neil johns, graincorp: improving the efficiency of grain logistics at bulk and container ports

Neil Johns, 20 November 2013

Improving efficiency at Bulk Grain Ports

Grain underpins global food

- 2 -

Wheat Barley Soybean Pulses Corn Canola

Cereal Foods & Beverages

Industrial Starch, Biofuels Edible

Oils

Animal Protein Beef, Poultry & Eggs,

Pork, Dairy, Fish

Grain processing

Food Products

Malting Ethanol Oil crushing Feed Milling

Sorghum

Grain supplies 60% of global calories

45% 55%

‘Food Security’ will drive trade

- 3 -

Grain Demand

Traded Grain

Population

Grain growth drivers to 2050

35% 50% 100%

45

11 9 16 1 20

27

44

23 12

14

-1

3

16

ME/North Africa Sub-SaharanAfrica

Sub-Continent Asia (ex.China) China Latin America Developed

+98%

+200% +140%+90%

+14%

+57%

Wheat Imports Growth to 2050MMt

Grain growth is on our doorstep

MENA

Sub-Saharan Africa

Asia

Sub-Saharan Africa

Asia (ex-China)

45% 76% 7% 100% 1% 57% 10%

Imports % of consumption

Sources: USDA, US Wheat Associates - 4 -

Middle East North Africa

World Wheat Imports Growth to 2050

Australia’s leading grain business

- 5 -

GrainCorp is Australia’s leading grain business with the largest network in eastern Australia

– 7 bulk grain ports ~16mmt elevation capacity handling ~85% of bulk exports

– 280 silos with~20mmt country storage capacity handling~55% production

– 2 port container facilities ~0.5mmt packing capacity

– 2 non grain bulk ports

– Manages 15+ trains handling ~60% of export grain rail transport

Country Storage Rail/Road Port Elevators

tonnes of storage

40m

~18m

Crop average

Port average

CAPACITY

utilisation

~35%

1. Grain constraint: Rail transport

- 7 -

Port capacity is not a constraint

0%

20%

40%

60%

80%

100%

-

2

4

6

8

10

12

14

16

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

MM

T

GrainCorp Bulk Exports Excess Capacity Average Utilisation

Port utilisation ranges from 5% to 65%

- 8 -

Major constraint is rail transport

RAIL

RAIL

ROAD

ROAD

0%

20%

40%

60%

80%

100%

2004 2013

Use of rail transport has fallen from 90% to 60%

9

Contract flexibility

Capacity flexibility

Pricing flexibility

One size fits all

First in first served

Reference prices

2. Grain constraint: Regulation

- 10 -

Port regulation not required

0

3

6

9

12

0

3

6

9

12

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

MM

T

MM

T

GNC Bulk Exports Containers Non GNC Bulk Exports

Non-GNC grain exports increased 3 fold in past 10 years

QBT

Port regulation applied unevenly

11

Mackay

Gladstone

Brisbane

Newcastle

Port Kembla

Geelong

Portland

NAT

Louis Dreyfus

Melbourne (Emerald)

Regulated Non-regulated

Containers

Containers

Containers

Containers

Thank you & Questions