDQGO\VLQJWKHEDFWHULDOFHOOV
7KHVHPHWKRGVDUHJHQHUDOO\EDVHGRQWKHGLVUXSWLRQRIPLFURELDOFHOOZDOOVE\VKHDUVWUHVV7KH
JULQGLQJKLJKSUHVVXUHKRPRJHQLVHUVDQGPHFKDQLFDOMHWVPDVKWHFKQLTXHVKDYHEHHQXVHGIRU
PHFKDQLFDOSUHWUHDWPHQWDSSOLFDWLRQ
8OWUDVRQLFDWLRQLVDPHWKRGWKDWDLPVWRHQKDQFHWKHELRGHJUDGDELOLW\RIWKHPDWHULDOV7KLVPHWKRG
EULQJVVHYHUDOEHQHILWVOLNHHIILFLHQWELRPDVVGLVLQWHJUDWLRQLPSURYHPHQWLQELRGHJUDGDELOLW\
LPSURYHGELRVROLGVTXDOLW\LQFUHDVHLQPHWKDQHSHUFHQWDJHLQELRJDVQRFKHPLFDODGGLWLRQOHVV
UHWHQWLRQWLPHDQGHQHUJ\UHFRYHU\ N: RIXOWUDVRXQGHQHUJ\JHQHUDWHVN:RIHOHFWULFDOHQHUJ\
LQFOXGLQJORVVHV,QDQDHURELFGLJHVWLRQSURFHVVK\GURO\VLVLVWKHUDWHOLPLWLQJVWHS8OWUDVRQLFO\VLV
DFFHOHUDWHVWKHK\GURO\VLVUHDFWLRQVE\GLVUXSWLQJFHOOV7KHEDFWHULDOFHOOVDUHGLVXQLWHGE\SUHVVXUH
ZDYHVDQGFDYLWDWLRQVJHQHUDWHGIURPDQXOWUDVRQLFJHQHUDWRUOHDGLQJWRHOXWLRQRILQWUDFHOOXODU
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

RUJDQLFVXEVWDQFHV7KHUHDUHWZRNH\PHFKDQLVPVDVVRFLDWHGZLWKXOWUDVRQLFWUHDWPHQWZKLFKDUH
FDYLWDWLRQV IDYRUHGDWORZIUHTXHQFLHV DQGFKHPLFDOUHDFWLRQGXHWRWKHIRUPDWLRQRI2++2+
UDGLFDOVDWKLJKIUHTXHQFLHV+LJKSRZHUXOWUDVRXQGLVQRUPDOO\RSHUDWLQJDWORZIUHTXHQFLHV
$QRWKHUPHFKDQLFDOSUHWUHDWPHQWPHWKRGLVJULQGLQJZKLFKLVDOVRNQRZQDVZHWPLOOLQJ*ULQGLQJ
XVHVVPDOOEHDGVWRUXSWXUHFHOOZDOOVWKHVL]HRIWKHEHDGVXVHGDUHFULWLFDOIRUPD[LPDOELRPDVV
GLVLQWHJUDWLRQ7KHVPDOOHUWKHEDOOPLOOGLDPHWHUWKHEHWWHUWKHSHUIRUPDQFHRILW%\XVLQJWKLV
WHFKQLTXHZDVWHVZDVSUHVVHGWKURXJKDF\OLQGULFDORUFRQLFDOVSDFHE\DQDJLWDWRULQFOXGLQJVKHDU
VWUHVVHVKLJKHQRXJKWREUHDNWKHEDFWHULDOFHOOZDOOV)XUWKHUPRUHKLJKSUHVVXUHKRPRJHQL]DWLRQLV
WKHPRVWIUHTXHQWO\XVHGPHWKRGIRUODUJHVFDOHRSHUDWLRQ7KHFRPSUHVVHGVXVSHQVLRQLVWKHQ
GHSUHVVXUL]HGWKURXJKDYDOYHDQGSURMHFWHGDWKLJKVSHHGDJDLQVWDQLPSDFWLRQULQJ7KHFHOOVDUH
KHUHE\VXEMHFWHGWRWXUEXOHQFHFDYLWDWLRQDQGVKHDUVWUHVVHVUHVXOWLQJLQFHOOGLVLQWHJUDWLRQ
0HFKDQLFDOSUHWUHDWPHQWLVSURYHGWREHVXLWDEOHIRUWKHDSSOLFDWLRQVDWIXOOVFDOHELRJDVSODQWVDQG
PD\LQFUHDVHWKHPHWKDQH\LHOGRIOLJQRFHOOXORVLFVXEVWUDWHE\XSWR+RZHYHUWKLVPHWKRG
QHHGVDKLJKHQHUJ\GHPDQGVDQGLVQRWHFRQRPLFDOO\DWWUDFWLYH)XUWKHUPRUHWKHVWHDPSUH
WUHDWPHQWKDVEHHQSURYHGE\UHVHDUFKWKDWLWFDQVLJQLILFDQWO\LPSURYHWKHELRGHJUDGDELOLW\RI()%
DQGDOVRHQKDQFHWKHELRJDVSURGXFWLRQ6WHDPSUHWUHDWPHQWZLWK1D2+SUHVRDNLQJKDVEHHQ
UHSRUWHGWRLQFUHDVHELRJDVSURGXFWLRQIURPPXQLFLSDOZDVWHVE\
)RUWKHUPDOSUHWUHDWPHQWDQDHURELFGLJHVWLRQPD\EHFDUULHGRXWXQGHUSV\FKURSKLOLFPHVRSKLOLF
DQGWKHUPRSKLOLFFRQGLWLRQZKLFKLVR&0HVRSKLOLFDQDHURELFGLJHVWLRQLVPRUHZLGHO\XVHGZKHQ
FRPSDUHGWRWKHUPRSKLOLFGLJHVWLRQ7KLVLVEHFDXVHRIWKHORZHUHQHUJ\UHTXLUHPHQWVDQGKLJKHU
VWDELOLW\RIWKHSURFHVV+RZHYHUWKHUPRSKLOLFGLJHVWLRQLVPRUHHIILFLHQWLQWHUPVRIRUJDQLFPDWWHU
UHPRYDODQGPHWKDQHSURGXFWLRQ0RUHRYHULWHQKDQFHVWKHGHVWUXFWLRQRISDWKRJHQV$ZLGHUDQJH
RIWHPSHUDWXUHKDVEHHQVWXGLHGUDQJLQJIURPWRR&$OWKRXJKWKHPRVWFRPPRQSUH
WUHDWPHQWWHPSHUDWXUHVDUHEHWZHHQDQGR&WKHWHPSHUDWXUHDERYHR&KDYHEHHQIRXQG
UHVSRQVLEOHIRUUHIUDFWRU\FRPSRXQGIRUPDWLRQ)RUSUHWUHDWPHQWWKDWDSSOLHGEHORZR&LWLV
FRQVLGHUHGDVORZWHPSHUDWXUHWKHUPDOSUHWUHDWPHQWV7KHWZRVWDJHVV\VWHPFRXSOLQJZLWKD
K\SHUWKHUPRSKLOLFGLJHVWHUZKLFKLVRSHUDWLQJDWR&DQGDWKHUPRSKLOLFGLJHVWHUZKLFKLV
RSHUDWLQJDWR&KDYHEHHQIRXQGWREHPRUHHIILFLHQWLQWHUPVRIPHWKDQHSURGXFWLRQZKHQ
FRPSDUHGWRVLQJOHVWDJHWKHUPRSKLOLFGLJHVWHUV
%DVHGRQVWXGLHVLWLVVXJJHVWHGWKDWWKHUPDOSUHWUHDWPHQWFDUULHVRXWDWDWHPSHUDWXUHDURXQG
R&WRHQKDQFHWKHELRORJLFDODFWLYLWLHVRIVRPHWKHUPRSKLOLFEDFWHULDSRSXODWLRQZLWKRSWLPXP
DFWLYLW\WHPSHUDWXUHVLQWKHKLJKYDOXHVRIWKHWKHUPRSKLOLFUDQJH+HQFHORZWHPSHUDWXUHSUH
WUHDWPHQWPD\EHFRQVLGHUHGDVDSUHGLJHVWLRQVWHS1RUPDOO\WKHHIILFLHQF\RISUHWUHDWPHQWVLV
DVVHVVHGE\WKHLQFUHDVHRIVROXEOHRUJDQLFPDWWHU$IWHUWKHWUHDWPHQWLWLVH[SHFWHGWKDWWKHWRWDO
GLVVROYHGVROLG 7'6 DQGYRODWLOHGLVVROYHVROLG 9'6 FRQFHQWUDWLRQZLOOLQFUHDVHGDIWHUWKHUPDOSUH
WUHDWPHQWDWR&DQGUHVXOWLQJLQDQLQFUHDVHLQ9'696 YRODWLOHVROLG UDWLR
)RUWKHFKHPLFDOSUHWUHDWPHQWPHWKRGWUHDWPHQWVZLWKDONDOLQHKDYHEHHQSURYHQWRHIIHFWLYHO\
LPSURYHWKHELRORJLFDOFRQYHUVLRQRIOLJQRFHOOXORVHV7KLVLVDYHU\SURPLVLQJSUHWUHDWPHQWIRU
LPSURYLQJWKHDQDHURELFGLJHVWLRQRIQHZVSDSHUFRUQVWDONKDUGZRRGVVRIWZRRGDQGSDSHUWXEHV
3UHWUHDWPHQWZLWK1D2+FDQEHFODVVLILHGLQWRWZRW\SHVZKLFKDUHKLJKFRQFHQWUDWLRQDQGORZ
FRQFHQWUDWLRQSURFHVVHV1D2+FDQK\GURO\]HVWKHERQGOLQNDJHVEHWZHHQOLJQLQDQGFHOOXORVHDV
ZHOODVLQWUDOLJQLQOLQNDJHVHWKHUERQGVSKHQ\OJO\FRVLGLFOLQNDJHVDFHWDOOLQNDJHVDQGHVWHU
ERQGVFDQEHFOHDYHGE\WKHDGGHGDONDOL
7KHORZFRQFHQWUDWLRQ1D2+SUHWUHDWPHQWQHHGVDKLJKWHPSHUDWXUHDQGKLJKSUHVVXUHFRQGLWLRQ
WREHHIILFLHQW$IWHUWKHSUHWUHDWPHQWSURFHVVQR1D2+UHXVHLVSRVVLEOHEHFDXVHWKHPHFKDQLVPLV
DUHDFWLYHGHVWUXFWLRQRIOLJQRFHOOXORVHV7KHSURFHVVFDQEHHIILFLHQWO\GLVLQWHJUDWHGWKH
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

