Kansas City Southern. Mexico Rail. June 16, Denver, Colorado

Transcription

1 Kansas City Southern Mexico Rail June 16, 2015 Denver, Colorado 1

2 Top Industries for Mexico Nearshoring Opportunities Automotive Furniture Appliances & Electronics Aerospace Machinery Construction Equipment Rubber & Plastics High Tech Electronics Fabricated Metals Kansas City Southern

3 10 Free Trade Agreements : 45 Countries The U.S. is Mexico s largest trading partner U.S. imports from Mexico have risen 23.5% since 2010 Canada Japan United States Guatemala El Salvador Honduras Nicaragua Costa Rica Colombia Bolivia Chile Uruguay Peru Venezuela European Union Iceland Liechtenstein Norway Switzerland Israel SOURCE: DOC, Bloomberg Businessweek, World Bank, Mexico Today, J.P. Morgan, U.S. Bureau of Labor Statistics, SICE, Goldman Sachs, Boston Consulting Group, Reuters

4 PLANT TIJUANA PLANT HERMOSILLO PLANT CHIHUAHUA PLANT MOTORS RAMOA ARIZPE PLANT SALTILLO PLANT SALTILLO 2013 PLANT RAMOS ARIZPE PLANT PESQUERIA 2016 PLANT AGUASCALIENTES PLANT CIVAC PLANT PUEBLA PLANTS AGUASCALIENTES 2017 PLANTS S.L.P PLANT 2 AGUASCALIENTES 2014 PLANT EL SALTO PLANTS S.L.P 2019 PLANT SAN JOSE CHIAPA 2016 PLANT SALAMANCA 2014 PLANT APASEO EL GRANDE 2018 PLANT CELAYA 2014 PLANT SILAO PLANT MOTORS Kansas City Southern PLANT TOLUCA PLANT TOLUCA PLANT CUATITLAN

5 Mexico s Auto Production Growth (units in millions) Source: Autocast, April

6 2014 Mexico Rail Infrastructure Projects ) Sanchez 2) Sanchez yard 3) Salinas Victoria 4) Ruben Jaramillo 5) Vanegas 6) San Luis Potosi 7) Ahorcado 8) San Cristobal 9) Maravatio 10) Ixtlahuaca 11) Toluca 12) Corondiro 13) Los Chivos 14) Palm Island 15) Mezquital 16) Gavilán 17) Obayos 18) Sierra Azul 19) Ext. 20) Carlos Pereyra 21) Bajan 22) Venus 23) Hipólito 24) Rivas 25) Mezquitillo 26) Pimienta 27) San Jerónimo 28) Guadalupe 29) Carbonera 30) Ext. 31) Ext. 32) Doble 33) Las Cruces 34) Guanajal 35) Ext. 36) Endo Mexico railroads are aware of the incremental volume & preparations continue to focus on expanding infrastructure Mainline Sidings Bridges Yards Kansas City Southern

7 Rail Summary of CAPEX 2014 & 2015 (Million USD) Summary of CAPEX for KCSM and FXE Year 2014 Year 2015 Total CAPEX By Year $ 497 $ CAPEX BREAKDOWN Equipment $ 181 Infrastructure and Track $ 235 Business Development and others $ Capex Breakdown by Category 26% 32% Equipment 32% Infrastructure and Track 42% Business Development and others 26% 42% 7

8 Celaya By-pass Update Interchange Tracks Celaya Yard (FXE) KCSM delivers to FXE 300 & 301 Tracks (KCSM) FXE delivers to KCSM 8

9 KCSM NB Line Celaya Bypass Status 9

10 From Interchange Yard at Celaya to Aguascalientes FXE Silao GM Silao Km (65.53 miles) Mazda Salamanca Km (35.51 miles) GM Silao Km (65.53 miles) Buchanan Lopez KCSM Irapuato Mazda Salamanca Km (35.51 miles) San Luis Potosi KCSM Escobedo KCSM Salamanca Jocoqui KCSM Guadalajara FXE MEXICO 45 D Irapuato Highway Celaya Querétaro Freeway MEXICO 45 Queretaro Highway MEXICO 45 D Honda Kansas City Southern

