«The Panama Canal Expansion: Potential Impact on U.S. Agriculture»

Transcription

1 «The Panama Canal Expansion: Potential Impact on U.S. Agriculture» Rodolfo Sabonge Vicepresident, Market Research and Analysis Autoridad del Canal de Panamá Oct. 5, 2011

2 Historical Background Expansion Project Potential Impact 2

3 1811 Alejandro von Humboldt

4 1855 Construction of the Transisthmian Railroad across Panama California William Aspinwall Henry Chauncey John Lloyd Stephens

5 Construction of the Panama Canal was a GAME CHANGER for World Trade

6 The Panama Canal changed trade flows

7 The Panama Canal Changed Trade Flows Ecuador New York Saves 7,366 Nautical Miles 17 days Source: Fairplay Worldshipping Encyclopedia

8 Changing Role of the Panama Canal

9 Changing Role of the Panama Canal Japan to New York Saves 2,846 Nautical Miles 6 days Source: Fairplay Worldshipping Encyclopedia

10 Construction of the Panama Canal was a GAME CHANGER for World Trade Total Number of Transits: 1,000,972 Amount of Cargo: 8,587,711,605 LT

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12 Transits vs. Panama Canal/UMS Tonnage FY 1915 FY 2011 Average PC/UMS Tonnage for Commercial Transits ,769

13 The Panama Canal

14 Principal Growth Drivers Population Growth Globalization China entering WTO Infrastructure Development Containerization Supply Chain Management Flexibility Price of Fuel Freight Rates Vessel Size Transshipment

15 Crecimiento de Población Estados Unidos CORREDOR NORESTE NH, MA, RI, CT, NY, NJ +4% Pob: 43M NOROESTE WA, OR, CA, AK +28.0% Pob: 70M POBLACIÓN GENERAL +21%, 353M (Países Selectos) REGIÓN DE GRANDES LAGOS IL, IN, MI, PA, OH +2.5% Pob: 55M GOLFO CENTRAL LA, TX, OK, KS +26% Pob: 45M CORREDOR SURESTE DE, VA, NC, SC, GA, FL +34% Pob: 68M Fuente: US CENSUS: «nterim Projections of the Total population for the United States» 15

16 México +18.9% Pob: 135M Guatemala, El Salvador, Belice, Honduras, Nicaragua % Pob: 19M Caribe, Cuba, Puerto Rico, República Dominicana, Jamaica, Haití +11.0% Pob: 42M Costa Rica, Panamá +23.0% Pob: 19M Crecimiento de Población Latinoamérica Colombia, Venezuela +22.0% Pob: 88M Ecuador, Perú, Bolivia, Chile +20.0% Pob: 85M Uruguay, Paraguay, Brazil, +18.0% Pob: 251M POBLACIÓN GENERAL +19%, 700M (Países selectos) Argentina,+17.0% Pob: 48M Fuentes: «US CENSUS: International Database»

17 Country ranking according to nominal GDP Ranking United States United States United States United States United States China China 2 Japan Japan China China China United States United States 3 Germany Germany Japan Japan Japan Japan India 4 United Kingdom United Kingdom Germany Germany India India Russia 5 France China France Brazil Russia Russia Japan 6 China France United Kingdom France Brazil Brazil Brazil 7 Brazil Brazil Brazil United Kingdom Germany United Kingdom United Kingdom 8 India India India Russia United Kingdom Germany France 9 Russia Russia Russia India France France Germany Source: WEO IMF Sep 11( ), 2016 growth rates are applied to period

18 Historical Background Expansion Project Potential Impact 18

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20 Transfer of the Canal to Panama: Change in Business Model Public Utility

21 Transfer of the Canal to Panama: Change in Business Model Public Utility Business Enterprise

22 Financial Performance FY $2,500 $2,000 Revenues $1,500 $1,000 In Millions $500 $0 Costs FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

23 Modernization and Investment Program Accumulated Investment) (in million of US Dollars) 1, AF Dredging Locomotives Technology Tugboats Tow track system Hydraulic system

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25 Historical Background Expansion Project 25

26 Panama Canal Expansion Program Objectives Maintain Canal competitiveness as well as the value of the route Increase capacity and allow the transit of larger ships Reduce water consumption Improve safety and efficiency Sustain tonnage and profitability growth

27 Secured Financing for Program December 9, 2008 The $2.3 billion financing package will cover a portion of the $5.25 billion total cost of the project and will be allocated as follows: FINANCING: European Investment Bank (EIB) Japan Bank for International Cooperation (JBIC) Inter American Development Bank (IDB) International Finance Corporation (IFC) Corporación Andina de Fomento (CAF) Subtotal: ACP: Total: $ 500 M $ 800 M $ 400 M $ 300 M $ 300 M $2,300 M $ 2,950 M $ 5,250 M The negotiated financing structure includes favorable provisions for the ACP including a 20- year amortizing period with a 10-year grace period.