KHPLFHOOXORVHVDQGOLJQLQ2QWKHRWKHUKDQGWKHKLJKFRQFHQWUDWLRQ1D2+SUHWUHDWPHQWUHTXLUHV
RQO\DWDPELHQWSUHVVXUHDQGUHODWLYHO\ORZWHPSHUDWXUHWRGLVVROYHWKHFHOOXORVHDQGUHJHQHUDWHLW
7KLVSURFHVVLVYHU\HIIHFWLYHIRUWKHUHGXFWLRQRIFHOOXORVHFU\VWDOOLQLW\OHDGLQJWRLPSURYHPHQWLQ
ELRORJLFDOFRQYHUVLRQRIOLJQRFHOOXORVHV
2QHRIDGYDQWDJHVRIKLJKFRQFHQWUDWLRQ1D2+SUHWUHDWPHQWLVWKDWWKH1D2+VROXWLRQLVSRVVLEOHWR
EHUHXVHGDIWHUWKHSURFHVVDQGWKLVLVYHU\LPSRUWDQWUHJDUGLQJWKHHFRQRP\DQGHQYLURQPHQWDO
LPSDFWRIWKHSURFHVV7KHSUHWUHDWPHQWSURFHVVZLWKSKRVSKRULFDFLGLVWKHPRVWHIILFLHQWSURFHVV
ZKLFKKDVEHHQVWXGLHGIRUWKHLPSURYHPHQWRIHQ]\PDWLFK\GURO\VLVRIOLJQRFHOOXORVLFPDWHULDOV7KLV
SUHWUHDWPHQWLVDEOHWRGLVUXSWWKHOLJQRFHOOXORVHVVWUXFWXUHDQGHOLPLQDWHWKHUHVLVWDQFHRIOLJQLQDQG
KHPLFHOOXORVHV7KHPDLQDGYDQWDJHRIXVLQJWKLVPHWKRGLVWKDWWKHSKRVSKRULFDFLGLVDEOHWREH
UHXVHGDIWHUWKHSUHWUHDWPHQWSURFHVV
$IWHUWKHFKHPLFDOSUHWUHDWPHQWSURFHVVWKHWRWDOVROLGV 76 DQGWKHYRODWLOHVROLGV 96 FRQWHQWRI
WKHWUHDWHGVDPSOHDUHORZHUWKDQWKHXQWUHDWHGVDPSOH7KHVHORZVROLGFRQGLWLRQVEULQJVHYHUDO
DGYDQWDJHVRQRSHUDWLQJWKHDQDHURELFGLJHVWHUZKLFKDUHORZHUHQHUJ\LQSXWIRUSXPSLQJDQG
PL[LQJEHWWHUDFFHVVLELOLW\IRUWKHPLFURRUJDQLVPVWRWKHVXEVWUDWHVDQGKLJKHUSURGXFWLYLW\7KH
UDWLRVRI96WR76LQFUHDVHVZKHQWUHDWHGZLWK1D2+ZKLOHGHFUHDVHVZKHQWUHDWHGZLWKSKRVSKRULF
DFLG+HQFHWKHSUHWUHDWPHQWZLWK1D2+LVPRUHHIILFLHQWDVLWSURGXFHKLJKHUPHWKDQH\LHOGVDQG
DOVRKLJKHU96WR76UDWLR7KHKLJKHU96WR76UDWLRFDQGHFUHDVHWKHUHDFWRUYROXPHQHHGHG2Q
WKHRWKHUKDQGWKH96FRQWHQWLQDWUHDWHGVDPSOHPD\GHFUHDVHDVWKHWUHDWPHQWWLPHLQFUHDVHV
7KHVHVKRZWKDWPRUHRUJDQLFPDWHULDOVDUHORVWGXULQJWUHDWPHQWZLWKSKRVSKRULFDFLGZKLOHPRUH
LQRUJDQLFPDWHULDOVDUHORVWLQWKHWUHDWPHQWZLWK1D2++RZHYHUZKHQWKHWUHDWPHQWWLPHZLWK
1D2+LQFUHDVHVWKHDPRXQWRIRUJDQLFPDWHULDOVORVHDOVRLQFUHDVHG7KXVDYHU\ORQJWUHDWPHQW
WLPHPD\QRWEHVXLWDEOHIRUWKHSUHWUHDWPHQWSURFHVVRI()%
)RUELRORJLFDOSUHWUHDWPHQW(Q]\PLF+\GURO\VLVSURFHVVLVXVHWRHQKDQFHWKHGHJUDGDWLRQRIZDVWH
E\WKHXVHRIPLFURELDOHQ]\PHV(Q]\PLF+\GURO\VLVZDVILUVWXVHGWRNLOOSDWKRJHQEXWDQ
HQKDQFHPHQWLQELRJDVSURGXFWLRQZDVREVHUYHGGXULQJWKHDQDHURELFGLJHVWLRQ%HVLGHVWKDWDQR[LF
JDVIORWDWLRQSURFHVVLVDOVRDQDQDHURELFGLJHVWLRQSURFHVVWKDWKDVSRWHQWLDOWRHQKDQFHELRJDV
SURGXFWLRQ7KLVSURFHVVXVHVDQR[LFJDVWRIORDWFRQFHQWUDWHDQGUHWXUQEDFWHULDRUJDQLFDFLGV
SURWHLQHQ]\PHVDQGXQGLJHVWHGVXEVWUDWHWRWKHDQDHURELFGLJHVWHUIRUWKHUDSLGDQGFRPSOHWH
FRQYHUVLRQRIZDVWHWRJDVDQGVROXEOHFRQVWLWXHQWV%\YLUWXHRIJUHDWHUVROLGVGHVWUXFWLRQDQGJDV
VFUXEELQJRI$*)SURFHVVPHWKDQHSURGXFWLRQFDQEHHQKDQFHGDQGDOVRWKHELRJDVTXDOLW\FDQEH
LPSURYHG
$OWKRXJKDOORIWKHSUHWUHDWPHQWPHWKRGVKDYHWKHLURZQPHULWVRQFRQWULEXWLQJWRDFFHOHUDWH
DQDHURELFGLJHVWLRQDQGHQKDQFHPHQWRIELRJDVSURGXFWLRQWKH\GRKDYHWKHLURZQGUDZEDFNV)RU
WKHUPDOSUHWUHDWPHQWLWUHTXLUHVDFRQVLGHUDEOHDPRXQWRIKHDWWRSUHKHDWWKHIHHGVWRFNVRLWLV
XQDYRLGDEOHWRFRQVXPHVRPHRIWKHELRJDVSURGXFHG)RUPHFKDQLFDOSUHWUHDWPHQWXOWUDVRQLFDWLRQ
LVQRGRXEWWKHPRVWSRZHUIXOPHWKRGWRGLVUXSWFHOOZDOOVEXWSRZHUFRQVXPSWLRQEHFRPHVDVHULRXV
GUDZEDFN)RUWKHRWKHUPHFKDQLFDOSUHWUHDWPHQWPHWKRGVVXFKDVJULQGLQJDQGKLJKSUHVVXUH
KRPRJHQL]DWLRQDUHOHVVHIIHFWLYHWKDQWKHRWKHUPHWKRGV$OWKRXJKPHFKDQLFDOSUHWUHDWPHQWGRHV
QRWUHTXLUHFKHPLFDOVRUKHDWPRVWRILWVWHFKQLTXHVFRQVXPHDORWRISRZHU

(PSW\)UXLW%XQFKHV
()%LVDE\SURGXFWRIWKHSURGXFWLRQRIYHJHWDEOHRLOZRUOGZLGH6LQFH0DOD\VLDDQG,QGRQHVLDDUH
WKHODUJHVWSURGXFHUVRISDOPRLOWKHDQQXDOSURGXFWLRQRI()%LVRYHUPLOOLRQWRQVDQGPLOOLRQ
WRQV6LQFHWKHQ()%LVLQFLQHUDWHGQRZDGD\VLWEULQJVVHYHUDOEHQHILWVRQXWLOL]LQJLWLQWRDUHQHZDEOH
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

