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Transnet Overview

12 September 2016

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2

Agenda

Introduction

• Transnet SOC Ltd

Transnet Port Terminals

• Containers, Bulk, Break-Bulk & Car Terminals

TPT Strategic Drivers

• Agile, Admired, United and Digital

Market Demand Strategy

• Progress & Looking Forward

TPT’s Growth Strategy

• Grow & Defend, Diversification

Global Expansion Strategy

• Terminal Operations for Africa

Transnet’s Value Proposition

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Ships are Getting Bigger

DBN EL PE CPT Ngqura

Draft 12.2m 10.2m 11.7m 13.8m 16.5m

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If all the 20 Foot Equivalent Unit (TEU) sized Containers from the world's largest container ship, the Emma Maersk were to be put on a train, the train would be more than 70 km long.

Vessel Sizes

Generation Years

Produced Capacity

(TEUs) Length

(m)Draft (m)

1st Early Containership 1956-1970 <1000 137-200 9

Fully Cellular 1970-1980 1000-2499 200-225 10

2nd - Panamax 1980-1985 2500-3499 250-290 11-12

Panamax Max 1985-1987 3500-4499 275-294 12.5-13

3rd Post-Panamax 1988-1999 4500-5999 295-320 13-14

Post Panamax Plus 2000-2003 6000-6999 320-340 14-14.5

4th New Panamax 2003-2007 7000-12999 340-350 14.5-15.2

5th Post New Panamax 2006-2012 13000-15999 350-400 15.5

Tripple E 2013 + 18000 TEU’s 400-440 16

Source: Geography of Transport Systems

• Only Cape Town and Ngqura can handle fully laden 4th generation

vessels

• Only Ngqura can handle 5th generation vessels

• The average size of vessels on order is currently 5,310 TEU

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Port Land Capacity- China Today, Durban Tomorrow?

http://www.agility.com/EN/news/australasia/Pages/ISSUE-16-2015-Port-congestion-in-TCIT,-Ho-Chi-Minh-City.aspx#.VxTz1_l9670

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Container Ships Trade Routes- 40 Ships around the SA coast on 16 Feb ’16 (20 Calling)

Source: Dr Henriëtte van Niekerk, Clarksons Platou

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Dry-Bulk Ships Trade Routes- 173 Ships around the SA coast on 16 Feb ’16 (70 Calling)

Source: Dr Henriëtte van Niekerk, Clarksons Platou

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Principal trading partners – exports

China: 11.8%

USA: 8.3%

Japan: 6.0%

Germany: 5.7%

India: 4.2%

'welcome_to_the_anthropocene'_earth_animation_1280x720.mp4

SOUTH AFRICA- Southern Hub for World Shipping Routes

Source: http://www.searates.com/reference/portdistance/

The position of South Africa’s ports system enables it to access to South-South trade, Far East trade, Europe & USA, East & West Africa regional trade

Imports:• China: 14.4%• Germany: 10.1%• Saudi Arabia: 7.7%• USA: 7.4%• Japan: 4.6%• India: 4.5%

Exports:• China: 11.8%• USA: 8.3%• Japan: 6.0%• Germany: 5.7%• India: 4.2%

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Europe- SA’s second biggest Trading Partner

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Africa- Regional Integration

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12 1212

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SA IMPORTS FROM SADC

0

2

4

6

8

10

12

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16

18

2005 2007 2009 2011 2013 2015

R billion

Africa

Exports ImportsImports

Total Imports into Africa, originating from overseas countries grew from R53.4bn in 2006 to R166bn in 2015.Exports to other countries, originating in Africa grew from R31bn to R88bn during the same period.

Sub Saharan Africa’s GDP has grown at 3.3% from 2014 to 2015, but is anticipated to only grow by 1.6% during 2016.

SSA’s current account has decreased by -5.9% as percentage of GDP and consumer price inflation increased by 7% in 2015.

Exports

African Trade Situation

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Thank YouTransnet

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History

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History of Transnet

The first harbour master was appointed in 1839 so perhaps Durban as a port should be considered from this time.

In 1840 the first railway lines were constructed in the Cape Colony and then later also in Natal.

In the 1850’s the construction of a railway line was started linking the Cape and Natal harbours with the hinterland.

After the discovery of diamonds in Kimberley in 1867, a need for railway and harbour expansions became apparent.

Cape railway system becomes government property in 1872 and the Natal railway system in 1877.

Rumours of gold deposits in the Transvaal Republic are confirmed. Economic power is shifted from the colonial south to the republican north from 1880 onwards.

After the Union of South Africa was achieved in 1910, the South African Railway and Harbours (SAR&H) administration is established in 1916 through an act of parliament.

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History of Transnet

The opening of efficient mainliner passenger links in the 1930’s led to an impressive network of urban and metropolitan train services that make South Africa a mobile nation.

Durban Bay also served a different kind of purpose in the 1930s until late in the 1950s when it was used as a base for flying boats. Durban was the terminus of the first commercial air route between South Africa and Europe for Imperial Airways flying from Maydon Wharf.

In 1981 the country’s railway, harbour, road transport, aviation and pipeline operations become known as South African Transport Services (SATS) after government agreed that the SAR&H should restructure along business lines.

In 1990 SATS is given company status and renamed Transnet Limited (State Owned Enterprise) with Spoornet, Portnet and Petronet as divisions. Business units not focussed and the transport of freight (like SAA and Metrorail) is sold off.

In 2003, the Ports division was split into Port Operations and the Ports Authority of South Africa.

In 2007 Transnet becomes a listed Public Enterprise and Transnet Port Terminals as well as Transnet National Ports Authority were named.

In 2012 Transnet announce a 7-year infrastructure investment strategy known as the Market Demand Strategy, pledging to invest R300 bn by 2019.

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Port, Rail and Pipeline Operations Advanced

ManufacturingCapital

Investment

Transnet Group EXCO

Ms Makano Mosidi

Group Chief

Information Officer

Mr Mlamuli Buthelezi

Chief Operating Officer Mr Krishna ReddyChief Capital Officer

Mr Thamsanqa Jiyane

Chief AdvancedManufacturing Officer

Mr Gert de Beer

Chief Business Development Officer

Ms Disebo Moephuli

Group Chief Corporate

and Regulatory Officer

Ms Nonkululeko SishiGroup Chief HR Officer

Mr Garry PitaGroup CFO

Mr Siyabonga GamaGroup Chief Executive

Business Development

Mr Ravi Nair

CE TFRMr Karl Socikwa

CE TPT

Ms Sharla Chetty

CE TPTMr Richard Vallihu

CE TNPA

HRIT&SLegalFinance

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Transnet’s Business Model

Port, Rail and Pipeline Operations

Advanced Manufacturing

Capital Investment

Business Development

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Transnet Integrated Operating Model

6 Common Interest Terminals

7 Strategic Inland Terminals

4 Joint Ventures

29 Operator Licenses

RAIL TERMINALS

44 Rail Terminals

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Stakeholder Environment

Industry BodiesPartnering with groups or organisations that are affected by the activity of the port.

CustomersAlignment and collaboration on growth and expansion plans. Implementation of Performance Standards.

GovernanceAs a State Owned Company Transnet is part of the DPE and subjected to governance by NDOT

EmployeesTransnet is highly unionised with 93% of employees being members of labour unions

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7. SaldanhaBulk (Export iron ore),

Breakbulk

6. Cape TownContainers,

Breakbulk

4. NgquraContainers

3. East LondonContainers, Breakbulk, Agri-Bulk, Automotives

1. Richards BayBulk (Export Coal, Magnetite, Chrome) Breakbulk

2. DurbanContainers, Breakbulk, Agri-Bulk, Automotives

5. Port ElizabethContainers, Breakbulk, Bulk, Automotives

Transnet’s alignment to SIPs

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• Transnet Freight Rail is the largest division of Transnet. It is a world class heavy haul freight rail company that specializes in the transportation of freight.

