The Role and Development Perspectives of the Port of Riga on the Competing Market

of Eastern Baltic Sea Region

Viesturs Silenieks

Vice Chairman of the BoardFreeport of Riga Authority

2

Presentation Outline

• Port of Riga in 2010• Role of Port in the Eastern Baltic Sea Region• Port Connections• Key Performance Indicators• Port Development Strategy• Investment Opportunities

3

Freeport of Riga in 2010

• By cargo turnover Latvia’s biggest port and the third biggest port in the Baltic States (30 mln.t)

• Multifunctional port with cargo handling capacity 45 mln.t/year

• Port accounts for 5 200 direct and close to 15 000 indirect work places (railway, forwarding, agencies, trucking, etc.)

• Total port revenues reached EUR 402 mln and net profit EUR 46 mln

• Taxes paid into the state and Riga municipal budgets - EUR 28 mln

www.freeportofriga.lv

Port in 2010

4

The Baltic Sea – a Region of Strong Port Competition

11 ports compete for cargo to/from Russia

Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 340 mln t in 2010

Eastern Baltic Sea Region

Role in EBS Region

RUS 176,6 mln t

EST 36,6 mln t

LAT 59,7 mln t

LIT 40,3 mln t

FIN 26,9 mln t

5

Cargo Turnover at the Ports of Eastern Baltic Sea Region (mln.t)

Rīga22%

Role in EBS Region

Prim

ors

k

St.P

ete

rsb

urg

Ta

llin

n

Kla

ipe

da

Rig

a

Ve

nts

pils

Ko

tka

/Ha

min

a

Vis

ock

Ka

linin

gra

d

Ust

-Lu

ga

He

lsin

ki

Bu

ting

e

Lie

pa

ja

Vyb

org

78

58

3631 30

25

16 15 13 12 11 9 4

1

200820092010

90

80

70

60

50

40

30

20

10

0

Rig

a

6

Dry Bulk Cargo Market in Eastern Baltic Sea Region in 2010

Role in EBS Region

Riga21.1%

St.Pe-tersburg19.7%

Klaipeda14.2%

Ust-Luga13.2%

Ventspils10.6%

Tallinn6.7%

Kaliningrad3.9%

Kotka/Ham-ina

3.5%

Visock2.8%

Liepaja2.3%

Helsinki1.0%

Vyborg0.9%

Total dry bulk cargo turnover at the ports of EBSR 82.6 mln. t

Dry bulk

7

General Cargo Market in Eastern Baltic Sea Region in 2010

Role in EBS Region

St.Petersburg34.2%

Helsinki13.3%

Kotka/Ham-ina

13.3%

Klaipeda13.0%

Riga8.7%

Tallinn7.1%

Kaliningrad3.6%

Ventspils2.7%

Liepaja2.6%

Ust-Luga1.2%

Vyborg0.3%

Total general cargo turnover at the ports of EBSR 74.3 mln. t

General cargo

8

Liquid Bulk Cargo Market in Eastern Baltic Sea Region in 2010

Role in EBS Region

Primorsk42.5%

Tallinn14.1%

St.Petersburg9.0%

Ventspils7.7%

Visock6.9%

Klaipeda5.4%

Butinge4.9%

Kaliningrad4.0%

Riga3.6%

Kotka/Ham-ina

1.7%

Liepaja0.3%

Total liquid bulk cargo turnover at the ports of EBSR 183.1 mln. t

Liquid bulk

9

Regular Liner Services

Connectivity

MSCCMA-CGMUnifeederTeam LinesMannLines MultimodalContainershipsMaersk

Tallink (ro pax)

Regular Liner Services

10

Hinterland ConnectionsDedicated Container Trains

Conectivity

• A scheduled block train service with two container trains per week

• Transit time 8-10 days• Operated by FIS company• 20 188 TEUs in 2010

• A dedicated block train service for the delivery of non-military goods to US troops in Afghanistan

