Captain Soppit's Remarks to City Council

March 27, 2007

City Briefing – March 26th, 2007 Navigating Growth

Remarks by Captain Alwyn G. Soppitt President and CEO, Saint John Port Authority

Good evening every one. It is truly a pleasure to be here tonight, to brief you on the tremendous progress being made at the port of Saint John…I consider these yearly briefings to council to be a special highlight of my position as President and CEO of the Port Authority.

This year however, I am particularly excited to be here and for good reason. Following my address tonight you will clearly see that our port is now, more than ever, a significant economic engine for the Saint John region and the province as a whole.

Ladies and gentlemen, our vision for the port is clear: to make the port of Saint John the Atlantic Canadian centre of marine activity linking North America to the world!

This is our vision and we are well on our way to fulfilling it.

The Port of Saint John is so diverse. It is already Atlantic Canada’s primary bulk and break-bulk port. We have capacity to handle containers and we are ‘the’ growing cruise port of call in Atlantic Canada.

More and more, Saint John is being seen as the ‘preferred gateway’ because of our central location in Atlantic Canada. We also have other important attributes:

• Deep water • Diverse, well-equipped facilities • Rail options • Direct highway access • North-south trade advantage • Closest Atlantic Canadian port to inland Canadian markets • Access to the U.S., New England and hinterland markets • Three industrial parks in proximity to the port that can complement cargo development at the port • Ideally situated to support our region’s development as Atlantic Canada’s energy hub

We have strategies in place to build on these attributes, and we are currently developing a new brand for the port of Saint John to strengthen its profile nationally and internationally.

While 2006 was a successful year for the port of Saint John; the year ahead projects even more growth—much more.

An unprecedented cruise season is in store:

• 55 ship calls and 138,000 passengers starting on June 5th of this year

• For the first time ever, Saint John has been chosen as the exclusive port of call for seven Carnival cruises sailing out of New York

• This cruise season we will have six occasions when there will be two large cruise ships in port on the same day and two other occasions when we will have three large cruise ships in port on two consecutive days. This will mean an incredible 14,000 passengers and crew in our city over this 48-hour period alone.

• With these significant increases in cruise traffic and with larger ships now in service in Atlantic Canada, it is obvious we need another cruise berth, close to the same caliber as that at Pugsley Terminal.

• This spring we will be carrying out major improvements at Long Wharf terminal to bring it up to the appropriate standard: o Demolition of the shed; o Resurfacing and repaving; o A new marquee tent to serve as a welcome centre and dockside market o A well laid out ground transportation area; and o The appropriate security measures to provide safe and secure access for visitors and meet international requirements.

• On Water Street at Pugsley Terminal, the anticipated expansion of Harbour Passage is now under way, in keeping with the redevelopment plans unveiled by the waterfront partnership and the Saint John Port Authority last fall; and…. towards the end of the season we will start construction of our cruise terminal building.

• With the cooperation of the City, the Water- Front Development Partnership and the Port Authority, over the next year to 18 months we are going to transform the city waterfront and Water Street to a new level of use and development which will do much to enhance our cruise business and further revitalize the uptown.

Forest Products/Break Bulk Sector

• AV Nackawic mill will continue to be the mainstay of our forest products business. With re-engineering of the mill under way, rayon pulp will soon be coming off the production line which will be available for export to India.

• Recent good news for the port was the announcement by Swire Shipping of Australia that Saint John will be the only Canadian port of call for their Indotrans service providing a direct link between India, South-East Asia and Saint John. This change will see an increase in import tonnage for the port and we are very pleased and excited about the possibilities this brings for us.

• Export of other paper products is also on the increase with shipments of paperboard to South American markets and we are also seeing new exports of lumber to Europe at Lower Cove. This cargo originates in New Brunswick and is destined for the U.K. On our recent visit to Miami, I met with two Irish ports, to see if there might be an opportunity for lumber exports to that country.

Bulk Cargo

There are three opportunities coming forward in this sector: pet coke and limestone; potash & salt; and L.N.G.

Petroleum products are by far the largest volume of bulk cargo moving through the port and this sector is about to take a further quantum leap with the introduction of L.N.G. in 2008 and the prospects of a second refinery in the offing. L.N.G alone will add an additional 100 ship calls to port traffic, which today is in excess of 700 ship calls annually. We are extremely fortunate to have a world-class operator in Repsol L.N.G. at the new facility being constructed at Canaport.

The introduction of pet coke as a fuel source for Coleson Cove presents a great opportunity for Saint John. Once the process is finalized at Coleson Cove, this cargo will add an additional 600,000 tonnes to port traffic annually over the long-term which in turn will also lead to increases in limestone.

Potash and salt represent more than 50% of our revenue cargo and exciting things are also happening in this sector. Serious consideration is being given to expanding the mine at Sussex, which would bode well for the port and would result in dramatic increases in exports of both potash and salt.

All of these developments will have a positive impact on jobs and economic activity in our region

Containers: There is much dialogue and buzz about containers – • Container growth; • Congested west coast ports; • Gateways and corridors; and • Asia-Pacific trade and China

It is important to know where we fit in this sector. First: the Port Authority places a high priority on expanding container business and services at the port. With this in mind, the Port Authority is calling for proposals for the future operation of the container terminal, to replace the current lease which is expiring at the end of the year. Proposals will be accepted up to April 30th this year, following which we will select a proponent with whom to negotiate.

Second: our best fit in the container world is in niche markets with mid-size or smaller vessels.

And finally: we have spent the better part of the last eight months analyzing our business, our strategies and we know that Saint John’s strength is its diversity – bulk, break-bulk, containers, cruise and dockside industries – we can do them all!

