Infrastructure and Shipping in Taiwan Taiwan International Ports Corporation Vice President, Mr. CHANG, Kuo-Ming

Agenda 1.Trades and Shipping of Singapore and Taiwan 2.Global Shipping Trends 3.Taiwan’s Key Challenges Of Ports 4.Infrastructure Responses to the Challenges 5.Conclusions

1. Trades and Shipping of Singapore and Taiwan Data of 2015 Population: 5.54 million GDP (Current Price) : US$ 292 billion Merchandise Export Value : US$ 336 billion Merchandise Import Value : US$ 288 billion Container Volume: 30.92 million TEU Data of 2015 Population: 23.49 million GDP (Current Price) : US$ 524 billion Merchandise Export Value : US$ 280 billion Merchandise Import Value : US$ 229 billion Container Volume: 14.49 million TEU

1. Trades and Shipping of Singapore and Taiwan Singapore is Taiwan’s 5th export trade partner and 7th import partner. Taiwan is Singapore’s 5th import partner. Both play an important role in maritime field. Trade Statistic of Taiwan, with Singapore (in million USD)

1. Trades and Shipping of Singapore and Taiwan Loaded Container Singapore/Taiwan Ports (in TEU) Shipping Routes connecting Singapore and Taiwan Total Kaohsiung Taipei Keelung Taichung 40 36 7 5 3

2. Global Shipping Trends Market Demand and Supply FE- Europe trade’s utilization maintains around 80% in 2nd half of 2015. As the market went down, this year utilization falls to below 80%. The situation of FE-US trade is better than Europe trade. The utilization maintains above 80%. Liners and shipping alliances keep adjust the capacity supply to lift the utilization. Source: Alphaliner

2. Global Shipping Trends Mega Container Vessels 1996-2001, average new vessel size grew from 2,000 TEU to 3,500 TEU. 2006-2011, average new vessel size grew from 4,000 TEU to 6,200 TEU 2005-2006, maximum vessel size grew from 9,000 TEU to 15,500 TEU

2. Global Shipping Trends Shipping Alliance Reshuffle Source: Alphaliner

2. Global Shipping Trends Shipping Alliance Reshuffle 2016/4/20, CMA-CGM/COSCO/Evergreen/OOCL signed a MOU to form the “OCEAN Alliance”. The proposed new alliance will cover some 350 vessels and initially more than 40 shipping routes. The new alliance plans to begin operations in April 2017. Source: Alphaliner

3. Taiwan’s Key Challenges of Ports Rising Competition from Nearby Ports China’s southern ports keep upgrading their port infrastructure and offer port tariff incentive programs to attract liners. Also, the ports in Southeast Asia built deep water container terminals to attract direct calls of the inter-continental routes. These competitions might impede the hub role of Taiwan’s ports in East Asia. Requirement of Infrastructure Upgrade The size of 18,000 TEU container vessels or above requires at least -17m draught of berth. Additionally, the gantry cranes need to upgrade to fulfill the new vessel size. Also, liners ask for high efficiency and time-saving loading/unloading operations. Weak Demand of Import and Export The global economic growth has decreased again and is expected to recover at a slower pace. The weaker economic environment hinders inter-continental and regional trade volume. Therefore, it has a negative impact on the performance of shipping industry and ports in Taiwan.

4.Infrastructure Responses to the challenges TIPC Kaohsiung An-ping Taichung Hualien Taipei Su-ao Keelung Taiwan International Ports Corporation(TIPC) was founded on 2012/3/1, 100% share owned by Ministry of Transportation and Communication. TIPC is tasked to handle comprehensive port operations and enhance operational efficiencies.

4.Infrastructure Responses to the challenges Continuingly improve port infrastructure and provide a better port service, including Dredge navigation channel and berth, Upgrade equipment and facilities Improve access roads of the ports

4.Infrastructure Responses to the challenges Dredge navigation channel and berth Port Draught of Navigation Channel Draught of Container Vessel Berth Project Content Keelung -15.5m-16.0m -10.0~-14.5m W18 wharf dredging W2-4 wharf dredging Navigation channel and turning basin dredging Taipei -17.5m -12.0~-16.0m S09 wharf construction Navigation channel dredging Taichung -16.0m -13.0~-14.0m #32-35 wharf dredging #5A.5B wharf dredging Kaohsiung 1st Entrance:-12.5m 2nd Entrance:-17.0m New Outer Entrance: -22.0m -10.5~-17.6m #56-57, #61-62 wharf dredging

4.Infrastructure Responses to the challenges InterContinental Phase II (Port of Kaohsiung) Infrastructure Budget: USD 682 million Period: 2011~2019 Area: 484 ha. Shoreline Length: 7,040m Total 19 berths

4.Infrastructure Responses to the challenges Petro-chemical Center 256.8 Ha. Container Terminal 162 Ha. Content: Relocate original petro-chemical wharfs and tanks, and build new deep water container terminal to accommodate large container vessels.

4.Infrastructure Responses to the challenges InterContinental Phase II (Port of Kaohsiung) Sub-project Budget Time Seawall & Breakwater US$ 270 million 2012/3~2017/12 Shoreline & Dredging US$ 272 million 2013/4~2018/5 Land Reclamation US$ 140 million 2015/11~2018/6 S4~S5 Container Terminal US$ 123 million 2015/5~2018/4

4.Infrastructure Responses to the challenges Business Diversification To react to the weak demand of global economic, we take some actions to diversify the port operations: Actively develop multi-country consolidation(MCC), LME, etc. new business types. Develop cruise tourism and make Port of Keelung become cruise home port. Transform old harbor area of Kaohsiung Port and promote water-front recreation to attract more tourists.

5. Conclusions Continuingly investing port infrastructure can provide a more efficient port operation service for shipping industry. Good shipping industry provides a great environment for economic / trade booming. Growing economic creates demands for infrastructure. Then government keeps input resources to port sector.

Thank You!!