INDUSTRIALIZED PRODUCTS 1
Agenda Summary 1Q07 Results Market Strategy Projects with Clients 2
Summary Industrialized Products Industrialized products business - Intermodality Area of operation: Brazil + Argentina Higher value-added added freights Low market share in the rail network High growth potential Higher service level Superior growth when compared to ALL s average 3
1Q07 Results 4
1Q07 Highlights - Volume INTERMODAL (RTK million) 19.4 % 649 775 TOTAL (RTK million) 11.4 % 1Q06 1Q07 1,772 1,973 1Q06 1Q07 5
1Q07 Highlights - EBITDAR EBITDAR (R$ million) 89 % 48 26 EBITDAR Margin (%) 1Q06 1Q07 17 % 42% 25% 1Q06 1Q07 6
Volumes Wood products Volume (RTK million) 54 % 124 81 1Q06 1Q07 Market Share (%) 50 % 15% 10% 1Q06 1Q07 7
Volumes - Containers Volume (RTK million) 19,2 % 180 151 1Q06 1Q07 Market Share (%) 15 % 2% 3% 1Q06 1Q07 8
Volumes Food Products Volume (RTK million) 15 % 70 80 1Q06 1Q07 Market Share (%) 12 % 21% 24% 1Q06 1Q07 9
Volumes - Steel Volume (RTK million) 203 6 % 215 1Q06 1Q07 Market Share (%) 0 % 13% 13% 1Q06 1Q07 10
Volumes - Construction Volume (RTK million) 267-4 % 256 1Q06 1Q07 Market Share (%) -7 % 21% 19% 1Q06 1Q07 11
Volumes - Argentina Volume (RTK million) -4 % 818 788 1Q06 1Q07 Market Share (%) -7 % 21% 19% 1Q06 1Q07 12
MARKET 13
Modal Matrix County Rail Highway Waterway Russia 81% 8% 11% India 50% 50% 0% Canada 46% 43% 11% Poland 44% 55% 1% United States 44% 33% 23% Australia 43% 53% 4% China 37% 13% 50% France 22% 74% 4% Brazil 22% 64% 14% Germany 20% 63% 17% Mexico 11% 55% 34% Italia 10% 90% - England 8% 68% 24% Japan 4% 55% 41% Source: CIA Factbook 2003 Brazilian Ministry of Transportation IBGE Brazilian Institute of Geography and Statistics Statistics Annual Report 2001 - GEIPOT 14
ALL Industrialized Products Share Southern Network Market Share 18% 82% ALL Market Argentina Market Share Northern Network Market Share 19% 3% 81% 97% ALL Market ALL Market 15
STRATEGY 16
Rail Modal in Brazil Brazil Distance (KM) 17
Southern Strategy Instant 1: 1997 to 2001 100% rail freights Large volumes Higher margin Lower need of service level Instant 2: 2001 ahead Intermodality and door-to to-door Long distances New terminals Dedicated projects Service level and reliability 18
Northern Strategy Instant 1: 2007 to 2012 100% rail freights Large volumes Higher margin Lower need of service level Instant 2: 2008 ahead Intermodalility and door-to to-door Long distances New terminals Dedicated projects Service level and reliability 19
Argentina Strategy Intermodality New terminals Flows among Argentina, Brazil and Chile Long distances Dedicated projects 20
PROJECTS 21
Vega do Sul Case 22
Vega do Sul Case OUTBOUND OPERATION INTERMODAL ABC Paulista SÃO PAULO Vale do Paraíba 12.000 ton VEGA DO SUL PLANT SÃO FRANCISCO DO SUL ARAUCÁRIA Rail Car Size Estimation Origin Destination Volume Rail Car TU Ttime Rail car Cycle Monthly Turnover 30 Number of Rail Cars Unavailability 5% 23
Vega do Sul Case RAIL CARS FOR COILS BEFORE AFTER Remodeled Platform Closed Railcar for Coils 24
Vega do Sul Case COILS CRADLE 1200 mm coils 800 mm coils 25
Cases C a s e s Klabin Case 26
Klabin Case TERMINAL TATUÍ Piracicaba (SP) 1,500 ton Jundiaí (SP) 2,000 ton Monte Mor (SP) -Tetra 5,000 ton KLABIN PLANT TELÊMACO BORBA 470 km TERMINAL PARANAGUA 8.000 ton 5 km PARANAGUÁ PORT 5.000 ton KLABIN PLANT OTACÍLIO COSTA 50 km TERMINAL LAGES 5.000 ton 27
