1. WE ARE REDUCING DISTANCES! Freeport of Riga: a Sustainable Brand in Logistics Edgars Sūna, Marketing Director, Freeport of Riga Authority April 12, 2012

2. 2 Latvia in Brief 64 000 square km Population 2,2 million GDP 18,12 billion EUR (2010) Transport and Communications sector builds 11% of GDP (2010) Currency LVL (Lats),1 EUR = 0,7028 LVL Member of the EU and NATO since 2004 and the WTO since 1998 3 major ice-free ports and 7 small ports 4 special economic zones Latvia

3. 3 Our Vission and Mission customer`s port of choice because they value our safe, efficient and competitively priced services multifunctional port which fully exploits the benefits of Freeport status and demonstrates sustainable economic success socially and environmentally responsible port which is adaptable and able to respond to global trends and the changing needs of customers. Port Authority We will continue to develop the Freeport of Riga as a leading port of the Baltic States and as a source of real prosperity for Latvia. Our Mission: We aim to develop the Freeport of Riga as:

4. 4 Freeport of Riga in 2011 By cargo turnover Latvias biggest port and the third biggest port in the Baltic States (34 mln.t) Multifunctional port with cargo handling capacity 45 mln.t/year Fast growing port – annual growth rate +11.8% Port accounts for 5 200 direct and close to 15 000 indirect work places (railway, forwarding, agencies, trucking, etc.) Total port revenues reached EUR 402 mln and net profit EUR 46 mln (2010) Taxes paid into the state and Riga municipal budgets - EUR 28 mln (2010) www.freeportofriga.lv Business Card

5. 5 Freeport of Riga – 11% of the City Territory Business Card Port border line ––– Railway - - - Main roads ––– Port border line ––– Railway - - - Main roads ––– Legend Total port area6 348 ha Total berths length13.8 km Max. depth16.0 m Max. vessels draft14.7 m Total port area6 348 ha Total berths length13.8 km Max. depth16.0 m Max. vessels draft14.7 m Main infrastructure figures

6. 6 Riga in the Network of Eurasian Transport Corridors Riga as a part of the corridor is linked to the Trans-Siberian Railway Haulage by the Trans- Siberian Railway saves transit time by 12-15 days in route Far East – Europe Riga as a part of the corridor is linked to the Trans-Siberian Railway Haulage by the Trans- Siberian Railway saves transit time by 12-15 days in route Far East – Europe East-West transport corridor Easy access to the corridor connecting Europe with the Middle East North-South transport corridor Location

7. 7 The Baltic Sea – a Region of Strong Port Competition 11 ports compete for cargo to/from Russia Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 362 mln t in 2011 11 ports compete for cargo to/from Russia Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 362 mln t in 2011 Eastern Baltic Sea Region Location RUS 185,4 mln t EST 36,5 mln t LAT 67,4 mln t LIT 45,5 mln t FIN 27,2 mln t Turnover at ports by country in 2011

8. 8 Regular Liner Services Connectivity MSC Antwerp-Bremerhaven-Kaliningrad- Riga-Gavle CMA-CGM Hamburg-Gdynia-Riga Unifeeder Hamburg-Bremerhaven-Riga-Klaipeda Team Lines Hamburg-Bremerhaven-Riga-Klaipeda MannLines Multimodal Rotterdam-Gdynia-Kaliningrad-Riga Containerships Riga-Klaipeda-Teesport-Rotterdam- Sheerness-Helsinki-St.Petersburg Maersk Bremerhaven-Klaipeda-Riga- Bremerhaven Tallink (ro-pax) Riga-Stockholm MSC Antwerp-Bremerhaven-Kaliningrad- Riga-Gavle CMA-CGM Hamburg-Gdynia-Riga Unifeeder Hamburg-Bremerhaven-Riga-Klaipeda Team Lines Hamburg-Bremerhaven-Riga-Klaipeda MannLines Multimodal Rotterdam-Gdynia-Kaliningrad-Riga Containerships Riga-Klaipeda-Teesport-Rotterdam- Sheerness-Helsinki-St.Petersburg Maersk Bremerhaven-Klaipeda-Riga- Bremerhaven Tallink (ro-pax) Riga-Stockholm

9. 9 Hinterland Connections Dedicated Container Trains Connectivity Container train Zubr (Riga-Minsk-Illichevsk) Container train Baltika-Transit (Riga-Almaty) Block Train (Riga-Hairaton) Container block train Riga Express (Riga-Moscow)

10. 10 EMMA - Eurasian Multi-Modal Alliance Connectivity Since 2011 a joint venture EMMA was established between Latvian forwarder SRR and French logistics group GEFCO for services to/from Riga to/from Central Asia Eurasian Multi – Modal Alliance

11. 11 Total transport logistics cost comparison for the ports of EBSR (EUR/20) in route Far East - Moscow Costs St.Petersburg Hong Kong- Bremerhaven Tallinn Riga Klaipeda Moscow 1752 EUR/20' 1529 EUR/20' 1523 EUR/20' 1764 EUR/20'

