LOGISTICS & SHIPPING...LOGISTICS & SHIPPING - STRATEGIC IMPACT ON GLOBAL CHEMICAL INDUSTRY...

LOGISTICS & SHIPPING - STRATEGIC IMPACT ON GLOBAL

CHEMICAL INDUSTRY COMPETITIVENESS

A Multi-Client Evaluation designed to deliver genuine Competitive Advantage to Subscribing Organisations

July 2004

Nexant ChemSystems 1st Floor South, Griffin House, 161 Hammersmith Road, London W6 8BS www.chemsystems.com Tel: +44 (0) 20 7950 1600 Fax: +44 (0) 20 7950 1550

Drewry Shipping Consultants Ltd Drewry House, Meridian Gate 213 Marsh Wall, London E14 9FJ www.drewry.co.uk Tel: +44 (0) 20 7538 0191 Fax: +44 (0) 20 7987 9396

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness

© Nexant ChemSystems/Drewry Shipping Consultants Ltd

Contents

Section 1: Introduction 1

Section 2: Report Objectives 3

Section 3: Coverage 4

3.1 Regional Coverage 4

3.2 Product Coverage 5

3.3 Ports 5

3.4 Time Period 5

Section 4: Approach 6

Section 5: Report Contents 7

Section 6: Timing and Costs 20

Section 7: Nexant/Drewry Credentials 21

7.1 Nexant ChemSystems 21

7.2 Drewry 23

Section 8: Questions Regarding this Proposal 24

Section 9: Order Form 25

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Introduction

1

© Nexant Chem Systems/Drewry Shipping Consultants Ltd

1. Introduction The Middle Eastern Petrochemical industry stands on the verge of yet another period of expansion, the biggest so far. At least 15 million tons per year of ethylene capacity and a similar amount of ethylene derivatives are due to come on-stream in the next decade. Rapidly increasing Asian demand for bulk polymers and other major derivatives, and access to advantageous feedstocks, continue to remain the key drivers for these capacity additions.

In order to understand the implications of the massive growth in production capacity and exports on shipping and logistics, it was felt necessary to understand the cost structure associated with producing and delivering materials from the Middle East. The general impression is that producers have access to feedstocks, which are extremely cost competitive. This is true – but as shown below, the cost of handling and delivering products to major markets is a substantial item for chemical producers and consumers, and as supply volumes grow, it will be something that cannot be ignored.

Typical Cost Breakdown for Polyethylene Delivered to East Asia

Cost of Delivery39%

Direct Operating Costs

4%

Raw Materials49%

Allocated Cash Costs3%Utilities

5%

Analysis clearly indicates that these costs are expected to increase, as it is extremely unlikely that the increase in transportation requirements (containers, ships, port facilities etc.) would match the requirements of the overwhelming (potential) exports. Therefore, proactive producers in the region who plan their transportation logistics have the potential to convert this into a significant competitive advantage versus others. An understanding of the magnitude of these cost increases will also allow these producers to plan for potential cost savings in other segments of the business to partly offset the inevitable increases in delivery costs.

At the same time, substantial scope exists for synergies between the various stages of the supply chain with a significant potential to form relationships and alliances, which can provide the extra edge required in doing business in this highly competitive environment. This strategic analysis thus aims to provide an insight, which will be essential to all planners involved in the industry, as well as for those who perceive this as a potential opportunity to expand into the region/ industry.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Introduction

2


This study has been designed to be of benefit to all such organisations in meeting the challenges they face in participating or dealing with this fast-developing industry.

In this environment of change and opportunity, Nexant ChemSystems (based in London, UK) and Drewry Shipping Consultants (also based in London, U.K) have teamed up and developed an in-depth Report that addresses all these issues, highlights areas where chemical companies might be exposed and also presents strategies for minimising threats and maximising opportunities. The amalgamation of skills and experience of these two companies has ensured that both the petrochemical and shipping/logistics aspects of the business are covered in detail.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Report Objectives

3


2. Report Objectives The Report provides a valuable aid for strategic planning purposes, at a time of fundamental change for the industry. As such it provides the necessary insight required by existing petrochemical producers and consumers, shipping companies, port/terminal operators and storage companies amongst others to plan for the future.

With the Middle East embarked on a course of massive increase in its petrochemical production capacity, there are a number of issues that has been addressed on the logistics and transportation front going forward.

Key points include:

What is the impact on costs of moving materials between the major producing and consuming locations? How will this impact the overall profitability of major players?

Will existing transportation and storage facilities be able to meet the requirements of the increased production capacity and export cargoes?

Will the increase in production and exports dictate changes in shipping arrangements, perhaps in terms of larger cargo sizes and more frequent deliveries, both of which will have implications for ports, terminals and storage?

What are the likely future transportation costs associated with various methods of securing transportation capacity, e.g. chartering-in ships, and/or purchasing new or second-hand ships?

What will be the optimum transportation strategies going forward for petrochemical producers and consumers?

With such a huge increase in production capacity, will it make financial sense for petrochemical producers and consumers to become more heavily involved in transportation – even to the extent of becoming shipowners?

What will be customer/consumers attitude to risk?

These are just some of the business issues that have been covered by the Report. An understanding of the fundamental issues that will challenge the industry in the future will allow petrochemical producers, consumers, shipping companies and port and terminal operators to plan for the future thereby making best use of the opportunities at their disposal.

Producers for example, can plan for potential changes in their cost structures, while shipping companies can utilise this report to plan for increased demand for their services, in terms of cargo types, cargo sizes, destinations and frequency. For the port/terminal operators and storage companies there is the potential to gauge the implications for increased traffic flows and plan additional/new resource facilities.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Coverage

4


3. Coverage The coverage of this Report has been carefully formulated to address the critical information requirements of key players from all segments of the industry (petrochemical producers, shipping companies and port/terminal operators).

The inter-linkages, and major issues addressed by the Report are illustrated below:

How much of what needs to be moved from where, and how

Are the ports capable of handling these volumes? If so-for how long? If

not – then what needs to be done Ports Ports

Producers Consumers

SHIPPINGIs the deep sea fleet

capable of handling the additional volumes? If not – than what needs to be done?, what are

the options available to optimise costs?

ISSUESISSUES POTENTIAL IMPACTPOTENTIAL IMPACT

Supply demand imbalances –level of pressure on prices owing to over supply?

Capital Investments –increases in handling/port charges?

Supply demand imbalances -increase in freight rates?

Specifically the research parameters embrace:

3.1 Regional Coverage

On a regional basis the Report considers all exports from the main ports in the Middle East to the following regional destinations.

Western Europe Middle East South-East Asia North-East Asia

In addition to regional summaries, country-wise information on demand-supply and the resulting trade patterns have been provided for the following key countries:

Middle East – Saudi Arabia, Qatar, Kuwait, Iran, UAE, Turkey and Egypt South-East Asia – India, ASEAN Countries North-East Asia – China, South Korea, Taiwan, Japan

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Coverage

5


3.2 Product Coverage

Three major types of cargo covered by the Report are:

Solid Bulk Chemicals

Bulk Liquid (Easy) Chemicals

Chemical Gases.

