TRANSNET SOC LTD AND TRANSNET PORT TERMINALS - Visit by delegation from H E Mr. André Kimbuta, Governor of Kinshasa, DRC and his delegation 6 August 2013 TABLE OF CONTENTS TRANSNET SOC LTD TRANSNET DIVISIONS MARKET DEMAND STRATEGY PORT DEVELOPMENT PAGE 1 TRANSNET STATE OWNED COMPANY LTD - OPERATIONAL DIVISIONS Ports Rail Pipelines Supporting Transnet Transnet Capital National Port Transnet Transnet Transnet Projects Ports Terminals Engineering Freight Rail Pipelines Transnet Authority (TPT) (TE) (TFR) (TPL) Foundation (TNPA) Property • 8 Commercial • 16 Cargo • Support TFR for • 20 500 km of • 18 billion litres of • R300 billion of ports along Terminals rolling stock and railway track petroleum capital 2943km of operating across TPT for lifting products and gas investments over • 182 million tons of coastline 7 SA ports equipment through 3 000 next 6 years freight maintenance km of pipelines, • Revenue R8.4bn • Revenue 7 bn • CSI in Education, • General freight & 2 mainly to • Revenue 9.8 bn Health, Sport, • Assets R56 bn • Assets R13.5 bn heavy haul export Gauteng Arts & • Assets R8.6 bn lines • 3558 employees • 6 324 employees • Revenue 1.3 bn Agriculture • 13 020 employees • Revenue 22.2 bn • Assets R20.1 bn • Property • Assets R54.7 bn Management • 600 employees • 24 177 employees PAGE 2 TRANSNET SOC LTD - STRATEGIC GOVERNANCE FRAMEWORK Mr. Brian Molefe Group Chief Executive Mr. Anoj Singh Chief Financial Officer Mr. Khomotso Phihlela Group Executive: Commercial Mrs Nonkululeko Sishi Group Executive: Human Resources Mr. Mark Gregg-Macdonald Ms. Nkuli Mabandla Group Executive: Group Executive: Planning and Monitoring Legal Services + Chief Executives Operating Divisions 3 Mr Tau Morwe Mr Karl Socikwa Mr Siyabonga Gama Mr Richard Valihu Ms Sharla Pillay Mr Charl Möller Ms RaisibePAGE Lepule TRANSNET’S VISION…. DELIVERING FREIGHT RELIABLY Transnet will meet customer demand for reliable freight transport and handling services through: • Fully integrating and maximising the use of our unique set of assets • Continuously driving cost efficiencies • A demonstrated concern for sustainability in everything we do PAGE 44 STAKEHOLDER ENVIRONMENT Success ultimately depends on a broader South African partnership and support – S.A. citizens will reap benefits Transnet Performance Government departments Regulators Greater collaboration thereby Alignment on tariff creating and enabling environment methodology and regulatory for successful execution of MDS policy to create regulatory certainty Investors Suppliers Continued support Partner with Transnet to deliver and access to cost capital spend and achieve effective funding to localisation and empowerment meet requirements objectives Labour unions Key customers Labour stability to support execution Alignment and collaboration on and competitiveness of SA freight growth and expansion plans Employees logistics system and conversion to Take or Pay contracts Increase in labour productivity to deliver on volume growth and MDS targets 30% 63% PAGE 5 FINANCIAL AND OPERATIONAL PROFILE Turnover • Would rate in the Top 25 of the biggest SA listed firms ito turnover, if Transnet SOC Ltd was listed $ 7.2 bn • Contributing 1.5% to SA GDP EBITDA • Used to develop infrastrucure and reduce the cost of doing $ 3 bn business by increasing capacity and enhancing productivity • In Top 10 of SA’s biggest firms ito assets Assets $ 24.2 bn • Requires substantial maintenance to continue operating efficiently Capital Investments* • Equates to 75% of the Asset Base $ 40 bn Employment • Transnet ensures the development of skills through training and development 63,725 • 56,354 (excluding contractors) All stats based on 2012/13 Corporate Plan – unless otherwise stated *Planned investments over the next 7 years PAGE 6 TRANSNETTransnet’s Integrated OPERATES Network AN is INTEGRATED Underpinned by PORT,a Limited Number RAILof Key ANDCorridors PIPELINE NETWORK 20,500 Km Rail Network 182 Million Tons of Cargo pa 4.3 Million Containers pa 18 Billion litres of fuel, oil 1. Richards Bay Bulk (Export coal, magnetite, Chrome), Breakbulk KZN PORTS 2. Durban Containers, Breakbulk, Agri-Bulk, Automotives 3. East London 7. Saldanha Containers, Breakbulk, Bulk (Export iron ore), Agri-Bulk, Automotives Breakbulk 4. Ngqura 6. Cape Town Containers Containers, 5. Port Elizabeth EASTERN CAPE PORTS Breakbulk Containers, Breakbulk, WESTERN CAPE PORTS Bulk, Automotives PAGE COMPLIMENTARY PORT SYSTEM delivering freight reliably Bulk – Coal & Minerals Bulk – Iron Ore Containers - Gateway Containers - Refrigerated Cars - Mercedes Containers - Transhipment Bulk – Manganese PAGE 8 SOUTH AFRICA’s ROLE IN BRICS PAGE 9 SOUTHERN HUB FOR WORLD SHIPPING ROUTES The position of South Africa’s ports system