THE MAPUTO CORRIDOR LOGISTICS INITIATIVE (MCLI)

2008 –BRENDA HORNE – CEO of MCLI

AGRICULTURE TRADE AWARENESS CAMPAIGN

Date: 17 JULY 2008

1. MAPUTO CORRIDOR BRIEF OVERVIEWRe-established proven transportation route for regional trade as well as to international markets for SA, Zimbabwe, Swaziland, Botswana through Mozambique.

SOUTH AFRICA

SWAZI-LAND

Maputo

Johannesburg

Nelspruit

ErmeloPiggsPeak

Komatipoort

Tzaneen

Belfast

Steelpoort

Middleburg

Palabora

Secunda

MAPUTO CORRIDOR

1 OF AFRICA’S PROMINENT ECONOMIC HUBS

To become the leading corridor stakeholders’ coordinator, contributing to the aims and objectives of the Maputo Development Corridor. This will be achieved by working towards a Logistics Corridor based on excellence – a cost-effective, continuous, reliable logistics route with positive returns for all stakeholders.

VISION

MISSION

To support the development of the Maputo Corridor into a sustainable, highly efficient transportation route, creating an increasingly favorable climate for investment and new opportunities for communities along the length and breadth of the Corridor.

STRATEGIC OBJECTIVES OF MCLI

• To inform the market about the Corridor and to market the strategic benefits and opportunities offered by the Corridor

WHAT IS THE MCLI

GOAL “Maputo Corridor the first choice for the Corridor Region’s Stakeholders”

•To coordinate the views of investors, service providers and users of the Corridor to engage with public sector to promote development and change, making the Maputo Development Corridor the first choice for the region’s importers and exporters alike.

MPDC SHARE HOLDINGAs from Jan 2008Portus Indico -Private Sector 51%•DPW 48.5% 24.735%•Grindrod – 48.5% 24.735%•Mozambique Gestores 3% 1.53%

Public Sector 49%•CFM 33% 33.000%•Government 16% 16.000%

100.00%

THE NEW BOARD OF MPDC- MAR 2008

• Port Master Plan - ensuring that the Port  is  armed with a business strategy that  is  farsighted and robust enough to weather the inevitable peaks, while remaining flexible and nimble enough to make the most of the opportunities which presented themselves. 

• In the context of regional development and growth, Port Maputo would be moving towards building the various business entities at the port into a single unified enterprise which would ensure that regional standards are set and which would service, with increasing efficiency, the growing volumes through the Port.  

• Regarding new investments - investments would be made in supporting operations such as depots, warehousing, packing and unpacking facilities, amongst others.

• “Our goal is to build a unified “Port Maputo” where every user and operator will have a voice and be an integral part of its growth and future success as the best service provider in the region.” said Ferraz the new Chairman of MPDC -

PORT OF MAPUTO TRANSIT CARGO

0

2, 000, 000

4, 000, 000

6, 000, 000

8, 000, 000

Y E A R S

T H R OU G H P U T

T ONN E S

TOTAL TRANSI T TOTAL TRAFFI C Linear (TOTAL TRAFFI C)

T OT A L T R A N S I T 2 , 0 16 , 4 0 0 2 , 0 5 2 , 0 0 0 2 , 0 5 4 , 10 0 1, 6 6 3 , 2 0 0 1, 9 2 3 , 6 0 0 1, 8 0 4 , 4 0 0 2 , 0 6 2 , 8 0 0 2 , 3 0 9 , 9 3 5 2 , 8 3 3 , 2 6 5 2 , 7 10 , 5 2 2 2 , 8 3 2 , 7 6 1

T OT A L T R A FFI C 3 , 10 9 , 0 0 0 3 , 0 16 , 4 0 0 3 , 10 1, 6 0 0 3 , 0 3 5 , 9 0 0 4 , 0 0 1, 6 0 0 4 , 4 2 3 , 6 0 0 5 , 0 3 6 , 0 0 0 5 , 5 5 4 , 0 3 6 6 , 3 8 1, 7 2 2 6 , 6 0 8 , 6 5 5 6 , 7 0 3 , 0 0 0