Specific products covered within these broad categories are outlined in the Table below:

Solid Bulk Chemicals Bulk Liquid Chemicals Chemical Gases

1. Polyethylenes 1. Ethylene glycol 1. Ethylene 2. Polypropylene 2. Styrene 2. Propylene 3. PVC 3. Benzene 3. Butadiene 4. Polyester chips 4. Ethylene di-chloride 4. Vinyl chloride monomer 5. PTA 5. Para-xylene 5. LPG 6. Methanol 6. Ammonia 7. MTBE

3.3 Ports

As mentioned earlier, the Report also contains in-depth analysis of the ports expected to be effected by the large increase in petrochemical trade flows. Some of the ports that have been included in the analyses are shown below.

Antwerp

Rotterdam

IstanbulIzmir

Suez

YanbuJeddah

Jubail/ Dammam

Bandar Imam Bandar

Assaluyeh

Mesaieed/ Jebel Ali/

Ruwais

Salalah

Kandla

MumbaiMap ta

Phut Singapore

Cilacap

Batangas

Hong Kong

Shanghai

YokohamaInchon

Pusan

3.4 Time Period

Historical data has been provided for the years 1998-2001, with estimates for 2002, and forecasts for the period 2003-2012.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Approach

6


4. Approach The Report was prepared using a conventional mix of both desk and field research. At the outset, the project team assembled for the project drew upon the internal databanks held and maintained by both companies. These unique databanks have been developed over many years of operation and have been interrogated in order to extract all information that is relevant to the Study. In addition, all relevant external sources have also been accessed in order to validate and build on the information already held by Nexant and Drewry.

Subsequent to the conclusion of the desk research, senior members of the project team also conducted a series of face to face interviews with senior management from the following types of organisation:

Petrochemical producers

Petrochemical consumers

Trading companies

Shipping companies

Storage providers

Port and terminal operators

Shipbuilders

These meetings followed a semi-structured format to extract the most up-to date information, as well as representing an opportunity to canvas industry opinions and ideas. These meetings were also utilised to validate the information and data collected during the desk-based research exercise.

Approach to the Study

DetermineResearchCriteria

FieldResearch

InternalDesk

Research

Analysis& Evaluation

ReportCompilation

ReportPublication

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Report Contents

7


5. Report Contents The table of content of the final Report presented below clearly shows the extensive coverage:

Section Page 1 Executive Summary........................................................................................................................... 1-1

1.1 INTRODUCTION ................................................................................................................... 1-1 1.2 PETROCHEMICAL TRADE OUTLOOK ................................................................................ 1-3 1.3 SHIP DEMAND...................................................................................................................... 1-9 1.4 SHIP SUPPLY ....................................................................................................................... 1-20 1.5 THE FREIGHT MARKET....................................................................................................... 1-29 1.6 PORTS .................................................................................................................................. 1-40 1.7 TRANSPORTATION COST OPTIONS ................................................................................. 1-43 1.8 SUMMARY CONCLUSIONS AND STRATEGIC IMPLICATIONS......................................... 1-46 1.9 STRATEGIC IMPLICATIONS................................................................................................ 1-54 1.10 OVERALL CONCLUSIONS................................................................................................... 1-56 1.11 RECOMMENDATIONS ......................................................................................................... 1-57

2 Introduction ........................................................................................................................................ 2-1 2.1 OBJECTIVE........................................................................................................................... 2-1 2.2 OVERVIEW ........................................................................................................................... 2-1 2.3 REGIONAL COVERAGE....................................................................................................... 2-2 2.4 PRODUCT COVERAGE ....................................................................................................... 2-3 2.5 TYPES OF PRODUCT AND SHIPPING ARRANGEMENTS ................................................ 2-4 2.6 TIME PERIOD ....................................................................................................................... 2-5 2.7 APPROACH .......................................................................................................................... 2-6 2.8 GLOSSARY OF TERMS ....................................................................................................... 2-7

3 Petrochemical Trade Outlook ........................................................................................................... 3-1 3.1 INTRODUCTION ................................................................................................................... 3-1 3.2 MIDDLE EAST....................................................................................................................... 3-2 3.3 NORTH-EAST ASIA .............................................................................................................. 3-66 3.4 WESTERN EUROPE ............................................................................................................ 3-86 3.5 TRADE GRIDS ...................................................................................................................... 3-92 3.6 CONCLUSIONS .................................................................................................................... 3-107

4 Ship Demand ...................................................................................................................................... 4-1 4.1. INTRODUCTION ................................................................................................................... 4-1 4.2. CHEMICAL PARCEL TANKERS........................................................................................... 4-2 4.3. LIQUEFIED GASES .............................................................................................................. 4-13 4.4. BULK SOLID CHEMICALS.................................................................................................... 4-17 4.5. CONCLUSIONS .................................................................................................................... 4-24


8


5 Ship Supply ........................................................................................................................................ 5-1 5.1 INTRODUCTION ................................................................................................................... 5-1 5.2 CHEMICAL TANKERS .......................................................................................................... 5-2 5.3 FUTURE TRENDS IN OWNERSHIP..................................................................................... 5-19 5.4 LPG TANKERS ..................................................................................................................... 5-20 5.5 CONTAINER VESSELS ........................................................................................................ 5-28 5.6 CONCLUSIONS .................................................................................................................... 5-35

6 The Freight Market............................................................................................................................. 6-1 6.1 INTRODUCTION ................................................................................................................... 6-1 6.2 BULK SOLID CHEMICALS.................................................................................................... 6-4 6.3 BULK LIQUID CHEMICALS .................................................................................................. 6-7 6.4 LIQUEFIED GASES .............................................................................................................. 6-17 6.5 CONCLUSION....................................................................................................................... 6-24

7 Ports.................................................................................................................................................... 7-1 7.1 INTRODUCTION ................................................................................................................... 7-1 7.2 KEY ASSUMPTIONS ............................................................................................................ 7-2 7.3 PORT SELECTION ............................................................................................................... 7-4 7.4 BELGIUM .............................................................................................................................. 7-6 7.5 CHINA ................................................................................................................................... 7-13 7.6 EGYPT .................................................................................................................................. 7-21 7.7 INDIA..................................................................................................................................... 7-27 7.8 INDONESIA........................................................................................................................... 7-38 7.9 IRAN...................................................................................................................................... 7-40 7.10 JAPAN................................................................................................................................... 7-45 7.11 KUWAIT................................................................................................................................. 7-49 7.12 THE NETHERLANDS............................................................................................................ 7-52 7.13 OMAN.................................................................................................................................... 7-59 7.14 PHILIPPINES ........................................................................................................................ 7-63 7.15 QATAR .................................................................................................................................. 7-65 7.16 SAUDI ARABIA ..................................................................................................................... 7-71 7.17 SINGAPORE ......................................................................................................................... 7-88 7.18 SOUTH KOREA .................................................................................................................... 7-93 7.19 THAILAND............................................................................................................................. 7-98 7.20 UNITED ARAB EMIRATES ................................................................................................... 7-100 7.21 CONCLUSIONS AND RECOMMENDATIONS ..................................................................... 7-109

8 Transportation Cost Options ............................................................................................................ 8-1 8.1. INTRODUCTION ................................................................................................................... 8-1 8.2. CAPITAL COSTS .................................................................................................................. 8-3 8.3. VESSEL OPERATING COSTS ............................................................................................. 8-5


