Change to the Malt MarketChange to the Malt Market

Rob WicksBusiness Unit Manager Barley and Malt

Joe White MaltingsJoe White Maltings

B d i lt i B ll t Vi t i i• Began producing malt in Ballarat, Victoria in 1858C tl l t lt i A t li• Currently largest malt company in Australia with 8 plants in 6 statesB t f ABB G i i 2004• Became part of ABB Grain in 2004

Malting ProcessClean and Grade Barley

Malting Process

↓

Steep (24 hours)p ( )↓

Germinate (96 hours)Germinate (96 hours)↓

Kil (24 h )Kiln (24 hours)

Malt is a friable grain with which when mashed in water at suitable gtemperatures will provide sufficient amino acids and carbohydrates to nourish yeast and produce beer. (You may wish to add hops for bitterness)

How is it madeHow is it made

Previously a Labour Intensive IndustryPreviously a Labour Intensive Industry

Now a capital intensive industryNow a capital intensive industry

Cost inputs (% Malt Price)Cost inputs (% Malt Price)B l i lt 70%• Barley in malt – 70%

• Energy, water and effluent – 5%

It’s all about the barley

World Barley for MaltWorld Barley for Malt

Malt Price InfluencesMalt Price Influences

• Beer Market• Beer Market• Barley MarketBarley Market• Malting Capacityg p y

TOP TEN BREWERSAs at end of 2007

Tsingtao Brewery Group

Molson-Coors

Yanjingl.

hl)

Carlsberg

Grupo Modelo

Tsingtao Brewery Group

olum

e (m

ill

Anheuser Busch

Heineken

Baltic Beverages Holding BBH

duct

ion

Vo

SABMiller

InBev

Anheuser-Busch

Pro

d

0 50 100 150 200 250 300

Source : The Barth Report 2007

Beer Production

700

500

600

700hl

400

500

d'n,

mil 2004

20052006

200

300

Beer

Pro 2006

2007

0

100

B

Africa America Asia Oceania EuropeCIS

Chinese Beer Production

Barley SupplyBarley Supply

B arley P ro duct io n

Australia

Africa

150

200Africa

Far east Asia

Near east Asia

50

100 Other

N&C America

02004 2005 2006 2007 2008e

CIS

Europe

Malting Barley ExportsMalting Barley Exports

• Europe, Australia and Canada key to Malting Barley price

ChinaChina

Top Ten Malting Companiesp g p

Boortmalt

JWM

Greencore

Rahr

United Malt Holdings

Supertime

Russky Solod

CofcoExistingPlanned

Malteurop (incl. ADM)

Soufflet

Cargill Inc.

United Malt Holdings

0 500 1,000 1,500 2,000 2,500

Malting Capacity ('000 mt)

T t lti i d i t l 9 400 000 t 44%• Top ten malting companies produce approximately 9,400,000mt = 44% global malt production

• Top ten brewing companies produce over 60% of global beer production

Malt ExportsMalt Exports

RussiaRussian Malt ImportsRussian Malt Imports

500 000

600,000

300,000

400,000

500,000

nnes

100,000

200,000

,

Ton

02002 2003 2004 2005 2006 2007

Japan’s Imported Malt (1991~2008) SOURCE; KIRIN, RMI CONFERENCE 2007

(i 1 000 )

8 0 0

9 0 0

Total Quantity

Max.Volume (1992)

806,226t(in 1,000mt)

2006(Estimate)

6 0 0

7 0 0

( )

4 0 0

5 0 0

3 0 0

4 0 0

Launch of New genreby Kirin & Asahi

1 0 0

2 0 0 Launch of Happoshu by Kirin

09 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 '0 0 '0 1 '0 2 '0 3 '0 4 '0 5 '0 6

7 08

OVERVIEW OF INVESTMENTS / DIVESTMENTS 2003-2006 (III)Source; Malteurope RMI Conference 2007

Metric Tonnes INCREASE OF CAPACITY

DECREASE OF CAPACITY

NET

E U 27 490 000 970 000 480 000E.-U.-27 490 000 970 000 - 480 000EAST EUROPE 1 040 000 ? + 1 000 000NORTH AM. 420 000 570 000 - 150 000SOUTH AM. 230 000 - + 230 000AUSTRALIA 100 000 40 000 + 60 000CHINA 500 000 100 000 + 400 000CHINA 500 000 100 000 + 400 000

2 780 000 1 685 000 1 100 000

2003 2006WORLD BEER PRODUCTION 1 478 Mio hl 1 675 Mio hl

197 Mio hl + 2 200 000 T of malt197 Mio hl + 2 200 000 T of malt

Malt Processing Fee;Malt Processing Fee;source SABMiller RMI conference 2007

Australian MaltstersAustralian Maltsters

Australian Malt Production

600700800900

MALTEUROPE

BBM

300400500600

1000

MT

BBM

KIRIN

ADMALT

0100200300 MALTCO

JWM

01995 2000 2004 2007 2008

JWM Plant Locations

Tamworth

Brisbane

Tamworth

Adelaide Ballarat

Perth

Devonport

Lake GardensDelacombe

Pt Adelaide Cavan

Asian MarketsAsia Malt ImportsAsia Malt Imports

800000900000

Vietnam

500000600000700000800000

nnes

VietnamThailandSingaporePhilippines

100000200000300000400000

Ton Philippines

MalaysiaKoreaIndonesia

0100000

2000 2001 2002 2003 2004 2005

IndonesiaIndia

FutureFuture

Threats• Energy and water prices relative toEnergy and water prices relative to

competitors.C titi f Chi• Competition from China.

OpportunitiesOppo tu t es• Superior access to quality Barley• Proximity to high growth markets in Asia

Thank You

• Questions