Date post: | 07-Jul-2015 |
Category: |
Economy & Finance |
Upload: | olivier-coispeau |
View: | 148 times |
Download: | 2 times |
China economic growth sets pace for securingenergy ressources for the 21st century
Confidential, January 2014
Summary
Disclaimer : this presentation was created for the exclusive use of our client who is entitled to use it for its own internal needs andfurther discuss with Maverlinn officers. This presentation must not be shared with third parties without the written prior consent ofMaverlinn. This presentation is not fully understandable, complete and reliable without further analyses and oral explanations.
Page 2
1.
2.
3.
4.
5.
Energy consumption in China is directly correlated to GDP growth
China has key assets to implement smart and successful energy policies
Moving abroad to acquire key IP or resources is needed
Success is based on pre-ops and post-ops management
Energy bottlenecks are driving resources management strategies
Presentation
• Economic growth will continue to fuel higher demand for energy
• Energy issues represent a key challenge for the future
• Leads for possible solutions and options
Page 3
China is likely to account for one third of the expected energygrowth in the next 20 years
Page 4
Source : Total, Shell
Comments :
• Primary energy demand 2030 vs2010: +33%, CAGR 1.4%
• 90% of the global growth from non-OECD countries
− China 33%
− India 26%0
100
200
300
400
500
600
1960 1970 1980 1990 2000 2010 2020 2030
EJ/Y
ear
USA - Canada Europe China India Latin America MEA Others IMB
Global Energy Consumption(in EJ / Year)
But China GDP has been steadily decelerating in the last 4years
Page 7
0
10 000
20 000
30 000
40 000
50 000
60 000
Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-130
2
4
6
8
10
12
14
GDP GDP growthSource : World Bank
China maintains its 2013 GDP growth target at around 7.5%to leave some leeway for economic restructuring…
622 713 790 874 930
1450
2000
2006 2007 2008 2009 2010 2020 2030
China energy needs will continue to grow as Chinaeconomy develops
Page 8
Source : China statistical yearbook, UPS Monitor, NEB, EPRI, State Grid
China installed electricity needsforecast scenarios
CAGR : 10,6% / year
CAGR : 4,5% / year(source : State Grid)
CAGR : 3,3% / year(source : NEB)
Presentation
• Economic growth will continue to fuel higher demand for energy
• Energy issues represent a key challenge for the future
• Leads for possible solutions and options
Page 9
Energy strategic planning including moving abroad ismainly based on scenarios methodology
Page 10
Energy policies in the long term rely on complex optimizations of sometimescontradictory results in the short term
EnvironmentalProtection
EconomicProsperity
EnergySecurity
Scenario 1
Scenario 3 Scenario 2
Energy scenario strategy
Three key driving forces :
• Energy security
• Environmental protection
• Economic prosperity
Typical explored scenarios :
• Watch and wait
• Shared urgency
• Leaders and laggards
Managing a large portfolio of strategic ressources worldwidemeans to handle a great diversity of risks to optimize returns
Page 12
Energy investment strategy
Return :
• Hurdle rate
• Objective
• Complex play
Risk :
• Typology
• Mini-Max
• Volatility
Return
Risk
Hurdle rate
Maxi
Even smart technological carbon neutral choice do bearunexpected catastrophic cost at times
Page 13
USA 108
Canada 18
Mexico 2
Brazil 2
Argentina 2 South Africa 2
France 59
UK 19
Germany 17
Other EU 70
Pakistan 2
Iran 2
Japan 55
Russia 32
South Korea 21
India 20
China 13
Global power mix(electricity prod.est.) :
Coal 40.9%Gas 21.3%Hydro 15.9%Nuclear 13.5%Oil 5.5%Others 2.9%
The total cost of the 1986 Chernobyl (Belarus) accident is estimatedUSD 235 billion of economic damage (UNDP)The cost of the 2011 Fukushima (Japan) accident is estimated USD250 billion of economic damage (Japan Center for Economic Research)
Presentation
• Economic growth will continue to fuel higher demand for energy
• Energy issues represent a key challenge for the future
• Leads for possible solutions and options
Page 17
Leadership and risk management excellence are highyield assets to succeed in external growth
Page 18
Leadership Risk Management– Systematic approach– Research and know your
targets– First call status– Get culture settings right
– Practical approach– Adaptability and
determination– Momentum, timing– Post acquisition skills
Target A
Target CTarget BAcquirer
External growth
We favor integrated M&A approach with emphasis on bothstrategy and finance decision criteria for maximum impact
Page 22
• We rely on an international network in China, in Europe and beyond• Most of our customers are Fortune 500, dealing with complex growth issues
Strategy
Business
Impact
Integra
-tion
M&A
We serve industry leaders onimpact M&A and also advise onpreparation and integration tooptimize success
We emphasize multiculturalstrategic finance as our distinctivefootprint, meaning we integrateM&A, culture and strategy
In China
Abroad
Presentation
• Economic growth will continue to fuel higher demand for energy
• Energy issues represent a key challenge for the future
• Leads for possible solutions and options
Page 24
So far China have invested over USD 780 billion abroad withenergy and metal accounting for USD 500 billion (64%)
Page 25
Key regions for investment :
• USA : n°1 but atypical portfolio,including $ 20 Bn in FIG and $16 Bn in energy
• Australia : energy $ 24.5 Bn,minerals $ 35 Bn
• Canada : energy $ 34.5 Bn,minerals $ 3.3 Bn
• Dominant regions :
− MEA, by far
− South America
050
100150200250300350400
Energy
Metals
Tranport
ation
Real esta
te
Financia
l Inst.
Agricu
lture
Techn
ology
Others
USD,
Bn
Energy and metals account for 62% :
• Energy : USD 370 billion (47.4%)
• Metals : USD 115 billion (14.7%)
Source : Heritage Foundation
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
1,8
2
QueenslandCurtis LNG
project
Brow seLNG project
TalisonLithium
Alumina FocusMinerals
USD
, Bn
Top resources investors 2008-2013China largest deals in 2013
China accounted for ~42% of all foreign acquisitions in Australia in 2013
Page 26
Country Deal Case : Australia
0
5
10
15
20
25
30
China Canada Japan USA UK
Source : The Australian
28.6
Deal story lineDeal background
Tianqi swiftly moved with a better but finally creative offer to get the deal
Page 27
“Strategic“ Case : Tianqi Ind. (China) – Talison (Australia)
• Tianqi was in competition with RockwoodHoldings, which made a lower offer at C$ 724million. Tianqi’s offer was then prefered
• In March 2013, Tianqi got the Australian Fednod for C$ 848 million
• Tianqi started to own 19,9% of the capital andclearance to later acquired the remaining 80%
• In December 2013, Tianqi and Rockwoodannounced a 51/49 joint venture for theacquisition of Talison
• Talison Lithium is a 25 years old miningcompany and producer of lithium, producing350,000 t of lithium products every year
• The company is listed on the TSX (Canada) andhas two key mining sites in Australia and Chile
Next steps
Page 29
Focus full energy on best opportunities
• A well prepared deal maximizes successchances (risk / return / integration)
• A trusted and expert M&A team makes adifference on the field
• A swift execution significantly enhance the dealprofile
• The integration investment management teamneeds to be quickly empowered
Leading a world of change, together