19 9 7 19 9 8 19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

PORT POTENTIAL 26 MILLION TONS2007 – Total 6,70mt transit 2.833mt2007 – Road traffic in/out of Port = 2.25M Tonne2007 – Rail traffic in/out of Port = 1.7M Tonne2007 – SA Exports = 59% of all Port Exports2007 – SA Transit = 77% of all Port Transit Cargo

MPDC – PORT OF MAPUTO

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Total

Local

Transit

Total '8865 '13508 '20439 '25875 '31729 '32425 '35010 '39486 '44349 '54088 '62516 '80347

Local 8865 13508 20439 25875 31729 27460 30199 33485 38121 45140 52506 64683

Transit 4965 4811 5641 6228 8948 9914 15485

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

MIPS Container Terminal

Throughputs in TEUS – 1996 - 2007

29% Increase over 2006 – 56% Increase in Transit Exports103% Increase Since MCLI Inception – 2003806% Increase since MIPS Concession - 1996

FPT Maputo RedevelopmentNeeds Volume Commitment

Is a Fruit Export Terminal required

in Maputo by the

Southern African Fruit Industry?

Location

Historical Issues

Maputo is much closer to the source areas and will obviously result in lower transport cost. Why was Durban chosen as historical site for investment in logistic facilities?

Political Issues (War, etc.)

Bad condition of road to Maputo

Border issues

Shipping opportunities

Access and draft limitations in Maputo Port

Lack of cold stores in Maputo

No sterilization facilities in Maputo

Long rail journey due to delays on Mozambique side

No market for rejected fruit

Historical Issues Current SituationPolitical Issues (War, etc.) Political stability

Bad condition of road to Maputo New N4 toll road

Long rail journey due to delays on Mozambique side

CFM invested in new rolling stock

FPT achieved 16 hour transit time Letsitele to Maputo in 2007

Border issues Waiting time at border reduced

Working hours extended 06h00 – 22h00

Shipping opportunities Introduction of direct container shipments in 2008

MOL – Far East service

MAERSK – Middle East service

Access and draft limitations in Maputo Port MPDC invested in new tugs and widened the access channel to accommodate larger vessels

No market for rejected fruit FPT repacking service

TerminalLand

TranspSea

TranspProduction area Distribution

Logistics Cost

Controlable

Influence (distance, etc)

Uncontrolable

CompetitivenessCompetitiveness

Production area

CurrentMarket

FutureMarkets

Highly Competitive

Benefits of Using Maputo Port

• Shorter landside transit time• Landside and freight cost benefits• No congestion (unlike Durban) and subsequent

transport delays• One stop cold storage and terminal handling service

– FPT (do not have to deal with multiple service providers)

• Handling services for container and specialized reefer cargo

• Full stock visibility• Simplified planning processes for exporter• Quality benefits of cold chain integrity

Terminal Volume Throughput

TOTAL

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2002 2003 2004 2005 2006 2007

Pa

lle

ts

Volume by Market

0

10,000

20,000

30,000

40,000

50,000

60,000

2005 2006 2007

Pa

lle

ts

EU/UK

MED

ME

RU

Production Areas

2005

62%

36%

0%

2%

Mpumalanga

Limpopo

Maputo

Other

Hinterland Production Volumes

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Tshipise/Musina

Swaziland

Senwes

Onderberg

Nelspruit

Letsitele

Hoedspruit

Crop (All)