9


8.4. VOYAGE COSTS .................................................................................................................. 8-10 8.5. THE TRANSPORTATION COST MODEL............................................................................. 8-15 8.6. CONCLUSIONS .................................................................................................................... 8-20

9 Strategic Implications........................................................................................................................ 9-1 9.1 INTRODUCTION ................................................................................................................... 9-1 9.2 IMPACT ON COST OF DELIVERY OF MATERIALS FROM THE MIDDLE EAST ............... 9-2 9.3 STRUCTURAL AND POLITICAL RISK FACTORS ............................................................... 9-17 9.4 STRATEGIC IMPLICATIONS................................................................................................ 9-18 9.5 OVERALL CONCLUSIONS AND RECOMMENDATIONS .................................................... 9-22

Appendix Page A Inter-Regional Trade Distances ........................................................................................................ A-1 B Vessel Configurations ....................................................................................................................... B-1 C Chemicals Classification................................................................................................................... C-1 D Ports.................................................................................................................................................... D-1

Figure Page 1.1 Bulk Solid Chemicals Net Trade Movements ....................................................................... 1-3 1.2 Middle East Bulk Solid Chemicals: Total Exports 2002-2012 ............................................. 1-4 1.3 Bulk Liquid Chemicals : Net Trade Movement .................................................................... 1-5 1.4 Bulk Liquid Chemicals: Total Exports 2002-2012 ............................................................... 1-6 1.5 Bulk Gases Net Trade Movements........................................................................................ 1-6 1.6 Bulk Gases: Total Exports 2002-2012 .................................................................................. 1-7 1.7 Middle East Bulk Chemicals Trade....................................................................................... 1-7 1.8 Seaborne Trade in Bulk Liquids............................................................................................ 1-10 1.9 Petrochemical Liquid Exports from the Middle East ........................................................... 1-12 1.10: Development of World Container and General Cargo Trade ................................................ 1-15 1.11 Chemical Tanker Fleet Development.................................................................................... 1-20 1.12 Chemical Tanker Supply and Demand Balance .................................................................... 1-21 1.13 Chemical Tanker Fleet Development.................................................................................... 1-22 1.14 Chemical Tanker Fleet by Owner - 2004 .............................................................................. 1-23 1.15 LPG Fleet Development ........................................................................................................ 1-25 1.16 LPG Ship Supply and Demand ............................................................................................. 1-26 1.17 Development of the Containership Fleet ............................................................................... 1-27 1.18 Ship Cost and Charter Type Relationships............................................................................ 1-30 1.19 Spot Rates for Easy Chemicals ............................................................................................. 1-33


10


1.20 Chemical Tanker Time Charter Rates ................................................................................... 1-35 1.21 Freight Rates: Arabian Gulf to Mumbai, Singapore and Ulsan ............................................ 1-36 1.22 Forecast Time Charter Rates, by Vessel Size........................................................................ 1-37 1.23 Petrochemical Gas Rates ....................................................................................................... 1-38 1.24 Historic Gas Tanker Rates..................................................................................................... 1-38 1.25: Location of Ports.................................................................................................................... 1-41 1.26 Some of the Variables in a Logistics Strategy....................................................................... 1-47 1.27 Bulk Solid Chemicals: Total Net Trade 2002-2012 .............................................................. 1-48 1.28 Bulk Liquid Chemicals: Total Net Trade 2002-2012............................................................ 1-49 1.29 Commercial and Industrial Ports in the Middle East............................................................. 1-51 3.1 China’s Major Petrochemical Complexes ............................................................................. 3-66 3.2 Bulk Solid Chemicals Net Trade Movements ....................................................................... 3-107 3.3 Bulk Solid Chemicals : Total Exports 2006 .......................................................................... 3-108 3.4 Bulk Solid Chemicals : Total Exports 2012 .......................................................................... 3-108 3.5 Bulk Solid Chemicals: Total Exports 2002-2012.................................................................. 3-109 3.6 Bulk Liquid Chemicals : Net Trade Movement .................................................................... 3-109 3.7 Bulk Liquid Chemicals : Total Exports 2006........................................................................ 3-110 3.8 Bulk Liquid Chemicals : Total Exports 2012........................................................................ 3-110 3.9 Bulk Liquid Chemicals: Total Exports 2002-2012 ............................................................... 3-111 3.10 Bulk Gases Net Trade Movements........................................................................................ 3-111 3.11 Bulk Gases : Total Exports 2006........................................................................................... 3-112 3.12 Bulk Gases : Total Exports 2012........................................................................................... 3-112 3.13 Bulk Gases: Total Exports 2002-2012 .................................................................................. 3-113 3.14 Bulk Exports: Total Exports.................................................................................................. 3-113 3.15 Middle East Bulk Chemicals Trade....................................................................................... 3-114 3.16 Middle East Bulk Chemicals Exports.................................................................................... 3-114 3.17 Middle East Bulk Chemicals Trade By Product.................................................................... 3-115 3.18 Middle East Bulk Chemicals Trade By Region .................................................................... 3-115 3.19 Middle East: Bulk Chemicals Total Net Trade ..................................................................... 3-116 3.20 North-East Asia: Bulk Chemicals Total Net Trade ............................................................... 3-116 3.21 South-East Asia: Bulk Chemicals Total Net Trade ............................................................... 3-117 3.22 Western Europe: Bulk Chemicals Total Net Trade ............................................................... 3-117 4.1 Seaborne Trade in Bulk Liquids............................................................................................ 4-3 4.2 Petrochemical Exports from the Middle East....................................................................... 4-5 4.3 Transportation Demand for Middle Eastern Petrochemical Exports by Destination ............ 4-12 4.4: Seaborne Trade in Liquefied Gases from Middle East ............................................................ 4-13


11


4.5 Global Net LPG Trade........................................................................................................... 4-14 4.6: Development of World Container and General Cargo Trade .................................................. 4-17 4.7: Middle East Bulk Solid Chemicals Exports............................................................................. 4-20 4.8 Destination of Bulk Solid Chemical Exports from the Middle East ..................................... 4-22 5.1 Cargo Tank Diagram: 38 000 dwt Stolt Sapphire Class Parcel Tanker ................................ 5-5 5.2 Chemical Tanker Fleet Development.................................................................................... 5-7 5.3 Chemical Tanker Fleet Age Profile....................................................................................... 5-8 5.4 Chemical Tanker Supply and Demand Balance .................................................................... 5-11 5.5 Chemical Tanker Fleet Development.................................................................................... 5-12 5.6 Chemical Tanker Fleet by Owner - 2004 .............................................................................. 5-13 5.7 70,000+ m3 LPG Tanker....................................................................................................... 5-21 5.8 LPG Fleet Development ........................................................................................................ 5-22 5.9 LPG Fleet Development, by Size of Vessel .......................................................................... 5-24 5.10 LPG Ship Supply and Demand ............................................................................................. 5-24 5.11 Ethylene Tanker Fleet Development, by Size of Vessel ....................................................... 5-26 5.12 Development of the Containership Fleet ............................................................................... 5-28 5.13 Distribution of Containership Fleet by Size .......................................................................... 5-30 5.14 Containership Orderbook (2004-2006) by Size ................................................................... 5-31 5.15 Containership Fleet Development ......................................................................................... 5-33 6.1 Ship Cost and Charter Type Relationships............................................................................ 6-3 6.2 Forecast Average Freight Rates: Containers ......................................................................... 6-6 6.3 Spot Rates for Easy Chemicals ............................................................................................. 6-9 6.4 Chemical Tanker Time Charter Rates ................................................................................... 6-11 6.5 Time Charter Rates by Vessel type and Deadweight, 1993 and 2003................................... 6-12 6.6 Freight Rates: Arabian Gulf to Mumbai, Singapore and Ulsan ............................................ 6-13 6.7 Freight Rates: Arabian Gulf North-West Europe.................................................................. 6-14 6.8 Forecast Time Charter Rates, by Vessel Size........................................................................ 6-16 6.9 Petrochemical Gas Rates ....................................................................................................... 6-19 6.10 Historic Gas Tanker Rates..................................................................................................... 6-21 6.11 Forecast Time Charter Rates ................................................................................................. 6-23 7.1: Location of Ports...................................................................................................................... 7-5 7.2 Port Locations in North-West Europe....................................................................................... 7-6 7.3 Relative Position of Antwerp versus Other Ports in North-West Europe - 2003 ................. 7-7 7.4 Port of Antwerp ..................................................................................................................... 7-8 7.5 Total Traffic 1975-2003 – Antwerp, Belgium ...................................................................... 7-11 7.6: Port Locations in China, Japan and South Korea..................................................................... 7-13


