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Global Ports Holding A Brief Company Overview & Aspirations for the
Container Terminal of Bar September 2014
Global Investment Holdings (GIH)
Overview Shareholder Structure Mehmet Kutman
25,55 % Retail
35,44 %
Global Investment Holdings was originally established in 1990 as a brokerage house shortly after which it
Erol Göker 0,22%
became the leading independent investment banking firm in Turkey.
brokerage and Foreign Institution
al 13,80 %
Treasury Stock
24,99 % Through its 20+ years of business, the group has been
a preferred partner by reputable international investors. Strategic Partners
The Company has played a key role in the development of Turkish capital markets.
The company transformed into an investment portfolio company in late 2004, when Global Investment Holdings evolved into a dynamic investment vehicle with interests in a variety of emerging business sectors in addition to the traditional non−bank financial service providers.
GIH is a publicly listed company with 99.9% of its shares quoted on the Istanbul Stock Exchange under the ticker symbol GLYHO.IS.
• Global cruise line operator
• Partner in Kusadasi Cruise Port
• Leading Spanish ports operator (portfolio company of JPMorgan) Partner in
Gemport sale process (did not succeed)
• Europe’s largest renewable energy company
• Former partner in Yesil Enerji, before Statkraft bought GIH’s shares
• Turkish engineering and construction group
• Partners in natural gas distribution business (Energaz)
• International engineering company based in China
• EPC contractor and O&M operator of Sirnak Thermal Power Plant
• Hong Kong based conglomerate investing in ports, telecom, retail, and energy
• Deutsche Bank’s infrastructure fund
• Partner in Izmir Port privatization tender (later cancelled)
• International shipping group owned by the Ofer Family
• Partner in Galata Port privatization tender (later cancelled)
• Tank farm project in Marmara developed together, Option to buy in
GIH Group Structure GIH has a diversified portfolio of investments in the commercial and cruise ports, energy, real estate and financial services sectors.
Energy Real Estate Finance
Global Energy (100%)
Pera REIT (50%)
Şirnak Thermal Power Plant
Renewable (Under
Development)
Denizli Sumer Park Project (100%)
Vakifhan No. 6 (100%)
GIH Headquarters
Van mixed-use
Development
(owned 100% by GIH)
Kibris – jointly owned by
Pera REIT and GIH (100%)
CNG Distribut
ion
Galata Energy (70%)
Naturelgaz (80%)
Solar Power Projects2
Gelis Mining Coal Mine
(80%)
Ports
Global Ports Holding (‘GPH’) (100%)
Ege Ports
Kusadasi Port (72.5%)
Port Akdeniz Antalya Port (99.8%)
Bodrum Cruise Port (60.0%)
CTGC (62.5%)
Lisbon Cruise Terminal (46.0%)
Creuers (62.0%)
Barcelona (100%)
Malaga (80%)
Singapore (40%)
Finance
Global Securities (75.67%)3
AZ Global Asset Management4
(40%)
GPH experienced significant growth with revenue and EBITDA expanding at a 2011 – 2014 CAGR of 29% and 30%, respectively.
GPH Strategy
Leverage rapid export and
tourism growth in Turkey
Focus on higher margin cargo and
ancillary port activities
Optimise cash generation at
existing facilities
Targeted privatisation
and acquisitions
in Turkey and
the
Org
anic
In
-org
anic
Potential opportunities in Turkey and the broader region
Commercial ports: Non-container ports with potential to be converted, and/or container ports with inefficient operations in the region
Cruise ports: Proximity to high profile touristic and historical sites
Optimise revenue capture across its portfolio
Create value through optimal capital expenditure going forward
Significant experience in improving underperforming ports and upgrading facilities and operational efficiency to increase margins
Focus on efficient container turn-around operations
Focus on ancillary revenue opportunities (e.g. rental income/duty free/advertising/ F&B)
Leverage proven platform to capture rapid growth of trade exports and tourism in Turkey
Investments in state of the art facilities and equipment to meet demand
Highly efficient management systems
Portfolio approach provides ability to cross-sell to cruise operators
Proven ability to deliver profitability and expansions
GPH manages a portfolio of strategic cruise and commercial ports in Turkey, Ege Port - Kusadasi, Bodrum Cruise Port- Bodrum and Port Akdeniz - Antalya. GPH has 62.5% stake at General Cargo- Bar, Montenegro. Additionally GPH has recently taken concrete steps to become the majority shareholder at Creuers (Port of Barcelona, Port of Malaga and Singapore) and the leading shareholder of the concessionaire for Lisbon Cruise Terminal.
