Report. or Ustka) Assignment Background Market information Tonnage/Concept Economy Summary Page 1

Report Feasibility study regarding a ferry route from Nexø to Poland (Kolobrzeg or Ustka) Assignment Background Market information Tonnage/Concept Economy Summary Page 1

Assignment Nexø Harbour has requested an examination of the commercial potential for the introduction of a larger and car-transporting ferry on the route between Nexø and Kolobrzeg and/or Ustka. The Polish shipping company KZP, which today operates this route during the summer half with the passenger ship M/S Jantar, is presumed to be a future partner in a potential new shipping company, whereby M/S Jantar is taken out of operation, thereby avoiding a destructive competition situation. Thus, the study must seek to determine the best possible concept for the route (route location, sailing schedule, tonnage, price level, etc.), review the requirements for harbour facilities, organisation and administration, and then identify the income and expense basis of an operational situation. If it becomes evident that there is commercial basis for a future car ferry route between Nexø and Kolobrzeg/Ustka, the results of the study will then be able to serve as the starting point for the development of an actual business plan. To identify the income basis for shipping, the most significant players in Bornholm will be contacted in order to estimate the potential income. In regard to passenger and car-related income, a decision was made not to conduct an actual market study in Poland; therefore, the assessment of the potential is based on an analysis of secondary market information and pre-existing knowledge about the Polish market. The calculation of operational costs is based on the current operation and experiences from other ferry routes. This report presents a brief review of the most significant results of the study. Assignment Background Market information Tonnage/Concept Economy Summary Page 2

Background As previously mentioned, the Polish shipping company KZP sails the Nexø-Kolobrzeg route during the summer half with the passenger ship M/S Jantar. In addition, another Polish shipping company (Zegluga Gdanska) sails the Lady Assa ship from Kolobrzeg, Darlowo, and Ustka to Nexø. In 2009, a total of about 41,500 passengers were transported on 97 round trips, equal to 214 passengers per one-way trip. 32,167 passengers were transported with Jantar and 9,282 with Lady Assa, which however only sailed from Darlowo and Ustka in 2009. M/S Jantar has a capacity of 288 passengers and the transport time from Nexø to Kolobrzeg is 4.5 hours with Jantar and 3.5 hours with Lady Assa. An adult round trip ticket with Jantar costs PLN 170, or about DKK 315. Polferries (Rønne-Swinoujscie) sails a total of 10 round trips on Saturdays during the peak season and in 2008 transported 1,829 cars, or about 91 cars per trip. The price for a round trip ticket with a standard car including 5 passengers is DKK 1,300 in 2010 if ordered before 30.05.2010. The traffic base on the routes from Nexø to Poland today consists primarily of Polish one-day tourists. Seen in relation to this concept, a sailing time of 4.5 hours seems very long. The primary traffic potential for a car ferry route between Nexø and Kolobrzeg/Ustka clearly must be found on the Polish market. A faster sailing time should be capable of attracting more Polish one-day tourists and the option of taking their car with them should also result in more Polish mini- and main-holiday tourists to Bornholm. In addition, the route should be capable of attracting both one-day traffic and mini-holiday/holiday traffic from Bornholm, as well as cargo to a limited degree. The question is simply whether the increased income basis would be sufficient to cover the significantly larger costs involved with a car-carrying ferry. M/S Jantar: Build in 1986 Capacity: 288 passengers Length and width: 37,8 x 11,5 m GRT: 572 BT Crossing time Nexø-Kolobrzeg: 4½ hour Assignment Background Market information Tonnage/Concept Economy Summary Page 3

Market information - General information about the Polish travel market The number of Polish overnight stays in Denmark has been growing strongly (doubled) since 2004, but the overall total is still at a low level; in 2008, about 143,000 Polish overnight stays were registered in Denmark. In comparison, Denmark s largest foreign travel market, Germany, produced 13.8 million overnight stays in Denmark in 2008. Despite the German market shrinking since its peak in 1993-1995 with about 20 million overnight stays, there are still enormous differences, including in terms of revenue: German tourists generated DKK 8.6 billion in revenue in Denmark, while Polish tourists generated DKK 236 million. However, there is no question that the nearby Polish market, with its 38.1 million residents and the EU s sixth largest economy, is the market of the future. The question is simply how long it will take before the economic development and growth in Poland results in enough purchasing power for Poles to begin travelling abroad for holidays in large numbers. Today there are only about 5-5.5 million Poles who within the past year have travelled abroad, or about 14% of the population; in comparison, the rate of foreign travels in Denmark is 4-5 times higher. Poles who travel frequently typically live in and around the large cities and belong to the 10% wealthiest households, which earn about 25% of the total personal income in Poland. In a class by itself, Warsaw is the biggest city and the financial centre of Poland. Warsaw is also number one in Central Europe in attracting foreign investments; and the province (Voivodskab) in which Warsaw is located, Mazowieckie, is by far the richest province in Poland, followed by the province of Slaskie, with the industrial (coal mines and steel factories) city of Katowice. Unfortunately, both cities (and provinces) are located relatively far away from the Baltic Coast. The largest and most important cities: Warszawa 1.702.139 inhabitants Lodz 760.251 Krakow 756.267 Gdansk/Gdynia 708.502 Wroclaw 634.630 Poznan 564.951 Szczecin 409.068 Bydgoszcz 363.468 Source: Wikipedia Assignment Background Market information Tonnage/Concept Economy Summary Page 4