12


7.7 China’s Major Petrochemical Complexes ............................................................................. 7-19 7.8 Port Locations in the Middle East ......................................................................................... 7-21 7.9 Port Locations in India .............................................................................................................. 7-27 7.10 Port Locations in the Far East ................................................................................................. 7-38 7.11 Port Locations in the Middle East ........................................................................................... 7-40 7.12 Port Locations in North-East Asia .......................................................................................... 7-45 7.13 Port Locations in the Middle East ........................................................................................... 7-49 7.14 Port Locations in North-West Europe..................................................................................... 7-52 7.15 Port of Rotterdam .................................................................................................................. 7-53 7.16 Total Liquid Storage Rotterdam, Netherlands....................................................................... 7-54 7.17 Total Throughput – Rotterdam, Netherlands .......................................................................... 7-56 7.18 Port Locations in the Middle East ........................................................................................... 7-59 7.19 Port Locations in the Far East ................................................................................................. 7-63 7.20 Port Locations in the Middle East ........................................................................................... 7-65 7.21 Port Locations in the Middle East ........................................................................................... 7-71 7.22 Port Locations in the Far East ................................................................................................. 7-88 7.23 Total Cargo Throughput – Singapore...................................................................................... 7-91 7.24 Port Locations in North-East Asia .......................................................................................... 7-93 7.25 Port Locations in the Far East ................................................................................................. 7-98 7.26 Port Locations in the Middle East ........................................................................................... 7-100 7.27 Total Cargo Throughput – Jebel Ali/Port Rashid.................................................................... 7-106 8.1: Indicative Operating Costs for an LPG Carrier........................................................................ 8-7 8.2 Forecast Vessel Operating Costs: Chemical Tankers............................................................ 8-9 8.3 Forecast Vessel Operating Costs: LPG Tankers.................................................................... 8-9 8.4 Bunker Prices ........................................................................................................................ 8-11 8.5 Indicative Port Charges for Various Regions ........................................................................ 8-13 9.1 Bulk Solid Chemicals : Total Exports 2002-2012................................................................. 9-3 9.2 Bulk Solid Chemicals: Total Imports 2002-2012.................................................................. 9-4 9.3 Bulk Solid Chemicals: Total Net Trade 2002-2012 .............................................................. 9-5 9.4 Bulk Liquid Chemicals : Total Exports 2002-2012............................................................... 9-6 9.5 Bulk Liquid Chemicals: Total Imports 2002-2012 ............................................................... 9-7 9.6 Bulk Liquid Chemicals: Total Net Trade 2002-2012............................................................ 9-7 9.7 Commercial and Industrial Ports in the Middle East............................................................. 9-10 9.8 Some of the Variables in a Logistics Strategy....................................................................... 9-13 9.9 Spot Rates for Easy Chemicals ............................................................................................. 9-16


13


Table Page 1.1 Global Exports of Petrochemicals by Main Commodity, 2002-2012 ................................... 1-10 1.2 Forecast Inter-Regional Seaborne Trade in Petrochemicals.................................................. 1-11 1.3 Transportation Demand for Petrochemicals .......................................................................... 1-12 1.4 Petrochemical Exports from the Middle East: Transportation Demand by Destination ....... 1-13 1.5 Global Seaborne Trade in Liquefied Gases........................................................................... 1-14 1.6 Transportation Demand for Petrochemical Gases ................................................................. 1-14 1.7 Demand Generated by Middle Eastern Bulk Solid Chemical Exports................................. 1-16 1.8 Evolution of Empty Container Movements........................................................................... 1-17 1.9 Structure of the Regional Chemical Fleets ............................................................................ 1-22 1.10 Development of Average Container Freight Rates................................................................ 1-31 1.11 Forecast Average Freight Rates : Containers ........................................................................ 1-31 1.12 Annual Spot Rates for Easy Chemicals, 1991-2003.............................................................. 1-32 1.13 Historic Chemical Tanker Time Charter Rates ..................................................................... 1-34 1.14 Forecast Time Charter Rates – Parcel Chemical Tankers ..................................................... 1-36 1.15 Importing and Exporting Ports .............................................................................................. 1-40 1.16 Composition of Ship Costs.................................................................................................... 1-43 1.17 Chemical Tanker - Indicative Operating Costs ..................................................................... 1-43 2.1 Product Coverage .................................................................................................................. 2-3 3.1 Bulk Solid Chemicals Capacities: Saudi Arabia ................................................................... 3-3 3.2 Bulk Solid Chemicals Net Trade: Saudi Arabia.................................................................... 3-5 3.3 Bulk Liquid Chemicals Capacity: Saudi Arabia ................................................................... 3-6 3.4 Bulk Liquid Chemicals Net Trade: Saudi Arabia.................................................................. 3-7 3.5 Chemical Gases Capacity: Saudi Arabia............................................................................... 3-9 3.6 Chemical Gases Net Trade: Saudi Arabia ............................................................................. 3-10 3.7 Bulk Solid Chemicals Capacities: Qatar ............................................................................... 3-12 3.8 Bulk Solid Chemicals Net Trade: Qatar ................................................................................ 3-12 3.9 Bulk Liquid Chemicals Capacity: Qatar................................................................................ 3-13 3.10 Bulk Liquid Chemicals Net Trade: Qatar.............................................................................. 3-13 3.11 Chemical Gases Capacity: Qatar ........................................................................................... 3-14 3.12 Chemical Gases Net Trade: Qatar ......................................................................................... 3-15 3.13 Bulk Solid Chemicals Capacities: Kuwait ............................................................................ 3-16 3.14 Bulk Solid Chemicals Net Trade: Kuwait ............................................................................. 3-17 3.15 Bulk Liquid Chemicals Capacity: Kuwait............................................................................. 3-17 3.16 Bulk Liquid Chemicals Net Trade: Kuwait........................................................................... 3-18 3.17 Chemical Gases Capacity: Kuwait ........................................................................................ 3-18 3.18 Planned Olefins Projects: Iran ............................................................................................... 3-19 3.19 Bulk Solid Chemicals Capacities: Iran.................................................................................. 3-20


