THE MAPUTO CORRIDOR LOGISTICS INITIATIVE MCLI AGRICULTURE TRADE

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THE MAPUTO CORRIDOR LOGISTICS INITIATIVE (MCLI) AGRICULTURE TRADE AWARENESS CAMPAIGN Date: 17 JULY 2008

THE MAPUTO CORRIDOR LOGISTICS INITIATIVE (MCLI) AGRICULTURE TRADE AWARENESS CAMPAIGN Date: 17 JULY 2008 –BRENDA HORNE – CEO of MCLI

1. MAPUTO CORRIDOR BRIEF OVERVIEW Re-established proven transportation route for regional trade as well

1. MAPUTO CORRIDOR BRIEF OVERVIEW Re-established proven transportation route for regional trade as well as to international markets for SA, Zimbabwe, Swaziland, Botswana through Mozambique. Tzaneen SOUTH AFRICA 1 OF AFRICA’S PROMINENT ECONOMIC HUBS Palabora MAPUTO CORRIDOR Steelpoort Nelspruit Komati poort Belfast Middleburg Johannesburg Secunda Ermelo Piggs Peak SWAZILAND Maputo

 WHAT IS THE MCLI VISION To become the leading corridor stakeholders’ coordinator, contributing

WHAT IS THE MCLI VISION 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. 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 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. To inform the market about the Corridor and to market the strategic benefits and opportunities offered by the Corridor • GOAL “Maputo Corridor the first choice for the Corridor Region’s Stakeholders”

MPDC SHARE HOLDING As from Jan 2008 Portus Indico -Private Sector 51% • DPW

MPDC SHARE HOLDING As from Jan 2008 Portus Indico -Private Sector 51% • DPW 48. 5% • Grindrod – 48. 5% • Mozambique Gestores 3% 24. 735% 1. 53% Public Sector 49% • CFM 33% • Government 16% 33. 000% 16. 000% 100. 00%

THE NEW BOARD OF MPDC- MAR 2008 • • Port Master Plan - ensuring

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 -

O T U P A M F O T R O P – C

O T U P A M F O T R O P – C MPD PORT POTENTIAL 26 MILLION TONS 2007 – Total 6, 70 mt transit 2. 833 mt 2007 – Road traffic in/out of Port = 2. 25 M Tonne 2007 – Rail traffic in/out of Port = 1. 7 M Tonne 2007 – SA Exports = 59% of all Port Exports 2007 – SA Transit = 77% of all Port Transit Cargo

MIPS Container Terminal Throughputs in TEUS – 1996 - 2007 29% Increase over 2006

MIPS Container Terminal Throughputs in TEUS – 1996 - 2007 29% Increase over 2006 – 56% Increase in Transit Exports 103% Increase Since MCLI Inception – 2003 806% Increase since MIPS Concession - 1996

FPT Maputo Redevelopment Needs Volume Commitment

FPT Maputo Redevelopment Needs Volume Commitment

Is a Fruit Export Terminal required in Maputo by the Southern African Fruit Industry?

Is a Fruit Export Terminal required in Maputo by the Southern African Fruit Industry?

Location

Location

Historical Issues Maputo is much closer to the source areas and will obviously result

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 Situation Political Issues (War, etc. ) Political stability Bad condition of

Historical Issues Current Situation Political Issues (War, etc. ) Political stability Bad condition of road to Maputo New N 4 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 06 h 00 – 22 h 00 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

Competitiveness Logistics Cost Production area Land Transp Controlable Influence (distance, etc) Uncontrolable Terminal Sea

Competitiveness Logistics Cost Production area Land Transp Controlable Influence (distance, etc) Uncontrolable Terminal Sea Transp Distribution

Highly Competitive Current Market Future Markets Production area

Highly Competitive Current Market Future Markets Production area

Benefits of Using Maputo Port • Shorter landside transit time • Landside and freight

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

Terminal Volume Throughput

Volume by Market

Volume by Market

Production Areas

Production Areas

Hinterland Production Volumes Cartons - millions 5, 5% per annum 2005 - 2010 Source

Hinterland Production Volumes Cartons - millions 5, 5% per annum 2005 - 2010 Source - CGA

New Plantings Total 2001 - 2006 Limpopo Province Mpumalanga 13. 4 m 5. 4

New Plantings Total 2001 - 2006 Limpopo Province Mpumalanga 13. 4 m 5. 4 m 1. 6 m 40% 12%

Distances to Maputo North Prov: 600 Km Mpum: 200 Km Swazi: 150 Km Distances

Distances to Maputo North Prov: 600 Km Mpum: 200 Km Swazi: 150 Km Distances to Durban North Prov: 1000 Km Mpum: 600 Km Swazi: 350 Km 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’

Logistical Cost Competitiveness Cost Chain Element Durban R’ Pallet Maputo R’ Pallet Differential R’ Pallet R 53 -R 188 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

Centre of Gravity Analysis

Volumes assumptions 2008 Volume Pallets Projection 2007 68 000 Additional volumes for 2008 UK/NW

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 Mpumalanga volumes to Middle East Total 10 000 99 000

Lease agreement • • • FPT operates fruit terminal facilities on premises belonging to

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

Current Intake Area

Building G 4

Building G 4

Project scope Convert G 5 building to cold store capable to handle sterilization cargo.

Project scope Convert G 5 building to cold store capable to handle sterilization cargo. Upgrade cold room configuration in building G 3 and G 4. Add container loading bays to building G 3. Upgrade plant: Replace compressors, add seawater condensers, coolers, NH 3 -tanks Upgrade electrical works, switchgear, etc. Build new forklift battery charging and technical workshop

Proposed layout Phase 1

Proposed layout Phase 1

Future phases

Future phases

Competitiveness Logistics Cost Production area Land Transp Controlable Influence (distance, etc) Uncontrolable Terminal Sea

Competitiveness Logistics Cost Production area Land Transp Controlable Influence (distance, etc) Uncontrolable Terminal Sea Transp Distribution

Stakeholder Commitment For this investment to be feasible volumes through the terminal need to

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. za brenda. horne@mcli. co. za Tel +27828022338 ACKNOWLEDGEMENTS: ; MPDC; MIPS;

www. mcli. co. za brenda. horne@mcli. co. za Tel +27828022338 ACKNOWLEDGEMENTS: ; MPDC; MIPS; FPT