DCT: Poland's Maritime Window on the World November 27th, 2013 Adam Żołnowski Chief Financial Officer
Company Profile Ownership Structure DCT Gdansk is an infrastructure asset majority owned and managed by Macquarie Group Macquarie Global Infrastructure Fund II MTAA Superannuation fund 9% 9% Statewide Superannuation Trust Westscheme Fund 18% 64% 1
Asset Overview Description DCT is a deep-water container terminal offering all year round ice-free access DCT is located at the centre of three major market growth areas Polish demand and regional transit flows (import / export) and transshipment for the Baltic Capex investments since port opening Key equipment purchases (2 STSs, 7 RTGs, Navis TOS) Rail upgrade (2 rail tracks + 2 new from September 2013) Yard upgrade (Rebuilding RoRo ramp into stacking area and gravel bed) Mooring dolphin Key statistics Feature Comments Invested to date 188m Terminal area Berth 44 hectares 1 berth 650m extended further by mooring dolphin Depth: 13.5m and 16.5m Key equipment 5 STS cranes with capacity for 7 16 RTG cranes Storage Space Theoretical capacity p.a. Reefer plugs 336 Warehouse size 6,553 ground slots 1.25m TEU CFS warehouse (7,200m²) with truck ramps Equity investments and commitments 135m invested to date 22m undrawn commitments 2
Evolution of Containership Size The principle of economies of scale is fundamental to the economics of maritime transportation Source: DP World
Closest Location to Final Destination DCT as the Most Eastern Deepwater North Continent Port The Gdansk Le Havre Range and the Ultra-Large Container Vessels Goteborg Aarhus Wilhelmshaven Bremenhaven DCT Gdansk Zeebrugge Rotterdam Hamburg Antwerp Le Havre Ports with depth 15,5m or more 4
The Baltic Revolution Past and present transportation patterns Traditional X/M model The DCT Gdansk alternative MOSCOW MOSCOW POZNAN WROCLAW KIEV KIEV Until the late-2000s, most Polish consumer goods imports were shipped to northern German, Dutch and Belgian ports, then transhipped to Gdynia or transported overland. The opening of DCT Gdansk in 2007 for the first time enabled deep sea calls direct to the Baltic sea, from whence goods could be transported onwards by transhipment, rail or road 5
DCT Catchment Area Transit (XM) by truck or rail Transshipment (TS) by feeder Poland with very limited transit to Eastern part of Czech Republic (Ostrava/Moravia Region), Slovakia, Western/Central Ukraine, Belarus, Russia (Kaliningrad) Russia (Kaliningrad and Saint Petersburg), Baltic Republics, Finland, Germany 6
per 40' container The Advantages to a Shipping Line of Using DCT Gdansk Comparative costs of shipping containers directly to DCT Gdansk OCT 2012 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 -----------to Warsaw------------ -----------to Wroclaw------------ --------------to Łodz--------------- Cheapest inland delivery Stevedoring / port duties Deepsea cost Source: OSC 7
The Competitive Container Port Landscape in the Baltic Sea Significant growth of container demand in the Baltic region (CAGR 2011-20 +8.5%) (1) Poland and Russia are and are forecast to remain the largest markets in the region (56.5% of total market in 2011, 58.1% in 2020) Large growth of Baltic ports capacity from 10.1m TEUs in 2011 to 18.1m TEUs in 2020 (CAGR 2011-20 +6.6%) Limited growth of Finnish and Estonian ports in terms of capacity, as apposed to a strong growth of Polish, Lithuanian and Russian (2) ports Source : Ocean Shipping Consultants (1) Excluding Finland as 2020 data not available (2) Baltic Russia ports only Please note that for the purpose of clarity, this graph does not show ports which capacity is less than 0.2m TEUs in 2011 Norway Denmark Germany Sweden +4.8% Czech Rep. Gdynia +2.3% +13.8% Gdansk* +9.4% Poland Finland** Helsinki Kotka - +0.0% Hamina Muuga Container T. +8.4% +9.8% Riga +4.7% +7.9% +0.0% Klaipeda +4.6% Lithuania Kaliningrad Estonia +8.2% Latvia +0.0% +23.1% +8.1% Belarus Ust Luga +4.1% +9.8% Ukraine St Petersburg +9.6% Russia 1 cm = 1m TEUs 1 cm = 1m TEUs Based on Base Case LEGEND Port Capacity CAGR 2011-2020 2011 2020 Port Container Demand CAGR 2011-2020 2011 2020 Country * Includes DCT Gdansk and Gdansk Container T. A conservative approach has been taken to the DCT Gdansk potential capacity development. **Forecast for 2020 not available. 8