• Transnet Freight Rail's core business lies in freight logistics solutions designed for customers in industry based business segments, mining, heavy and light manufacturing.

• Transnet Freight Rail has over 38 000 employees, who are spread throughout the country.

• The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-Saharan region, with its rail infrastructure representing about 80% of Africa's total.

• The company is proud of its reputation for technological leadership beyond Africa as well as with-in Africa, where it is active in some 17 countries.

Business Units• Agriculture & Bulk Liquids• Containers & Automotive Business• Coal• Iron Ore and Manganese• International Business• Mineral Mining and Chrome• Steel & Cement

Transnet Freight Rail

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Transnet Freight Rail Network & Terminals

Kimberley

Saldanha

Cape TownPort Elizabeth

East London

Durban

Richards Bay

Ermelo

Noupoort

De Aar

Ngqura

Bloemfontein

Phalaborwa

KroonstadUpington

Groenbult

Mahikeng

Botswana

Namibia

Zimbabwe

Mozambique

Lesotho

Swaziland

Sishen

Hotazel

Lohatla

City Deep

PretconRustenburg

Vaalcon

Kascon

Worcester

Polokwane

Operator License

Strategic

Eastcon

Deal PartyBelcon

Bayhead

Nelspruit

Grootvlei

Camden

Joint Ventures

Newcon

ArnotHendrina

Kendal

Potchefstroom

Pietermaritzburg

Cato Ridge

Back of Port Rail Terminals

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• Transnet pipelines is the custodian of the country’s strategic pipeline assets

• TPL is currently servicing two key industries (fuel and gas) by transporting petroleum and gas products over varying distances.

• Our business, having been established in 1965, is integral to the well-being of the South African economy.

• The business handles an annual average throughput of some 18 billion litres of liquid fuel and more than 450 million cubic metres of gases.

• The liquid products include crude oil as well as diesel, leaded and unleaded petrol and aviation turbine fuels.

Customers• Transnet pipelines' customers are all

South Africa's major fuel companies namely; BP, Caltex, Engen, Exel, Sasol Oil, Sasol Gas, Tepco, Shell and Total.

• Many of these organisations are empowerment companies, representing new players in the market

Transnet Pipelines

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• Transnet National Ports Authority is responsible for the safe, effective and efficient economic functioning of the national port system, which it manages in a landlord capacity.

• The national ports authority provides port infrastructure and marine services at the eight commercial seaports in South Africa.

• It operates within a legislative and regulatory environment created by the National Ports Act 2005 (Act No. 12 of 2005).

• The functions of the TNPA are:• To plan, provide, maintain and improve

port infrastructure;• to provide marine-related services;• to ensure the provision of port services,

including the management of port activities and the port regulatory function at all south African ports; and

• to provide aids to navigation and assistance to the maneuvering of vessels within port limits and along the coast.

• Container Sector• Dry bulk (such as coal, iron ore,

manganese, sugar, chrome ore, copper, lead, woodchips)

• Liquid bulk (such as petroleum products, chemicals, vegetable oils)

• Break-bulk (such as fruit, steel, scrap steel, ferro alloys) and

• The Automotive Sector.

Transnet National Ports Authority

TRANSNET

NATIONAL PORTS AUTHORITY

(TNPA)

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The Roles & Functions of TNPA

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Transnet National Ports Authority

33°1′S 27°54′E

33°57′S 25°38′E

33°48′S 25°41′E

33°54′S 18°26′E

29°52′S 31°2′E

28°48′S 32°5′E

33°1′S 17°57′E

MOSSEL BAY

TNPA Infrastructure:

19 container berths;

5 automotive berths;

21 dry-bulk berths;

7 Agri-bulk berths

29 break-bulk berths;

16 liquid-bulk berths

97 berths nationally

(82 Private Terminal Licenses)

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Thank YouTransnet Port Terminals

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TPT Corporate DVD

• Transnet Port Terminals provides cargo handling services at 16 terminal facilities in seven ports to a wide range of customers including shipping lines, freight forwarders and cargo owners.

• Operations are in containers, bulk, break-bulk and automotives.

• We invest in state-of-the-art cargo handling equipment (ship-to-shore cranes, straddle carriers, rubber-tyre gantries, tipplers, conveyors) and manage the logistics interface with inbound and outbound rail and trucking carriers.

• We are proud of the implementation of the NAVIS-terminal operating system and the certification of all our terminals to ISO standards.

• Transnet Port Terminals is Africa’s biggest container terminal operator in terms of volumes handled.

In line with Transnet’s new market demand strategy (MDS) and related investments, Transnet’s Port Terminals are currently expanding in response to growing business in the country.

Expansion includes creating storage capacity, the replacement of old equipment and upgrading of software.

Transnet Port Terminals

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7. SaldanhaBulk (Export iron ore),

Breakbulk

6. Cape TownContainers,

Breakbulk

4. NgquraContainers

3. East LondonContainers, Breakbulk, Agri-Bulk, Automotives

1. Richards BayBulk (Export Coal, Magnetite, Chrome) Breakbulk

2. DurbanContainers, Breakbulk, Agri-Bulk, Automotives

5. Port ElizabethContainers, Breakbulk, Bulk, Automotives

TPT Infrastructure:

• 4 Container Terminals (19 berths)

• 3 Automotive Terminals (5 berths)

• 3 Mineral Bulk Terminals (10 berths)

• 6 Break Bulk Terminals (22 berths)

• 0 Liquid Bulk Terminals (0 berths)

• 16 Terminals 68 berths

•

Transnet Port Terminals

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TPT EXCO

Mr Karl SocikwaCE Transnet Port Terminals

Mr Pru ArcharyChief Financial Officer

Dr Deirdre AckermannChief Information Officer

Ms Michelle PhillipsGM Commercial & Planning

Mr Dumisani KhuzwayoGM Human Resources

Ms Ntombeziningi SheziGM Procurement

Mr Zeph NdlovuGM Risk & Corporate Affairs

Ms Nombuso AfolayanGM Ops: KZN BBC

Ms Brenda MagqwakaGM Ops: KZN Containers

Mr Siyabulela MhlalukaGM Ops: Eastern Cape

Mr Velile DubeGM Ops: Western Cape

Mr Themba GwalaChief Operating Officer

Mr Josiah MpofuGM Engineering

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Port Terminals operates container terminals at the ports of:

– Durban,

– Port Elizabeth,

– Ngqura and

– Cape Town.

Port Terminals has an

annual capacity of

over 6.4 million TEUs

Container Terminals

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With a market share of 52%, Port Terminals handles mineral bulk at the ports of:

– Richards Bay,

– Port Elizabeth and

– Saldanha,

TPT handles agricultural bulk commodities at the ports of:

– Durban and

– East London.

Bulk Terminals

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Break-Bulk is handled in all the ports where TPT operates except Ngqura and is

best described as freight that is not classified as bulk and is not containerized.

TPT’s market share is 53% Break-Bulk is handled at:

– Richards Bay,

– Durban,

– East London,

– Port Elizabeth,

– Cape Town and

– Saldanha

Break-Bulk Terminals

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Port Terminals has a capacity to handle 850 000 units pa. TPT handles

100% of newly manufactured exports from South Africa and operates

automotive terminals at the ports of:

– Durban,

– East London and

– Port Elizabeth.

