WE ARE REDUCING DISTANCES!

Freeport of Riga: a Sustainable Brand in LogisticsEdgars Sūna, Marketing Director, Freeport of Riga Authority

April 12, 2012

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Latvia in Brief

• 64 000 square km

• Population 2,2 million

• GDP 18,12 billion EUR (2010)

• Transport and Communications sector builds 11% of GDP (2010)

• Currency LVL (Lats),1 EUR = 0,7028 LVL

• Member of the EU and NATO since 2004 and the WTO since 1998

• 3 major ice-free ports and 7 small ports

• 4 special economic zones

Latvia

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Our Vission and Mission

• customer`s port of choice because they value our safe, efficient and competitively priced services

• multifunctional port which fully exploits the benefits of Freeport status and demonstrates sustainable economic success

• socially and environmentally responsible port which is adaptable and able to respond to global trends and the changing needs of customers.

Port Authority

We will continue to develop the Freeport of Riga as a leading port of the Baltic States and as a source of real prosperity for Latvia.

We will continue to develop the Freeport of Riga as a leading port of the Baltic States and as a source of real prosperity for Latvia.

Our Mission:

We aim to develop the Freeport of Riga as:

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Freeport of Riga in 2011

• By cargo turnover Latvia’s biggest port and the third biggest port in the Baltic States (34 mln.t)

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

• Fast growing port – annual growth rate +11.8%

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

• Total port revenues reached EUR 402 mln and net profit EUR 46 mln (2010)

• Taxes paid into the state and Riga municipal budgets - EUR 28 mln (2010)

www.freeportofriga.lv

Business Card

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Freeport of Riga – 11% of the City Territory

Business Card

Port border line –––Railway - - -Main roads –––

Port border line –––Railway - - -Main roads –––

Legend

Total port area 6 348 haTotal berths length 13.8 kmMax. depth 16.0 mMax. vessels draft 14.7 m

Total port area 6 348 haTotal berths length 13.8 kmMax. depth 16.0 mMax. vessels draft 14.7 m

Main infrastructure figures

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Riga in the Network of Eurasian Transport Corridors

Riga as a part of the corridor is linked to the Trans-Siberian Railway

Haulage by the Trans-Siberian Railway saves transit time by 12-15 days in route Far East –Europe

Riga as a part of the corridor is linked to the Trans-Siberian Railway

Haulage by the Trans-Siberian Railway saves transit time by 12-15 days in route Far East –Europe

East-West transport corridor

Easy access to the corridor connecting Europe with the Middle East

Easy access to the corridor connecting Europe with the Middle East

North-South transport corridor

Location

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The Baltic Sea – a Region of Strong Port Competition

11 ports compete for cargo to/from Russia

Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 362 mln t in 2011

11 ports compete for cargo to/from Russia

Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 362 mln t in 2011

Eastern Baltic Sea Region

Location

RUS 185,4 mln t

EST 36,5 mln t

LAT 67,4 mln t

LIT 45,5 mln t

FIN 27,2 mln t

Turnover at ports by country in 2011

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Regular Liner Services

Connectivity

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Hinterland ConnectionsDedicated Container Trains

Connectivity

Container train “Zubr” (Riga-Minsk-Illichevsk)

Container train “Baltika-Transit” (Riga-Almaty)

Block Train(Riga-Hairaton)

Container block train “Riga Express” (Riga-Moscow)

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EMMA - Eurasian Multi-Modal Alliance

Connectivity

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

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

Eurasian Multi – Modal Alliance

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Total transport logistics cost comparison for the ports of EBSR (EUR/20’) in route Far East - Moscow

Costs

St.PetersburgSt.Petersburg

Hong Kong-BremerhavenHong Kong-

Bremerhaven

TallinnTallinn

RigaRiga

KlaipedaKlaipeda

MoscowMoscow

1752 EUR/20'

1752 EUR/20'

1529 EUR/20'

1529 EUR/20'

1523 EUR/20'

1523 EUR/20'

1764 EUR/20'

1764 EUR/20'

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Total transport logistics cost comparison for the ports of EBSR (EUR/20’) in route Far East - Almaty

Costs

St.PetersburgSt.Petersburg

Hong Kong-BremerhavenHong Kong-

Bremerhaven

TallinnTallinn

RigaRiga

KlaipedaKlaipeda

AlmatyAlmaty

2511EUR/20'

2511EUR/20'

2405 EUR/20'

2405 EUR/20'

2347 EUR/20'

2347 EUR/20'

2615 EUR/20'

2615 EUR/20'

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Port Infrastructure

Infrastructure

Total port area 6 348 haPort land 1 962 haAvailable land 445 haTotal berths length 13,8 kmMax. depth 16 mMax. vessels draft 14.7 m