IXHOLQWKHWUDQVSRUWDWLRQVHFWRU0DMRUSDUWRIWKHJUHHQKRXVHJDVHPLVVLRQVRULJLQDWHVIURPWKHXVH
RIIRVVLOIXHOLQWUDQVSRUWDWLRQ7KXVWKHGHPDQGIRUDOWHUQDWLYHIXHOVSURGXFHIURPUHQHZDEOH
UHVRXUFHVLVYHU\KLJK0RUHRYHUWKHGLJHVWHGPDWHULDOOHIWDIWHUWKHDQDHURELFGLJHVWLRQRI()%FDQ
EHXWLOL]HGDVDVXVWDLQDEOHIHUWLOL]HUIRUWKHFXOWLYDWLRQRIQHZFURSV%LRJDVSURGXFWLRQLVLPSRUWDQWIRU
WKHIXWXUHDVLWEHQHILWVLQERWKUHQHZDEOHHQHUJ\SURGXFWLRQDQGHQYLURQPHQWDOSURWHFWLRQ$FFRUGLQJ
WRWKHUHVHDUFKRQHWRQRI()%ELRPHWKDQHSURGXFWLRQFDQUHSODFHDSSUR[LPDWHO\OLWHUVRIIRVVLO
IXHOLQWUDQVSRUWDWLRQVHFWRU
+RZHYHUWKHPHWKDQH\LHOGZLOOGHFUHDVHZKHQWKHVXEVWUDWHVDUHSUHVHQWLQDKLJKFRQFHQWUDWLRQ
FRQGLWLRQ7KLVLQGLFDWHVWKDWWKH\KDYHSRWHQWLDOLQLQKLELWLQJWKHSURFHVVZKHQRYHUORDGHG7KLVLV
EHFDXVHWKHKLJKFRQWHQWRIORQJFKDLQIDWW\DFLG /&)$ LQWKH()%FDQDOVRLQKLELWWKHGHJUDGDWLRQ
SURFHVV7KHOLSLGULFKZDVWHWKDWFRQWDLQVORQJFKDLQIDWW\DFLGVFDQLQKLELWWKHJURZWKRIEDFWHULDDQG
PHWKDQHIRUPDWLRQ
0RUHRYHU()%FDQEHFRPELQLQJZLWKSDOPRLOPLOOHIIOXHQW 320( WRREWDLQDPRUHHIILFLHQWELRJDV
SURGXFWLRQ2LOSDOPPLOOSODQWUHTXLUHVDODUJHDPRXQWRIZDWHUIRULWVRSHUDWLRQDQGGLVFKDUJH
FRQVLGHUDEOHTXDQWLWLHVRIZDVWHZDWHURUSDOPRLOPLOOHIIOXHQW 320( 320(FDQEHYHU\LPSRUWDQW
VRXUFHVIRUZDWHUSROOXWLRQZKHQLWLVUHOHDVHGXQWUHDWHGLQWRWKHULYHURUODNH%HVLGHV()%RLOSDOP
PLOOSODQWDOVRJHQHUDWHVRWKHUZDVWHVVXFKDVPHVRFDUSILEHUDQGVKHOO
,Q0DOD\VLDVSDOPRLOLQGXVWULHVDSSUR[LPDWHO\PLOOLRQWRQRIOLJQRFHOOXORVLFELRPDVVDQG
PLOOLRQWRQRI()%ZLWKRIPRLVWXUHFRQWHQWDUHSURGXFHGIURPWKHPLOOLQJSURFHVV&RGLJHVWLRQ
VWUDWHJLHVDQGSUHWUHDWPHQWSURFHVVDUHUHTXLUHGWRLPSURYHWKHGHJUDGDELOLW\RIWKHOLJQRFHOOXORVLF
PDWHULDOVDQGKHQFHWRLQFUHDVHWKHELRJDVSURGXFWLRQ&RGLJHVWLRQRIYDULRXVRUJDQLFZDVWHVEULQJ
VHYHUDODGYDQWDJHVZKHQFRPSDUHWRWKHGLJHVWLRQRIRQO\RQHVXEVWUDWHVXFKDVLQFUHDVHVLQELRJDV
\LHOGHFRQRPLFDGYDQWDJHVGHULYHGIURPWKHVKDULQJRIHTXLSPHQWHDVLHUKDQGOLQJRIPL[HGZDVWHV
DQGDOVRV\QHUJLVWLFHIIHFW7KHFRGLJHVWLRQRIWUHDWHG()%ZLWK320(UHVXOWHGLQEHWWHU
LPSURYHPHQWRQELRGHJUDGDELOLW\DQGPHWKDQHSURGXFWLRQ+RZHYHU320(KDVOLPLWHGDYDLODELOLW\
GXULQJORZRLOSDOPIUXLWSURGXFWLRQSHULRGZKLFKLVIURP'HFHPEHUWR)HEUXDU\7KLVVKRUWDJHRI
IHHGVWRFNKDVEHFRPHDPDMRUERWWOHQHFNIRUDFKLHYLQJWKHJRDOV7KHUHIRUHDQDOWHUQDWLYH
IHHGVWRFNLVWREHGHYHORSHG

%LRPDVVDV5HQHZDEOH(QHUJ\
$FFRUGLQJWRWKH)RXUWK$VVHVVPHQW5HSRUW $5 ZKLFKZDVUHOHDVHGRQ'HFHPEHURI
8QLWHG1DWLRQ,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH ,3&& WKHJOREDOLQFUHPHQWLQFDUERQ
GLR[LGHFRQFHQWUDWLRQLVSULPDULO\GXHWRWKHXVHRIIRVVLOIXHOZKLOHWKHLQFUHPHQWLQPHWKDQHDQG
QLWURXVR[LGHDUHEHFDXVHRIDJULFXOWXUHDFWLYLWLHV+HQFHLQRUGHUWRUHGXFHJUHHQKRXVHJDVHV
HPLVVLRQDQGSURPRWHDJUHDWHUHQHUJ\HIILFLHQF\UHQHZDEOHHQHUJ\VKRXOGEHXVHGWRUHSODFHWKH
XVHRIIRVVLOIXHODQGEHDSDUWRIWKHFOLPDWHFKDQJHVROXWLRQDVLWLVGHYHORSHGLQDVXVWDLQDEOHZD\
6LQFH0DOD\VLDLVDFRXQWU\WKDWKDVDVLJQLILFDQWDPRXQWRIDJULFXOWXUDODFWLYLWLHVELRPDVVFDQEHD
YHU\SURPLVLQJDOWHUQDWLYHVRXUFHRIUHQHZDEOHHQHUJ\
7KHHQHUJ\GHPDQGLQ0DOD\VLDLVLQFUHDVLQJUDSLGO\KHQFHLQRUGHUWRPHHWWKHLQFUHDVLQJGHPDQG
RIHQHUJ\DQGWRUHGXFHHPLVVLRQRIFDUERQGLR[LGHZKLOHHQVXULQJHQHUJ\VHFXULW\0DOD\VLDQHHGV
WRKDYHDQHIIHFWLYHDQGVXVWDLQDEOHVRXUFHRIHQHUJ\XUJHQWO\(YHQWKRXJK0DOD\VLDLVDFRXQWU\DW
ZKLFKELRPDVVFDQEHREWDLQHGHDVLO\WKHXVHRIUHQHZDEOHUHVRXUFHVLVVWLOOYHU\UDUH,IWKHVROHO\
XVHRIIRVVLOIXHOZDVFRQWLQXHGLWLVSUHGLFWHGWKDW0DOD\VLDZLOOHQFRXQWHUDSUREOHPRIWKHODFNLQJRI
HQHUJ\VHFXULW\7KLVLVEHFDXVHWKHIRVVLOIXHOUHVHUYHVLQ0DOD\VLDDUHSUHGLFWHGWRODVWIRUDQRWKHU
\HDUV
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