14


3.20 Bulk Solid Chemicals Net Trade: Iran .................................................................................. 3-21 3.21 Bulk Liquid Chemicals Capacity: Iran .................................................................................. 3-23 3.22 Bulk Liquid Chemicals Net Trade: Iran ................................................................................ 3-24 3.23 Chemical Gases Capacity: Iran ............................................................................................. 3-25 3.24 Chemical Gases Net Trade: Iran............................................................................................ 3-26 3.25 Bulk Solid Chemicals Capacities: United Arab Emirates ..................................................... 3-27 3.26 Bulk Solid Chemicals Net Trade: United Arab Emirates...................................................... 3-28 3.27 Chemical Gases Capacity: United Arab Emirates................................................................. 3-28 3.28 Chemical Gases Net Trade: United Arab Emirates ............................................................... 3-29 3.29 Bulk Solid Chemicals Capacities: Turkey............................................................................. 3-30 3.30 Bulk Solid Chemicals Net Trade: Turkey ............................................................................. 3-31 3.31 Bulk Liquid Chemicals Capacity: Turkey............................................................................. 3-32 3.32 Bulk Liquid Chemicals Net Trade: Turkey ........................................................................... 3-32 3.33 Chemical Gases Capacity: Turkey ........................................................................................ 3-33 3.34 Chemical Gases Net Trade: Turkey ...................................................................................... 3-33 3.35 Bulk Solid Chemicals Capacities: Egypt............................................................................... 3-34 3.36 Bulk Solid Chemicals Net Trade: Egypt ............................................................................... 3-35 3.37 Bulk Liquid Chemicals Capacity: Egypt............................................................................... 3-36 3.38 Bulk Liquid Chemicals Net Trade: Egypt ............................................................................. 3-36 3.39 Chemical Gases Capacity:.................................................................................................... 3-37 3.40 Chemical Gases Net Trade: Egypt ........................................................................................ 3-37 3.41 Bulk Solid Chemicals Capacities: Other Middle East........................................................... 3-39 3.42 Bulk Solid Chemicals Net Trade: Other Middle East ........................................................... 3-39 3.43 Bulk Liquid Chemicals Capacity: Other Middle East ........................................................... 3-40 3.44 Bulk Liquid Chemicals Net Trade: Other Middle East ......................................................... 3-41 3.45 Chemical Gases Capacity: Other Middle East ...................................................................... 3-42 3.46 Bulk Solid Chemicals Capacities: Total Middle East ........................................................... 3-43 3.47 Bulk Solid Chemicals Net Trade: Total Middle East ............................................................ 3-43 3.48 Bulk Liquid Chemicals Capacity: Total Middle East............................................................ 3-43 3.49 Bulk Liquid Chemicals Net Trade: Total Middle East.......................................................... 3-44 3.50 Chemical Gases Capacity: Total Middle East ....................................................................... 3-44 3.51 Chemical Gases Net Trade: Total Middle East ..................................................................... 3-44 3.52 Bulk Solid Chemicals Capacities: India ................................................................................ 3-46 3.53 Bulk Solid Chemicals Net Trade: India................................................................................. 3-46 3.54 Bulk Liquid Chemicals Capacity: India ................................................................................ 3-47 3.55 Bulk Liquid Chemicals Net Trade: India .............................................................................. 3-47 3.56 Chemical Gases Capacity: India............................................................................................ 3-48 3.57 Chemical Gases Net Trade: India.......................................................................................... 3-48


15


3.58 Bulk Solid Chemicals Capacities: Thailand .......................................................................... 3-50 3.59 Bulk Solid Chemicals Net Trade: Thailand........................................................................... 3-50 3.60 Bulk Liquid Chemicals Capacity: Thailand .......................................................................... 3-51 3.61 Bulk Liquid Chemicals Net Trade: Thailand ........................................................................ 3-52 3.62 Chemical Gases Capacity: Thailand...................................................................................... 3-53 3.63 Chemical Gases Net Trade: Thailand.................................................................................... 3-53 3.64 Bulk Solid Chemicals Capacities: Singapore ........................................................................ 3-54 3.65 Bulk Solid Chemicals Net Trade: Singapore......................................................................... 3-55 3.66 Bulk Liquid Chemicals Capacity: Singapore ........................................................................ 3-56 3.67 Bulk Liquid Chemicals Net Trade: Singapore ...................................................................... 3-56 3.68 Chemical Gases Capacity: Singapore.................................................................................... 3-57 3.69 Chemical Gases Net Trade: Singapore.................................................................................. 3-57 3.70 Bulk Solid Chemicals Capacities: Indonesia......................................................................... 3-58 3.71 Bulk Solid Chemicals Net Trade: Indonesia ......................................................................... 3-59 3.72 Bulk Liquid Chemicals Capacity: Indonesia ......................................................................... 3-60 3.73 Bulk Liquid Chemicals Net Trade: Indonesia ....................................................................... 3-60 3.74 Chemical Gases Capacity: Indonesia .................................................................................... 3-61 3.75 Chemical Gases Net Trade: Indonesia .................................................................................. 3-61 3.76 Bulk Solid Chemicals: Capacity Malaysia ............................................................................ 3-62 3.77 Bulk Solid Chemicals: Net Trade Malaysia .......................................................................... 3-63 3.78 Bulk Liquid Chemicals Capacity: Malaysia.......................................................................... 3-63 3.79 Bulk Liquid Chemicals: Net Trade: Malaysia....................................................................... 3-64 3.80 Chemical Gases Capacity: Malaysia ..................................................................................... 3-65 3.81 Chemical Gases Net Trade: Malaysia ................................................................................... 3-65 3.82 Proposed Joint Ventures Petrochemical Projects .................................................................. 3-67 3.83 Bulk Solid Chemicals Capacities: China............................................................................... 3-69 3.84 Bulk Solid Chemicals Net Trade: China ............................................................................... 3-69 3.85 Bulk Liquid Chemicals Capacity: China............................................................................... 3-70 3.86 Bulk Liquid Chemicals Net Trade: China ............................................................................. 3-71 3.87 Chemical Gases Capacity: China .......................................................................................... 3-72 3.88 Chemical Gases Net Trade: China ........................................................................................ 3-72 3.89 Bulk Solid Chemicals Capacities: South Korea .................................................................... 3-74 3.90 Bulk Solid Chemicals Net Trade: South Korea..................................................................... 3-74 3.91 Liquid Chemicals Capacity: South Korea ............................................................................. 3-75 3.92 Bulk Liquid Chemicals Net Trade: South Korea .................................................................. 3-76 3.93 Chemical Gases Capacity: South Korea................................................................................ 3-77 3.94 Chemical Gases Net Trade: South Korea.............................................................................. 3-77 3.95 Bulk Solid Chemicals Capacities: Taiwan ............................................................................ 3-78