Market information - General information about the Polish travel market As shown in the figure to the right, purchasing power in the Polish population has grown by an average of about 18% in the past five years, or 3.5% annually on average. If this trend continues, the average purchasing power in Poland will in six years be on level with the current purchasing power in Portugal, but there will still be a long way to the purchasing power in Denmark and Germany today. However, it is interesting that the number of cars per capita in Poland is on level with that of Denmark (about 350 cars per 1000 residents); this may indicate something about the Polish people s priorities or something about the high Danish taxes and fees on cars. Development in PPS per capita in Poland, Denmark and Germany PPS (purchasing power standard) is an artificially calculated currency that takes into consideration the price differences that are not reflected in currency exchange rates and makes it possible to compare income levels in the individual EU member countries. Source: The EU Information Centre 130 The most popular form of holiday among Poles is costal and beach holidays thus, Southern European destinations have a market share of 44%, while the market share for destinations in the Nordic region is under 10%. In addition to a strong desire to enjoy warm sunny weather on the beach and relax, other factors influencing Poles choice of holiday include: the ability to experience new attractions, scenic nature and sporting activities. However, all of these holidays are selected in the context of limited holiday budgets, so inexpensive holidays are in focus. Internet penetration among frequently travelling Poles is relatively high and thus the internet is the most significant tool for inspiration and holiday planning. 120 110 100 90 80 70 60 50 49 51 51 52 54 58 Poland Denmark Germany 40 2003 2004 2005 2006 2007 2008 Assignment Background Market information Tonnage/Concept Economy Summary Page 5

Market information - Distances and travel times in Poland In 2007, Poland s public roads network totalled 383,000 kilometres. Until the first half of 2004, 665 kilometres of motorways and 257 kilometres of expressways had been established. According to plans, by 2013 there will be a total of 2085 kilometres of motorways and 5466 kilometres of expressways in Poland. As shown in the figure to the right, only a small portion of the existing motorways (black) and the currently under construction and planned motorways (blue) are located in the north-western corner of Poland. The massive motorway investments are concentrated on a single north-south corridor from Gdansk to Katowice and two east-west corridors in central and southern Poland. Therefore, a significant improvement of the current corridors along the Baltic coast and the north-western corner of Poland is unlikely. As shown by the distance driving times table to the right, this means that there will continue to be long driving times from the larger cities to both Kolobrzeg and Ustka. Based on a market, competition and surrounding area perspective, there is no doubt that Gdansk/Gdynia would be the most optimum place to sail from the only problem is the sailing distance of about 162 SM, which at 16 Kn means a sailing time of about 10 hours. Thus, the concept moves in the direction of a night ferry route, which the market cannot support. It is also significant to note the driving time from Szczcin and Gdansk to Kolobrzeg and Ustka. Ustka has a clear profile, with its shorter distance to Gdansk, which naturally is beneficial in relation to the potential from this area, as well as in relation to the future potential when construction of the A1 motorway is completed. In addition, the competition situation in relation to Swinoujchie-Rønne and Sassnitz- Rønne becomes less important. On the other hand, there is significant potential for one-day traffic in Kolobrzeg, as the area attracts 300,000 holiday guests annually, compared to only 100,000 in Ustka. City Kolobrzeg Driving Distance time Ustka Driving Distance time Szczecin 144 2h16 247 3h49 Gdansk 246 4h14 155 2h42 Gdynia 223 3h54 131 2h23 Poznan 288 4h36 330 5h19 Bydgoszcz 268 4h12 312 4h14 Wrocklaw 485 7h09 503 8h04 Katowice 692 8h34 687 9h43 Warszawa 552 8h18 497 7h37 Lodz 505 7h07 488 7h06 Assignment Background Market information Tonnage/Concept Economy Summary Page 6

