APAC Competitiveness A look at Australia Brent Casey Kingsman - - PowerPoint PPT Presentation

APAC Competitiveness A look at Australia

Brent Casey Kingsman Asia-Pacific Sugar Conference May 2013

…. the Asian population growth story

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…. the burgeoning middle class

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3.6 1.3 4.8 1 2 3 4 5

2010 2020 (forecast) (billion people)

World population with household income exceeding $5k USD per annum

Source: Euromonitor Bain Macro Trends Analysis 2011

It is estimated that 1 billion of the 1.3 billion people that move into the middle class between 2010 and 2020 will be from east or south Asia.

…. Australian market share in Asia declining

4 0% 10% 20% 30% 40% 50% 60% 70% 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Raw Sugar Australia Market Share in Asia Pacific

Source: Czarnikow

.… lots of M&A activity in Australia

• 5 large transactions over the last few years
• 1. Bundaberg Sugar to MSF
• 2. Sucrogen to Wilmar
• 3. Tully to COFCO
• 4. Proserpine Mill to Wilmar
• 5. MSF to Mitr Pohl

5 5 1980 19 companies, 33 mills 1997 12 companies, 29 mills 2010 Mitr Phol takes 19%

• f Maryborough

Sugar 2011 COFCO acquires Tully Sugar and bids for Proserpine 2012 Wilmar acquires Proserpine 2010 Wilmar acquires Sucrogen 2011 Mitr Phol acquires Maryborough Sugar 2013 8 companies, 24 mills

…. the last 15 years have been tough in Australia

• Cane production hit 40 mmt in Australia

– 1999 the Brazilian Real devalued – 2003 sugar went as low as 3.9 USC/lb – 2006 the European Sugar Regime was challenged by the WTO

• World demand kept growing at 2% p.a. tracking population

and income growth.

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.… the Australian production response

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Source: ASMC

…. to sum up

• The Australian sugar industry has endured a tough decade
• The world population is forecast to grow at 65.0 million people

per annum, with a large part of this growth to be focussed in Asia over the next 50 years

• Population growth and a burgeoning middle class in Asia will

inevitably lead to increased sugar demand

• Australia is well placed to meet the demand growth is Asia

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