16


3.96 Bulk Solid Chemicals Net Trade: Taiwan............................................................................. 3-79 3.97 Bulk Liquid Chemicals Capacity: Taiwan ............................................................................ 3-80 3.98 Bulk Liquid Chemicals Net Trade: Taiwan........................................................................... 3-80 3.99 Chemical Gases Capacity: Taiwan........................................................................................ 3-81 3.100 Chemical Gases Net Trade: Taiwan .................................................................................... 3-81 3.101 Bulk Solid Chemicals Capacities: Japan ............................................................................. 3-83 3.102 Bulk Solid Chemicals Net Trade: Japan .............................................................................. 3-83 3.103 Bulk Liquid Chemicals Capacity: Japan.............................................................................. 3-84 3.104 Bulk Liquid Chemicals Net Trade: Japan............................................................................ 3-84 3.105 Chemical Gases Capacity: Japan ......................................................................................... 3-85 3.106 Chemical Gases Net Trade: Japan ....................................................................................... 3-85 3.107 Bulk Solid Chemicals Capacities: Western Europe............................................................. 3-87 3.108 Bulk Solid Chemicals Net Trade: Western Europe ............................................................. 3-87 3.109 Bulk Liquid Chemicals Capacity: Western Europe ............................................................. 3-89 3.110 Bulk Liquid Chemicals Net Trade: Western Europe ........................................................... 3-90 3.111 Chemical Gases Capacity: Western Europe ........................................................................ 3-91 3.112 Chemical Gases Net Trade: Western Europe ...................................................................... 3-91 3.113 Trade Grid for LDPE: 2006................................................................................................. 3-93 3.114 Trade Grid for LDPE: 2012................................................................................................. 3-93 3.115 Trade Grid for HDPE: 2006 ................................................................................................ 3-94 3.116 Trade Grid for HDPE: 2012 ................................................................................................ 3-94 3.117 Trade Grid for LLDPE: 2006............................................................................................... 3-95 3.118 Trade Grid for LLDPE: 2012............................................................................................... 3-95 3.119 Trade Grid for Polypropylene: 2006.................................................................................... 3-96 3.120 Trade Grid for Polypropylene: 2012.................................................................................... 3-96 3.121 Trade Grid for Ethylene: 2006............................................................................................. 3-97 3.122 Trade Grid for Ethylene: 2012............................................................................................. 3-97 3.123 Trade Grid for Propylene: 2006........................................................................................... 3-98 3.124 Trade Grid for Propylene: 2012........................................................................................... 3-98 3.125 Trade Grid for Methanol: 2006............................................................................................ 3-99 3.126 Trade Grid for Methanol: 2012............................................................................................ 3-99 3.127 Trade Grid for MEG: 2006 .................................................................................................. 3-100 3.128 Trade Grid for MEG: 2012 .................................................................................................. 3-100 3.129 Trade Grid for Benzene: 2006 ............................................................................................. 3-101 3.130 Trade Grid for Benzene: 2012 ............................................................................................. 3-101 3.131 Trade Grid for Styrene: 2006............................................................................................... 3-102 3.132 Trade Grid for Styrene: 2012............................................................................................... 3-102 3.133 Trade Grid for PVC: 2006 ................................................................................................... 3-103


17


3.134 Trade Grid for PVC: 2012 ................................................................................................... 3-103 3.135 Trade Grid for VCM: 2006.................................................................................................. 3-104 3.136 Trade Grid for VCM: 2012.................................................................................................. 3-104 3.137 Trade Grid for EDC: 2006................................................................................................... 3-105 3.138 Trade Grid for EDC: 2012................................................................................................... 3-105 3.139 Trade Grid for Para-xylene: 2006........................................................................................ 3-106 3.140 Trade Grid for Para-xylene: 2012........................................................................................ 3-106 4.1 Seaborne Trade in Bulk Liquids, 1982-2003....................................................................... 4-2 4.2 Global Exports of Petrochemicals by Main Commodity, 2002-2012.................................. 4-3 4.3 Forecast Inter-Regional Seaborne Trade in Petrochemicals ................................................ 4-4 4.4 Transportation Demand for Petrochemicals ........................................................................ 4-8 4.5 Petrochemical Exports from the Middle East: Transportation Demand by Destination...... 4-11 4.6 Global Seaborne Trade in Liquefied Gases ......................................................................... 4-13 4.7 Transportation Demand for Petrochemical Gases ............................................................... 4-16 4.8 Demand Generated by Middle Eastern Bulk Solid Chemical Exports ............................... 4-22 4.9 Evolution of Empty Container Movements ......................................................................... 4-23 5.1 Chemical Tanker Orderbook and Delivery Schedule .......................................................... 5-9 5.2 Historic and Forecast Chemical Tanker Fleet Development ............................................... 5-10 5.3 Ownership of the Ocean Chemicals Fleet, 2003.................................................................. 5-15 5.4 Structure of the Regional Chemical Fleets .......................................................................... 5-16 5.5 Ownership of the Oil/Chemical Tanker Fleet...................................................................... 5-16 5.6 Ownership of the Time Charter Fleet .................................................................................. 5-17 5.7 Ownership of the Specialist Fleet ........................................................................................ 5-18 5.8 LPG Tanker Delivery Schedule, by Size of Vessel............................................................... 5-23 5.9 LPG Fleet Development, 2000-2012(1) ................................................................................ 5-23 5.10 Ethylene Fleet – End Period .................................................................................................. 5-25 5.11 Ethylene Tanker Orderbook .................................................................................................. 5-25 5.12 Ethylene Tanker Fleet Development, 2000-2012(1) ............................................................. 5-26 5.13 World Containership Fleet by Size Range ............................................................................ 5-29 5.14 Containership Orderbook by Size and Scheduled Year of Delivery ..................................... 5-31 5.15 Forecast Containership Fleet Development........................................................................... 5-32 5.16 Top 30 Global Containership Operators................................................................................ 5-34 6.1 Development of Average Freight Rates ................................................................................ 6-4 6.2 Forecast Average Freight Rates : Containers ........................................................................ 6-6 6.3 Annual Spot Rates for Easy Chemicals, 1991-2003.............................................................. 6-8 6.4 Historic Chemical Tanker Time Charter Rates ..................................................................... 6-10 6.5 Forecast Time Charter Rates – Parcel Chemical Tankers ..................................................... 6-15 6.6 LPG Spot Freight Rates: Small Sizes.................................................................................... 6-18