Spain Barcelona Cruise Port
A world-Leading Cruise Homeport
Malaga Cruise Port Key Mediterranean Cruise Port
Montenegro
General Cargo – Bar A Leading Port in the Region
Turkey
Ege Ports-Kuşadası
Primary Cruise Port in Turkey
Port Akdeniz-Antalya
Export and Mining Growth
Bodrum Cruise Port
Preferred Luxury and Leisure Destination
Singapore
Singapore Cruise Port One of the Largest Terminals in Asia
Lisbon Cruise Port
Gateway to Atlantic and Med
Portugal
1. Ministry of Transport and Maritime Affairs and Communications.
Creuers
Barcelona Cruise Port
One of the largest cruise homeports
Operates 5 cruise terminals of the Port of Barcelona (4 as a concessionaire)
Total of 27,100m² of indoor area
Pax 2012A: 1.9m
Malaga Cruise Port
Main activity is boarding, unloading & billing of passengers, and luggage management
Concession of the three cruise terminals Total of 16,941m² of indoor area
Pax 2012A: 652k; Calls 2012A: 288
General Cargo – Bar
Main activities are general and container cargo,
and special purpose warehouse services
Cargo 2012A: 805k tons (including 31 kTEUs of
containers)
Vessel arrivals 2012A: 179
Singapore Cruise Port
Main activity is the operation of Terminal Marina Bay Cruise Centre in Singapore
Total of 28,000m2 of terminal space
Pax 2012A: 416k; Calls 2012A: 108
Port Akdeniz – Antalya
High capacity commercial port with a
dominant position in export traffic for
its hinterland
Majority of revenues from marble and
cement
Concession length: 30 years
End of concession: 2028
Ege Ports – Kuşadası
Busiest cruise port in Turkey
Located near Ephesus, a major tourist attraction and the House of the Blessed Virgin Mary
Market Share: 30% and 27% by vessel calls and passengers respectively (2012)1
Concession length: 30 years
End of concession: 2033
Bodrum Cruise Port
Cruise, ferry and mega-yacht port located on Turkey's Aegean coast
Bodrum has one of the best-preserved medieval castles in Europe
Market Share: 8.8% and 2.6% by vessel calls and passengers respectively (2012)1
Concession length: 12 years
End of concession: 2019
Lisbon Cruise Port
B-O-T project that comprises construction of a new terminal building
Potential to be the hub for Western Med cruise itineraries
35 years concession including a 2 years construction period
Pax 2013: 558K (Incl 51K Turn-around)
Leading Turkish Ports Operator Largest Cruise Port Operator in the World
Summary of Activities GPH’s core operations consist of commercial port and cruise port activities, with commercial ports expected to contribute
72% of Group 2013 revenue. Commercial Port Activities
Specialising in container, bulk and general cargo handling
Cruise Port Activities Serving cruise liners, ferries
yachts and mega-yachts
Contribution to Group
2013 Revenue
Contribution to Group
2013 Revenue 28%
72%
US$22.2m US$57.3 m
GPH Positioning GPH Positioning
In Turkey: #1 in Turkey, 38% of the passenger traffic, 45% of the calls
Location of Port Akdeniz ensures limited competition with other ports Capacity to enhance tariffs under market limits given lack of competition and absence of any government regulation on pricing
In Europe: #9 in Europe in terms of passengers
Total Revenue 2013E: US$79.5m
Port Akdeniz: The Port of Antalya Port Akdeniz-Antalya is a multi-functional port harboring a
commercial port, a cruise port and a large marina with 125 mployees.
GPH acquired 40% of the port in 2006, another 59.8% stake in 2010
and now owns 99.8% The biggest and best equipped sea port along the 700km Turkish Aegan-Mediterranean coast between Izmir and Mersin Containers comprise more than 50% of revenues
Total wharf length (meters): 1,732
Port area (m2): 166,778 Location of Port Akdeniz: Limited competition
– The nearest ports, Mersin and Iskenderun located at c.490km and c.750km respectively from Port Akdeniz
– Significant trucking costs from Antalya hinterland to
these ports prevent direct competition.