Automotive Terminals

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Containers*

Durban: 3.6 million Ngqura: 1.5 millionPort Elizabeth: 400,000Cape Town: 900,000

*TEUs

Agri-bulk*

Durban: 1.47East London: 0.76 Cape Town: 1.8

*mtpa

Automotives*

Durban Ro-Ro:520 00East London:139,000 Port Elizabeth:200,000

*FBUs

Bulk*

Richards Bay: 21Port Elizabeth: 5.5 Saldanha: 60

*mtpa

Break bulk*

Richards Bay: 8Durban Ro-Ro: 0.4Durban MW: 1.2East London: 0.21Cape Town: 1.2

*mtpa

65 4

3

2

1

7

Key:

1: Richards Bay2: Durban3: East London4: Ngqura

5: Port Elizabeth6: Cape Town7: Saldanha

SOURCE: Team Analysis

Transnet Port Terminals Capacity

38Containers and Dry Bulk contribute to 85% of TPT’s volume revenue

Market Size 4.3m TEU 132mt 672,000 15mt 32mt

0102030405060708090

100

Competitors

TPT

%

TPT Market Share

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Major commodities Imported through Durban

Containers 39,1%

Petroleum 41,8%

Vehicles 5,7%

Wheat 2,3%

Fertilizer 1,7%

Steel 1,6%

Cement 1,5%

Anim/Veg Oil 1,4%

Chemicals 1,3%

Rice 1,0%

Agric Prod 0,7%Mech/Elec Appl 0,4%

Coal 0,3%

Misc 1,3%

Other 19,1%

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Containers 63.6%

Petroleum 6.6%

Manganese 8,5%

Maize 4,7%

Vehicles 4,4%

Coal 3,4%

Wood Chips 1,6%

Steel 1,5%

Chemicals 1,3%Chrome Ore 1,1%

Sugar 0,9%Woodpulp 0,9%Citrus Fruit 0,5%

Misc 1,0%

Other 29,7%

Major commodities Exported through Durban

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Richards Bay Terminals

CARGO TYPE TERMINAL BERTHS USABLE BERTHS TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Dry bulk Richards Bay coal 301, 302, 303, 304, 305, 306 6 91 000 000 2 029m 19m

Dry bulk DBT – woodchips 804 1 3 935 693 260m 19m

Dry bulk DBT – import 607, 701, 702 3 9 153 290 760m 14,5m to 19m

Dry bulk DBT – export 703, 704, 801 3 9 763 905 740m 19m

Dry bulk Richards Bay break bulk 606, 607, 608,706, 707, 708 6 8 962 000 1 244m 14,5m to 19m

Dry bulk Richards Bay bulk liquid 209 and 208 2 4 429 600 300m 14m

• Richards Bay is South Africa’s largest port, and handles large volumes of coal exports through the Richards Bay Coal Terminal and the Richcor rail corridor.

• The port also provides dry bulk, liquid bulk and multi-purpose terminals to handle mining, industrial and agricultural cargoes

• Potential for major expansions in all port precincts.

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Richards Bay Terminals

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Durban Container Terminals

DCT Pier 2 DCT Pier 1

CAPACITY: 2,900,000 TEU’s after deepening

CAPACITY: 700,000 TEUS

5 Equipped Berths (1,920m Quay Length)11.7-12.2m Draft

2 Berths (660m Quay Length)11.2-12.2m Draft

17 Post Panamax STS Cranes (7 x ZPMC tandem lift;8 Liebherr twin lift,2 Noell twin lift)

6 Post Panamax STS Cranes (Twin lift 18 Across)

115 Straddle carriers,53 Haulers2 Reach Stackers12 Empty Handlers

22 RTG’s45 Haulers (31 Cartage & W/S)2 Reach Stackers2 Empty Handlers

Stack area 110 hectareSlots: 14,18639,474 TEU’sReefer Plug Points: 1,744

Stack area 19.7 hectareSlots: 3,54824,960 TEU’sReefer Plug Points: 800

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Durban Point – Bulk, Break Bulk & Car Terminals

Berths 3 Automotive

Capacity 480 000 (Fully Built Units) FBUs

Cargo New & Second hand vehicles and high & heavy cargo

Berths 4 Break-Bulk & Containers

Capacity 400 000 tons per annum + 230 000 TEU

CargoHandles a niche market of container business as well as

Break bulk (abnormals, steel commodities and project cargo)

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Durban Maydon Wharf - BBC

Capacity 1.2 million tons per annum

Berths Access to 15 berths with a footprint align to 4 berths (MW9 to MW12)

Draft 9.6m - 10.3m

CargoComplex mix including project cargo, neo-bulk, steel coils and other

steel products, rice, timber, paper, malt, sugar, fertilizers and granite.

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Durban Agri Terminal

Agriport – handles maize, wheat, soya bean meal, sunflower pellets, woodchips and woodchips pellets.

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Port Elizabeth

CARGO TYPE TERMINAL BERTHSUSABLE BERTHS

TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Containers PE container 102, 103 2 500 000 635m 12,2m

Cars PE motor vehicle 100, 101 1 120 000 342m 12,2m

Dry bulk PE manganese 13 1 4 900 000 360m 12,2m

Break bulk PE multipurpose 8, 9, 10, 11, 12 4 1 574 000 1 037m 7m to 11m

Liquid bulk PE liquid bulk 15 1 1 300 000 242m 9,9m

• Port Elizabeth has historically provided port services to the Eastern Cape region. These include container, automotive, multi-purpose and bulk terminals, and facilities for the fishing industry.

• The development of the new Port of Ngqura has provided an opportunity to relocate the bulk operations, with the option of expanding container operations and redeveloping the vacated sites on the southern portion of the port with additional vehicle handling facilities and a commercial development.

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Port Elizabeth Container & Car Terminals

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Port Elizabeth Bulk & Break Bulk Terminals

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Port of Ngqura

CARGO TYPE TERMINAL BERTHS USABLE BERTHS TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Containers Ngqura container D100, D101 2 800 000 720m 16,5m

Dry bulk Ngqura dry bulk C100 1 24 000 000 316m 16,5m

Break bulk Ngqura multipurpose C101 1 957 000 316m 16,5m

Liquid bulk Ngqura liquid bulk B100 1 0 300m 18m

• The deep-water Port of Ngqura is South Africa’s newest port, and is focussed on bulk products and transhipment containers.

• The port services the adjacent Coega IDZ, and has the potential for extensive future development both up the river valley and through additional seaward basins.

• The port has an operational two berth container terminal, as well as three jetty berths, with an additional two container berths nearing completion.

• Current plans include a container transhipment hub, a liquid bulk terminal, a general cargo terminal, and a manganese export terminal.

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Ngqura Container Terminal

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Ngqura Container Terminal

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East London Terminals

• East London is situated on the Buffalo River, and provides Buffalo City, the IDZ, and the Eastern Cape with multi-purpose, liquid bulk, dry bulk and automotive terminals.

• Future expansion of the port is restricted by the narrow and shallow river basin.

CARGO TYPE TERMINAL BERTHS USABLE BERTHS TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Containers Quay 6 K, L 2 93 000 506m 10,7m

Cars West Quay P, R 1 130 000 559m 9m

Dry bulk East London bulk S, T 1 4 000 000 388m 10,7m

Break bulk Quay 3 and 4 G, I 2 250 000 492m 11m

Liquid bulk Tanker Berth TB 1 2 400 000 259m 10,7m

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East London Car Terminal

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East London Grain Elevator

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East London Combi Terminals

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Cape Town

CARGO TYPE TERMINAL BERTHS USABLE BERTHS TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Containers Cape Town container 601, 602, 603, 604 4 1 000 000 1 151m 12,8m to 15,5m

Dry bulk Cape Town dry bulk G, H 2 1 400 000 569m 12,2m to 12,8m

Break bulk Cape Town multipurpose B, C, D, E, F, J 6 4 200 000 1 368m 9,1m to 12,2m

Liquid bulk Cape Town liquid bulk TB1 and TB2 2 3 400 000 489m 13,7m to 15,2m

• Cape Town is the premier port for the Western Cape region, providing a full range of port services.

• Future port growth is limited by landside capacity, and the incorporation of the Culemborg and Salt River rail yards for back-of-port activities, and further seaward expansion to meet future container growth, will be required.