Klabin Case 28
Masisa Case Forest Industry Solutions: Rail car 13.5 m long with no central pillar; Strong freight flexibility; 66% of rail car open. 29
Cases C a s e s SLC Case 30
SLC Case Equipment: Platform White rice (milled) Empty Rail Car 31
SLC Case Logistic intermodal operation that comprises the product transportation by railroad and its storage and distribution to points of sale Advantages to the client: Logistic integration / sole interlocutor Flexibility for servicing retailers Transit time reliability SLC Advanced point of sale Transfer and palletized distribution of the product 32
CONTAINERS PROJECT 33
Containers Market 2006 Exports ALL Ports (TEUS) January 68,981 February 74,760 March 77,277 April 80,958 May 82,388 June 83,578 July 86,694 August 94,036 September 88,898 December October 86,943 90,801 November 83,737 2006 Containers Handling Containers Handling 1Q07 Santos Port 227,257 Containers Handling 1Q07 - South 145,369 1.3% of total 1,974 Market ALL Market ALL 34
Containers Terminals Old Terminals Tatuí Uruguaiana Araucária Terminals Concluded in June 2007 Porto Alegre Mafra Cambé Apucarana Lages Terminals to be concluded in 2007 Guarapuava Cascavel São Francisco Ports Paranaguá Rio Grande 35
Cambé Terminal/PR Cambé Terminal Rail detour for 20 rail cars Area: 6.000 m² 30 electric switches 36
Esteio Terminal/RS 37
Container Holder Rail Cars Shields in the headboards of the rail car that impede the opening of the container, providing security to the freight and to the container components. 38
Cascavel x Paranagua Flow GUARAPUAVA CURITIBA PARANAGUÁ CASCAVEL 250 km 150 km 100 km TCP 3 days 1 d 1 d Cascavel 3 days Paranaguá Operating Descriptive: 20-rail cars daily train from Cascavel and TCP; Reach Stacker Equipment in Cascavel; Temperature monitoring team in Cascavel, Guarapuava and Curitiba; Transit time Cascavel x TCP: 3 days (72 hours); ALL and partners are developing a project to expand the Containers Terminal in Cascavel. Charging Point 39
FLUXO Cambé x Paranaguá CURITIBA PARANAGUÁ CAMBÉ 350 km 100 km TCP 1 d CAMBÉ Operating Descriptive: 20-rail car daily train from Cambé and TCP; Reach Stacker Equipment in Cambé; 3 days 3 days 30 switches of 440 v; 30 thousand square meters area; Temperature monitoring team in Cambé and Curitiba; 1 d Paranaguá Transit time Cambé x TCP: 3 days (72 hours); Charging Point 40
Esteio x Rio Grande Flow SANTA MARIA RIO GRANDE ESTEIO 250 km 350 km TECOM 1 d ESTEIO Operating Descriptive: 20-rail cars daily train from Esteio and Tecom; Reach Stacker Equipment in Esteio; 2 days 2 days 30 switches of 440 v; 6 thousand square meters area; Temperature monitoring team in Esteio; 1 d TECOM Transit time Esteio x Tecom: 2 days (48 hours). Charging Point 41
Sadia Logistic Operator Zone 5 Project Volume 34,304 tons/month 4.157 Tons 6.000 Tons SADIA Distribution Center - Uvaranas PONTA GROSSA/PR GUARAPUAVA SADIA TOLEDO/PR 45 km 14.286 Tons CASCAVEL PONTA GROSSA (Ribas Detour) 24.147 Tons PONTA GROSSA (Ribas Detour) CURITIBA CURITIBA 220 km SADIA Francisco Beltrão/PR 5.494 Tons TERMINAL COMPACTA PARANAGUÁ KM5 Empty Rail Car Return TCP SADIA Dois Vizinhos/PR 245 km 8.524 Tons Charging Point SADIA PLANT PARANAGUÁ/PR 42
Mission To be the best logistic company in Latin America. 43