1. F INNISH S HIPPING REQUIREMENTS IN 2025 - A MEGATREND APPROACH Eero Pyhäranta 29.8.2013

2. A GENDA Research question Methodology Megatrends Industry summaries & shipping requirements Conclusions Q&A 29.8.2013 2 Finnish Shipping requirements - A megatrend approach

3. R ESEARCH Q UESTION To analyze the current megatrends and their affects to ship transportation in Finland. To analyze industry trends to determine the transportation needs in 2025 What type of cargo? What will be the volume? 29.8.2013 3 Finnish Shipping requirements - A megatrend approach

4. M ETHODOLOGY 29.8.2013 4 Finnish Shipping requirements - A megatrend approach

5. G IGATREND REVIEW Gigatrend = global phenomena behind the megatrends Gigatrends Population growth Economical growth Technological development ”Speed up” 29.8.2013 Finnish Shipping requirements - A megatrend approach 5

6. Social Increasing divergence in population trends Urbanisation Diseases & pandemics Technological Accelerating technological change Economic Continued economic growth Multipolar world Competion for resources Environmental Decreasing natural resources Climate change Pollution Political M EGATREND REVIEW 29.8.2013 Finnish Shipping requirements - A megatrend approach 6

7. I NDUSTRY S UMMARY : M ETAL A ND M INERAL I NDUSTRY (1/2) 29.8.2013 7 Finnish Shipping requirements - A megatrend approach

8. I NDUSTRY S UMMARY : M ETAL A ND M INERAL I NDUSTRY (2/2) Possible development Export of late and mid-cycle minerals is expected to increase. Transportation volumes will increase Alternative transportation routes? Volatility in the mineral markets will increase Transportation needs to adapt to the situation 29.8.2013 8 Finnish Shipping requirements - A megatrend approach

9. I NDUSTRY S UMMARY : C HEMICAL I NDUSTRY (1/3) Chemical industry has invested the most in Finland during the last few years. EU is and will remain as the most important market for the industry. Bulky chemicals are expected to flow from Asia to Europe. 29.8.2013 9 Finnish Shipping requirements - A megatrend approach

10. I NDUSTRY S UMMARY : C HEMICAL I NDUSTRY (2/3) 29.8.2013 10 Finnish Shipping requirements - A megatrend approach

11. I NDUSTRY S UMMARY : C HEMICAL I NDUSTRY (3/3) Open questions Despite chemical industry has invested the most, tanker capacity is not increased! Some studies estimate oil volumes to decline? Solid chemicals (fertilizers, etc.) Rail road cargo? 29.8.2013 11 Finnish Shipping requirements - A megatrend approach

12. I NDUSTRY S UMMARY : F OREST, P ULP & P APER (1/2) Structural change in the industry Wood product industry focus on more specialized and more processed materials Transportation requirements might differ No major changes in the wood product cargo. 29.8.2013 12 Finnish Shipping requirements - A megatrend approach

13. I NDUSTRY S UMMARY : F OREST, P ULP & P APER (2/2) Pulp & paper cargo will decrease How to balance the import / export? Generally, pulp and paper companies are still focusing on operational improvements not in new investments. ”Bio-economy” takes time 29.8.2013 13 Finnish Shipping requirements - A megatrend approach

14. I NDUSTRY S UMMARY : T ECHNOLOGY I NDUSTRY (1/3) 29.8.2013 14 Finnish Shipping requirements - A megatrend approach R&D expenses, investments

15. I NDUSTRY S UMMARY : T ECHNOLOGY I NDUSTRY (2/3) 29.8.2013 15 Finnish Shipping requirements - A megatrend approach Focus on high value investment goods Adjustable production and on time deliveries Volumes might decrease in the future Investments in R&D, sales and other supporting functions Real investments have been decreasing Focus on niche markets Value of the cargo will increase

16. I NDUSTRY S UMMARY : T ECHNOLOGY I NDUSTRY (3/3) 29.8.2013 16 Finnish Shipping requirements - A megatrend approach Cargo will be more volatile Technological trends and product cycles even shorter Cargo predictability is likely to decrease Customer requirements are individual and they will change in time. New solutions to transportation offering?

17. I NDUSTRY S UMMARY : C OMMERCE S ECTOR Consumer trade will become more complex in the future. Fierce competition in the industry. Challenging equation: Individual requirements + technology development = low cost? Commerce industry is import intensive Could this be utilized when maximizing the capacity usage? Succees in commerce = superb business modes + operational excellence ! 29.8.2013 17 Finnish Shipping requirements - A megatrend approach

18. PART 2: C ONCLUSIONS 29.8.2013 18 Finnish Shipping requirements - A megatrend approach

19. C ONCLUSIONS Four crucial megatrends 1. Economic growth in emerging countries 2. Multipolarization 3. Speed-up 4. Environmental awareness Cargo outlook Metals mineral ↗ Pulp & paper ↘ Technology → Chemical industry ↗? Commerce → 29.8.2013 19 Finnish Shipping requirements - A megatrend approach

20. C ONCLUSIONS Vessel requirements Energy efficiency Cost reduction Agile, flexibility Frequently changing customer requirements More specific customer requirements within the industry Business model? 29.8.2013 20 Finnish Shipping requirements - A megatrend approach

21. Q&A? 29.8.2013 21 Finnish Shipping requirements - A megatrend approach

22. B ACKUP S LIDES 29.8.2013 22 Finnish Shipping requirements - A megatrend approach

23. B ACKUP S LIDES 29.8.2013 23 Finnish Shipping requirements - A megatrend approach