Change to the Malt Market
Rob Wicks Business Unit Manager Barley and Malt Joe White Maltings
• BdiltiBlltVitiiBegan producing malt in Ballarat, Victoria in 1858 • CtlltltiAtliCurrently largest malt company in Australia with 8 plants in 6 states • Became par t of ABB G rai n i n 2004 Malting Process Clean and Grade Barley ↓ Steepp( (24 hours) ↓ Germinate (96 hours) ↓ Kiln (24 hours )
Malt is a friable grain with which when mashed in water at suitable temperatures will provide sufficient amino acids and carbohydrates to nourish yeast and produce beer. (You may wish to add hops for bitterness) How is it made Previously a Labour Intensive Industry Now a capital intensive industry Cost inputs (% Malt Price)
• BlBarley in ma lt – 70% • Energy, water and effluent – 5%
It’s all about the barley World Barley for Malt Malt Price Influences • Beer Market • Barley Market •Maltinggpy Capacity TOP TEN BREWERS As at end of 2007
Yanjing Molson-Coors . hl) ll Tsingtao Brewery Brewery Group Group Grupo Modelo Carlsberg lume (mil lume oo Baltic Beverages Holding BBH Heineken uction V dd Anheuser Busch-Busch
Pro InBev SABMiller
0 50 100 150 200 250 300
Source : The Barth Report 2007 Beer Production
700
600
hl 500 2004 400 2005 d'n, mil 300 2006 2007 200 eer Pro BB 100
0 Africa America Asia Oceania EuropeCIS Chinese Beer Production Barley Supply
Barley P roduction
Australia
Africa 200 Far east Asia 15 0 Near east A sia 10 0 Ot her
50 N&C America
0 CIS 2004 2005 2006 2007 2008e Europe Malting Barley Exports
• Europe, Australia and Canada key to Malting Barley price China Toppgp Ten Malting Companies
Rahr
Greencore
JWM
BoortmaltCofco Russky Solod Existing Planned Supertime United MaltCargill Malt Holdings Inc. Holdings Soufflet
Malteurop (incl. ADM) 0 500 1,000 1,500 2,000 2,500 Malting Capacity ('000 mt)
• Top t en malti ng compani es prod uce approxi mat el y 9 ,400 , 000m t = 44% global malt production • Top ten brewing companies produce over 60% of global beer production Malt Exports Russia
Russian MaltMalt Imports Imports
600,000 500, 000000 400,000 s ne 300 ,000 nn
To 200,000
100,000 0 2002 2003 2004 2005 2006 2007 Japan’s Imported Malt (1991~2008) SOURCE; KIRIN, RMI CONFERENCE 2007
900 (in 1, 000mt) Max.Volume (1992) 806,226t Total Quantity 800 2006(()Estimate) 700
600
500
400 Launch of New genre 300 by Kirin & Asahi 200 Launch of Happoshu by Kirin
100
0 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06
708 OVERVIEW OF INVESTMENTS / DIVESTMENTS 2003-2006 (III) Source; Malteurope RMI Conference 2007
Metric Tonnes INCREASE OF DECREASE OF NET CAPACITY CAPACITY E.-U.-27 490 000 970 000 - 480 000 EAST EUROPE 1 040 000 ? + 1 000 000 NORTH AM. 420 000 570 000 - 150 000 SOUTH AM. 230 000 - + 230 000 AUSTRALIA 100 000 40 000 + 60 000 CHINA 500 000 100 000 + 400 000 2 780 000 1 685 000 1 100 000
2003 2006 WORLD BEER PRODUCTION 1 478 Mio hl 1 675 Mio hl 197 Mio hl + 2 200 000 T of malt Malt Processing Fee; source SABMiller RMI conference 2007
Australian Maltsters
Australian Malt Production
900 800 700 MALTEUROPE 600 BBM 500 KIRIN 400 ADMALT 1000MT 300 MALTCO 200 JWM 100 0 1995 2000 2004 2007 2008 JWM Plant Locations
Brisbane
Tamworth Perth
Adelaide Ballarat
Delacombe Lake Gardens Devonport
Pt Adelaide Cavan Asian Markets
Asia MaltMalt ImportsImports
900000 800000 Vietnam 700000 Thailand 600000 Singapore 500000 nes Philippines nn 400000
To 300000 Malaysia 200000 Korea 100000 Indonesia 0 India 2000 2001 2002 2003 2004 2005 Future
Threats • Energy and water prices relative to competitors. • CtitifChiCompetition from China. Oppor tunit ies • Superior access to quality Barley • Proximity to high growth markets in Asia Thank You
• Questions