The sight of a Port Operator

Cool Logistics The sight of a Port Operator São Paulo, May 15 th 214 Patrício Junior CEO PORTO ITAPOÁ VP Associação dos Terminais Portuários Privados - ATP Making the difference to always make it better

A Stakeholder's View Cool Logistics 15 min AGENDA 1. Brazil's Figures - Export 2. Cargo Reefer + Meat + Ports 3. Bottlenecks 4. Draft How important is 1 cm?

Wolrd s Population Over 7B People Source: Konecranes World Bank/IMF

What does Brazil produce and export? Top 1 Export - US$ Million - 213 Value % 213/12 % Share 1 - Ores 35.83 5,5 14,5 2 - Transport material 31.584 28,4 13, 3 - Soybeans & prods 3.965 18,5 12,8 4 - Oil & fuel 22.398-27,7 9,2 5 - Meat 16.272 6,6 6,7 6 - Chemicals 14.635-3,6 6, 7 - Sugar & ethanol 13.711-8,8 5,7 8 - Metalurgic products 13.262-14,8 5,5 9 - Machines & equipments 8.979-15,1 3,7 1 - Paper & pulp 7.155 7,5 3, falling compared to 212 growth compared to 212 Source: Ministry of Development, Industry and Trade Perishables - especially meat - presents growing continuously

Meat How are we? 7. 6. 5. 4. 3. 2. 1. - -1. Handling of Reefer cargo 212-213 (Containers Exported) Ports of RS/SC/PR/SP, by Dataliner SANTOS PARANAGUA ITAPOA S. F. DO SUL NAVEGANTE ITAJAI IMBITUBA RIO GRANDE S 212 64.214 57.643 11.592 5.38 37.99 35.836 247 27.923 213 67.416 51.595 25.232 968 46.768 28.478 36 27.923 GROWTH % 5, -1,5 117,7-8,8 23,4-2,5-85,4,

An Important Point: Ministry of Agriculture/Health Inspection/Customs Example of Ministry of Agriculture 16 check-in points in Brazil animal / plant SANTOS - 34 agents - 1.2 container per day Ports - 28 Airports 26 Borders 28 Interior Customs - 24 ITAJAÍ-NAVEGANTES - 13 agents - 4 container per day S. FCO./ITAPOÁ - 3 agents - 6 container per day

81 8 86 9 1 112 111 119 127 132 153 173 177 24 228 234 253 278 27 255 257 261 276 275 279 274 26 296 289 316 34 39 331 333 316 352 338 367 392 415 44 476 473 494 545 577 588 593 Millions TONS Movements in the Brazilian Ports General Cargo and Container (TONs) 1. 9 PUBLIC PORTS 834 886 94 931 8 7 PRIVATE PORTS (TUP) TOTAL 621 649 693 755 768 733 6 5 4 36 35 341 347 36 388 386 414 443 436 485 56 529 571 3 2 1 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 Source: ANTAQ

Brazilian ports in numbers Containers São Sebastião TUP SANTA CLARA TUP TEPORTI Porto Velho Macapá Santarém Itaqui Imbituba Recife Belém Natal Vila do Conde São Francisco do Sul Fortaleza TUP PECÉM Vitória TUP SUPER TERMINAIS Salvador Itaguaí (Sepetiba) Rio de Janeiro TUP CHIBATÃO Suape Itajaí TUP PORTO ITAPOÁ Rio Grande TUP PORTONAVE Paranaguá Santos 1 1 2 2 2 3 3 4 4 4 6 6 6 8 8 Santos concentrates 34% of cargo handled (TEU) in Brazil 213. And still competes with bulk cargo. 34 Source: ANTAQ - 5 1 15 2 25 3 35 4 Share (%)

Infrastructure

Compared with the BRICs BRIC: Transport Infrastructure Investment 211 China 1,6 1.15,5 India 8 324,8 Russia Brazil 7,36 8,14 155,4 2 4 6 8 1 12 % of GDP Investment (in US$ billion) Source: APICS American Production and Inventory Control Systems, SCC World Supply Chain Council, and ABDIB

Reality and Prospect of Public Investment VALUES (BRL Billion) GROWTH SECTORS 26-29 211-214 % % per year Eletric Power 14 139 34 6 Telecommunication 62 72 15 2,8 Sanitation 26 41 57 9,4 Logistics 55 129 499 18,6 Railways 2 6 22 24,7 Highways 3 51 71 11,4 Ports 5 18 225 26,6 Infrastructure 247 38 54 9 Ports has been always the last priority of the Governments Big growth but not enough Source: APE/BNDES

Brazil: transport infrastructure investments Public investment in transport infrastructure over the years in Brazil In % of GDP Source: CNT Confederação Nacional dos Transportes (National Transports Confederation)

Brazilian Reality Current Reality Most of the investments are exclusive from the State Tax complexity Low investments in specialized training of logistics human resources Legal complexity Consequences - Delays in projects conclusions - Lack of control - Overspending - Limited technical knowledge - High of "Brazil Cost - Fear of large investments in longterm - Inability technical - Complex projects are postponed - Delay in resumption of growth - Fear for attracting foreign investment - Occasional investments (no interconnection)

Draft How important is 1cm?

Bunker prices increased exponentially Source: SeaIntel Maritime Analysis

Concerning ports situation, specifically One of the consequences we are not a Top player REQUIREMENTS FOR BERTHING BIG VESSELS Maritime Safety Depth Evolution bay Equipment None of these vessels enter into Brazilian ports at maximum capacity.

An example: Itapoá access conditions Variants of determining access to a port: 1 - Access Channel - Draft - Width 2 - Evolution basin 3 - Depth alongside

Rea$on$ for investment in maritime access in Brazil + 1 cm in draft 1 ton p/ vessel 1 ton p/ vessel 8 CTR (with 12.5 ton each) 1 CTR generates movement 8 CTRs generates movement US$ 8, US$ 1, Loading/discharging... + 1 cm in draft +US$ 8, p/ vessel + 1 cm in draft 8 CTR + 1 cm in draft +US$ 8, p/ vessel 1 service in 1 berth 52 berthing/year 7 services in week 364 berthing/year 1 berth - 1% used 364 berthing/year X 364 berthing/year US$ 8, p/ vessel US$ 2,9 millions ONLY 1 cm in draft can generate In a berth 1% utilezed US$ 2,9 millions/year

Thank You!