$V0DOD\VLDLVWKHZRUOGVVHFRQGODUJHVWSURGXFHUDQGH[SRUWHURISDOPRLOLWVSDOPRLOLQGXVWULHVDUH
OHDYLQJEHKLQGDKXJHDPRXQWRIELRPDVVIURPLWVSODQWDWLRQDQGPLOOLQJDFWLYLWLHVLQZKLFKWKH
DPRXQWLVYHU\PXFKODUJHUWKDQWKHRWKHUW\SHVRIELRPDVV7KXVDOOWKHVHELRPDVVFDQEH
FRQYHUWHGLQWRELRJDVIRUWUDQVSRUWDWLRQDQGXVHWRJHQHUDWHHOHFWULFLW\%LRPDVVLVDQDWXUDOSODQW
PDWHULDOZKLFKLVFRQVLGHUHGDVDW\SHRIQHZUHQHZDEOHHQHUJ\VRXUFHEHFDXVHWKHHQHUJ\LW
FRQWDLQVFRPHVIURPWKHVXQWKURXJKWKHSURFHVVRISKRWRV\QWKHVLV
,QWKH\HDU0DOD\VLDSURGXFHGPLOOLRQWRQHVRUSDOPRLORURIWKHWRWDOZRUOGVXSSO\
ZKLOH,QGRQHVLDSURGXFHGPLOOLRQWRQVRIRLORURIWKHWRWDOZRUOGVXSSO\,Q0DOD\VLDV
RLOSDOPSODQWDWLRQDUHDZDVPLOOLRQKHFWDUHVDQLQFUHDVHLQIURP$VWKHSDOPRLO
SURGXFWLRQLQ0DOD\VLDLQFUHDVHVWKHDPRXQWRIZDVWHVUHJHQHUDWHGDOVRLQFUHDVHV%DVHGRQ
UHVHDUFKRQHKHFWDUHRIRLOSDOPSODQWDWLRQFDQSURGXFHDSSUR[LPDWHO\WRQVRIELRPDVV
7KHUHIRUHSDOPRLOLQGXVWULHVDUHWKHODUJHVWSURGXFHURIELRPDVVLQ0DOD\VLD7KHELRPDVVSURGXFHV
IURPSDOPRLOLQGXVWULHVLQFOXGH()%ILEHUVKHOOZHWVKHOOSDOPNHUQHOIURQGVDQGWUXQNV()%
FRYHUHGDURXQGRIDOOW\SHVRIELRPDVVSURGXFHVIURPSDOPRLOSURGXFWLRQ%DVHGRQWKHRLO
SDOPELRPDVVFROOHFWHGLQDQGWKHLUHQHUJ\SRWHQWLDOHQHUJ\JHQHUDWHGIURPRLOSDOPELRPDVV
PD\UHDFKRIHQHUJ\HIILFLHQF\7KLVVKRZVFOHDUO\WKDWRLOSDOPELRPDVVLVYHU\SRWHQWLDOWREH
WKHPDMRUHQHUJ\VRXUFHLQ0DOD\VLD$VLWLVUHQHZDEOHLWLVFRQVLGHUHGWREHDYHU\LPSRUWDQWHQHUJ\
VRXUFH
,Q0DOD\VLDVXVWDLQDELOLW\RISDOPRLOSODQWDWLRQLVJRYHUQHGE\WKHHVWDEOLVKPHQWRI5RXQGDEOHRQ
6XVWDLQDEOH3DOP2LO 5632 5632GHILQHVVXVWDLQDEOHSDOPRLOSURGXFWLRQDVDOHJDOHFRQRPLFDOO\
YLDEOHHQYLURQPHQWDOO\DSSURSULDWHDQGVRFLDOO\EHQHILFLDOPDQDJHPHQWDQGRSHUDWLRQV$QRWKHU
LPSRUWDQWPHDVXUHPHQWIRUVXVWDLQDELOLW\RIRLOSDOPELRPDVVLVWKHFDUERQEDODQFHIRURLOSDOP
ELRPDVVXWLOL]DWLRQVXFKDVE\GLUHFWEXUQLQJWRJHQHUDWHHQHUJ\,IRLOSDOPELRPDVVLVEXUQHGDQG
UHSODFHGWKHXVHRIIRVVLOIXHODFHUWDLQDPRXQWRIFDUERQWKDWPD\UHOHDVHWRWKHHQYLURQPHQWVXFK
DVFRDODQGQDWXUDOJDVZLOOEHGLVSODFHG7KHUHGXFWLRQLQFDUERQHPLVVLRQLVYHU\LPSRUWDQWIRU
SUHYHQWLQJIXUWKHUJOREDOZDUPLQJ
0RUHRYHUWKHFRPEXVWLRQRISDOPRLOELRPDVVGRHVQRWFRQWULEXWHWRDPRXQWRIFDUERQLQWKH
DWPRVSKHUHDVLWFDQEHWDNHQXSE\SODQWVIRUWKHJURZWKRISODQWV)XUWKHUPRUHE\XWLOL]LQJSDOPRLO
ELRPDVVVRFLDOVXVWDLQDELOLW\FDQEHHQVXUHGE\FUHDWLQJQHZHPSOR\PHQWRSSRUWXQLWLHVLQUXUDO
DUHDVIRUDGHYHORSLQJFRXQWU\OLNH0DOD\VLD7KHODERUUHTXLUHPHQWIRUELRPDVVHQHUJ\LVUHODWLYH
KLJKHVSHFLDOO\LQWKHFXOWLYDWLRQRIHQHUJ\FURSV
)URPWKHHLJKWK0DOD\VLDQSODQUHQHZDEOHHQHUJ\ZDVDQQRXQFHGDVWKHILIWKIXHOLQWKHQHZ)LYH
)XHO6WUDWHJ\LQWKHHQHUJ\VXSSO\PL[5HQHZDEOHHQHUJ\LVWDUJHWHGWRFRQWULEXWHRIWKH
FRXQWU\VWRWDOHOHFWULFLW\GHPDQG:LWKWKLVREMHFWLYHHIIRUWVDUHXQGHUWDNHQWRHQFRXUDJHWKH
XWLOL]DWLRQRIUHQHZDEOHUHVRXUFHVVXFKDVELRPDVVELRJDVDQGHWF

0(7+2'2/2*<
5DZ0DWHULDOV6HOHFWLRQ
7RSURGXFHELRJDVIURPELRPDVVPDQ\PHWKRGVDQGPDWHULDOVFDQEHXVHG6LQFH0DOD\VLDLVRQH
RIWKHZRUOGVODUJHVWSDOPRLOSURGXFHUVDWUHPHQGRXVDPRXQWRIZDVWHZLOOEHSURGXFHGIURPSDOP
RLOSURGXFWLRQVLQZKLFKHPSW\IUXLWEXQFKHVLVRQHRIWKHP,QWKLVSURMHFWHPSW\IUXLWEXQFKHV ()%
LVFKRVHQDVWKHUDZPDWHULDOVIRUELRJDVSURGXFWLRQEHFDXVH()%LVQRQZRRGOLJQRFHOOXORVLF
PDWHULDODQGFDQEHXWLOL]HGDVUHQHZDEOHHQHUJ\()%LVREWDLQHGIURPSDOPRLOPLOODQGGULHGDWD
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

WHPSHUDWXUHRIR&,WLVWKHQJURXQGWRSDVVDPHVKVFUHHQZKLFKUHVXOWHGLQSDUWLFOHVL]HRI
OHVVWKDQPP7KHPDWHULDOVDUHWKHQVWRUHGLQDQDLUWLJKWFRQWDLQHUDWURRPWHPSHUDWXUH
EHIRUHXVH

3UHWUHDWPHQW3URFHVV
6LQFHWKHFHOOXORVHDQGOLJQLQFRQWHQWLQ()%DUHQRWHDVLO\GHJUDGDEOHGXULQJDQDHURELFFRQGLWLRQVD
SUHWUHDWPHQWSURFHVVLVUHTXLUHGWRRSHQXSWKHFRPSDFWVWUXFWXUHWRLPSURYHWKHELRGHJUDGDELOLW\
$PRQJDOOW\SHVRISUHWUHDWPHQWSURFHVVHVWKHFKHPLFDOSUHWUHDWPHQWZLWKDONDOLQHLVFKRVHQ7KLV
LVEHFDXVHDONDOLQHFDQHIIHFWLYHO\LPSURYHWKHELRORJLFDOFRQYHUVLRQRIOLJQRFHOOXORVH6RGLXP
+\GUR[LGHVROXWLRQ1D2+LVXVHGLQWKLVSUHWUHDWPHQWSURFHVV,QVRGLXPK\GUR[LGHSUHWUHDWPHQW
JRI()%DQGJRI1D2+VROXWLRQ ZY ZDVPL[HGIRUPLQXWHVLQURRPWHPSHUDWXUH7KH
PL[WXUHLVWKHLQFXEDWHGDWR&IRUGLIIHUHQWSHULRGRIWLPHDQGPL[HGLQHYHU\PLQXWHVLQWHUYDO
GXULQJWKHLQFXEDWLRQSHULRG$IWHUWKDWWKHPL[WXUHVDUHFHQWULIXJHGDWUSPDQGURRP
WHPSHUDWXUHIRUPLQXWHVDQGWKHQZDVKHGE\GLVWLOOHGZDWHUDQGIROORZHGE\YDFXXPILOWUDWLRQXQWLO
S+KDGEHHQUHDFKHG7KHVROLGVDIWHUWKHSUHWUHDWPHQWSURFHVVDUHNHSWDWDWHPSHUDWXUHRIR&
XQWLOXVH