18


6.7 Ethylene and Propylene Spot Rates....................................................................................... 6-18 6.8 Butadiene and VCM Spot Freight Rates ............................................................................... 6-19 6.9 LPG Tanker Time Charter Freight Rates, Basis 6-12 Month Period .................................... 6-21 6.10 Forecast Time Charter Rates – LPG Tankers........................................................................ 6-22 7.1 Liquid Berth Capacity Assumptions ..................................................................................... 7-2 7.2 Importing and Exporting Ports .............................................................................................. 7-4 7.3 Cranes – Antwerp, Belgium .................................................................................................. 7-9 7.4 Container Storage – Antwerp, Belgium ................................................................................ 7-10 7.5 Special Storage – Antwerp, Belgium .................................................................................... 7-10 7.6 Tank Storage – Antwerp, Belgium........................................................................................ 7-10 7.7 Cranes – Hong Kong, China.................................................................................................. 7-14 7.8 Storage – Hong Kong, China ................................................................................................ 7-15 7.9 Storage – Shanghai, China .................................................................................................... 7-17 7.10 Cranes – Shanghai, China ..................................................................................................... 7-17 7.11 Cranes – Suez, Egypt............................................................................................................. 7-22 7.12 Storage Areas – Suez, Egypt ................................................................................................. 7-22 7.13 Cranes – Damietta, Egypt...................................................................................................... 7-24 7.14 Storage Areas – Damietta, Egypt .......................................................................................... 7-24 7.15 Storage – Mumbai, India ....................................................................................................... 7-28 7.16 Cranes – Mumbai, India ........................................................................................................ 7-29 7.17 Storage – Jawaharlal Nehru, India......................................................................................... 7-31 7.18 Cranes – Jawaharlal Nehru, India.......................................................................................... 7-31 7.19 Storage – Kandla, India ......................................................................................................... 7-33 7.20 Cranes – Kandla, India .......................................................................................................... 7-34 7.21 Cranes – Bandar Imam, Iran.................................................................................................. 7-42 7.22 Storage Areas – Bandar Imam, Iran ...................................................................................... 7-42 7.23 Cranes – Yokohama, Japan ................................................................................................... 7-46 7.24 Container Storage – Yokohama, Japan ................................................................................. 7-47 7.25 Tank Storage – Yokohama, Japan ......................................................................................... 7-47 7.26 Cranes – Shuaiba, Kuwait ..................................................................................................... 7-50 7.27 Storage – Shuaiba, Kuwait .................................................................................................... 7-50 7.28 Cranes – Rotterdam, Netherlands.......................................................................................... 7-54 7.29 Liquid Storage – Rotterdam, Netherlands ............................................................................. 7-54 7.30 Independent Liquid Storage – Rotterdam, Netherlands ........................................................ 7-55 7.31 Covered Storage – Rotterdam, Netherlands ......................................................................... 7-55 7.32 Cranes – Salalah, Oman ........................................................................................................ 7-60 7.33 Cranes – Batangas, Philippines ............................................................................................. 7-64 7.34 General Cargo Storage Areas – Mesaieed, Qatar .................................................................. 7-66


19


7.35 Cranes – KFIP, Yanbu, Saudi Arabia.................................................................................... 7-72 7.36 Storage Areas – KFIP, Yanbu, Saudi Arabia ........................................................................ 7-72 7.37 Cranes – Yanbu Commercial Port, Saudi Arabia .................................................................. 7-75 7.38 Storage – Yanbu Commercial Port, Saudi Arabia................................................................. 7-75 7.39 Cranes (North) – Jeddah Islamic Port, Saudi Arabia............................................................. 7-79 7.40 Storage Areas (North) – Jeddah Islamic Port, Saudi Arabia ................................................. 7-79 7.41 Cranes (South) – Jeddah Islamic Port, Saudi Arabia............................................................. 7-80 7.42 Storage Area (South) – Jeddah Islamic Port, Saudi Arabia................................................... 7-80 7.43 Cranes – KAP, Dammam, Saudi Arabia ............................................................................... 7-83 7.44 Storage Areas – KAP, Dammam, Saudi Arabia.................................................................... 7-83 7.45 Storage Areas – Jubail Commercial Port, Saudi Arabia........................................................ 7-86 7.46 Cranes – Jubail Commercial Port, Saudi Arabia ................................................................... 7-86 7.47 Cranes - Singapore ................................................................................................................ 7-89 7.48 Storage – Singapore............................................................................................................... 7-90 7.49 Storage – Pusan, South Korea .............................................................................................. 7-94 7.50 Cranes – Inchon, South Korea.............................................................................................. 7-96 7.51 Cranes – Ruwais, UAE.......................................................................................................... 7-101 7.52 Container Storage Areas – Jebel Ali, UAE ........................................................................... 7-104 7.53 Cranes – Jebel Ali, UAE ....................................................................................................... 7-104 7.54 General Cargo Storage Areas – Jebel Ali, UAE.................................................................... 7-104 7.55 Container Storage Areas – Port Rashid, UAE....................................................................... 7-105 7.56 Cranes – Port Rashid, UAE................................................................................................... 7-105 8.1 Composition of Ship Costs.................................................................................................... 8-1 8.2 Allocation of Shipping Costs by Contract Type.................................................................... 8-2 8.3 Chemical Carrier Newbuilding Costs.................................................................................... 8-3 8.4 LPG Carrier Newbuilding Costs ........................................................................................... 8-3 8.5 Chemical Carriers – Indicative Secondhand Values ............................................................. 8-4 8.6 LPG Carriers – Indicative Secondhand Values(1) ................................................................ 8-4 8.7 Chemical Tanker - Indicative Operating Costs ..................................................................... 8-6 8.8 LPG Carrier -Indicative Operating Costs .............................................................................. 8-7 8.9 Forecast Vessel Operating Costs ........................................................................................... 8-8 8.10 Operating Speeds and Fuel Consumption ............................................................................. 8-10 8.11 Bunker Prices ........................................................................................................................ 8-11 8.12 Indicative Port Charges ......................................................................................................... 8-12 8.13 Suez and Panama Canal – Transit Charges ........................................................................... 8-14 8.14 Transportation Costs.............................................................................................................. 8-16 8.15 Distance ................................................................................................................................. 8-18 8.16 Canal Dues ............................................................................................................................ 8-19

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Timing and Costs

20


6. Timing and Costs The cost of the Report – “LOGISTICS & SHIPPING - STRATEGIC IMPACT ON GLOBAL CHEMICAL INDUSTRY COMPETITIVENESS” is US$24 000 (US dollars twenty four thousand only) and report will be delivered electronically (in PDF format) on receipt of payment, with 1 hard bound copy of the report couriered to the mailing address.

Additional copies of the Report can also be ordered for a cost of US$500 per copy, which represents the costs associated with printing and collating additional copies.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Nexant/Drewry Credentials

21


7. Nexant/Drewry Credentials 7.1 NEXANT ChemSystems

Nexant ChemSystems is a business consulting group providing management consultancy services to the hydrocarbon, chemical and related process industries. The Group offers global coverage through its major offices in London and White Plains (New York), other offices in Tokyo, and Bangkok, and representatives in Singapore, Argentina, Moscow and throughout Central and Eastern Europe. Total full-time consulting personnel number approximately 80 with a similar number of support staff.

The Group provides a wide range of services to assist its clients in planning and implementing business and project decisions. The Group's activities are organised into the following practices:

Business Practices Competencies

Upstream Oil and Gas Strategic Planning Downstream Oil Financial Commodity Chemicals Technology/Economics Strategy and Finance Commercial

The Business Practices are responsible for the mainstream work, monitoring the individual sectors, analysing current issues and projecting future developments. The Competencies have the increasingly important role of leading assignments with a specialised focus, whether by reason of the clientele served, the methodologies employed or because the expertise is applicable across the business sectors.

Strategic Planning

Industry-specific expertise and an understanding of world market forces distinguish our work in Strategic Planning. Various innovative tools and methodologies tailored to the energy and process areas are used to challenge conventional thinking. Nexant ChemSystems extends its project team approach to engaging clients directly in the Strategic Planning process. Interactive client-consultant relationships promote consensus, a critical factor for successfully developing pragmatic, implement solutions.

Financial

Nexant ChemSystems provides a complete range of consulting and advisory services to the financial community. Consulting covers due diligence studies, mergers and acquisitions support, project funding support studies to name a few.

Technology/Economics

From its foundation in chemical engineering and industrial chemistry, Nexant ChemSystems offers distinctive expertise in process technology and economic analysis. Assignments may be performed on a separate, stand-alone basis or as input to broader consulting engagements.