Max draft (m): -10
Total ship capacity (per year): 2,970
Total handling capacity (TEU/year): 500,000
Date of acquisition Turkey’s cement and mining industry 2006 – –
3rd largest cement exporter globally with rising exports Close to hinterland with strong exposure to mining and cement industries (marble exports to China, cement exports to MENA, export and import of metals, granite, coal, aluminium, chemicals and agriculture growing).
Concession term 30 Years
Concession ends 2028 Marina, Duty Free Shops Facilities
Well developed touristic region: – with significant number of coastal resorts rendering new commercial port development unfeasible.
GPH 99.8%
Capacity to enhance tariffs Under market limits given lack of competition and absence of any government regulation on pricing.
Shareholding Structure
Strategic Advantage
Key Technical Features
Port Akdeniz: The Port of Antalya
$35m (including $3m for the cruise section only) 255%
Terminal handling services Passenger fee (landing fees)
Waste & garbage removal
Storage
Pilotage – towage
Cargo & container handling
Sheltering
Mooring
1100%
8000
200 5000 3000
00
Marina with a capacity of 400 yachts. Strong increasing revenue growth since privatisation
Growing volumes of bulk and general cargo and containers due to significant export-driven industries in Antalya’s hinterland
Container shipping lines like MSC, ZIM and CMA- CGM are shifting a significant portion of their operations to the Port Akdeniz Antalya due to the lack of modernisation and congestion at other ports
Effective pricing mechanism
Expanding profitability guaranteed by:
• Containerisation trend
• Defendable and limited competition for access to hinterland
50
(00
0 t
on
s)
(00
0 T
EU)
(00
0 P
AX
) (0
00
TEU
)
Port Akdeniz: Cruise Passenger Growth
Rental Revenue
Port Akdeniz: Cargo and Container Volume Growth
9000 350
7000 300
6000 250 4000 150 2000 100 10
0 0 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
General Cargo Dry Bulk Container (tonnage) Container (TEU)
Port Services
Total Investment since acquisiton Container and Cruise Performence
Ege Ports: The Port of Kuşadası
In July 2003, the 30-year operating rights for the Ege Ports was awarded to the consortium including RCCL and GIH
Ege Ports is a major gateway to unrivalled world heritage sites.
Ege Ports has one of the highest participation rates (in onshore excursions) of any Mediterranean cruise port of 85-87%.
First port in Turkey to be ISPS compliant and to receive ISPS certification (2004)
Total pier length (meters) 966 Ege Ports Kuşadası - Facilities - Ultra modern port and security facilities
- Shopping mall encourages cruise liners to offer
quality shopping time to their customers.
Port area (m2) 23,000
Total ship capacity/year 2,000
Draft -10m Only direct competition from İzmir Date of acquisition 2003
Favourable location: Ephesus (21km away from Ege vs. 80km from Izmir) Ephesus attracts over 1.7m tourists per year via Kuşadası.
House of the Virgin Mary (18km away from Ege vs. 89km from Izmir)
Positioning Serves a large diversified group of cruise lines focused on mid and upper end of market whereas Izmir serves primarily by budget lines operators such as MSC, Costa
Concession term 30 Years
Concession ends 2033 Scala Nuova Shopping Mall & Duty Free Shop
Facilities
GPH 72.50% etc. rcı 27.50%
Shareholding Structure
Access to … Key Technical Features
Bodrum Cruise Port
GPH acquired 60% of Bodrum Cruise Port in December 2007, after the infrastructure was substantially completed
Niche port within a popular and luxury resort for domestic and international tourists.
Bodrum Cruise Port is located 36 km from the Milas International Airport and few minute walk to the city center.
Total pier length (meters) 480 Unique luxury and leisure destination with
style
- Unique port location with limited competition in the cruise segment from Izmir (c. 250km away) and Marmaris (c.160km away).