$QDHURELF'LJHVWLRQ
$IWHUWKHSUHWUHDWPHQWSURFHVVWKHPDWHULDOVDUHUHDG\IRUXVHLQDQDHURELFGLJHVWLRQWRSURGXFH
ELRJDV7KHUHDUHIRXUNH\ELRORJLFDODQGFKHPLFDOVWDJHVRIDQDHURELFGLJHVWLRQZKLFKDUH
K\GURO\VLVDFLGRJHQHVLVDFHWRJHQHVLVDQGPHWKDQRJHQHVLV,QRUGHUIRUEDFWHULDLQDQDHURELF
GLJHVWHUVWRDFFHVVWKHHQHUJ\SRWHQWLDORIWKHPDWHULDOWKHFKDLQVRIWKHPDWHULDOVPXVWEHEURNHQ
LQWRVPDOOHUFRQVWLWXHQWSDUWV7KLVSURFHVVLVFDOOHGK\GURO\VLV7KHUHIRUHWKHK\GURO\VLVSURFHVVLV
QHFHVVDU\LQWKHILUVWVWHSRIDQDHURELFGLJHVWLRQ7KHWUHDWHG()%LVK\GURO\]HGLQDWZRVWDJH
K\GURO\VLVXVLQJGLOXWHVXOSKXULFDFLGRIDQGDWR&ZLWKDKROGLQJWLPHRIDQG
PLQXWHV7RFDUU\RXWK\GURO\VLVDF\OLQGULFDOYHVVHOVPDGHRIFRUURVLRQUHVLVWDQWDOOR\DUHXVHGDV
UHDFWLRQYHVVHOV7KHUHDFWRUVDUHKHDWHGLQDQRLOEDWKHTXLSSHGZLWKDWKHUPRVWDW7KHRLOEDWKLV
HTXLSSHGZLWKDVWLUUHUWRKRPRJHQL]HWKHWHPSHUDWXUHZLWKLQWKHWDQN3ULRUWRK\GURO\VLVJRI
WUHDWHG()%LVVRDNHGLQWKHWXEHUHDFWRUVLQP/RIDQGVXOIXULFDFLGVROXWLRQ7KHWXEH
UHDFWRUVDUHWKHQLPPHUVHGLQWRWKHRLOEDWKWDQNIRUDQGPLQXWHVDWYDULRXVWHPSHUDWXUHV$IWHU
FRPSOHWHGWKHK\GURO\VLVSURFHVVWKHUHDFWRUVZHUHFRROHGXQWLOURRPWHPSHUDWXUH$IWHUWKHILUVW
VWDJHRIK\GURO\VLVWKHOLTXLGLVGUDLQHGDQGWKHVROLGVUHPDLQLQWKHUHDFWRUVDUHXVHGIRUWKHVHFRQG
VWDJHK\GURO\VLV,QVHFRQGVWDJHK\GURO\VLVVXOSKXULFDFLGLVDGGHGDQGWKHVROLGVUHVLGXHVDUH
K\GURO\]HGDJDLQ7KHK\GURO\]DWHVIURPWKHILUVWDQGVHFRQGVWDJHVDUHFROOHFWHGDQGVWRUHDWR&
EHIRUHEHLQJXVHG$IWHUWKHK\GURO\VLVFRPSOH[RUJDQLFPROHFXOHVDUHEURNHQGRZQLQWRVLPSOH
VXJDUVDPLQRDFLGVDQGIDWW\DFLGV
7KHUHPDLQLQJFRPSRQHQWVDUHIXUWKHUEUHDNGRZQE\DFLGRJHQLFEDFWHULDZKLFKDUHDOVRNQRZQDV
IHUPHQWDWLYHEDFWHULD,QWKLVSURFHVVYRODWLOHIDWW\DFLGVDUHFUHDWHGDORQJZLWKDPPRQLDFDUERQ
GLR[LGHK\GURJHQVXOSKLGHDQGRWKHUE\SURGXFWV$IWHUDFLGRJHQHVLVSURFHVVLWLVIROORZHGE\
DFHWRJHQHVLVSURFHVVLQZKLFKWKHVLPSOHPROHFXOHVFUHDWHGE\DFLGRJHQLHVLVDUHIXUWKHUGLJHVWHGE\
DFHWRJHQVWRSURGXFHODUJHDPRXQWRIDFHWLFDFLGDVZHOODVK\GURJHQDQGFDUERQGLR[LGH,QWKH
ILQDOVWDJHZKLFKLVWKHPHWKDQRJHQHVLVSURFHVVWKHPHWKDQRJHQVXVHWKHLQWHUPHGLDWHSURGXFWVRI
WKHSUHFHGLQJVWDJHVDQGFRQYHUWWKHPLQWRPHWKDQHFDUERQGLR[LGHDQGZDWHU7KHVHFRPSRQHQWV
PDNHXSWKHPDMRULW\RIELRJDVHPLWWHGIURPWKHV\VWHP)XUWKHUPRUHWKHUHPDLQLQJLQGLJHVWLEOH

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

PDWHULDOWKDWWKHPLFUREHVFDQQRWXVHDQGDQ\GHDGEDFWHULDOUHPDLQDVGLJHVWDWH,QWKLVDQDHURELF
GLJHVWLRQFRQWLQXRXVVWLUUHGWDQNUHDFWRUVDUHXVHGDQGWKHPDWHULDOVDUHFRQVWDQWO\DGGHGLQWRWKH
UHDFWRUVDQGWKHHQGSURGXFWVDUHFRQVWDQWO\UHPRYHG

%LRJDV8WLOL]DWLRQ
7KHGLJHVWDWHIURPELRJDVSURGXFWLRQFDQEHXVHGDVQXWULHQWULFKIHUWLOL]HUVZKLOHELRJDVFDQEHXVHG
RQVPDOOVFDOHKRXVHKROGXVHVXFKDVFRRNLQJDQGZDWHUKHDWLQJ%LRJDVFDQDOVREHXVHGRQODUJH
LQGXVWULDOVFDOHZKHUHLVFDQHLWKHUEHEXUQWLQSRZHUJHQHUDWLRQGHYLFHVIRURQVLWHJHQHUDWLRQRU
XSJUDGHGWRQDWXUDOJDVVWDQGDUGVIRULQMHFWLRQLQWRWKHQDWXUDOJDVQHWZRUNDVELRPHWKDQH
)XUWKHUPRUHLWDOVRFDQEHXVHGGLUHFWO\DVJDVHRXVELRIXHOLQJDVHQJLQHEDVHGFDSWLYHIOHHWVVXFK
DVEXVHVDQGWD[LHV

5(68/76$1'',6&866,21
3URFHVV)ORZ'LDJUDP
7KHGLDJUDPEHORZVKRZVWKHRYHUDOOSURFHVVIORZGLDJUDPRIELRJDVSURGXFWLRQIURP()%7KH
SURFHVVLVGLYLGHGLQWRWZRSDUWVZKLFKDUHWKHELRJDVSURGXFWLRQDQGWKHELRJDVXSJUDGLQJRU
UHILQHU\V\VWHP

)LJXUH3URFHVV)ORZ'LDJUDPRI%LRJDV
3URGXFWLRQIURP()%
3DUW$
7KHGLDJUDPEHORZVKRZVSDUWRQHRIWKHRYHUDOOSURFHVVZKLFKLVWKHELRJDVSURGXFWLRQSDUW

)LJXUH3URFHVV)ORZ'LDJUDPRISDUWRQH
WKH%LRJDV3URGXFWLRQ
,QSDUWRQHZKLFKLVWKHELRJDVSURGXFWLRQSDUWUDZPDWHULDOLVVHOHFWHGWRSURGXFHELRJDV%LRJDV
FDQEHSURGXFHGE\GLIIHUHQWW\SHVRIPDWHULDOVVXFKDVFRZPDQXUHSDOPRLOPLOOHIIOXHQWSDGG\
VWUDZ()%DQGHWF,QWKLVFDVH()%LVXVHGDVUDZPDWHULDOVIRUWKHSURGXFWLRQRIELRJDV()%WKDW
LVXVHGIRUWKHSURFHVVLVREWDLQHGIURPDSDOPRLOPLOODQGVHQGWRWKHELRJDVSURGXFWLRQSODQW$IWHU
WKH()%LVVHQWWRWKHSODQWLWLVUHTXLUHGWRGU\LQWKHGU\HUDWDWHPSHUDWXUHRIR&7KLVVWHSLVWR
UHPRYHH[FHVVLYHZDWHUFRQWHQWIURPWKH()%()%LVWKHQSDVVHGWKURXJKDFUXVKHUDQGJURXQG
ZLWKDPHVKVFUHHQZKLFKUHVXOWVLQWKHSDUWLFOHWREHVL]HGDWOHVVWKDQPP7KLVLVWR
LQFUHDVHWKHVXUIDFHDUHDRIWKH()%IRUWKHIROORZLQJUHDFWLRQV7KHJURXQGHG()%LVWKHQVWRUHGLQ
DLUWLJKWFRQWDLQHUVDWURRPWHPSHUDWXUHEHIRUHXVHG
%HIRUH()%LVIHGLQWRWKHGLJHVWHUVDSUHWUHDWPHQWSURFHVVLVUHTXLUHGWRRSHQXSWKHFRPSDFW
VWUXFWXUHRI()%7KLVKHOSVWRSUHSDUHDVXLWDEOHFRQGLWLRQLQWKHDQDHURELFGLJHVWLRQWDQNVWRFDUU\
RXWWKHGLJHVWLRQSURFHVVDQGLPSURYHWKH\LHOGRIELRJDV+HQFHWKHSUHWUHDWPHQWZLWKVRGLXP
K\GUR[LGH 1D2+ LVFDUULHGRXWDQGVWRUHGLQDYHVVHODWDWHPSHUDWXUHRIR&XQWLOXVH