22


Commercial

Based upon a technical and commercial understanding of the industries we serve, Nexant ChemSystems supports clients through a variety of market and commercial activities. As with our technoeconomic work, these commercial assignments may be performed on a stand-alone basis but are more normally an input to broader consulting engagements.

New Capabilities

In September 2001, Chem Systems became part of the independent consulting group Nexant. The main focus of Nexant’s work prior to acquiring Chem Systems was energy. For example, the group provides services to assist commercial clients to optimise how they obtain and use energy, using interactive web-based solutions.

Nexant is also strongly engaged in consultancy on development of major industrial or infrastructure projects, such as the West African gas pipeline and the extension of the Al Jubail site in Saudi Arabia. Nexant and Chem Systems have similar skills, including experienced chemical engineers. Nexant supplements Chem Systems’ skills and knowledge in particular in the upstream oil and gas sector, and also has in-house economists and environmental specialists to enhance our capability in these areas.

Nexant ChemSystems therefore offers a full range of established services, plus additional depth in certain areas. Our portfolio of services has been focused to leverage our core competences across the full spectrum of industries we now serve.

Portfolio of Services

TECHNOLOGY EVALUATIONS COMMERCIAL ANALYSIS

• Techno-economic studies

• Technology assessment

• Operational benchmarking

• Cost curve assessments

• Market research and analysis

• Supply/demand analysis

• Pricing and profitability scenarios

• Market forecasts

• Performance benchmarking

• Market segmentation analyses

TECHNOLOGY EVALUATIONS COMMERCIAL ANALYSIS

• Techno-economic studies

• Technology assessment

• Operational benchmarking

• Cost curve assessments

• Market research and analysis

• Supply/demand analysis

• Pricing and profitability scenarios

• Market forecasts

• Performance benchmarking

• Market segmentation analyses

FINANCIAL SERVICES

• Acquisition identification

• Portfolio appraisal

• M&A support

• Project finance support

• Asset valuations

• Due diligence

STRATEGIC PLANNING

• Portfolio re-positioning

• Customer segmentation

• Manufacturing strategy

• Value chain positioning

• Growth strategies

• Industry structure analyses

FINANCIAL SERVICES

• Acquisition identification

• Portfolio appraisal

• M&A support

• Project finance support

• Asset valuations

• Due diligence

STRATEGIC PLANNING

• Portfolio re-positioning

• Customer segmentation

• Manufacturing strategy

• Value chain positioning

• Growth strategies

• Industry structure analyses

Nexant ChemSystems is a specialist, not a generalist company. Our area of expertise is the energy and process industries, including oil refining, natural gas, petrochemicals, polymers, chemicals, pharmaceuticals and fertilizers. Our business has been built upon providing broad management consultancy services to leading companies active in these industries, and also to banks, suppliers, governments and others interested in these sectors.


23


7.2 DREWRY

Drewry Shipping Consultants (Drewry) was established in 1970 and has over three decades of experience in undertaking specialist consultancy services to all sections of the international maritime community. Today, the Drewry portfolio of products and services includes: Consultancy in all marine sectors:

o Markets – e.g. containers

o Port and terminal operations

o Shipbuilding and ship repair

o Marine equipment

o Finance and technical

Shipping publications

Maritime expert support to legal and financial advisors

Benchmarking services

Content and data provision to maritime portals

Further details of the products and services offered by Drewry can be viewed at the company’s website: www.drewry.co.uk.

Drewry’s consultancy work for its international clients base includes:

Feasibility and strategy studies Market studies Due diligence Prospectus preparation

Benchmarking studies Valuations Legal support Technical appraisals

Our clients span a broad spectrum and embrace:

Shipping companies Port operators National governments Financial institutions Industry and trade institutions Shipyards

Venture capitalists Prospective investors Business and financial advisors Lawyers Technical consultancies Ship classification societies

Drewry is an independently owned company, with principal shareholders who are active in the business on a day to day basis. It is not involved in any form of broking, either for cargoes or ships, and in this sense it can say with some honesty that it represents a truly objective voice.

Consultancy work is undertaken by highly qualified consultants working in specialist teams that are assembled on a project-by-project basis to provide client and project specific approaches. The core Drewry consultancy teams can supplemented if required with independent specialists, or by working in consortium with joint venture partners to ensure that the highest quality of expertise and knowledge is brought to each task and made available to the client.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Questions Regarding this Proposal

24


8. Questions Regarding this Proposal Any questions regarding the proposal or for further information please contacting the following personnel:

Nexant ChemSystems (www.chemsystems.com)

Drewry Shipping Consultants (www.drewry.co.uk)

Dr. Andrew Spiers Vice President + 44 207 950 1560 [email protected] Rizwan K. Sheikh Senior Consultant + 44 207 950 1568 [email protected]

Mr. Nigel Gardiner Managing Director + 44 207 536 6523 [email protected] Capt. Saurabh Nakra Senior Consultant + 44 207 536 6514 [email protected]

Address:

Nexant Limited Griffin House, 1st Floor South 161 Hammersmith Road London W6 8BS United Kingdom Fax: + 44 207 950 1550

Address:

Drewry Shipping Consultants Drewry House Meridian Gate 213 Marsh Wall London E14 9FJ Fax: + 44 207 987 9396

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Order Form

25


9. Order Form We wish to subscribe to Nexant - Drewry Shipping Consultants study “Shipping & Logistics – Strategic Impact on Global Chemical Industry Competitiveness”, and understand that:

1. The cost of the study is US $24,000 (US dollars twenty four thousand only). These fees are net of all local taxes.

2. We will receive one (1) copy of the report. Additional copies are available at US$500 (US dollars five hundred only) per copy. We will also receive the report in a PDF format on a CD-ROM.

3. We nominate the following person to whom the Report should be sent:

Name:

Title:

Company:

Address:

Date:

4. Except for information that is or becomes generally available to the public in a printed publication, or is already in our possession or developed independently by us or is received by us in good faith from a third party, any information in the subject study is for the sole and confidential use of our Company and our affiliates in which we possess more than 50 percent share. Said information may be used in our research and commercial activities on a confidential basis.

5. We agree to use reasonable care to protect the confidential nature of this Report. Our foregoing obligations shall, in no event, continue beyond three (3) years from the date of publication.

Logistics & Shipping - Strategic Impact on Global Chemical Industry Competitiveness Order Form

26


6. Payments can be made either through direct wire transfer directly to Nexant Limited (at the details given below) or through cheque or demand draft made out to Nexant Limited. Nexant Limited’s bank details are:

Nexant Limited

Bank: NatWest

Account Number: 37535234

Sort Code: 60-50-06

Swift Code: NWBKGB21

I have understood the terms and conditions for subscription.

Kindly send me a confirmation of my subscription.

Signature: ...........................................................................................................

Name: ...........................................................................................................

Designation: ...........................................................................................................

Company: ...........................................................................................................

Date: ...........................................................................................................

LOGISTICS & SHIPPING...LOGISTICS & SHIPPING - STRATEGIC IMPACT ON GLOBAL CHEMICAL INDUSTRY...

Documents

Transcript of LOGISTICS & SHIPPING...LOGISTICS & SHIPPING - STRATEGIC IMPACT ON GLOBAL CHEMICAL INDUSTRY...