Port area (m2) 22 Total ship capacity/year 800
Draft -9 m
World-class nightlife Bodrum’s pristine beaches are popular tourist attractions
– In 2012, 3 mn tourists visited the Muğla
province where Bodrum is the biggest resort
area.
Date of acquisition 2008
Investment term 16 months
Concession term 12 years Concession ends 2019
Competition within the ferry segment from the competing municipal pier, which is expected to close down soon due to inability to meet international standards.
GPH 60%
Local Partner 30%
Setur 10%
Shareholding Structure
Access to … Key Technical Features
Creuers del Port de Barcelona SA Port of Barcelona
At a galance
CREUERS was founded in 1999, when was awarded the Public Concession of 4 Terminals in Barcelona CREUERS invested in the refurbishment of Terminals North and South at the WTC, and in the design and erection of the Terminals B (2005) and A (2008) prepared to accommodate the biggest cruise ships in Homeport calls. CREUERS also revamped the Terminal C (2005) being operated under an Authorization from Port Authority, renewable for periods of 1 year.
Highlights
Operational Figures
The 1st cruise port in Europe ahead of Rome, Venice and Southampton The 4th homeport in the world just after the 3 Caribbean ones: Miam, Port Everglades and Port Canaveral In the year 2013, CREUERS operated 612 calls with a total of 1.889.000 passengers, of which 61 % were home porters
GPH’s Involvment
In 2013 GPH acquired 43% of the shares of Creuers del Port de Barcelona in partnership with Royal Caribbean Cruises (RCCL) through Barcelona Port Investment (BPI) GPH has recently taken concrete steps to become the majority shareholder at Creuers (Port of Barcelona, Port of Malaga and Singapore)
Creuers del Port de Barcelona SA Port of Barcelona
Cruceros Malaga
At a galance
The Company, 80% owned by Creuers del Port
de Barcelona SA. started operations in February
2009
Cruceros Malaga operates under Concession,
the Terminals: South , North (2011), Palmeral
(2012) and a fourth berth at Levante Pier
Operational Figures
In 2013 the number of passengers has been
397.479
GPH’s Involvment
In 2013 GPH acquired 43% of the shares of Creuers del Port de Barcelona in partnership with Royal Caribbean Cruises (RCCL)
Singapore Marina Bay Cruise Center
At a galance
Part of Sats-Creuers Cruise Services Pte. Ltd joint venture, Creuers holds 40% stake at Terminal Singapore Marina Bay Cruise Center since 21 December 2011
Highlights
Operational Figures
equivalent to three football fields, the MBCCS is designed as an architectural icon with the capability to accommodate some of the world's largest ships. The Terminal is just 20 minutes drive from the ultra modern Changi International Airport with a direct highway exit, and at 5 Km from midtown.
In 2013 the number of passengers have been 416,000
Lisbon Cruise Terminal
At a galance
The 35-year concession will include the construction and the operation of a landmark cruise terminal, on a public-service concession basis, at the Lisbon Cruise Terminal. The new terminal is expected to provide the port with estimated 1.8mn passengers while supporting the growth of turnaround business and therefore contributing favorably to regional tourism and the economy. The construction of the new Terminal is estimated to require c. Euro22mn in total investment.
Highlights
Our aim is to increase calls and cruise passengers, while also increasing the turn-around operations with an aim to double the current traffic of 550,000 passengers in the medium term.
GPH’s Involvment
GPH is the lead investor with 40% of the consortium with 30% held by Grupo Sousa Investimentos SGPS, 20% by Royal Caribbean Cruises Ltd. and 10% by Creuers Del Port Barcelona S.A
Container Terminal and General Cargo – Bar
(CTGC) Status of CTGC pre- privitisation Negative financial results
In 2013, on a total turnover (revenues) of only €6.7m a negative result (Net Loss) of €1,1m was registered. Over 4.7 million EURO liabilities.
Sharp loss of market share Container: Handled only 33,050 TEU in 2012, while the Balkan Ports together handled 370,000 TEU in 2012. (loss of important shipping line customers) General Cargo: The port handled 293 thousand tonnes of general cargo in 2012. A significant drop as compared to the years before. (fall in production at its main customers KAP Aluminium and Serbia Steel.). Hinterland connectivity: Rijeka offers daily container train connections to Belgrade, Bar has not any container train connection. Ploce, Rijeka, Koper, and Durres all have excellent highway connections but not Bar.