• The Duncan Dock precinct provides berthing for multi-purpose and bulk vessels, as well as for fishing and recreational craft and the ship repair industry.

• The container terminal is situated in the Schoeman Basin. The V+A Waterfront occupies the older portion of the port.

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Cape Town Container Terminals

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Cape Town Break Bulk Terminals

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Saldanha

CARGO TYPE TERMINAL BERTHS USABLE BERTHS TERMINAL CAPACITY BERTH LENGTH BERTH DRAFT

Iron ore Iron ore 101, 102 2 58 000 000 1 260m 23m

Break bulk Multipurpose 201, 202, 203 4 3 300 000 874m 13m to 15m

Liquid bulk Liquid bulk 103 1 25 000 000 360m 23m

• South Africa’s deepest port.

• Iron ore export jetty provides berthing for large dry bulk and liquid bulk vessels.

• Multi-purpose terminal and facilities for offshore rig servicing and fabrication.

• The port has the potential for expansion to support the adjacent industrial development.

• Future port expansion will require extensive land acquisition, as well as limited reclamation.

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Saldanha Iron Ore Terminal

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Saldanha Break Bulk Terminal

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Thank YouStrategic Thrusts

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TPT’s Vision

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Transnet is striving to be:

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Arrival at Port Limits1

Pilot Onboard (Cross breakwater)2

Tie Last Line

4

Untie Last Line (Pilot on-board)

5

Pilot Drop (Steaming out)

6

Terminal

Operation center/planning

GateYard

TPT is responsible for the process from first crane move (nr 4) to last crane move (nr 5)

Planning process and handovers are key enablers to influence fluidity

1St Move (Operations begin)

Last Move (Ship Operations finished)

7

A

Previous Port

B

Next Port

3

4 D

ays Po

rt Dw

ell Time

Vessel W

orkin

g Time

80 mins Truck Staging35 mins Truck Turnaround

Performance

- Productivity Improvement

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Performance

- Productivity Improvement

1

2

3

4

5

6

7

A

B

Vessel W

orkin

g Time

42

hrs

(2 0

00

TEU)

Po

rt Dw

ell Time

4 d

ays

Pilot on board

SARS agent Port Clearance

Immigration

Port Health

Ropes Tied

3rd

Party

2 h

rs

Arrival at outer breakwater

Truck booking system

An

cho

rage3

6 h

rs

TNP

A2

hrs

Pilot on board

Ropes Untied

TNP

A2

hrs

Berth on arrival if pre-arranged

Depart from outer breakwater

Stevedores

3rd

Party

1 h

r

Stevedores

Shipping Line Release

Gate

Yard 80 mins Truck Staging

35 mins Truck Turnaround

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Agile

- The Ultimate Port Call

1

2

3

4

5

6

7

A

B

PlanningArrival

Operation

Departure

Vessel W

orkin

g Time

Po

rt Dw

ell Time

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Admired

There will be renewed focus on Customer

Relationship Management across all the

sectors to ensure that customers are

satisfied with a tailor-made service they

receive from Port Terminals:

• Marketing

• Key Account management

• Contracting

• Customer experience Management

• Commercial capabilities

• Governance and Compliance

• Call Centre Management

• Volume validation

• New Business / Sales Management

• Volume & Revenue Trend Analysis

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TPT Model - IntelliPort

Smart Port

Smart Roads/Rail

Smart City

™

Digital

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1

2

3

4

5

6

7

A

B

Vessel W

orkin

g Time

Po

rt Dw

ell Time

United

Inland Terminal Yard

Activities

TFRMainline Transit

Back of Port Yard ActivitiesDepart Train

TNPA Vessel Berth

Inland Terminal Stack and Deliver to

customer

TPT Vessel Discharge and Load Rail

- Collaboration across Organisational Divisions

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Transnet & TPT Values

A Safety MindsetGood

Communication

Dignity & Respect

Empowered to Perform

Business FocusRecognition &

RewardDeliver on our

Promises

Transnet’s Culture Charter Values

TPT

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Port

1 Shanghai 36,537,000

2 Singapore 30,922,300

3 Shenzhen 24,204,600

4 Ningbo‐Zhoushan 20,626,000

5 Hong Kong 20,073,000

6 Busan 19,433,690

7 Guangzhou 17,570,000

8 Qingdao 17,435,600

9 Dubai 15,592,000

10 Long Beach LA 15,352,407

11 Tianjin 14,111,300

12 Rotterdam 12,234,535

13 Port Kelang 11,866,685

14 Kaohsiung 10,264,420

15 Antwerp 9,653,511

Top Container Ports in the World

Source: Alphaliner Monthly Monitor July 2016

75

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75

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TPT Terminal Handling Cost Vs. Global Comparators

Research as at 19 July 2016Source - https://ecom.hamburgsud.com/ecom/en/ecommerce_portal/tariffs_and_surcharges/thc_calc/ep_thc_calculator.xhtml

The above graph clearly illustrates Transnet Port Terminal’s (TPT) commitment to keeping terminal handling costs

competitive to global comparators. TPL is 58% ($123) lower than the global average when compared to ports such as

Hamburg ($ 249) and Rotterdam ($ 227).

Terminal handling charges:

“Container from ship to stack and then onto transporter (rail or truck) inclusive of three (3) days storage. This also applies from land to ship.”

76

TPT RATED #1 IN AFRICA BY MAERSK

TPT Productivity Vs. Global Comparators Operating in Africa

77

Thank YouMarket Demand Strategy

78

MDS – TPT Investment over 10 Years = R61,7bn

Saldanha (7%) R4,1bn

Cape Town (5%)R 2,2bn

Richards Bay (23%)R 14,4bn

Durban (45%)R 27,9bn

Ngqura (5%)R 3.1bn

PE (1%)R 814M

Manganese (14%)R8.6bn

ELR 41m

4,830

2021/22

7,458

2024/25

61,766

Total2023/24

8,224

2022/23

12,508

2020/21

7,700

2019/20

5,261

2018/19

5,4796,353

2016/17

2,853

2015/16

1,100

ReplacementR 24bn

39%Expansion

R37.8bn61%

2017/18

79

MDS – First Four YearsDurban Harbour Entrance Ngqura Phase 2 – 4 STS Cranes, 18 RTG’s

Richards Bay C & D West Cape Town 2 STS Cranes

80

MDS – First Four YearsDCT 15 Straddles DCT Stack Rehabilitation

4 Liebherr Cranes Mid Life Refurbishment 2 New Rail Mounted Gantry Cranes for DCT

81

MDS – First Four YearsStaff Facilities at Pier 1 Berth 107 Pier 1 Truck Staging Area

Staff Facilities at Pier 1 2 New STS Cranes for DCT East Quay

82

• The assets in the container sector include:

• 45 ship-to-shore (STS) cranes, seven of which are tandem lift cranes

capable of lifting four 20-foot containers simultaneously.

• There is a fleet of 151 straddle carriers and

• 90 rubber-tyred gantry (RTG) cranes.

Asset BaseContainer Sector

Equipment DCT Pier 1 DCT Pier 2 CTCT NCT PECT

STS cranes 6 17 8 10 4

Straddle Carriers 0 115 12 0 26

RTG cranes 22 0 28 40 0

RMG cranes 2 3 1 2 0

83

• The assets in the Bulk sector include:

• Six tipplers and

• 10 ship loaders and

• 4 unloaders.

Asset BaseBulk Sector

Equipment Type Richards Bay Port Elizabeth Saldanha

Tipplers 2 2 2

Ship loaders 6 2 2

Ship unloaders 4 0 0

84

Port Infrastructure Investment to grow at 2.7% Annually

Source: BMI Forecaster

We remain upbeat on Transnet's ability to execute its plans at the port, despite current market dynamics. It is in a fairly strong financial position (relative to its parastatal peers) to execute its plans and we maintain its manageable debt load will keep borrowing costs accommodative.