Sum of Volume

Year

Region

Car

ton

s -

mill

ion

s

5,5% per annum2005 - 2010

Source - CGA

New Plantings

Total 2001 - 2006 13.4 m

Limpopo Province 5.4m 40%

Mpumalanga 1.6 m 12%

North Prov: 600Km

Mpum: 200Km

North Prov:1000Km

Mpum: 600Km

Swazi: 150Km

Swazi: 350Km

Distancesto Durban

Distancesto Maputo

Maputo is definitely a more competitive option as far as road/rail transport

Logistical Cost Competitiveness

Cost Chain Element

Durban

R’ Pallet

Maputo

R’ Pallet

Differential

R’ Pallet

R 53-R188

Transport - Road 400 – 580 220 - 480 45 - 180

Transport - Rail 207 – 440 378 – 485 45 - 171

Cargo dues 84 0 84

Container scanning

0 6 (6)

Freight surcharge

0 70 (70)

Centre of Gravity Analysis

Fresh Products Terminals: Centre-of-Gravity Analysis

-400

-200

0

200

400

0 200 400 600 800 1000 1200

Coor dinates in km

Production > 10m

Production >5m

Production <5m

Maputo

Durban

Production CoG

Export CoG

Combined CoG

Optimal CoG

Volumes assumptions 2008

Volume Pallets

Projection 2007 68 000

Additional volumes for 2008

UK/NW Continent 7 000

Far East 5 000

Mpumalanga volumes to Russia 10 000

Mpumalanga volumes to Middle East 9 000

Total 99 000

Lease agreement

• FPT operates fruit terminal facilities on premises belonging to the Port Authority – Maputo Port Development Company (MPDC).

• FPT is required to construct facilities and increase volumes handled through Maputo inline with the expectations of MPDC.

• New lease agreement to be long term due to investment requirements.

• FPT will be allowed to handle all perishable cargo.

• FPT to provide a minimum throughput guarantee.

Current Intake Area

Building G4

Project scope

Convert G5 building to cold store capable to handle sterilization cargo.

Upgrade cold room configuration in building G3 and G4.

Add container loading bays to building G3.

Upgrade plant: Replace compressors, add seawater condensers, coolers, NH3-tanks

Upgrade electrical works, switchgear, etc.

Build new forklift battery charging and technical workshop

Proposed layout Phase 1

R00400 A10005

MGC INDUSTRIAL PROJECTS (PTY) Ltd

DEK

N/A

DEK

FPT - MAPUTO

GENERAL SITE LAYOUT - PHASE 1

NEW COLD STORE FACILITY

JPDT

08/12/06

1:500

IP06 -

MGC INDUSTRIAL PROJECTS

R00400 A10005

MGC INDUSTRIAL PROJECTS (PTY) Ltd

DEK

N/A

DEK

FPT - MAPUTO

GENERAL SITE LAYOUT - PHASE 1

NEW COLD STORE FACILITY

JPDT

08/12/06

1:500

IP06 -

MGC INDUSTRIAL PROJECTS

Future phases

R00402 A10005

MGC INDUSTRIAL PROJECTS (PTY) Ltd

DEK

N/A

DEK

FPT - MAPUTO

GENERAL SITE LAYOUT - TOTAL

NEW COLD STORE FACILITY

JPDT

08/12/06

1:500

IP06 -

MGC INDUSTRIAL PROJECTS

TerminalLand

TranspSea

TranspProduction area Distribution

Logistics Cost

Controlable

Influence (distance, etc)

Uncontrolable

CompetitivenessCompetitiveness

Stakeholder Commitment

For this investment to be feasible volumes through the terminal need to increase substantially over present volumes, this can only be possible if you the exporter and shipping line give your commitment to exporting fruit through Maputo.

We are fully aware of the many unknowns but we trust that today’s workshop addressed all those.

FPT requires an intent from you as to the volumes per market you will commit on a continuous basis to Maputo in future.

FPT will ensure that the following are in place at all times:

•Terminal remains competitive•Service levels maintained and improved•Enough space allocated to handle your fruit•Ability to handle all shipping modes (Container / Specialized Reefer)

www.mcli.co.zabrenda.horne@mcli.co.za

Tel +27828022338

ACKNOWLEDGEMENTS:; MPDC; MIPS; FPT