NSW Ports Consortium & its investment in infrastructure


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Michael Hanna, Head of Infrastructure Australia, IFM delivered this presentation at the 2013 NSW State Transport Infrastructure Summit.
The State Transport Infrastructure Series of events represent the leading forums in Australia to assess the future plans for transport infrastructure development and financing across Australia. For more information, please visit www.statetransportevents.com.au

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NSW Ports Consortium & its investment in infrastructure

  1. 1. NSW Transport Infrastructure Summit August 2013 Introduction to NSW Ports Owner of Port Botany and Port Kembla
  2. 2. Industry Funds Management Pty Ltd (“IFM”) AustralianSuper Pty Ltd (“AustralianSuper”) Tawreed Investments Limited (“Tawreed”) The State Public Sector Superannuation Fund (“QSuper”)  NSW Ports is a consortium of leading institutional investors and represents more than 80% Australian superannuation funds. The NSW Ports consortium comprises: 1 Who we are
  3. 3. We are investors in Australia’s most important infrastructure 2 Western Australia Northern Territory Queensland New South Wales Victoria South Australia Tasmania  NSW Ports is a long-term asset investor, with interests in a range of key infrastructure assets throughout Australia, including:  Ten airports, three seaports, three toll roads, one transport interchange, 16 social infrastructure assets  The consortium has a strong track record in supporting the development of essential infrastructure assets Perth Airport Perth Law Courts Northern Territory Airports Port of Brisbane Eastern Distributor Brisbane Airport Melbourne Airport Southern Cross Station
  4. 4. We have invested in NSW’s infrastructure since 1998 3 New South Wales Wyuna Water Axiom M1, M4, M5, Sydney Airport, Sydney Desalination Plant, NSW Rent Buy  NSW Ports members are also investors in critical NSW road infrastructure including the Eastern Distributor and M5 South West motorway  We are delighted with the opportunity to invest in NSW’s most important seaports Investment Description Location Year Acquired M5 South West Motorway Toll road Sydney 1998 M4 Motorway Toll road Sydney 1998 M1 Motorway / Eastern Distributor Toll road Sydney 2000 Wyuna Water Water treatment Illawarra, Woronora 2003 Axiom Education School buildings Sydney 2003 NSW Rent Buy Public sector housing Sydney 2005 Sydney Airport Airport Sydney 2008 Sydney Desalination Plant Water treatment Sydney 2012 Port Botany & Port Kembla Ports Sydney, Illawarra 2013 Port Kembla Port Botany
  5. 5. About IFM 4  IFM is a global investment manager and is fully-owned by 30 Australian superannuation funds.  We manage $46 billion across infrastructure, debt, private equity and listed equities  IFM is Australia's largest investor in infrastructure, and with over $14 billion in infrastructure investments globally, is one of the largest infrastructure investors in the world  IFM has a strong 18 year track record successfully managing infrastructure through economic cycles IFM Owners Direct investors into Port Botany & Port Kembla
  6. 6. Port Botany 5
  7. 7. Port Botany – Significant new capacity added 6
  8. 8. Port Kembla 7
  9. 9. Port Kembla – Growth Opportunities 8
  10. 10. A compelling investment opportunity 9 • Serve as the gateway to Australia’s largest economy • Population base provides strong ongoing demand for container imports • Main port facilities serving NSW (except for coal exports at Newcastle) • Combination of Botany and Kembla results in a diversified profile of import and export driven revenue from a range of trade types and commodities High quality, essential economic assets • Container wharfage (50% of total revenues) faces very limited competition from other ports • Majority of property leases are long term (20+ years) with favourable terms Revenue largely contracted or monopolistic in nature • Low levels of operational risk – no stevedoring or dredging businesses • High margins (75%+) with strong operational leverage due to fixed and relatively low cost base Landlord business model with high margins • Over $1 billion of major growth capital expenditure expected to be largely completed prior to Financial Close Significant investment prior to privatisation – high cash conversion expected • Option to expand container facilities as Port Botany approaches capacity • Close proximity to the high growth industrial areas in south west Sydney Future expansion opportunities at Port Kembla • IFM’s economic exposure to NSW was only 6.5% while NSW represents 1/3 of Australia’s population and 31.6% of GDP • One of only three remaining major capital city port companies in Australia Strong portfolio fit
  11. 11. Our vision: To create an integrated, world class port management company 10  NSW Ports wants to continue the great work we have evidenced from management and staff through our diligence phase and first two months of ownership • Promote safe, responsible and reliable operations • Capitalise on the strengths of each facility Develop both ports to their full potential • Bring out the best from the combined organisation by having a highly engaged workforce • Support management and staff to deliver effective outcomes Responsible and efficient operation of the organisation • Maintain strong customer relationships • Work with other stakeholders including government, stevedores, transportation logistics companies and local communities to solve off port issues Build strong relationships with all stakeholders • Committed to managing and developing the ports in a safe, secure, efficient and environmentally responsible manner • Be a good corporate citizen that employees and investors can be proud to be part of Focus on sustainable growth
  12. 12. NSW Ports is positioned to support future growth 11 Management & Staff Board of NSW Ports Port Botany Port Kembla • NSW’s primary container port • Critical infrastructure for bulk liquids trade • The only LPG import facility in NSW • Independent Chairperson • Appointees with significant port and other infrastructure experience Collaborative sharing of best practices between the two ports  NSW Ports is well capitalised and aligned to support the development of both ports to their full potential • Australia’s largest vehicle import facility • Primary bulk trade port in NSW focusing on grain and coal • Management team representing both facilities • Active engagement with staff to enhance operations Backed by committed and influential investors that will support the growth and development of both ports