Our future strategic trading partners: We will be giving priority over the next five years to develop trade opportunities with three key geographic areas – The United States East Coast and the Caribbean, South America and India.

We are well situated in the north-south trade corridor; this gives us significant advantages:

• We are the closest Canadian port to this market area and

• We already have a direct service into Florida & the Caribbean and Crosby’s has been importing molasses from this market for more than 75 years.

South America presents a relatively untapped growing market, which offers opportunities yet to be explored.

• Again we are the closest Canadian port to this market

• A high percentage of our potash is exported to Brazil, and

• We have recently started to import sugar from there.

• One of their big exports is forest products and we have a purpose-built terminal for this cargo sector.

India is the second fastest growing global economy and we believe, similarly to Halifax, that this market also offers opportunity for us.

• We already have a direct interest in that continent through the Aditya Birla Group who now operate the Atholville and Nackawic mills

• We have a direct break-bulk/container service in Indotrans between Saint John and India and South-East Asia; and

• We have been developing relationships with India over the past few months. This is in cooperation with the Canada-India business council, the provincial government and port stakeholders.

• Progress is being made and our objective this year will be to facilitate a trade mission to India in the fall of the year. We invite the city to join us in this venture.

Our greatest opportunity in tapping into the Far East container trade, may well be with the potential of future feeder services from major east coast container ports in the U.S. and in the development of a retail distribution centre in our city. This is where Enterprise Saint John, the Saint John Industrial Parks and the Port Authority can work together to achieve this objective.

Diversified Operations:

We are also attracting other industries and activities to the port consistent with our core business and providing economic diversification for the port of Saint John.

The Port Authority hosts a number of these diversified operations today.

• Autoterm on the west side receives and distributes new vehicles to Atlantic Canada. The vehicles are brought in by rail from Ontario and distributed by road throughout Atlantic Canada;

• The Floating Pipeline Company has set up shop in shed d at the forest products terminal on the west side. Once up and running, FPC will import steel products for fabrication of gas transportation modules at the facility which will subsequently be fitted on to vessels at port facilities;

• The dockside market at the cruise facility has proven to be a successful component of our cruise program which is well-received by our visitors; and

• We are also actively talking to other businesses interested in setting up manufacturing operations at the port of Saint John.

All of this highlights the need for the port to carefully safeguard its land—because without land, we cannot grow.

Land Use Strategy & Port Infrastructure:

Our land use strategy is directly related to our mandate as a Port Authority and our responsibility to provide the marine infrastructure necessary to support national trade objectives. We will continue to aggressively market our major terminals and all of our port facilities to increase cargo and activity at the port.

This makes economic sense and it is only common sense.

Our primary facilities are: • Navy Island for break bulk; • Rodney Terminal for containers; • Pugsley and Long Wharf for cruise; • Lower Cove for new cargo development; and • The Potash Terminal for potash and salt

This year, the port will be proceeding with the cruise terminal, carrying out improvements at Long Wharf and overseeing development of a structure for handling pet coke.

Consistent with the development of the Water Street precinct we will also be engaging outside resources to explore development opportunities for Pugsley Park.

We may also extend this to the use of the upland at Long Wharf, while maintaining the working apron for cruise and other marine activities

We will continue to use the lower west side facilities for their current cargo and at the same time we will be examining the best approach and developing a business case for its redevelopment and future use.

Five-Year Goals:

My objective is to see 3.5 million tonnes of cargo pass over Port Authority facilities annually and attain 200,000 cruise passengers per year in Saint John.

• 2 million tonnes of bulk • 1 million tonnes of break bulk • 500,000 tonnes in containers and 200,000 cruise passengers • This will double present throughput.

With the inclusion of cargo over private facilities and the introduction of L.N.G., tonnage at this port should be in excess of 30 million tonnes annually within the next five years.

The impact of a potential second oil refinery would take us beyond that number yet again.

Ladies and gentlemen, this is a port of international significance.

Atlantic Gateway:

There is another issue related to transportation, which is important to this entire region and that is the pending National Gateway Strategy.

Let me be clear on the importance of this strategy to Saint John. This strategy cannot be ignored or underestimated.

This is why the Port Authority has initiated a strategy for gateway development, recognizing again, the important leadership role our port will play. This strategy is an integral part of true growth and our five municipal regions should be a key part of the process.

We need to organize as a region, develop and prioritize objectives in the area of transportation, reach a consensus and make the case for Saint John.

The federal government is defining a gateway as a system of marine, road, rail and air transportation infrastructure of national significance for international commerce within a defined geographic zone.

So you see, the gateway is not just about a port alone- it is about airports, rail, road, highways and bridges and even public transportation. It is about the efficient movement of goods and people within a region.

We have a unique asset here in Saint John – our port. It is already making a significant contribution to the economy of New Brunswick and given the opportunities coming forward, many of which I have outlined here tonight, the potential for further growth is huge.

Conclusion:

A purpose for being here this evening is to ask for your support in five key areas:

1) Your continued support in marketing the city to cruise lines as a cruise destination

2) We have achieved such a milestone in cruise development, as Carnival’s exclusive port of call—your worship having you personally welcome our visitors on these cruises would be a special way to recognize what has been bestowed upon us.

3) Participate with stakeholders in developing trade with India

4) Develop gateway strategy for Saint John

5) Partner with stakeholders to attract a major retail distribution centre to Saint John.

Ladies and gentleman, you can see how we all need to be good navigators to maintain the port’s strong growth and development.

And also knowing your determination and commitment to our port, I am confident we will achieve this.

As a result, there is no question in my mind that the port of Saint John will become the Atlantic Canadian center of marine activity linking North America to the world!

Thank you all very much!