24th June 2013Overview by UGL Unipart

Doing Business in Australia

www.uglunipart.com

Who are UGL Unipart?

• Joint Venture between:• United Group Limited (Australia) & Unipart Rail (UK)• 500 staff• JV went live from January 2012

• RailCorp awarded outsourced contract to UGL Unipart, commencing July 2012 to:• Conduct all L3 Heavy Maintenance for 1,050 Electric fleet vehicles• Provide Logistics and Supply Chain Management services to 7 Electric & Diesel

Maintenance sites across NSW (1,200 vehicles)

• Contract length 7 years with option to extend further 5 years

• Value of business $1.8b (GBP 1.2b) over 7 years

Strategic Challenges

• RailCorp outsourced contract:• To work alongside RailCorp to achieve world’s best practice for:

• Railway car & component maintenance• Logistics & Inventory Management

• Develop business capabilities which facilitate diversification into varying markets (e.g.):• Transport• Defence• Marine

• Transform supply chain to become highly competent in:• Perfect quality• Globally competitive costs• Exceptional delivery performance• Highly responsiveness• Product & Service Innovation

Current Supply Chain in Australian Rail Industry

• Not performing in many metrics:• Quality – inconsistent• Very high prices compared to UK/Europe• Unresponsive

• Not lean:• Much talk of being lean, but no real depth in executing lean into business

• Not customer centric:• Companies very customer focused and responsive

• Minority• Dominated by OEM’s with too few independent alternative suppliers into the rail

industry

General observations of Australian Supply Chain in Australia

• Positives:• Australia holds many business growth opportunities:

• Buoyant economy• Investment in rail

• Issues with Sydney region:• Rail industry needs much greater business skills to deliver in:

• Quality, Cost, Delivery & Responsiveness

• Industrial Relations climate very strong:• Highly unionised labour force

• Time difference makes real time support from UK difficult

• Government tightening visa approvals process

• Sydney region is expensive v costs in UK

Your Unique Partner in Rail

10,000 people

AU$ 2 bturnover

Operating in 100

countriesworldwide

6 divisions

Majority owned by employees

We takea long term

view

The Unipart Group – Where We Work

New Location Current Location Deploying Consulting Services

BrisbaneDenver

TorontoMahwahAtlanta

Brazil

South Africa

UKGermanySpainBelgiumNetherlands

Russia

UAE China

Tokyo

Sydney

Business offerings:

• Product Supply• Logistics• Consultancy

Initial desktop research / Visits - UKTI

Sydney Location due to sister company operations

Australia

Launched at AusRail 2007

Industry Activities:

• Innovation forums• Industry society participation• Key industry activities

Growing consultancy and Niche Product business

Developed Australian specific products

Achievements

Formation of JV with UGL

States Independent of each other:

• Management Structure – one franchise arrangement • Track gauge• Approval Process• Standards

Tyranny of distance / time – Inter-state and UK

High proportion of ex-pat employees in Industry

Lessons Learnt

Established Rail market – 150 years +

State and Federal finances in place:- State Transport plans - UKTI

Focus on development’s similar to Europe - LX

Showcase at Industry Show – AusRail in Sydney November

Opportunities

Innovation / Modern technology