• Started in February 2009• Operated by

TransContainer• Average transit time 10-11

days

• Scheduled container train between Riga and Minsk (Belarus), with further deliveries via Orsha (Belarus) to Illichevsk (Ukraine)

• Average transit time 4 days

“Zubr” Riga-Hairaton

Baltika-Transit

11

EMMA - Eurasian Multi-Modal Alliance

Conectivity

Since 2011 a joint venture EMMA was established between Latvian forwarder SRR and French logistics group GEFCO for services to/from Riga to/from Central Asia

Eurasian Multi – Modal Alliance

12

Cargo turnover at the Freeport of Riga (mln. t)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

13.414.9

18.121.7

24.0 24.4 25.4 25.9

29.6 29.7 30.5

Total

Liquid Bulk

General Cargo

Dry Bulk

Performance

• Average annual growth rate 8.8%

40

35

30

25

20

15

10

5

0

33.9

(estimated)

13

Main Types of Cargo in 9 months of 2011

Coal 39,0%9 821,7 thous.t (+15%)

Oil products 23,1%5 810,9 thous.t (+27%)

Timber 11,9%3 000,1 thous.t (-14%)

Containerized cargo 9,1% 222 712 TEU (+20%)

Chemicals (fertilizers) 5,0%1 252,7 thous.t (+21,4%)

Performance

14

Passenger Traffic

Performance

• Tallink provides daily passenger connection from Riga to Stockholm

• Number of Tallink passengers increased by 17% in 2010 (632 thous.)

• Tallink carried 100 000 ro-ro units (up to 15% trucks ) in 2010

Ferry Passenger Traffic

• Cruise season of 2010 brought to Riga 64 cruise ships and 58 564 cruise passengers

• Number of cruise calls is expected to increase by 9.3% (70 calls) in 2011

• Number of cruise passengers is expected to grow by 10.9% (65 000 passengers) in 2011

Cruise Passenger Traffic

15

Port Authority`s Investments

• Deepening of the fairway to 15.5 – 17m

• Multifunctional dry bulk terminals on the Krievu sala

• Modernization of the port’s railway network

• Construction of the new railway bridge

Private Investments

• Oil products terminal in Bolderaja

• Natural gas handling terminal

• New terminals on the Kundziņsala (fertilizer terminal, container terminal, grain terminal and logistics park)

• Terminal for production and handling of bioethanol

Development Projects (2010 – 2020)

Development

Total port investment portfolio 1.1 bln EUR

• Port Authority`s Investment 300 mln EUR• Private Investment 757 mln EUR

1

2

3

4

5

5

7

1

2

3

3 7

86

48

6

16

Deepening of the Fairway (1/2)

Development

16 m

13.5 m 12.5 m 10 m

Current depth of the fairway

17

Deepening of the fairway (2/2)

Development

17 m15 m 12.5 m

10 m

• 1st phase: 2012-2014: canal depth -

15m• 2nd phase:

2014-2018: canal depth -17m

Widening of the canal from existing 100m to 135-165m

Two-phase development:

18

New Dry Bulk Complex on the Krievu sala

• Project: Relocation of Port Activities from the City Center to Krievu sala

• Project duration: 2009-2013

• Investment: EUR 153 mln.

• Territory: 56 ha

• Capacity 17-22 mln tons/year

• 4 berths of 1180 m total length

Development

19

Diverse Cargo Terminals on the Kundziņsala (1/2)

• Total territory: 181 ha

• Project duration: 2010-2020

• Investment: EUR 239 mln.

• 5 terminals with different profiles:

containers, cold stores, fertilizer terminal, grain terminal, logistics park

Development

20

Investment Opportunities in the Freeport of Riga

• Long-term leasing of land on attractive terms (up to 45 years)

• 445 ha of land available for development

• Licensed company status and Free zone regime allows to receive tax relieves

• Freeport Authority assistance in the development of private terminal infrastructure

• A favourable investment climate in Latvia

Investment

21

Thank you for your attention!