85

MDS – Next Seven YearsDCT Prime Berth Expansion

Pier 1 Infill Maydon Wharf Quay Wall Rehabilitation

86

Richards Bay Future Expansion Plans

• Bulk operations form the core of the port’s activities and the primary challenge remains

to accommodate the growing demand for handling bulk cargoes.

• The achievement of this is planned to be through three main expansion projects. The

first is the Port Capacity Expansion Project (formerly ECICS) in the Bayvue precinct, the

second the 500 and 600 series terminal expansion for additional dry bulk and the third,

the development of a new coal terminal with a capacity of 32 mtpa, as part of the 500

series development. Other developments will include a ship repair and dry dock facility,

and an additional two berth liquid bulk terminal.

• The capacity of the liquid bulk terminal is currently 3,5 million kilolitres and an increase

to 5,5 million kilolitres is planned by 2025/26, to meet the medium term demand

forecast. Liquid bulk volumes are expected to grow from 1,9m to 6,9 million kilolitres

over a 30-year period.

• In addition to three liquid bulk berths adjacent to RBCT, an LNG facility is proposed on

the southern side of the entrance channel.

If volumes allow, then TNPA have plans to build a new Container Handling Terminal that will replace the current container handling facility.

Source: http://www.saoga.org.za/

87

87

Future Expansion Plans For Durban

The new Durban Dig-Out Port will be able to provide liquid bulk handling capacity and will include

deepwater berths in the port entrance to possibly replace the current SBM, which would have to be

repositioned to allow for the construction of the port’s new entrance channel.

The existing Port of Durban is some 20 km distant from Durban’s old airport site. The site is bordered by

the Umlaas Canal, the SAPREF refinery, the Prospecton industrial area, with the Toyota factory, and by

the N2 freeway in the foreground.

The proposed dig-out port on the old airport site will provide more than 20 new deepwater berths. The

new port will require its own entrance channel and breakwaters, and a new turning basin and tug harbour.

The fully-developed port will include container terminals, automotive terminals, and a fourberth liquid bulk

terminal with the capacity to berth VLCC vessels which are currently restricted to offshore moorings.

The current landscape of the proposed Dig-Out Port in Durban.

Shows an artists impression of the layout of the proposed Dig-Out Port in Durban.

Source: http://www.saoga.org.za/

88

88

Ngqura Future Expansion Plans

The section 56 process for the Ngqura liquid bulk terminal is progressing, with new berths and a tank farm

planned. These will replace the Port Elizabeth facility, which will be decommissioned once Ngqura is

operational. Expected to come online in 2017/18, initial capacity will be around two million kilolitres a year,

doubling to four million by 2020/21 to meet forecast demand.

TNPA is finalising the selection process for potential tank farm and liquid bulk terminal operators, in

anticipation of the relocation of liquid bulk facilities from Port Elizabeth after 2017, when the current leases

expire. This initiative would require one liquid bulk berth, with a new tank farm sited on high ground to the

east.

The proposed PetroSA oil refinery will require the importing of crude oil through an offshore SPM. The SPM

will have a capacity of 20 million kilolitres when the facility comes online in 2019/20, and will be sufficient to

meet the 30-year demand forecast.

The short-term plans also include a tug and admin harbour and a LNG berth at the root of the reconfigured

main breakwater.

Plans for the port include the addition of an energy cluster to the east of the port in association with the

adjacent IDZ, which will require extensive landside storage infrastructure, and a new liquid bulk basin

with outer breakwater on the Big Bay side of the jetty, with bunker and LPG berths.

Source: http://www.saoga.org.za/

89

89

Saldanha Future Expansion Plans

The short-term port expansion will require extensive land acquisition as well as some reclamation. The

port’s plans to expand its waterside and landside infrastructure are in line with the development of the

industrial development zone (IDZ) currently receiving high levels of governmental support.

The proposed first phase of the IDZ includes facilities for the oil and gas industry in the form of cargo

handling and repair facilities. An additional berth (Berth 205) is envisioned for the Multi-Purpose Terminal.

Short-term plans for the port include strategic land acquisitions to ensure improvements to the port access

corridor; the development of a port logistics park, and ensuring that the future growth of the port is not

restricted on the landside.

An extra liquid bulk berth is planned for the end of the Iron Ore jetty, along with an LPG SPM facility in Big

Bay. A privately funded development is providing additional berthing to the Mossgas facility to increase

capacity for oil and gas activities.

Medium-term plans for the port include the addition of a major energy cluster to the east of the port in

association with the adjacent IDZ, which will initially require extensive landside storage infrastructure, and a

new liquid bulk basin with outer breakwater on the Big Bay side of the jetty, with bunker and LPG berths.

Source: http://www.saoga.org.za/

90

TPT…. Where We Will Be In 10 Years

Pier 1 expansion with new Salisbury Island infill

and deepwater berths

Pier 1 Phase 2 Infill

North Quay Upgrade

http://www.ipavinhphuc.vn/en/support/project-construction-of-inland-container-depot-and-railway-station

Inland container depots…

Seamlessly Integrated SADC corridors

Strong presence at DDOP

91

Thank YouTPT Growth Strategy

92

TPT’s Growth Strategy

93

POLITICAL ENVIRONMENT

Left political swing

Political change in leadership perceived purging of political appointees

SADC political instability

ECONOMIC REALITY

Chinese economic adjustment Decreasing Oil prices Future Growth Markets in the African continent Low GDP growth in South Africa Volatile exchange rate Falling commodity prices Reduced energy supply Impact of industrial action

SOCIAL ENVIRONMENT

Xenophobia

High food prices

High fuel prices

Labour Unrest

High Unemployment

TECHNOLOGICAL

Big Data

Broadband policy review

Development of Smart Port City

Integrated supply chain solutions

Intelligent Ports

ENVIRONMENT/SUSTAINABILITY

Electricity supply interruptions

Renewable Energy

IMO Sulphur emissions control

LEGAL/REGULATORY ENVIRONMENT

IMO SOLAS Container Weight Verification

Consignor Consignee legislation

BCEA requirements re hours worked

Micro management of SOE’s by the state

Single Transport Economic Regulator Bill

Stricter enforcement of the OHSE Act

National Ports Act

National Development Plan Operation Phakisa National Maritime Policy National Cabotage Policy National Transhipment Policy Impact of new IMDG 24 hour dispensation

Macro Environmental Analysis

94

Porter’s 5 Forces

95

Strengths

Well-developed infrastructure in both Durban and Richards Bay

Established rail/road network to support movement of cargo

Deep water berths at Durban Ro-Ro Terminals

Substantial market share in the bulk sector and market leader in

handling iron ore and manganese

TPT holds 21 Terminal Operator licenses across the country

Owns and manages a large fleet of state-of-the-art cargo

handling equipment

Operates a complementary ports system that supports a single-

call strategy for shipping lines, enabling them to reduce sea

freight costs

Financially strong, healthy profit margins with the ability to fund

capital investment off its own balance sheet

Established client base and maintains good relationships with

shipping lines

Meets ISO standards and requirements in safety, environment

and quality

Uses market-leading information technology

Micro Environmental Analysis

Weaknesses

Dependency on 3rd Party Service Providers

Limited ability to offer value add services

Limited capacity for expansion opportunities - confined by city and

therefore has to comply to by-laws, which limits flexibility for

expansion

Berth outages, due to expansionary or maintenance activities by the

National Ports Authority present planning and operational challenges

and may pose a threat to volumes.