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

:KHQWKHGLJHVWLRQSURFHVVLVFDUULHGRXWDSXPSLVLQVWDOOHGEHIRUHWKHGLVWULEXWLRQWDQNDQGSXPSV
WKHSUHWUHDWHG()%LQWRWKHGLVWULEXWLRQWDQN()%IHHGLVWKHQGLVWULEXWHGLQWRWKHSULPDU\GLJHVWHUV
E\WKHGLVWULEXWLRQWDQN7KHSULPDU\GLJHVWHUVDUHZRUNLQJVLPXOWDQHRXVO\,QWKHSULPDU\GLJHVWHUV
()%LVGLJHVWHGE\EDFWHULDELRJDVLVSURGXFHG7KHUDZELRJDVSURGXFHVKHUHFRQWDLQDPL[WXUHRI
PHWKDQHFDUERQGLR[LGHK\GURJHQVXOSKLGHDQGZDWHU)XUWKHUPRUHWKHVPDOODPRXQWRI
XQGLJHVWHG()%UHPDLQVLQWKHSULPDU\GLJHVWHULVWKHQVHQWWRVHFRQGDU\GLJHVWHUVIRUIXUWKHU
GLJHVWLRQDQGSURGXFHH[WUDUDZELRJDV7KHELRJDVSURGXFHVE\SULPDU\DQGVHFRQGDU\GLJHVWHUV
DUHVHQWWRDELRJDVKROGLQJWDQNIRUWKHELRJDVXSJUDGLQJSURFHVV
0RUHRYHUWKHGLJHVWDWHWKDWUHPDLQVLQVHFRQGDU\GLJHVWHUVLVVHQWWRFHQWULIXJHWRUHPRYHZDWHU
WKDWFRQWDLQVLQLW7KHZDWHUWKDWVHSDUDWHVRXWIURPGLJHVWDWHLVUHF\FOHGIRUIXWXUHXVH$IWHUWKDW
WKHGLJHVWDWHLVVHQWWRGU\HUIRUIXUWKHUGU\LQJSURFHVVWRUHPRYHWKHUHPDLQLQJVPDOODPRXQWRI
ZDWHU7KHGULHGGLJHVWDWHLVWKHQXVHGDVIHUWLOL]HULQWKHPLOORUVHOOLQJWRRWKHUIDUPV
3DUW%
7KHGLDJUDPEHORZVKRZVWKHSDUWWZRRIWKHRYHUDOOSURFHVVZKLFKLVWKHELRJDVXSJUDGLQJSURFHVV

)LJXUH3URFHVV)ORZ'LDJUDPRISDUWWZR
WKH%LRJDV8SJUDGLQJ6\VWHP
,QSDUWWZRZKLFKLVWKHELRJDVUHILQHU\SURFHVVDZDWHUVFUXEELQJWHFKQRORJ\LVXVHGWRUHILQHWKH
UDZELRJDVLQWRSXUHPHWKDQH7KHUDZELRJDVWKDWVWRUHVLQELRJDVKROGLQJWDQNLQSDUWRQHLVGLUHFW
WRWKHZDWHUVFUXEELQJV\VWHPE\DERRVWHUIDQ7KLVERRVWHUIDQDFWVDVDJXLGHIRUWKHELRJDVLQ
KROGLQJWDQNWRIORZLQWRWKHZDWHUVFUXEELQJV\VWHP$FRPSUHVVRULVLQVWDOOHGEHIRUHWKHZDWHU
VFUXEEHUDEVRUSWLRQFROXPQWRSUHVVXUL]HWKHHQWHULQJJDVWREDU$IWHUWKHJDVLVEHLQJ
SUHVVXUL]HGLWLVIHGLQWRWKHERWWRPRIWKHDEVRUSWLRQFROXPQ,QDEVRUSWLRQFROXPQFDUERQGLR[LGH
DQGK\GURJHQVXOSKLGHDUHDEVRUEHGLQZDWHU:DWHULVIHGLQWRWKHDEVRUSWLRQFROXPQIURPWKHWRS
SDUWRIWKHFROXPQDQGWKHZDWHUVFUXEELQJSURFHVVLVRSHUDWLQJFRXQWHUFXUUHQWO\
7KHQWKHH[LWLQJJDVIURPWKHDEVRUSWLRQFROXPQZKLFKFRQWDLQVKLJKSHUFHQWDJHRIPHWKDQHDQGD
VPDOODPRXQWRIZDWHULVIHGWRDVHSDUDWRUWRVHSDUDWHZDWHUIURPWKHJDV7KHZDWHUWKDWLV
VHSDUDWHGIURPWKHVHSDUDWRULVUHF\FOHGEDFNWRWKHDEVRUSWLRQFROXPQ7KHSXULILHGPHWKDQH
REWDLQHGKHUHLVLQKLJKWHPSHUDWXUHKHQFHDFRROHULVLQVWDOOHGDIWHUWKHVHSDUDWRUWRFRROWKHJDV
GRZQWRDORZHUWHPSHUDWXUH$IWHUWKHJDVLVFRROHGGRZQLWLVVHQWWRPHWKDQHVWRUDJHWDQNIRU
VHOOLQJRUEXUQLQJDVHQJLQHWRSURGXFHHOHFWULFLW\
7KHOLTXLGPL[WXUHH[LWVIURPWKHERWWRPSDUWRIDEVRUSWLRQFROXPQFRQWDLQFDUERQGLR[LGHK\GURJHQ
VXOSKLGHDQGZDWHU%HIRUHVHQGLQJWKHOLTXLGWRGHVRUSWLRQFROXPQLWLVUHTXLUHGWRSDVVWKURXJKWKH
IODVKWDQNWRGHSUHVVXUL]HLWDQGVHSDUDWHWKHUHPDLQLQJVPDOODPRXQWRIELRJDVDQGUHF\FOHEDFNWR
WKHUDZELRJDVVWUHDP,QGHVRUSWLRQFROXPQFDUERQGLR[LGHLVUHPRYHGIURPWKHOLTXLGPL[WXUHDQG
VHQGWRFDUERQGLR[LGHVWRUDJHWDQNIRUVHOOLQJEXWQRWUHOHDVHWRWKHDWPRVSKHUHDQGFDXVHV
SROOXWLRQ7KHOLTXLGPL[WXUHWKDWFRQWDLQVK\GURJHQVXOSKLGHDQGZDWHULVVHQWWRDQRWKHUVHSDUDWRUWR
VHSDUDWHK\GURJHQVXOSKLGHIURPWKHPL[WXUH7KHUHPRYHGK\GURJHQVXOSKLGHLVWKHQVHQWWRD
VWRUDJHWDQN7KHUHPDLQLQJZDWHULVUHF\FOHGEDFNWRWKHDEVRUSWLRQFROXPQZKLFKHQWHULQJIURPWKH
WRSSDUWRIFROXPQ
7DEOH&RPSDULVRQRI9DULRXV%LRJDV8SJUDGLQJ7HFKQRORJLHV 

:DWHU6FUXEELQJ
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

$PLQH6FUXEELQJ
36$
0HPEUDQH
(QHUJ\&RQVXPSWLRQ N:KPELRJDV



1$

&+UHFRYHU\





+6FRUHPRYDO
<HV
&RQWDPLQDQW
3RVVLEOH
3RVVLEOH

/LTXLG+2FRUHPRYDO
<HV
&RQWDPLQDQW
&RQWDPLQDQW
1R

9DSRXU+2FRUHPRYDO
1R
<HV
<HV
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

1R

1DQG2FRUHPRYDO
1R
1R
3RVVLEOH
3DUWLDO

&RVW
/RZ
0HGLXP
0HGLXP
+LJK

6LPSOLFLW\
6LPSOH
6LPSOH
0HGLXP
&RPSOLFDWHG

%LRJDV3URGXFWLRQ3URFHVV6LPXODWLRQ
7KHGLDJUDPEHORZVKRZVWKHELRJDVSURGXFWLRQSURFHVVVLPXODWLRQSHUIRUPHGE\$VSHQWHFK+<6<6
YHUVLRQ 

)LJXUH+\V\VVLPXODWLRQIRUSURGXFWLRQRI
ELRJDV
)LJXUH0DWHULDO6WUHDPVFRQGLWLRQVIRUWKH
RYHUDOOSURFHVV
7KHGLDJUDPDERYHVKRZVWKHFRQGLWLRQVIRUHYHU\PDWHULDOVWUHDPRIWKHSURFHVV,WLQGLFDWHVWKH
WHPSHUDWXUHVDWHDFKVWUHDPLQDXQLWRI)DKUHQKHLWSUHVVXUHLQWKHXQLWRISVLDYDSRXUIUDFWLRQ
PRODUIORZLQDXQLWRIOEPROHKUPDVVIORZLQOEKUOLTXLGYROXPHIORZLQEDUUHOGD\DQGKHDWIORZLQ
EWXKU

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

)LJXUH&RPSRVLWLRQRIDOOFRPSRQHQWVLQ
HYHU\VWUHDP
)URPWKHGLDJUDPDERYHLWVKRZVWKDWWKHFRPSRVLWLRQRIFRPSRQHQWVLQUDZELRJDVFRQWULEXWHVWR
PHWKDQHK\GURJHQVXOSKLGHDQGFDUERQGLR[LGH$IWHUWKHSXULILFDWLRQSURFHVVWKH
FRPSRVLWLRQRISXULILHGPHWKDQHFRQVLVWVRIRIPHWKDQHDQGRIZDWHU

)LJXUH&RQGLWLRQVLQ$EVRUSWLRQ&ROXPQ
,QDEVRUSWLRQFROXPQWKHLQOHWELRJDVKDVDWHPSHUDWXUHRI)DQGDSUHVVXUHRISVLD7KH
PDVVIORZUDWHRILQOHWELRJDVLVOEKUZKHUHE\WKHPDVVIORZUDWHRIELRJDVH[LWLQJWKHFROXPQLV
OEKU7HPSHUDWXUHIRUWKHH[LWLQJJDVLV)7KHUHF\FOHGZDWHUHQWHULQJWKHFROXPQKDVD
WHPSHUDWXUHRI)DQGDPDVVIORZUDWHRIOEKU

)LJXUH&RQGLWLRQVLQ6HSDUDWRU
,QVHSDUDWRUWKHUHLVQRWHPSHUDWXUHDQGSUHVVXUHFKDQJHLQWKHLQOHWJDVDQGRXWOHWJDVZKLFKLV
WKHSXULILHGPHWKDQH$WHPSHUDWXUHRI)LVFRQVLGHUHGDVDKLJKWHPSHUDWXUHDQGWKLVKLJK
WHPSHUDWXUHLVQRWVXLWDEOHIRUWKHVWRUDJHRIPHWKDQH+HQFHDFRROHULVLQVWDOOHGWRORZHUGRZQWKH
WHPSHUDWXUH