12. 12 Total transport logistics cost comparison for the ports of EBSR (EUR/20) in route Far East - Almaty Costs St.Petersburg Hong Kong- Bremerhaven Tallinn Riga Klaipeda Almaty 2511 EU R/20' 2405 EUR/20' 2347 EUR/20' 2615 EUR/20'

13. 13 Port Infrastructure Infrastructure Total port area6 348 ha Port land1 962 ha Available land445 ha Total berths length13,8 km Max. depth16 m Max. vessels draft14.7 m Total port area6 348 ha Port land1 962 ha Available land445 ha Total berths length13,8 km Max. depth16 m Max. vessels draft14.7 m Port Infrastructure Warehouses180 000 m² Open storage1 797 000 m² Cold storage13 000 t Tank farm350 000 m³ Warehouses180 000 m² Open storage1 797 000 m² Cold storage13 000 t Tank farm350 000 m³

14. 14 Port Companies 33 stevedoring companies 28 ship agencies 37 companies provide different facilities for cargo warehousing 16 companies operate customs warehousing 7 companies provide different added value services 12 companies offer cargo forwarding services Infrastructure

15. 15 Facilities for Container Handling Total handling capacity 480 thous. TEU 3 terminals: Baltic Container Terminal, Ltd, Riga Universal Terminal, Ltd, Riga Container Terminal, Ltd All terminals are directly linked to the main rail routes Container ground slots 9350 Crane productivity 25-30 cont.mov./hour Max draft at container berth13.5 m Infrastructure EM Athens (2010) Length 207 m DW 32 350 GT 25 294 Capacity2503 TEU EM Athens (2010) Length 207 m DW 32 350 GT 25 294 Capacity2503 TEU Largest vessel handled

16. 16 Cargo Turnover at the Freeport of Riga (mln. t) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 13.4 14.9 18.1 21.7 24.0 24.4 25.4 25.9 29.6 29.7 30.5 Total Liquid Bulk General Cargo Dry Bulk Total Liquid Bulk General Cargo Dry Bulk Performance Average annual growth rate 9.1% 40 35 30 25 20 15 10 5 0 34.1

17. 17 Inbound and Outbound Cargo in 2011 Performance 78% of cargo handled at the Freeport of Riga is transit traffic

18. 18 Deepening of the fairway to 15 – 17m Multifunctional dry bulk terminals on the Krievu sala Modernization of the ports railway network Construction of a new railway bridge Private Investments Oil products terminal in Bolderaja Liquified natural gas (LNG) terminal in Daugavgriva Terminals on the Kundziņsala island (fertilizer, container, grain and logistics park) Terminal for production and handling of bioethanol Development Projects (2010 – 2020) Development Total port investment portfolio 1.1 bln EUR Port Authority`s Investment 300 mln EUR Private investment 757 mln EUR Total port investment portfolio 1.1 bln EUR Port Authority`s Investment 300 mln EUR Private investment 757 mln EUR 1 2 3 4 5 5 7 1 2 3 7 8 6 4 8 6 Port Authority`s Investments 3

19. 19 Investment Opportunities at the Freeport of Riga Long-term lease of land on attractive terms (up to 45 years) 445 ha of land available for development Status of a licensed company and free zone regime allows to receive tax relieves Freeport Authority assistance in the development of private terminal infrastructure A favorable investment climate in Latvia Investment

20. 20 Available Territories for Development Investment Approx. 445 ha are presently available for the development of new facilities (distribution, logistics, warehousing, etc.) Available territories

21. 21 Status of a Licensed Company and the Free Zone Regime Freeport status provides for substantial tax reductions Status of a licensed company allows to receive direct tax relieves Licensed company fulfilling certain requirements of the Free zone regime can receive both direct and indirect tax relieves Licenses are issued for 5 years by the Freeport of Riga Authority Investment Direct taxes Income tax80 % Real estate duty80-100% Indirect taxes Value added tax100 % Excise tax100 % Customs duty100 % Direct taxes Income tax80 % Real estate duty80-100% Indirect taxes Value added tax100 % Excise tax100 % Customs duty100 % Tax relieves:

22. 22 Investment Climate in Latvia Business without borders: an EU member state Advantages and experience in working with Russia and the CIS A highly skilled and multilingual workforce Easy to set up and manage business Equal rights and benefits for both foreign and local investors Opportunities to qualify for funding from the EU`s Structural Funds Investment

23. 23 Summary Strategically well linked to economically strong and developing areas (closest EU port to Moscow, EU border with Russia) A corridor of competitive total transport logistics costs Multifuncional port with powerful infrastructure for the container handling Favourable business conditions (Free Economic Zone, long-term lease of land on attractive terms, available land for development) Port of Riga: Hub for Logistics of the Textile Industry in the Baltics

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25. 25 Thank you for your attention!