enables it to access to South- South trade, Far East trade, Europe & USA, East & West Africa regional trade Shortest Trade Route between Shangai and Santos is via South Africa 11,270nm = 22 days @ 21 knots via Panama Canal13,130nm = 26 days + transit fee via Suez Canal 13,590nm = 27 days + transit fee PAGE 10 10 NEW 18,000 TEU SHIPS ORDERED BY MAERSK - To be delivered over next 3 years PAGE 11 EVOLUTION OF SHIP SIZES Source: Geography of Transport Systems PAGE 12 NGQURA ROLE AS A HUB PORT FOR TRANSSHIPMENT TRAFFIC IS TO ENABLE REGIONAL INTEGRATION Lome Takoradi Monrovia (Togo) Cotonou (Ghana) (Liberia) (Benin) Abidjan Tema Lagos San Pedro (Côte (Ghana) (Côte d'Ivoire) d'Ivoire) (Nigeria) Douala (Cameroon) Mombasa Libreville (Kenya) (Gabon) Pointe Noire Dar es Salaam Matadi (Congo) (Tanzania) Luanda Tanga (Angola) (Tanzania) Lobito Nacala (Angola) (Mozambique) Beira (Mozambique) Toamasina (Madagascar) Maputo (Mozambique) Walvis Bay Port Louis (Namibia) (Mauritius) Richards Bay (SA) Durban (SA) East London (SA) Cape Town Ngqura (SA) (SA) Port Elizabeth (SA) Source: Team analysis PAGE 13 TRANSNET DIVISIONS PAGE 14 TRANSNET FREIGHT RAIL • Transnet Freight Rail is the largest division of Transnet. It is a world class heavy haul freight rail company that specialises in the transportation of freight. • Transnet Freight Rail has approximately 28 000 employees, who are spread throughout the country. • The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-Saharan region, with its rail infrastructure representing about 80% of Africa's total. • The company is proud of its reputation for technological leadership beyond Africa as well as The company is made up of the following six with-in Africa, where it is active in some 17 business units: countries. • Agriculture and Bulk Liquids • Transnet Freight Rail has positioned itself to • Coal Business Unit become a profitable and sustainable freight • Container and Automotive Business Unit railway business, assisting in driving the • Iron Ore and Manganese Business Unit competitiveness of the South African • Mineral Mining and Chrome Business Unit • Steel and Cement Business Unit economy. PAGE 15 TRANSNET PIPELINES • Transnet Pipelines, the custodian of the country’s strategic pipeline assets, is currently servicing two key industries liquid fuel and gas by transporting petrol, crude oil, diesel and gas products over varying distances. • The business, formerly known as Petronet established in 1965, is integral to the well-being of the South African economy. • It is Transnet Pipelines’ policy to monitor the integrity of its pipeline network The business handles an annual average continually. throughput of some 18 billion litres of liquid fuel and more than 450 million cubic metres • Transnet Pipelines is acknowledged as one of gases. of the leaders in the development of pipeline survey technology in South The liquid products include crude oil as well as diesel, leaded and unleaded petrol and aviation Africa. turbine fuels. PAGE 16 TRANSNET ENGINEERING • Transnet engineering, an operating division of Transnet SOC Ltd, is the backbone of South Africa’s railway industry. • TE boasts with eight product-focused businesses, 150 depots, seven factories and 15, 000 employees countrywide. • The organisation is dedicated to in-service maintenance, repair, upgrade, conversion and manufacturing of rolling stock. • TE manufactures freight wagons, • While focus is mainly on the South African market, investment in research and development to service the mainline and suburban coaches, diesel and specific requirements of Africa and the rest of the world electric locomotives as well as wheels, has led to an ever-expanding range of rolling stock rotating machines, rolling stock equipment, products and a comprehensive list of satisfied customers. castings auxiliary equipment and services. • This has further enhanced the organisation’s • In the past financial year TE has done international reputation. • The proximity of the coastal plants to major ports nearly ZAR1 bn in business in Africa. facilitates the movement of products to and from overseas markets. PAGE 17 OVERVIEW TRANSNET NATIONAL PORTS AUTHORITY • Transnet National Ports Authority provides port infrastructure and marine services at the eight commercial seaports on the 2,954km South African coastline. • The national ports authority is responsible for the safe, effective and efficient economic functioning of the national port system, which it manages in a landlord capacity. • The national ports authority operates within a legislative and regulatory environment created by the National • The distance around the port of Durban is Ports Act (Act No. 12 of 2005). 21 km. • The national ports authority’s service • Rail