)LJXUH&RQGLWLRQVLQ3XULILHG0HWKDQH
7KHSXULILHGPHWKDQHKDVDWHPSHUDWXUHRI)DIWHUWKHFRROLQJSURFHVV7KHWHPSHUDWXUHQRZLV
PRUHVXLWDEOHIRUVWRUDJHRIPHWKDQHZKHQFRPSDUHWRWKHSUHYLRXVKLJKHUWHPSHUDWXUH,WKDVD
SUHVVXUHRISVLDDQGDPDVVIORZUDWHRIOEKU

)LJXUH&RQGLWLRQVLQ)ODVK7DQN
,QIODVKWDQNWKHOLTXLGWKDWLVH[LWLQJIURPDEVRUSWLRQFROXPQLVGHSUHVVXUL]HGIURPSVLDWR
SVLD7KHUHF\FOHGELRJDVKDVDPDVVIORZUDWHRIOEKUZKHUHE\WKHOLTXLGOHDYLQJWKHIODVKWDQN
DQGHQWHULQJWKHGHVRUSWLRQFROXPQKDVDPDVVIORZUDWHRIOEKU

)LJXUH&RQGLWLRQVLQ'HVRUSWLRQ&ROXPQ
,QGHVRUSWLRQFROXPQFDUERQGLR[LGHLVUHPRYHGIURPWKHPL[WXUH7KHFDUERQGLR[LGHUHPRYHVKHUH
KDVDWHPSHUDWXUHRI)DQGDSUHVVXUHRISVLD%HVLGHVWKDWLWDOVRKDVDPDVVIORZUDWH
RIOEKU7KHOLTXLGPL[WXUHOHDYLQJGHVRUSWLRQFROXPQKDVDPDVVIORZUDWHRIOEKU

)LJXUH&RQGLWLRQVLQ6HSDUDWRU
,QVHSDUDWRUWKHDPRXQWRIK\GURJHQVXOSKLGHUHPRYHGIURPWKHPL[WXUHLVOEKU2QWKH
RWKHUKDQGWKHZDWHUIURPWKHPL[WXUHLVUHF\FOHGEDFNWRWKHDEVRUSWLRQFROXPQDWDUDWHRI
OEKU

(FRQRPLF$QDO\VLV
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

7KHJUDSKEHORZVKRZVWKHJUDSKRIELRJDVSURGXFWLRQFRVWYHUVXVSODQWUXQQLQJFDSDFLW\

*UDSK%LRJDV3URGXFWLRQ&RVW9ROXPH
3URILW*UDSK
)URPWKHJUDSKDERYHWKHEUHDNHYHQSRLQWRIWKHSURMHFWFDQEHGHWHUPLQHGE\ORFDWLQJWKH
LQWHUVHFWLRQSRLQWRIWRWDOUHYHQXHDQGWRWDOFRVW%UHDNHYHQSRLQWRFFXUVZKHQWKHWRWDOFRVWLVHTXDO
WRWKHWRWDOUHYHQXH7KHEOXHOLQHVKRZVWKHWRWDOIL[HGFRVWRIWKHSURMHFW7RWDOIL[HGFRVWUHPDLQV
XQFKDQJHGDVWKHSODQWUXQQLQJFDSDFLW\LQFUHDVHVZKLFKLV867KHSXUSOHOLQHVKRZVWKH
WRWDOUHYHQXHRIWKHSURMHFWZKLOHWKHJUHHQOLQHVKRZVWKHWRWDOYDULDEOHFRVW7KHJUHDWPDUJLQ
EHWZHHQWRWDOVDOHVUHYHQXHDQGWRWDOFRVWLVFDXVHGE\WKHORZYDULDEOHFRVW$VVHHQLQWKHJUDSK
WRWDOYDULDEOHFRVWDQGWKHWRWDOIL[HGFRVWDUHORZDQGFDXVHWKHWRWDOFRVWWREHORZDVZHOO7KHORZ
YDULDEOHFRVWLVGXHWRWKHORZPDWHULDOFRVWRU]HURPDWHULDOFRVW7KLVLVEHFDXVHWKHUDZPDWHULDO
XVHGLQWKHSURGXFWLRQRIELRJDVZKLFKLVWKH()%LVREWDLQHGIURPSDOPRLOPLOODVDZDVWH7KH
EUHDNHYHQSRLQWRFFXUVDWDSODQWUXQQLQJFDSDFLW\RIDQGDFRVWRI86






6XPPDU\RI%LRJDV3URGXFWLRQIURP()%
(FRQRPLFV$QDO\VLV5HYLHZ





KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\


3ODQWFDSDFLW\
.7$






%LRJDVSURGXFWLRQFDSDFLW\
.7$





KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\



)L[HGLQYHVWPHQWFRVW
86PLOOLRQ






9DULDEOHFRVW
8607




KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\



)L[HGFRVW
8607






%LRJDVSURGXFWLRQFRVW
8607




KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\



$YHUDJH%LRJDVVHOOLQJSULFH )2%
8607






&RQWULEXWLRQPDUJLQUDWLR





KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\




*URVVSURILW
8607






6DOHVSURILW




KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\





5HWXUQRQLQYHVWPHQW 52,








5HWXUQSHULRG
\HDUV

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\






%UHDNHYHQSRLQW



D 6DOHVYDOXH
86PLOOLRQ
E 3URGXFWLRQRXWSXW




KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\




7DEOH6XPPDU\RI(FRQRPLF$QDO\VLVIRU
%LRJDV3URGXFWLRQ
7KHWDEOHDERYHVKRZVWKHVXPPDU\RIHFRQRPLFDQDO\VLVRIELRJDVSURGXFWLRQIURPHPSW\IUXLW
EXQFKHV7KHGHWDLOVFDQEHIRXQGLQDSSHQGL[$()URPDSSHQGL[$LWLVFDOFXODWHGWKDWWKHWRWDO
SURMHFWFRVWLV867KHWRWDOSURMHFWFRVWFRQVLVWVRIDILQDQFLDOFKDUJHWRWDORWKHUFRVW
DQGWRWDOHTXLSPHQWFRVWZKLFKLVFDOFXODWHGEDVHGRQWKHHTXLSPHQWGHVLJQ7RWDOHTXLSPHQWFRVW
FRQWULEXWHVWRDQDPRXQWRI86ZKLOHILQDQFLDOFKDUJHDQGRWKHUFRVWFRQWULEXWHWR86
DQG86UHVSHFWLYHO\$OOFRVWVDUHFDOFXODWHGE\XVLQJ0LFURVRIW([FHO
)URPDSSHQGL[%WRWDOYDULDEOHFRVWLVFDOFXODWHGWREH8607RIELRJDVSURGXFHG7KHWRWDO
IL[HGFRVWLVDERXW8607DQGFDQEHIXUWKHUEUHDNGRZQLQWRWRWDOPDQXIDFWXULQJH[SHQVHVDQG
WRWDORWKHUH[SHQVHV0RUHRYHUWKHFRVWRIELRJDVSURGXFWLRQLVREWDLQHGE\WKHVXPPDWLRQRIWRWDO
YDULDEOHFRVWDQGWRWDOIL[HGFRVWZKLFKLV86077KHODQGUHTXLUHGIRUEXLOGLQJDSURGXFWLRQ
SODQWLVDSSUR[LPDWHO\DFUHVZKLFKFRVWDURXQG867KHFDOFXODWLRQRIODQGFRVWLV
DWWDFKHGLQDSSHQGL[&
)URPDSSHQGL['WKHEUHDNHYHQSRLQWLVFDOFXODWHGEDVHGRQDSURGXFWLRQYROXPHRIWRQQHV
SHU\HDU7KHELRJDVPDUNHWVHOOLQJSULFHLV86.7DQGWKLVJDLQDWRWDOVDOHVUHYHQXHRI86
:LWKWKHFDOFXODWHGEUHDNHYHQSRLQWUHWXUQRQLQYHVWPHQWDQGWKHUHWXUQSHULRGFDQEH
REWDLQHG7KHSURMHFWKDVDUHWXUQRQLQYHVWPHQWRIDQGDUHWXUQSHULRGRI\HDUV6LQFH
WKHUHWXUQSHULRGLVEHORZ\HDUVLWLVFRQVLGHUHGDVDZRUNDEOHLQYHVWPHQW7KHGHWDLOFDOFXODWLRQ
FDQEHIRXQGLQDSSHQGL[(

(TXLSPHQW&RVW
(TXLSPHQWVDUHGHVLJQHGEDVHGRIWKHFRGHVDQGVWDQGDUGVDVIROORZ
+HDW([FKDQJHU7(0$$60($16,
6WRUDJH7DQN$3,$3,$:6
3UHVVXUH9HVVHO6HSDUDWRU'LVWLOODWLRQ&ROXPQ$60(6HFWLRQ9,,,'LY

7DQN
%LRJDV
0HWKDQH
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

+\GURJHQ6XOSKLGH
&DUERQ'LR[LGH
)ORZUDWH PKU





3UHVVXUH NSD





7DQNYROXPH P





7DQNKHLJKW P





7DQNGLDPHWHU P





KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

1XPEHURIFRXUVHV





6WRULQJWLPH KUV





1XPEHURIWDQNLQVWDOOHG





6KHOOWKLFNQHVV P





+HDGWKLFNQHVV P





1XPEHURISODWHV


KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\




:HLJKW OE





0DWHULDOFRVW 86'





