1 Malmö 17 th March, 2010 Trans Baltic Conference Strength in diversity Hyundai Merchant Marine Ltd Kirsi-Maarit Poljatschenko

This is what they say at “c ompany descriptionwww.ft.com HYUNDAI MERCHANT MARINE CO.,LTD is a Korea-based company specialized in the provision of shipping services. The Company provides its services under two main segments: container and bulk. Its container segment provides container carrier transportation services, which include transpacific services, Asia-Europe services, transatlantic services, intra-Asia service and Latin America service, through more than 40 sea routes and over 100 ports. Its bulk segment provides transportation services with vessels such as tankers, liquid natural gas (LNG) carriers, liquid petroleum gas (LPG) carriers and trampers for LNG, LPG, steel mills, power plants, coals and iron ores suppliers. It is also engaged in the operation of port terminals…”

Container Shipping Today. After 20 years of Growth was a nightmare: >10% of total world vessel fleet was idle during 2009 Far East-Europe trade volume has dropped 15% during 2009 vs 2008 (source: Alphaliner) Top 10 ports of the world lost 6% of their container turnover in 2009, Baltic Sea ports lost much more. Suddenly in Jan2010 container handling activity shot up by 18.7% ( against Jan2009 – Drewry) VOLATILE IS THE WORD! Ports of Singapore, Shanghai and Hongkong each operate >20 mio TEU turnover per year, Rotterdam, Antwerp and Hamburg operate <10 mio TEU. The world’s largest shipping line operates 538 container vessels with 2 mio TEU which equals 15% share of total capacity. TOP 10 container carriers control 60% of the total vessel capacity of 13 mio TEU Source: Alphaliner Monthly Monitor Feb TEU = a 20-foot-equal unit

Shipping Lines’ Planning for Future... Global orderbook for new capacity reads 732 vessels and 4.5 mio TEU (which is some 35% of existing total fleet). Orderbook contains different vessel sizes but 242 vessels in the pipeline are > 7,500 TEU each (2.5 mio TEU capacity). Top 3 shipyards are Korean In total TEU of vessel capacity was scrapped in Key word is uncertainty – in 2009 basically no new vessel orders were placed and many of existing orders were deferred Between October 2009 and February 2010 freight rates have increased by 38% (source: Clarkson) Larger vessels, less frequency, slow steaming and other efforts for less cost, maybe mergers?, joint hub arrangements...

Far East Freight Conference volume development between 2003 and UK market and Russia market on separate scale. Author’s estimate of 2008 is based on FEFC actual volumes of 1st half Total containerized trade from Asia to Europe will be ca 15.9 mio TEU in 2010 Relative Importance of Russian volumes

Baltic Sea is the Gateway to Russia It is all about geography? ‘largest country in the world in terms of area but unfavorably located in relation to major sea lanes of the world…’ (by CIA the world factbook) 70% of Russia’s incoming cargo arrives via Baltic Sea

Gateway & National Competition : ports vs ports This is not only about geography, it is about politics Some ports are natural gateways – some can be made gateway hubs Russia will set the speed Russian middle class will set the volume Who decides which gateway to use? – hierarchy in logistics decision making is complex if not virtual. Domestic Competition : ports vs ports This is not only about geography, it is also about politics Port organizations seek for efficiency – survival of the fittest Where to do sales work and whom to promote port services? Collaboration across the country borders? The Baltic Sea

Signals, trends and wild cards GREEN SHIPPING Environmental aspect is being utilized for better economy, also investor relations and PR Environmental actions and plans of companies must be manifested in standardized way and cannot be overlooked by any global player Slow steaming for reduced fuel cost, also less emissions Consumers’ ’learning curve’? – How selective will they get? Professional buyers’ selection criteria? Facebook has something to say Principles Hyundai Merchant Marine Environmentally sound & sustainable development. Utilization of best available methodologies Continual improvement

9 Thank you Tack Kiitos Спасибо Hyundai Merchant Marine Ltd Thank You