DCT Pier 2 reduced by 400 000 TEUs during the extension of berth

205 in 2016/17

The agricultural operation requires significant capital investment to

fully refurbish the facility; the existing volumes do not support this

investment. Port Terminals is seeking solutions through exploring

Private Sector Participation (PSP) to mitigate this challenge

Capacity is adversely impacted by growing vessel sizes

There is insufficient road capacity within the terminals to allow

faster movement and turnaround of trucks

96

Environmental Analysis

Threats

The volatile energy supply creates uncertainty around business

continuity

Imports and exports are directly impacted by the state of the South

African economy

The majority of Port Terminals’ volumes come from a few key

customers. This introduces concentration risk to the business

Declining commodity prices impact South African exporters’ ability to

sustain operations. Oversupply of magnetite & chrome to China,

Magnetite and Chrome secondary input products for steel production

and General market conditions

There is a growing presence of international terminal operators in

Africa

Terminals in neighbouring countries present a growing competitive

threat across all the sectors in which Port Terminals competes

Declining breakbulk volumes (steel, granite, paper and other).

Highveld Steel plant shutdown, Reduced demand for granite in Italy

and Mondi Paper migration into containers

Declined production from harbour bound industries in Richards Bay.

Local industries (RBM, Tronox , BHP and Foskor) facing difficulties

and less import/exports products including woodchips

Draft limitations in Durban may lead to customers moving to other

African ports

Labour market inflexibility and volatility may have a negative impact

on productivity levels and also lead to reputational damage

As it stands, RCB Terminal, when viewed in aggregate, is unable to

justify capital investment and presents a complex set of commercial,

operational and organisational challenges for management

Opportunities

There is growing demand for Port Terminals’ current services,

as well as opportunities to expand service offerings across the

transport value chain. Opportunities are being explored “back-

of-port” to offer warehousing and value-add services in the

container and automotive sectors

The implementation of the truck appointment system, with

relevant buy-in from road transporters, will ease traffic

congestion

Operational and planning efficiencies can be improved by

collaborating with major shipping lines

The implementation of a fleet management system will

introduce predictive maintenance scheduling

With Port Terminals’ network of terminals there may be

opportunities to provide a short-sea shuttle service

Support of Transnet’s regional integration strategy by applying

strengths and capabilities to countries in Africa

There are PSP opportunities that are being explored that may

reduce Port Terminals’ funding and operational requirements

and present opportunities for leveraging the capabilities of

partners for mutual benefit

The TVCC continues to facilitate improvements in operational

efficiencies and logistics integration with Freight

Opportunities to offer tailor made service to individual OEM’s

Partnering with government departments e.g. Department of

Trade and Industry to attract new OEM’s

Competing with neighbouring ports will increase service levels

97

Transnet Strategies to date

98

99

Reshaping the Core in 16/17

100100

TPT Growth Strategy

101

‘Game changer' goals:- Reshape the Core- Customers- Ops - CI- Employees

Finance & Capital Strategy

Commercial, Marketing & Planning Strategy

Operations, Continuous Improvement Strategy

Maintenance Strategy

Human Capital Strategy

Procurement Strategy

Information Systems & Innovation

Risk Management Strategy

Strategy

TPT Growth Strategy Roadmap

102

1. Labour costs Dumisani Khuzwayo2. Energy (Fuel and Electricity) Deidre Ackerman3. TNPA Land rentals Pru Archary4. Repairs, Maintenance and Mat Nttombeziningi Shezi5. Contract services Ntombeziningi Shezi6. Other costs & Discretionary Pru Archary

TPT Growth Strategy Initiatives

• Containers focused on majors including gateway and tranships:

– Value added initiatives and execution

• RCB Bulk Revenue Drive (MMC)– Magnetite, Chrome ore and Anthracite

• PECT, PE & EL MPT’s future: – Defend & growth current customers– Acquired - Build logistic services

• Manganese: realizing the 11.8mt• MPT’s Revenue Drive:

– CT MPT, MWF, POINT, SAL, RB

• Coal exports via RCB: – RBTG contract signed & execution of volume

• Agri Import Potential

103

• Containers focused on majors including gateway and tranships:– Value added initiatives and execution

• RCB Bulk Revenue Drive (MMC)– Magnetite, Chrome ore and Anthracite

• PECT, PE & EL MPT’s future: – Defend & growth current customers– Acquired - Build logistic services

• Manganese: realizing the 11.8mt• MPT’s Revenue Drive:

– CT MPT, MWF, POINT, SAL, RB• Coal exports via RCB: RBTG contract signed & execution of volume• Agri Import Potential

Grow Initiatives for 2016/17

The objective is to grow the current business through increasing volumes:

Commercial, Marketing & Planning Strategy

104

The objective is to protect the current business through cutting our expenses by 25%:

1. Labour costs Dumisani Khuzwayo

2. Energy (Fuel and Electricity) Deidre Ackerman

3. TNPA Land rentals Pru Archary

4. Repairs & Maintenance and Materials Ntombeziningi Shezi

5. Contract services Ntombeziningi Shezi

6. Other costs & Discretionary Spend Pru Archary

Defend TPT’s Business (Reshape the Core)

Finance & Capital Strategy

105

Diversification - Supply Chain Integration

TPT DIVERSIFICATION STRATEGY 2015 – 2020

1. Value added services – Pre Trip Inspections (Velile)

2. FMCG/Atlantis/Culemborg/Belcon Freight Station (Velile)

3. Stuffing and de stuffing of containers (Brenda)

4. Third Party Logistics - MOUs with Barloworld, Imperial (Ningi)

5. Saldanha IDZ (Velile)

6. Ngqura – CDC/Freight Station (Siya)

7. Cato Ridge (Michelle)

8. Dube Trade Port/Air Freight (Michelle)

9. Edwin Swales (Brenda)

10.Pendoring & Steelpoort (Michelle)

11.Clearing & Forwarding (Zeph)

12.Richards Bay IDZ (Nombuso)

11.Maydon Wharf Precinct (Nombuso)

12.Mini RBEP (Includes Coal Triangle and RBGT) (Nombuso)

13.Cars for Africa (Pru)

14.Manganese move to Ngqura (Pru)

15.East London Grain Elevator PSP (Siya)

16.Liquid Bulk (Deirdre)

17.Intelli-Port (Deirdre)

18.Short Sea Shipping (Zeph)

19.Compliance to SOLAS (Michelle) & Consignor (Brenda)

20.Employee Initiatives to support SC Integration (Dumisani)

Commercial, Marketing & Planning Strategy

106

Game Changers for 2016/17 to 2018/19

Project Sponsor

A

B

C

D

Value Added Services

11. Cars for Africa Site Pru12. Maydon Wharf Precinct Nombuso 13. Richards Bay mini Expansion Project Nombuso

16. FMCG Belcon/Atlantis/Culemborg Velile

17. Liquid Bulk Deirdre

7. West Coast IDZ Velile

Cooperation with Third Party Logistics Providers

19. Short Sea Shipping Zeph

Special Economic Zones

18. Intelli-Port Deirdre

Breaking New Ground

1. Long Term storage, Micro dotting, Pre Trip inspections Velile

14. Manganese Move to Ngqura Pru15. East London Grain Elevator PSP Siya

6. Ngqura – Coega Development Corporation Siya

8. Cato Ridge Freight Station with TFR Michelle9. Pendoring & Steelpoort Michelle

3. Diversify into Air Freight, MOU with Dube Trade Port Michelle

5. Richards Bay IDZ Nombuso

2. Expansion into Clearing & Forwarding services Michelle

10. Edwin Swales Inland Container Depot Brenda

4. Sign MOU with Dube Trade Port re joint marketing Michelle

Back of Port Operations and Inland Depots

E

Diversification - Supply Chain Integration

107

Thank YouGlobal Expansion

108

Global Expansion

109

African Integrated Maritime Strategy Vision 2050

Alignment with Operation Phakisa

Target markets• Benin• Nigeria• Ghana• Angola• Namibia

Value proposition• Maritime Development Funding • Ship building & repair, offshore vessel

building & repair• Port Management & Operations• Planned Maintenance Package• Training

Key enablers• Targeted Buying Missions with the

President using trade agreements

• Kenya• Tanzania• Mozambique• Mauritius

To foster increased wealth creation from Africa’s oceans and seas by developing a sustainablethriving blue economy in a secure and environmentally sustainable manner.