28 Bid Prices/Budget of Principal Expansion Program Projects Dredging the Northern Entrance to the Pacific Access Channel Dredging Gatun Lake s Northern Reaches Pacific Access Channel - 4 Atlantic Entrance Dredging BUDGET Jan De Nul BUDGET Dredging International BUDGET ICA-FCC-MECO BUDGET JAN DE NUL, NV $ 56,527,400 $ 54,550,647-3% $ 63,600,000 $ 39,983, % $ 302,374,000 $ 267,798, % $ 105,821,000 $ 89,617,317-15% Locks Pacific Access Channel- 3 Pacific Entrance Dredging BUDGET GUPCSA BUDGET Constructora MECO, S.A. BUDGET Dredging International $ 3,481,0000,000 $ 3,221,631,384-7% $ 68,067,623 $ 36,659, % $ 181,096,000 $ 177,500, % Pacific Access Channel - 2 Pacific Access Channel - 1 BUDGET $ 48,459,296 CILSA - MINERA MARÍA BUDGET Constructora Urbana S.A. $ 25,489, % $ 61,208,966 $ 41,094,000-33% 25% 50% 75% 100%

29 Canal Expansion Program Components Deepening of Pacific and Atlantic entrance channels Deepening and widening of the Gatun Lake navigation channel Construction of new access channel for Pacific Locks Construction of new Post Panamax Locks and water saving basins in the Atlantic and the Pacific Increase the maximum operating level of Gatun Lake

30 Comparison of the volume of concrete required for the Locks Existing locks: 3.4 Mm 3 New locks: 4.7 Mm 3

31 Locks Design and Construction Item Explosives Gel Explosives Ammonium Nitrogen Concrete Cement for Concrete Pozzuolana for Concrete Reinforcement steel Structural steel for gates Structural steel for valves Amount 1,506 Tons 3,600 Tons 4.9 M m M Tons 436,000 Tons 279, 000 Tons 47,200 Tons 20,000 Tons

32 Historical Background Expansion Project Potential Impact 32

33 GAME CHANGER? The Panama Canal

34 Locks Chamber and Vessel Size Existing locks' maximum vessel size: 4,400 TEU 1m m (110 ) ) ( m (106 ) 12.4 m (39.5 ) ck s o l g stin (1,000 ) i x E 8m m (180 ) 0 ) (1,20 m m (42 ) 49 m (160 ) Ne ck o l w m (60 ) New locks' maximum vessel size: 12,600 14,000 TEU s ) 00 1,4 ( m 15.2 m (50 )

35 million of TEUs Total Container Trade Source: IHS Global Insight, Nov Containerized trade (million TEUs) growth rate Exporter China % Japan % South Korea % Taiwan % USA %

36 Container Fleet Capacity and Vessel Size Composition 2000 (4.79 millionteu) 2011 (14.9 million TEU) 2016 (19.4 million TEU) 15% P.Pmax 85% Pmax and less 44.4% Total P.Pmax % 55.6% Pmax and less 54.6% Total P.Pmax 17.6% 37% 45.4% Pmax and less 0-4,000+ teu 4,000-6,000+ teu 0-5,000 teu 5-10,000 teu 10,000+ teu 0-5,000 teu 5-10,000 teu 10,000+ teu 371 Panamax 134 Post Panamax 961 Panamax 889 Post Panamax 1,021 Panamax 1,325 Post Panamax Fuente: Clarkson s Research Studies julio 2011

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38 Liner Services Through The Panama Canal Tokyo Qingdao PyongtaekYokoham Busan a Shanghai Taipe Ningbo Yantian i Hong Kong Kaohsiung Chiwan Vancouver Seattle Oakland New York Norfolk Los Angeles Charleston Ensenad Mobile Savannah a Houston Jacksonvill e Miami Manzanillo Lázaro Kingston San Juan Cardenas P. Pto. Quetzal PR P. Caucedo Cabello Cartagena CristobalManzanilloPort of Spain Balboa Hamburg Tilbury Rotterdam Antwerp Dunkirk Le Marin Havre Bilbao La Spezia Naples Valencia Gioia Tauro Tangier Dubai Manta Guayaqu il Sidney Melbourne Papeete Lautoka Noumea Tauranga Auckland Napier Timaru Port Chalmers Calla o Ilo Iquique Mejillones Antofagast a San Antonio Trade Route Number of Services Yearly Capacity Number of Vessels Average Vessel Size Asia - USEC 13 3,008, ,440 Pendulum 3 747, ,784 WCSA - Europe 8 1,097, ,900 Asia - Caribbean 1 239, ,588 WCSA - Caribbean 1 97, ,405 WCSA - USEC 3 378, ,423 Oceania - USEC Europe 2 209, ,654 USWC - Europe 2 283, ,255 USWC - ECSA 1 100, ,918 Source: Compair Data, January 2011

39 Port Development in Panama 1996: 235K TEUs 2010: 5.6M TEUs 2015: 8.4M TEUs(P) Panama Ports Company Cristobal Colon Container Terminal Manzanillo International Terminal (MIT) Panama Ports Company - Balboa

40 Emerging Global Maritime Freight Transport System Port Traffic, TEU (2010)

41 Impact of the Expansion of the Canal, due to economies of scale derived from the use of larger container carriers through the Panama Canal

42 Major Rail Corridors Improved since 2000

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45 Expanded Canal Benefits to the US Grain industry Increased cargo carrying capacity with larger vessels and more draft capacity. Opportunity for more flexibility to get advantage of demand surges. (China) Improved transit times.

