APAC Competitiveness A look at Australia Brent Casey Kingsman Asia-Pacific Sugar Conference May 2013
…. the Asian population growth story 2
…. the burgeoning middle class World population with household income exceeding $5k USD per annum 3.6 1.3 4.8 5 It is estimated that 1 billion of the 1.3 billion 4 people that move into (billion people) 3 the middle class between 2010 and 2020 2 will be from east or 1 south Asia. 0 2010 2020 (forecast) Source: Euromonitor Bain Macro Trends Analysis 2011 3
…. Australian market share in Asia declining Raw Sugar Australia Market Share in Asia Pacific 70% 60% 50% 40% 30% 20% 10% 0% 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Source: Czarnikow 4
.… 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 1980 1997 2011 2012 2010 19 companies, 33 12 companies, 29 COFCO acquires Tully Wilmar acquires Mitr Phol takes 19% mills mills Sugar and bids for Proserpine of Maryborough Proserpine Sugar 2010 2011 2013 Mitr Phol acquires Wilmar acquires 8 companies, 24 Sucrogen Maryborough Sugar mills 5 5
…. 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. 6
.… the Australian production response Source: ASMC 7
…. 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 • 8
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