110

Geographic Expansion Initiatives

Project Description Description Location

1. Tanzania – Concession to operate Berths 13 & 14 in Dar es Salaam Port

Transnet/Aveng consortium pre-qualified and GCE approved submission of a concession bid to design, build, finance and operate the terminal.

Bid due 22 April 2015 but have just received notification of 1 year delay in process.

Geographic Expansion East Africa Shipping Hub

2. Nigeria – Concession for terminal operator in Warri Port – EOI Submitted with Rosehill group

Geographic Expansion West Africa Shipping Hub

3. Nigeria – Proposed TE maintenance facility in Lagos – project on hold Geographic Expansion West Africa Shipping Hub

4. Kenya – Concession to develop and operate 3 berths in the Port of Lamu (part of the Lappsett Corridor) – Government of Kenya have requested the consortium (Transnet/DBSA/Group5/Dredging International/Mwalimu Ltd) to submit a framework agreement to undertake a prefeasibility study that will inform a priced bid

Geographic Expansion East Africa Shipping Hub

5. Zimbabwe- Technical partner and equipment supplier needed for recapitalisation of NRZ.

Export Sales

Cross Border VolumesNorth South Corridor

6. North/South Corridor – W.I.P. Operational improvement project involving 6 railway companies

Cross Border Volumes North South Corridor

7. SADC – Development of a locomotive leasing pool is being driven through the NBF Africa Infrastructure Desk

Export Sales

Cross Border VolumesSADC

111

Cotonou, Benin Phase 2

- Cont, Bulk & BB

2016/17 African Projects

Lamu, Kenya

- Cont, Bulk & BB

Dar 13 & 14, Tanzania

- Container Terminal

Warri, Nigeria Douala, Cameroon

Ports of Matadi, Boma

and Kinshasa in the DRC

Takoradi, Ghana

- Dry Bulk Terminal

Minergy, Senegal

- Dry Bulk Terminal

112

• Currently TPT generate R441m from transhipment in Ngqura to other African

countries. The intention is to grow this to R790m by 2020/21.

• Transnet has signed a Technical Services and cooperation agreement with the

port of Cotonou, Benin commencing September 2015. This includes the sale

of GCOS as well as deployment of an operations/consulting team to Benin for

a period of 5 years.

• TPT submitted a bid for a DBOT-concession for berths 13 & 14 in Dar es

Salaam to grow the Tanzanian percentage contribution to this figure. TPT

has been shortlisted but process currently on hold pending changes post the

election. It is foreseen that actual monetary returns from obtaining the

concession will not be derived within the initial period of the concession as the

first 6 or 7 years will be spent by our bid partners, Aveng on constructing the

infrastructure.

• TPT (and TFR) submitted an Expression of Interest on 16 November 2015 for

a concession for the Ports of Matadi, Boma and Kinshasa in the DRC, and

the railway between Matadi and Kinshasa.

• TPT has been shortlisted for a concession for the Port of Warri, Nigeria in

2015. Awaiting progress from Nigeria.

Regional Integration Strategy

113

Transnet’s Regional Integration Strategy

Trans-

shipment Hub

Geographic Expansion

Pursue option to invest in rail, port and pipeline operating concessions

Relationship management

Revenue growth

1

Export Sales

Position TE as preferred OEM for Africa

Launch the Africa Locomotive

Increase export sales

2

Transhipment Hub

Grow transshipment revenue

Create a specialised unit in TPT/TNPA to focus on short sea shipping & transhipment

Promote linkages between short sea shipping and rail operators

Create alliances with trans-shipment destination ports

3

Cross-border Volumes

Focus on three rail corridors

Set up joint-operating centres

Increase cross-border rail volumes Increase annual revenue

4

Transnet International Holdings

114

Transhipment Competitor analysis: Competitors categorisation

• Salalah (Suez)

• Las Palmas

• Algeciras

• Valencia

• Carribean(Panama 2016)

• Pointe Noire

• Kribi Deep Seaport,

• Bagomoyo(Proposed)

• Lome (MSC)

• Tema

• Badagry & Lekki(New)

• Tangiers, Algiers, Djibouti (N)

• Direct callers compete with transhipment hubs at a supply chain level in terms of cost and service delivery time

• Walvis Bay

• Port Louis

SADC HUBS DIRECT CALLERS

INTERNATIONAL HUBSAFRICAN HUBS

115

Africa’s Port Capacity

Dar es Salaam, Tanzania

(612,600 TEU)

Mombasa, Kenya

(1.2m TEU)

Port of Tangier, Morocco

(2,964,324 TEU in 2015)

Port of Durban

(2,770,335 TEU in 2015)

Port Said, Egypt Port Alexandria, Egypt

(1.6m TEU in 2014)(3,850,000 TEUs in 2015)

56

50 37

116

Beira, Mozambique

(218,700 TEU)

Africa’s Port Capacity

Luanda, Angola

(210,000 TEU)

Walvis Bay, Namibia

(750,000 TEU 2017)Port Louis, Mauritius

(556,350 TEU)

Lagos, Nigeria

(1,538,086 TEU in 2015)

Lobito, Angola

(118,000 TEU)

93

117

Port of Jebel Ali, UAE

(15.2m TEU in 2014)

Competition from the Middle East & Med

Port of Salalah, Oman

(3.34m TEU)

Port of Khor Fakkan, UAE(3.8m TEU)

Port of Jeddah, Saudi

(4.68m TEU)

Port of Valencia, Spain

(4.4m TEU in 2014)

Port of Algercias, Spain

(4.5m TEU in 2014)

118

• CARRIERS could save an average of $17.7m per year per service by sailing south of

Africa, if shippers would accept an extra week’s transit time on the headhaul,

according to new research from SeaIntel.

• By calculating the costs of extra vessels needed on the trade lane and the additional

bunkers required, then removing the cost of transiting the Suez Canal, SeaIntel

calculated some services could save as much as $19m a year. Even the service with

the least benefit would gain as much as $7.3m a year.

• “If carriers also route the backhaul leg around SouthAfrica, the fuel savings alone

from the slower sailing speed would add an additional average saving of roughly $5m

a year per service, in addition to the backhaul canal fee savings of approximately

$20m a year per service, while the entirety of the added vessel costs are already

factored into the savings on the headhaul,” SeaIntel said.

• “This is a massive additional incentive for the South Africa routing on the headhaul.”

Cheaper to Sail South Africa rather than Suez

Source: Lloyds List 01.03.16

119

Thank YouTPT Value Proposition

120

TPT’s Value proposition to the Industry

UNITED

AG

ILE

Collaboration

Available Capacity

Operational Strategy

Performance

Commercial

CRM

- CI Partnering initiatives- Value Added Services - Customisation where possible- Joint strategy sessions with

customer/Industry - Complimentary Port/ Terminalsystem

- Adequate berth length & draft- Adequate storage & equipment- Well resourced Terminals

(equipment & people)

- Seamless approach- Berthing windows to support global network

product at lowest cost to lines - Transhipment hubs with international and

regional interconnectivity- Effective stock management to reduce stock

losses, claims, contamination.- TVCC Supply chain integration with TFR- Reducing supply chain costs- Use of technology

- Berth Planning- Optimal dwell times- Vessel, Road & Rail Planning and optimal turnaround times- Unit per hour handling rate targets- Minimal claims- Customer centric EDI based business processes - Berthing Window compliance- Cargo & vessel security