46 Economies of scale derived from the use of larger dry bulk carriers through the Panama Canal Estimated Total Maritime Costs for Drybulker from the US East Coast to China Vessel Fuel Charter costs Ports Canal Cargo Handling Total Panamax - 80,000 DWT (75% of utilization) $659,326 $608,136 $248,265 $189,983 $402,559 $2,108,268 Mini Cape Size - 120,000 DWT (96% of utilization) $844,139 $758,233 $319,662 $233,986 $837,013 $2,993,034 Savings $184,813 $150,097 $71,397 $44,004 $434,454 $884,766 Estimated Maritime Unit Costs for Drybulker from the US East Coast to China ($/Ton) Vessel Fuel Charter costs Ports Canal Cargo Handling Total Panamax - 80,000 DWT (75% of utilization) $10.99 $10.14 $4.14 $3.17 $6.71 $35.14 Mini Cape Size - 120,000 DWT (96% of utilization) $7.34 $6.59 $2.78 $2.03 $7.28 $26.03 Savings -$3.65 -$3.54 -$1.36 -$1.13 $0.57 -$9.11 Note: Note: Route of coal from Baltimore to Xingang, China. Does not include cost of repositioning the vessel in ballast. Source: Based on information from Drewry Consultants, Novix Competitive Model and other sources.

47 The Impact of Canal Expansion on Dry Bulks

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49 Dry Bulk Fleet Capacity (Millions DWT) Size Range 2011 Orders ( ) 2015 E* Capacity in Millions of DWT Up to Panamax (10-90K DWT) Capesize (>90K DWT) Total * Total 2015 estimated,not including scrapping Source: Clarksons Research Studies, June

50 Tonnage by Market Segments FY 2010 FY 2011 Container Dry Bulk Vehicle Carrier Tanker Refrigerated Passenger General Cargo Others FY2011 (e) FY PCUMS (in millions)

51 US Grain and the Panama Canal US Grain cargo tonnage accounts for nearly 18% of total Canal cargo and over 30% of Drybulk vessel tonnage. 1.5 Billion Bushels of Grains transit the Panama Canal, mostly Corn and Soybeans The Panama Canal transit costs represent less than 1% of the price of Corn, Soybeans and Wheat The Panama Canal saves between 4,800 6,000 nautical miles or days compared to alternatives through the Cape of Good Hope and Suez Canal

52 Grain vessel tonnage is 31% of Drybulk tonnage 100% = 80.0 M PCUMS TONS (FY 2011 E) Source: ACP Data Warehouse

53 Grain Cargo Tonnage Source: ACP Data Warehouse Years are fiscal: October through September

54 FY 2011 continued strong Source: ACP Data Warehouse In Million Metric TonsNote: 1 metric ton = 36.7 bushels of soybeans and 39.4 bushels of corn

55 Source:ACP Data Warehouse Soybean and corn (Metric Tons)

56 Value of US Grain Exports by Principal Producing States Prepared by ACP based on data estimates from USDA:

57 Soybeans growth by State

58 Corn growth by States

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60 The Impact of Canal Expansion on Liquid Bulks

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62 54 Transisthmian Pipeline Colon Free Zone Technology and Innovation Center Fiber Optic Duct Air Hub Banking Center Panama-Pacific Special Economic Zone

63 Average Annual GDP Growth Rates for Latin America (%chg) 1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Panama Surinam Trinidad & Tobago Peru R. Dominicana Costa Rica Ecuador Argentina Honduras Colombia Belice Bolivia Chile Brazil Paraguay Uruguay Guatemala Venezuela Nicaragua El Salvador Mexico Jamaica Haiti Source: IMF, INDESA

64 Source: ACP, MEF

65 Transportation Infrastructure s Investment Program Total: B/. 2,677.6MM (as of February 2011) «METRO DE PANAMÁ» Location: Panamá City Amount: B/. 1,089 MM MADDEN COLÓN HWY EXPANSION Location: Colón Amount: B/ MM ROAD REALIGNMENT PROJECTS Location: Panamá City Amount: B/ M SANTIAGO DAVID HWY EXPANSION Locaction: Chiriquí / Veraguas Amount : B/. 750 MM «METRO BUS» Location: Panamá City Amount: B/. 30M ARRAIJÁN CHORRERA HWY REFURBISHMENT Location: Panamá Oeste Amount: B/ MM DAVID BOQUETE HWY EXPANSION Location: Chiriquí Amount: B/ MM DIVISA CHITRÉ HWY EXPANSION Location: Herrera Amount: B/. 114 MM LA VILLA LAS TABLAS HWY EXPANSION Location: Los Santos Amount: B/ MM Under construction Awarded

66 GAME CHANGERS REQUIRE STRATEGIC PLANNING Rodolfo Sabonge Vicepresident, Market Research and Analysis Panama Canal Authority

67 Managua 67

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