Inefficient Labour Force CTGC employed 579 people. Industry standards for the volume of 30 thousand TEU and 293 thousand tonnes would require a labour force of almost one third of the amount of people employed .
Installations and equipment Quaywall (needs structural repair and upgrading) Container and General Cargo Cranes (from 60s and 70s, need to be replaced and need for one more container crane) Warehouses (need to be modernized + refrigerated warehouse capacity for perishables ) Terminal Operation System (needs and up to date TOS)
How to unlock the value Improve efficiency to international level to become competitive through:
Operational and technical improvements to satisfy shipping companies. Close collaboration with other players in the logistics chain.
Actively attract cargo from the hinterland.
Establish reefer capacity Benefit from the Free Economic Zone Status
Shape the active labour force to match the best industry standards
Operational, Technical and CAPEX plan
GPH’s Proposal for
CTGC
Proposal submitted to: Government of Montenegro Council for Privatisation and Capital Projects.
Tender: Sale of the State’s Shares and the Concession to Repair, Finance, Operate, Maintain and Transfer (RFOMT) the Terminal at Bar – Montenegro.
Value Proposition and Capability of GPH
Experience and commitment to operate a full port: containers and general cargo, logistics
GPH operates three full ports: Port Akdeniz (the major cargo port in the region); Port of Kusadasi and Bodrum Cruise Port (ferry and passenger ports). GPH is highly qualified to work with the mixed cargo flows in Bar and the wide variety of activities performed in the port.
The strategic growth of CTGC should and will be through container business. However, the other cargo types are complimentary.
Built-up a port from a relatively small base, with a diverse mix of cargo, and specific business environment:
GPH’s capability of growing a port starting from a small base: Port Akdeniz:
From 60,000 TEU handled in 2008, increased to 220,000 TEU in 2013 (post crisis!) Invested in mobile harbor cranes, organizing flexible labor, increasing the hinterland reach, and attracting multiple container liners.
Attracted new cargo from the hinterland.
Respect for and understanding of local culture and habits:
Build on the political, historical and economic relations that the two countries have developed over the years. Investments from other Turkish companies in Montenegro: Toscelik and Gintaş Company.
Turkish Airlines’ Istanbul-Podgorica flights, which commenced on July 2010.
Technical
Proposal
Financial Proposal (~) (€)
Commercial Plan
Capex Plan
Operational Plan
Equity Valuation (62.09%) 8.07m
CAPEX 13.6 m
Social Program 6-7m
Total 28m
Technical Proposal
1) Position CTGC as South Adriatic Balkan Gateway:
Target Develop Port of Bar as the South Adriatic Balkan Gateway, as an alternative to the Upper Adriatic gateways Rijeka and Koper.
Advantages Compared to Upper Adriatic Ports;Closer to the Mediterranean shipping routes Shorter distance to the hinterland. Close to the Balkan hinterland with rail connectivity that would be developed by GPH
Strategy Operational improvements to satisfy liner and end-user demand Close collaboration with other players in the logistics chain (Highway & train) Actively attract cargo from the hinterland Follow-up on our initial discussion with liners Establish reefer capacity Benefit from the Free Economic Zone Status
2) Establish CTGC / Town of Bar as the main regional distribution & logistics hub for the Balkan region :
Target Unlock the potential of the vast logistics infrastructure which is in place at CTGC .
Project cargo: Large potential from infrastructure projects in Montenegro and the region. (Position Bar as the hub for project cargo, where Customers can rely upon for handling and storage of their Project Cargo). Potential from regional projects; highway construction, hydro energy, mining in Serbia, Trans Adriatic Pipeline, Nabucco pipeline. (Actively approach the project owners directly, offering them a fully integrated solution).