- Differentiated pricing for Integrated contracts (Composite Basket Indices),

- Competitive pricing- Extended storage- Competitive Volume based pricing on

t/ships

- IKAM- CRM Mobile app- Customer service center- Operational engagements daily, weekly &

monthly- Monthly & quarterly strategic customer

engagements- Integrated meetings with strategic

customers (Local and international)

121

Service Offering to International Clients

122

Offering from Transnet SOC Ltd

As an African State-owned Entity with extensive experience, deep capabilities and unique expertise across the logistics supply chain, Transnet delivers competitive, innovative, end-to-end logistics solutions by creating partnerships to support customers throughout the logistics life-cycle and across all requirements, to sustainably grow together

Planning Operations Consulting and Advisory

Engineering and Maintenance

Enable growth through

short, medium & long

term planning of rail,

port and pipeline

operations

High level conceptual

and feasibility studies

of port, rail and

pipelines including

advisory services for

port cities

Design operations

through business &

systems planning

Operate port, rail and

pipeline facilities

Promote the integration

of port and rail solutions

to generate seamless

logistics solutions

Establish and operate

seaport terminals,

inland terminals and

warehouse facilities

Extend port & rail

equipment life-cycle

through maintenance and

equipment supply

Provide property life-cycle

management and safety

programs to reduce costs

and improve working

conditions

In-service maintenance,

upgrades, as well as

conversion, manufacturing

and supply of new rolling

stock

Training and Development

Leverage Transnet’s

extensive knowledge

and experience across

the logistics value chain

to provide value adding

training services across

the continent

Utilise Transnet’s

various schools to

transfer skills and to

create sustainable

organisations across

Africa

Provide engineering,

infrastructure & technical

services for optimal rail,

port and pipeline asset

utilisation and planning, as

well as EPCM1

Installation, customisation

and support of IT (GCOS)

solutions for port terminals

Provide advisory on port

management, marine and

port authority related

matters to improve focus

and efficiency

Our support services enable organisations to access financing, capital dredging, construction and pre-construction design, as well as other key enablers to your logistics offerings

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Transnet Ports’ service offering

• Transnet’s distinct port operations and authority enable efficient port terminal operations and the

offering of maritime and port development services

Port Terminals

Monitoring and executing port terminal operations

National Port Authority

Maritime authority responsible for safe, efficient and effective ports management

Terminal Operations

Value-Added Services

Advisory

Provide commercial cargo handling services of sea freight across imports, exports and transhipments in containers, bulk, break bulk & automotive

Operate terminals in several African commercial ports Import and export operations across sectors including containers,

mineral bulk, agricultural bulk and roll on/roll off services Trade facilitation and customized value added logistics services

Staff training in port operations and cargo handling Renewable energy solutions including solar power

Improve and coordinate transhipments processes Provide an understanding of General Cargo Operations System IT

system and support its implementation

Maritime Services

Port Development

Advisory

Infrastructure expansion and requirements planning Technical planning including aspects such as depth, capacity, resources

and equipment requirements Adjacent infrastructure requirements such as access road specifications Managing port activities and port regulatory functions

Provide dredging, navigation, ship repairs, hydrographic surveys and marine operations

Port management and divisionalisation advisory IT infrastructure (Integrated Port Management System) Integrated port and city planning partnerships

Port Infrastructure

Provides infrastructure for containers, dry bulk, liquid bulk, break bulk and automotive such as stockpiling and warehousing

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Transnet Rail’s Service Offering

• Transnet Freight Rail and Engineering divisions provide rails solutions that span from rolling stock

manufacture to rail advisory and operations

Freight Rail

Offering freight rail logistics solutions across sectors

Engineering

Manufacture, assemble, upgrade, refurbishment conversion & maintenance of locomotives, coaches & wagons

Planning

Operations

Advisory

Repair & Maintenance

Railway line operations Signalling & telecommunications IT/scheduling systems and platforms National rail command centre management capability Freight management across agriculture, liquid bulk, iron ore and

manganese, containers, automotive business, coal, chrome, etc.

Develop customers’ businesses through short, medium & long term planning of infrastructure and operations

Technical rail consulting including advisory on infrastructure, asset planning and operational efficiency

Construction of and rehabilitation of railway lines, partnering for other construction

Installation of technology and systems

Rail-related Rolling Stock

Port Services

Advisory

Manufacturing of bath tub trailers, skips and containers Refurbishment of dolley trailers, ship-to-shore carriers & hoppers Maintenance of grabs, skips, electrical motors, & straddle carriers

Offers in-service maintenance, repair, upgrade, conversion and manufacture of freight wagons, mainline and suburban coaches, as well as diesel and electric locomotives

Original equipment manufacturer of wagons with custom designs of heavy haul coal & iron ore wagons, cement wagons, car carriers, intermodal wagons as well as fuel and gas tankers

Provides wheels, rotating machines, rolling stock equipment castings, auxiliary equipment and services

Inter-modal logistics solutions Training on equipment maintenance and operations Research and design services in line with customer specifications Facilitate equipment leasing

125

Transnet Pipelines Service Offering

• Transnet’s pipeline offerings include pipeline operations and maintenance, and extend to technical

services, training and advisory

Pipeline

Oil & Gas Pipeline Operator:Responsible for transportation of petroleum and gas products via a pipeline network

Pipeline Operations

Terminalling

Technical Services

Transport petroleum and gas products via pipeline Operates pipelines with internal diameter ranging from 150mm to

610mm Monitors pipeline integrity and conducts pipeline maintenance to

ensure security of supply of petroleum products to five provinces of South Africa

Coordinates intermodal petroleum delivery with rail and other modes to ensure reach beyond Transnet’s pipeline network

Conduct risk assessments around pipeline infrastructure Planning, scheduling and coordination of product movement

throughout pipeline network Metering, conducted in compliance with API standards Automated pipeline control

Training

Conduct training for pipeline maintenance, management and depot operations

Conduct safety programs

Advisory

Provide planning and scheduling coordination Reputation management and customer relationship management Provide compliance, regulation and marketing advisory

Capabilities for liquid fuels storage with and road and rail load out facilities

126

Transnet Capital Projects Service Offering

• Transnet Capital Projects has extensive experience in managing mega projects, and is in a position

to advise other state-owned logistics operators on implementation of infrastructure projects

Transnet Capital Projects is a specialised unit within Transnet, responsible for implementation and coordination of mega projects and is one of the primary channels for meeting our capital investment plan

Infrastructure Development and Planning

Project Management for Mega Projects

Stakeholder Management for Key Projects

Conduct feasibility studies of major infrastructure development and logistics

Provide property life-cycle management support

Provide fit-for-purpose infrastructure safely, on time, within budget and according to specification

Coordinate project implementation to enable operating teams to focus on operational delivery

Schedule and cost projects for timely delivery

Ensure project excellence and successful delivery through appropriate technology and innovation

Engage in community upliftment and social infrastructure development

Ensure integration of systems and processes across operational areas in order to deliver the organisation’s capital plan seamlessly

127

Transnet Academy’s Training Service Offerings

• Transnet’s schools offer a wide range of training options to equip individuals to perform both

technical and business roles across ports, rail and pipelines logistics solutions

Maritime School of Excellence

School of

Rail

The Institute of Technical Training, Pipeline and Security

School of Leadership, Business Training and

Commercial

Prepares learners for port and port authority roles both

in South Africa and in the Southern African region

through various local and international collaborations

Assorted rail-related training including operations,

signalling, permanent way construction, welding, maintenance, railway

engineering and safety training, in South Africa and

internationally

Developing technical skills for critical roles such as apprentices, artisans, engineers, planners, operators, protection

officers, investigators and peace keepers

Competencies related to business, management and

leadership in the logistics sector with the relevant accreditations deliver for the competitive market

128

Thank YouAlignment with Government’s Strategies

129

Alignment with Provincial Strategies

130

Western Cape Strategic Goals

131

Eastern Cape Strategic Plan

132