%DUH0RGXOH&RVW 86'





7\SH
$EVRUSWLRQFROXPQ
6HSDUDWRU
6HSDUDWRU
)ODVKWDQN
'HVRUSWLRQFROXPQ
'HVLJQ3UHVVXUH N3D

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\






2SHUDWLQJ3UHVVXUH N3D






2SHUDWLQJ7HPSHUDWXUH R&






0DWHULDO
6$*UDGH&DUERQ6WHHO
6$*UDGH&DUERQ6WHHO
6$*UDGH&DUERQ6WHHO
6$*UDGH&DUERQ6WHHO
6$*UDGH&DUERQ6WHHO

&RUURVLRQ$OORZDQFH PP






'LDPHWHU P
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\







+HLJKW P /HQJWK P






5HTXLUHG6KHOO7KLFNQHVV PP






6SHFLILF6KHOO7KLFNQHVV PP






+HDG7KLFNQHVV PP






KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

-RLQW(IILFLHQF\






%DUHPRGXOHFRVWLQ 86'






0L[HU


)ORZUDWH PKU



9ROXPH P



)OXLGGHQVLW\ NJP



)ORZ *30

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\



3RZHU +3



6SHFLILFJUDYLW\



IRESXUFKDVH 


7KHWDEOHVDERYHVKRZWKHFRVWVUHTXLUHGWRSXUFKDVHHTXLSPHQWV7KHGHWDLOFDOFXODWLRQRI
HTXLSPHQWFRVWVLVDWWDFKHGLQDSSHQGL[)

&21&/86,21$1'5(&200(1'$7,216
&RQFOXVLRQ
,QFRQFOXVLRQWKHELRJDVSURGXFWLRQSURFHVVSURYLGHVDQHFRQRPLFDOO\DWWUDFWLYHURXWHWRFRQYHUWORZ
FRVWPDWHULDOVRUZDVWHVVXFKDV()%WRDKLJKYDOXHELRJDV%LRJDVFDQDFWDVDVXEVWLWXWHWRQRQ
UHQHZDEOHIRVVLOIXHOV%LRJDVFDQHLWKHUEHELRIXHOIRUWUDQVSRUWDWLRQFRRNLQJZDWHUKHDWLQJVSDFH
KHDWLQJFRQYHUWVWRHOHFWULFLW\DQGHWFVLQFHWKHHQHUJ\GHPDQGLVJHWWLQJKLJKHUDQGKLJKHUELRJDV
FDQEXUQLQJDVHQJLQHWRSURGXFHHOHFWULFLW\HLWKHUIRUVHOIXVDJHRUVHOOLW2QWKHRWKHUKDQGZKHQLW
LVXVHGRQYHKLFOHVLWSURGXFHVOHVVSROOXWLRQRUQRSROOXWLRQ7KLVLVEHFDXVHZKHQELRJDVLVEXUQHG
LWRQO\UHOHDVHVFDUERQGLR[LGHZLWKFDQWKHQXSWDNHE\WKHJURZWKRISODQWV
:LWKHFRQRPLFDQDO\VLVDSSOLHGWKHEUHDNHYHQSRLQWLVSUHGLFWHGWRKDSSHQDWDSODQWUXQQLQJ
FDSDFLW\RIDQGDFRVWRI862YHUDOOWKLVELRJDVSURGXFWLRQSURMHFWLVREVHUYHGWR
KDYHD52,RIDQGDUHWXUQSHULRGRI\HDUV$VWKHUHWXUQSHULRGLVEHORZ\HDUVLWLV
FRQVLGHUHGWREHDIHDVLEOHLQYHVWPHQW

5HFRPPHQGDWLRQ
7REXLOGDELRJDVSURGXFWLRQSODQWWKHORFDWLRQRISURGXFWLRQSODQWZRXOGEHDQLPSRUWDQWLVVXHWREH
WDNLQJLQWRFRQVLGHUDWLRQ7RVHOHFWDVXLWDEOHVLWHORFDWLRQWKHIDFWRUVOLVWHGEHORZPXVWEHWDNHQLQWR
DFFRXQW

)HHGVWRFNVKRXOGEHHDVLO\DYDLODEOHDWWKHVLWH
ORFDWLRQ
KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

'XHWRWKHORZHQHUJ\FRQWHQWSHUYROXPHDQGLWVODUJHTXDQWLWLHVLWLVDGYLVDEOHWKDWQRWWRWUDQVSRUW
WKHOLTXLGIHHGVWRFNIXUWKHUWKDQNP %L*!(DVW DQGVWDFNDEOHHQHUJ\FURSVQRWPRUHWKDQ
NP7KHGLJHVWDWHZKLFKLVXVHGDVIHUWLOL]HUVKRXOGDOVRQRWEHWUDQVSRUWHGIXUWKHUWKDQNPGXHWR
WKHLQFUHDVLQJWUDQVSRUWDWLRQFRVWV

'HFLGHDVXLWDEOHQHLJKERUKRRGZLWKLQWKH
VHOHFWHGUHJLRQ
$VXLWDEOHQHLJKERUKRRGLVGHILQHGDVWKHRSSRUWXQLWLHVWRVHOOELRJDVDQGIHHGHOHFWULFLW\LQWRWKH
JULGV7KLVLVEHFDXVHWUDQVSRUWDWLRQFRVWVKRXOGEHDVORZDVSRVVLEOH

'HWHFWWKHVXLWDEOHVLWHVZLWKLQWKHVHOHFWHG
QHLJKERUKRRG
$VXLWDEOHVLWHLVGHILQHGDVDSLHFHRIODQGZKHUHDOOGHYLFHVRUHTXLSPHQWVRIDELRJDVSODQWFDQEH
LQVWDOOHGXQGHUWKHIDYRUDEOHWHFKQLFDODQGOHJDOIUDPHZRUNFRQGLWLRQVVXFKDVVXIILFLHQWVSDFHRU
JRRGURDGDFFHVV7KHODVWIDFWRULVWKHIXOILOOLQJVRIWUHTXLUHPHQWVIRUWKHVHOHFWHGVLWHVZKLFK
PHDQVWKHPRELOL]DWLRQRILQVWLWXWLRQDOVXSSRUWEHWZHHQSROLF\DQGDGPLQLVWUDWLRQDQGWRZLQSXEOLF
VXSSRUWIRUWKHSURMHFW
6LQFH0DOD\VLDLVWKHZRUOGVVHFRQGODUJHVWSDOPRLOSURGXFHUDSDOPRLOSODQWDWLRQDUHDFDQEH
HDVLO\IRXQGHLWKHUDWWKHHDVW0DOD\VLDRUSHQLQVXODU0DOD\VLD7KHELRJDVSURGXFWLRQSODQWLV
VXJJHVWHGWREXLOGQHDUE\WKHSDOPRLOSODQWDWLRQDUHDRUULJKWEHVLGHWKHSODQWDWLRQDUHD7KLVFDQ
UHGXFHWKHWUDQVSRUWDWLRQFRVWRI320(IURPSDOPRLOSURGXFWLRQDUHDWRELRJDVSURGXFWLRQDUHD

3/$&(<28525'(572'$<
*HWDTXRWH SULFHVSKS

3ODFHDQRUGHU RUGHU

&KDQJH/DQJXDJH MVGLVFODLPHUER[HVODQJSKS

3RSXODU6HUYLFHV

)UHH5HVRXUFHV

(VVD\:ULWLQJ6HUYLFH

6WXGHQW*UDQWV,QIRUPDWLRQ

 VWXGHQW

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS





2LO3DOP(PSW\)UXLW%XQFKHV,Q0DOD\VLD(QYLURQPHQWDO6FLHQFHV(VVD\

VHUYLFHVHVVD\VSKS
'LVVHUWDWLRQ:ULWLQJ6HUYLFH
VHUYLFHVGLVVHUWDWLRQVSKS
0DUNLQJ6HUYLFH  VHUYLFHVPDUNLQJSKS
3HUVRQDOVWDWHPHQWVHUYLFH
VHUYLFHVVWDWHPHQW

JUDQWVDQGORDQVSKS
5HIHUHQFLQJVW\OHV  UHIHUHQFLQJVW\OHVSKS
8QLYHUVLW\7HUPLQRORJ\  XQLYHUVLW\
WHUPLQRORJ\SKS
)UHH(VVD\([DPSOHV  HVVD\VDPSOHV

7HUPV &RQGLWLRQV WHUPVSKS

)DLU8VH3ROLF\ IXSSKS

&RPSODLQWV3ROLF\ FRPSODLQWVSKS

6LWHPDS [POVLWHPDSSKS

 KWWSVZZZIDFHERRNFRPSDJHV8QL$VVLJQPHQW&HQWUH 

KWWSVWZLWWHUFRPXQLDVVLJQPHQWF\ 

 KWWSVSOXVJRRJOHFRP

&RS\ULJKW8QL$VVLJQPHQWFRP

KWWSZZZXQLDVVLJQPHQWFRPHVVD\VDPSOHVHQYLURQPHQWDOVFLHQFHVRLOSDOPHPSW\IUXLWEXQFKHVLQPDOD\VLDHQYLURQPHQWDOVFLHQFHVHVVD\SKS



You might also like