Advantages
Strategy Collaboration with logistics companies DHL, Kuehne and Nagel, Milsped, Pacorini as business partners and customers. Intensive marketing in the hinterland, proposing integrated logistics solutions, including transportation, warehousing and storage, and stevedoring Upgrading the warehousing up to industrial best practice Development of cold storage for fruits, vegetables, fish and meat Capitalise on highway Improve the security
GIH (Global Investments Holding) will actively consider other logistics investments outside CTGC
Commercial Plan
Technical Proposal
3) Consolidate and strengthen CTGC as an industrial commodity port for the Balkan hinterland: • Ferrous Metals
• Non Ferrous Metal
• Perishables
• Cement
• Other Cargoes
4) Attract cruise business capitalising on touristic potential of coastal Montenegro and extensive experience and network and GP H:
Represent and Market Bar under GPH Cruise Ports Umbrella at international events
GPH is present at major industry events since 2003 (Seatrade Miami, Europe and Med Cruise) Introducing Port of Bar at these events and launching an event.
Register Bar under International Cruise Associations
GPH is an executive member of Medcruise, Cruise Lines International Association, European Cruise Council and Florida Caribbean Cruise Association.
Include Bar in the one-to-one meetings One-to-one and round table meetings with key decision makers to create solutions right on the spot.
Allocate budget for advertising in major cruise publications
GPH has strong connections with international cruise publications such as Cruise nsight magazine, Cruise industry news and Seatrade Publications
Collaborate and train local tour operators and vitalize Montenegrin Tourism via Cruise
Target cruise-oriented travel agencies and tour companies in the USA and Europe. Support the marketing requirements of cruise line sales, shore excursion and marine departments.
5) Utilize CTGC experience as a stepping stone for continued GIH, and other Turkish investments in the country:
GIH current investments Diversified strong Turkish group, active in ports, energy, real estate and finance.
GIH future plans Exploring non-logistics investment opportunities in the country: Hydro energy power plant, mining, financial services, real estate and tourism. GIH will be capable to capitalise therefore on : local management presence, investment experience, the know-how of legislation;,and local know-how
GIH strategy in Montenegro Through its extensive and strong connections in Turkey and in the international investment community GIH will function as an ambassador for attracting FDI to the country.
Commercial Plan
Technical Proposal
Operational Structure
Terminal Amenities: Install in new truck entrance gates and a gate out. Make Bar an ISPS compliant port. Container Operations: Achieve a productivity level of 40 moves per hour Install proper Terminal Management System Yard Management in line with industry standards (throughput time of a truck withing 1hr) Warehouses: For better utilization, upgrade of Container Freight Services Warehouses General Cargo: Increase the loading rate by investing in forklifts. Reefer warehouse and perishables: Invest in reefer warehouses to establish Bar perishables hub and distribution centre for Balkans. Provide ancillary cargo services: Containers: washing etc. / general cargo: labelling
Health Safety and Environment
Health and seafety: Define core values and rules to make people aware of their own responsibility, supported by training and workshops. Environment: Environmentally cautious approach, in compliance with local and international regulations
Organizational Structure
Board of Directors: Representatives from GPH, non-executive local and international experts CEO: Responsible in execution of the strategy and the targets set by the Board of Directors and will lead the senior management team on the day to day basis. Core team reporting to the CEO: CFO, CCO, COO, HSE Manager, HR Director, Secretary, Legal Affairs and PR and Community Responsible.
Social Program A socially acceptable program, in accordance with local and national regulations, in collaboration with the labor union. Objective 1: Shape the active labour force to match the best industry standards Early retirement, shape labor force to mid-term labour requirements, Outplacement Objective 2: Bring the labour force fit for the effective operation and sustainable growth through on the job and external training Training areas: Health, Safety, Security and Environment / Operational Excellence / Commercial and Corporate Identity Objective 3: In collaboration with consultants and universities design and implement an outplacement program to guide people back to the economy Outplacement strategy: Map the capabilities of workforce, determine labour demand, retraining and follow up) /Financial compe nsation (6M€)
Area Target
Operational Plan
Technical Proposal
Areas of Investment Cranes (the existing container gantry is too old and offers too limited capacity to deliver high quality service)
Rolling equipment of different kinds to ensure smooth and high level (non-damage) operations
IT and terminal management systems
Reefer warehouse
Security
Additional paving of container yard
Total amount of investment (~) 13.6M€ (During the first three years – restructuring phase)
4M€ (Five years after the restructuring period)
***Beyond 2021, capital expenditures will comprise re-investments and additional investments to answer the market demand.
CAPEX Plan