11 Bypass Construction Progress: FXE Line (AM) 0 to 5 100% Construction Completed to % Construction not started. Right of Way Issues Línea AM to % Construction Completed to % Construction not started ROW under Negotiation KM % Construction Completed. PSV Km AM (Entronque Aeropuerto) 33.6% progress (ROW & some industry issues) AM Line (FXE) 67.59% Kansas City Southern

12 Bypass Construction Progress: KCS Line (NBA) to % Construction Completed Km to (Viaduct) 100% Construction Completed to % progress Phase 100% Phase 0% (Lack of Budget) to % advance Right of Way Issues to % Progress Right of Way Issues NBA Line (KCSM) 64.00% Kansas City Southern

13 The Celaya By-pass: In Summary Type of Program or Investment Project: Federal Location Amount Rail Infrastructure Project Total Cost of the Project Amount Assigned for 2015 Celaya Rail Bypass Guanajuato $ 5,468,972,018 $ 400,000,000 Expansion of the Electrified Urban Train System in the Metropolitan Zone of Guadalajara Jalisco $ 14,669,596,379 $ 5,442,370,772 Build Inter-Metropolitan Areas Passenger Train - Mexico - Toluca (first phase) Various $ 25,255,196,554 $ 7,883,742,800 Support the High Speed Train Project Between Queretaro and Mexico City Various $ 45,061,541,063 $ 1,798,407,200 Mass Transportation Rail System for the Eastern Zone of the State of Mexico - Extension of the A Line of the Mass transit System Metro Chalco - La Paz State of Mexico $ 11,907,732,503 $ 1,500,000,000 Investment Program for Track Maintenance of the Chiapas Mayab Railroad - Phase 2 Various $ 1,252,872,164 $ 564,971,366 Total $ 103,615,910,681 $ 17,589,492,138 Source: 2015 Federal Budget Allocation 13

14 14 The Celaya By-pass: In Summary Intent: Seeks to create a safe corridor for rail Will increase safety for the community Will increase rail speed Will streamline the operation for both rail operators in a fast growing region (Bajio Area). Issues: Slow land acquisition process caused land to escalate continues to escalate. Budget Reduction in 2015 will delay project beyond 2015 Positive: The project continues under construction where land issues have been settled. Current government agencies are managing issues to move forward (some eminent domain). Steps Going Forward: Stay engaged with different levels of government to express importance of completing the by-pass. OEM s should voice their support of the by-pass and stay engaged with their government relations departments to push to speed up completion.

15 # of Rejected Cars 15 Rail Cars Rejected in Mexico 90 # of Rejected Cars by Month & by Plant January February March April May June July August September October November December 0 CHRYSLER FORD VW NISSAN GM SILAO GM RAMOS MAZDA

16 16 Rail Cars Rejected in Mexico # of Rejected Cars by Month January February March April May June July August September October November December

17 17 MUAR Vandalism/Damage Forum Mar Tactics - origin best practices to ensure origin is not the issue All loose items in one bag Verification of keys at each movement or handoff Line-off Accessorization Loading ~ Including tracking sheet ~ Include destination verification Security Measures Outsource Security Security Audits Personnel, including lunch box, backpack, etc. Lockers Receiving area (line-off) VPC yard Security and Quality departments

18 18 MUAR Vandalism/Damage Forum Mar Yard Access Single, secure ingress/egress Daily logbook Metal detectors No foil Other measures Rotation of shifts Close railcar doors ASAP after loading Breakroom security cameras storage for lunchboxes, backpacks, etc.

19 19 MUAR Vandalism/Damage Forum Mar Other issues raised: When vandalism is identified, waybilled so destination ramp is aware Claims vandalism counts do not match ramp counts; need to identify why different MUAR should consider a joint communication to state governments re impact of vandalism Next Steps - monthly conference call will: Pursue three issues above Track individual manufacturer origin activities and success thereof

20 THANK YOU! QUESTIONS? 20