P3: The Alliance of Three World s Biggest Shipping Lines The move towards larger vessels on key routes will be accelerated by the formation of P3 42% 34% 24% 9
Expansion plans DCT Gdansk has the ambition to become a 7m+ TEUs terminal by 2025-2030 Management has therefore developed an expansion plan to adequately support this growth scenario 2011: Terminal 1 Existing Capacity 1,000 kteus 2012-2014: Terminal 1 Stretch Capacity Expansion + 500 kteus 2013-2022: T2 Expansion + 1,750 kteus 2020+: Option North Expansion 750 kteus 2020+: Option East Expansion 1,500 kteus Additional expansion plans / Investment opportunities: West Pomeranian Logistics Centre (PLC) adjacent to Terminal 1 Overview Total additional capacity could amount to M 5,5 TEUs Pomeranian Logistic Center Adjacent to DCT Gdansk Ground-lease 30 years Total development area: approx 500,000 m 2 Possibility to create: A special economic trading zone A duty free industrial zone Pomeranian Logistic Center Rail Terminal T1 Stretch Capacity Option East 2020+ T2 2013-2022 Option North 2020+ ROZWÓJ NABRZEŻA 2015+
T2 - Driver for Further Capacity Development Terminal 1 Existing infrastructure (cap. 1 000 k TEU) Yard expansion 2012-2014 (+500k TEU) Terminal T2 2016+ New yard and equipment Terminal T2 1750 k TEU 2022
Importance of Polish Container Ports for the Polish Economy 1. Poland is developing its export market and needs a strong container port sector to access directly its export market without depending on NEPs 2. Poland strong dependence on Far East imports stresses importance of direct connection to main markets (China, Korea, Japan) Lower cost of imports via Polish ports should benefit Polish consumers GDP driven by consumption should benefit Polish state income by having imports entering Poland via Polish ports (collection of duties & VAT in Poland) 3. Development of container port sector will create new jobs in the transport and logistic sectors: Polish companies may serve Polish market and go beyond it to the CEE market. Current dominance of NEPs has been favouring German and Benelux logistic operators 4. Attractiveness of Poland for foreign investment will increase as the country develops into the gateway to the CEE and as a major hub to the BSR: Polish container ports have potential to serve a market of 100 million people Throughput( TEU) Direct Employment (DCT) Associated employment 1 mio 580-660 700-800 4 mio 2270-2670 2720-3210 12
Importance of DCT for the Polish Economy Fiscal benefits for Polish government Government revenues generated by import containers handled by DCT Gdansk (in `000 PLN) 2010 2011 2012 2013F VAT 798 557 1 419 664 1 511 549 1 665 033 Excise 437 454 24 720 6 579 Duties 127 599 221 175 201 031 219 269 Sum 926 593 1 641 294 1 737 301 1 890 880 Source: Customs Office in Poland; October 2013
GCT Complaint Polish container terminals need to work together in order create complimentary and effective container port system. DCT Gdansk have been informed that the European Commission received a complaint from Gdynia Container Terminal, majority owned by Hutchison Whampoa on 19 th April 2013, alleging that the Port Authority of Gdansk (ZMPG) has unfairly favoured DCT Gdansk by granting them the lease for the land on which the second terminal will be constructed without a public tender. The complaint alleges that this is in breach of EU State Aid laws and Polish procurement legislation otherwise the biggest beneficiary of surge of Polish import/export volumes will be German and Benelux ports.
THANK YOU! Adam Żołnowski Chief Financial Officer Adam.Zolnowski@dctgdansk.com