Total port area 6 348 haPort land 1 962 haAvailable land 445 haTotal berths length 13,8 kmMax. depth 16 mMax. vessels draft 14.7 m

Port Infrastructure

Warehouses 180 000 m²

Open storage 1 797 000 m²

Cold storage 13 000 t

Tank farm 350 000 m³

Warehouses 180 000 m²

Open storage 1 797 000 m²

Cold storage 13 000 t

Tank farm 350 000 m³

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Port Companies

33 stevedoring companies

28 ship agencies

37 companies provide different

facilities for cargo warehousing

16 companies operate customs warehousing

7 companies provide different

added value services

12 companies offer cargo forwarding services

Infrastructure

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Facilities for Container Handling

• Total handling capacity 480 thous. TEU

• 3 terminals:Baltic Container Terminal, Ltd, Riga Universal Terminal, Ltd, Riga Container Terminal, Ltd

• All terminals are directly linked to the main rail routes

• Container ground slots 9350

• Crane productivity 25-30 cont.mov./hour

• Max draft at containerberth13.5 m

Infrastructure

EM Athens (2010)Length 207 m DW 32 350GT 25 294Capacity 2503 TEU

EM Athens (2010)Length 207 m DW 32 350GT 25 294Capacity 2503 TEU

Largest vessel handled

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

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

13.414.9

18.121.7

24.0 24.4 25.4 25.9

29.6 29.7 30.5

Total

Liquid Bulk

General Cargo

Dry Bulk

Total

Liquid Bulk

General Cargo

Dry Bulk

Performance

• Average annual growth rate 9.1%

40

35

30

25

20

15

10

5

0

34.1

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Inbound and Outbound Cargo in 2011

Performance

78% of cargo handled at the Freeport of Riga is transit traffic

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• Deepening of the fairway to 15 – 17m• Multifunctional dry bulk terminals

on the Krievu sala• Modernization of the port’s railway network• Construction of a new railway bridge

Private Investments

• Oil products terminal in Bolderaja• Liquified natural gas (LNG) terminal in

Daugavgriva• Terminals on the Kundziņsala island

(fertilizer, container, grain and logistics park)• Terminal for production and handling of

bioethanol

Development Projects (2010 – 2020)

Development

Total port investment portfolio 1.1 bln EUR• Port Authority`s Investment 300 mln EUR• Private investment 757 mln EUR

Total port investment portfolio 1.1 bln EUR• Port Authority`s Investment 300 mln EUR• Private investment 757 mln EUR

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3

4

5

5

7

1

2

37

8

6

4

8

6Port Authority`s Investments

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Investment Opportunities at the Freeport of Riga

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

• 445 ha of land available for development

• Status of a licensed company and free zone regime allows to receive tax relieves

• Freeport Authority assistance in the development of private terminal infrastructure

• A favorable investment climate in Latvia

Investment

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Available Territories for Development

Investment

• Approx. 445 ha are presently available for the development of new facilities (distribution, logistics, warehousing, etc.)

• Approx. 445 ha are presently available for the development of new facilities (distribution, logistics, warehousing, etc.)

Available territories

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Status of a Licensed Company and the Free Zone Regime

Freeport status provides for substantial tax reductions

•Status of a licensed company allows to receive direct tax relieves

•Licensed company fulfilling certain requirements of the Free zone regime can receive both direct and indirect tax relieves

•Licenses are issued for 5 years by the Freeport of Riga Authority

Investment

Direct taxes

Income tax 80 %Real estate duty 80-100%

Indirect taxes

Value added tax 100 %Excise tax 100 %Customs duty 100 %

Direct taxes

Income tax 80 %Real estate duty 80-100%

Indirect taxes

Value added tax 100 %Excise tax 100 %Customs duty 100 %

Tax relieves:

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Investment Climate in Latvia

• Business without borders: an EU member state

• Advantages and experience in working with Russia and the CIS

• A highly skilled and multilingual workforce

• Easy to set up and manage business

• Equal rights and benefits for both foreign and local investors

• Opportunities to qualify for funding from the EU`s Structural Funds

Investment

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Summary

• Strategically well linked to economically strong and developing areas (closest EU port to Moscow, EU border with Russia)

• A corridor of competitive total transport logistics costs

• Multifuncional port with powerful infrastructure for the container handling

• Favourable business conditions (Free Economic Zone, long-term lease of land on attractive terms, available land for development)

Port of Riga: Hub for Logistics of the Textile Industry in the Baltics

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Thank you for your attention!