Market information - Train connections in Poland Poland has one of the most extensive rail networks in the world, which in 2007 comprised a total of 20,100 kilometres of tracks. In 2007 the railways transported 280 million passengers and 245 million tonnes of goods. There are good train connections between most larger cities in Poland, including both Kolobrzeg and Ustka. Poland is also currently adjusting and modernising its rail network and, in the period 2007-13, the EU is investing 14 billion euro in modernising Poland s infrastructure, including rail networks, roads, harbours and airports. As shown in the table to the right, the travel times from the large cities in central and southern Poland are significant, which will probably improve when the modernisation of the rail network is completed. But, as with the road network, no modernisation of the rail network along the Baltic coast is planned. When travelling by train from Gdansk/Gdynia, the advantage of Ustka over Kolobrzeg is not as significant as when travelling by car a little time is saved, but travellers have to change trains for the final stretch from Slupsk to Ustka. It is assessed that up to 40% of the passengers on the Kolobrzeg- Nexø route today travel to Kolobrzeg by train. City Kolobrzeg Travel Shifts time Ustka Travel Shifts time Szczecin 1 2h45 2 4h54 Gdansk 0 4h08 1 3h56 Gdynia 0 3h26 1 2h50 Poznan 1 4h43 2 6h02 Bydgoszcz 2 5h10 2 9h31 Wrocklaw 1 6h46 2 9h05 Katowice 2 10h04 3 15h30 Warszawa 2 7h48 2 8h50 Lodz 2 8h16 2 12h17 Assignment Background Market information Tonnage/Concept Economy Summary Page 7

Market information - Ferry prices As mentioned, the list price in 2010 for an adult round trip passenger ticket from Kolobrzeg to Nexø is DKK 315 with the M/S Jantar. This price is only for passengers completing the round trip journey on the same day. Younger children travel free, a child and family discount is offered and groups of 15 and more also receive about a 20% discount. The realised average income per passenger round trip is estimated at about DKK 250. About the same price level can be found with the competing Polferries Rønne-Swinoujchie route. The price of DKK 1,300 for a car including five passengers requires that the ticket is reserved before 31 May. Otherwise, the same ticket costs DKK 1,220 each way. On the Rønne-Sassnitz route with Bornholmstrafikken, a one-way ticket for a car and five passengers is DKK 783 in the off season, DKK 1028 from Tuesday-Thursday in the peak season and DKK 1,558 Friday-Monday in the peak season. There is no discount for round trip tickets. The price level on Rønne-Sassnitz is thus somewhat higher than on the routes to/from Poland, but the most significant customer base on the route are Germans, which is reflected in the prices. This is in spite of the fact that many Poles from eastern and southern Poland can also benefit from taking the German motorway to Sassnitz especially when construction is completed on the two east-west Polish motorways (A1 and A2). Route Operator Price Adult Round trip (DKK) Price Child Round trip (DKK) Price Car + 5 pax Roundtrip (DKK) Nexø- Kolobrzeg PZB 315 260 n.a Rønne- Swinoujchie Polferries 300 255 1.300 Ystad- Swinoujchie PolFerries/ Unity Line 785 667 2.144 Overall, it appears that major changes in willingness to pay cannot be expected on the Polish market in the near future. Therefore, it could be difficult to achieve significantly higher prices on a future ferry route from Nexø to Poland than the prices found on the Polish market today. Assignment Background Market information Tonnage/Concept Economy Summary Page 8

Market information - Volume development The development since 1990 in the number of passengers on the four routes that have sailed between Danish and Polish harbours is shown in the figure below. As shown, the totals have been steadily increasing from 84,000 passengers on Copenhagen-Swinoujchie in 1990 to 158,000 passengers on three different routes in 2008. However, the overall level must be seen as particularly low. A total of 21,700 cars and 1,800 lorries (of which 5 were on Rønne-Swinoujchie) were transported in 2008. However, it is interesting that the establishment of the DFDS route from Copenhagen-Gdynia in 2002/2003 did not have any significant impact on the traffic development on the Copenhagen-Swinoujchie route. Thus, Swinoujchie and Gdansk can be considered two separate markets with very little mutual competition. This naturally has importance for the selection of harbour in either Kolobrzeg or Ustka, both in terms of avoiding a competition situation with Rønne-Swinoujchie and Rønne-Sassnitz, and in relation to attracting customers from the Gdansk and Gdynia area. 160 140 120 100 København-Swinoujscie København-Gdansk Rønne-Swinoujscie Nexø-Poland 80 60 40 20 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Statistics Denmark Assignment Background Market information Tonnage/Concept Economy Summary Page 9

Market information - Volume development There is a very different situation with traffic between Sweden and Poland. In 2009, 780,000 passengers, 220,000 cars and 270,000 lorries were transported on the ferry routes between Poland and Sweden. The three ferry routes that operate between Poland and southern Sweden all have daily departures and the market has been developed more intensively than is the case for traffic between Denmark and Poland. Comparing the development in the overall traffic in the Sweden- Poland corridor with the Denmark-Germany and Sweden-Germany corridors, there is also a significantly more positive development in the Sweden-Poland traffic. This is true of all traffic categories, but is most significant for lorries and cars. Trucks 150 140 130 120 110 100 90 80 Denmark-Germany Sweden-Germany Sweden-Poland Passengers 122 107 85 2001 2002 2003 2004 2005 2006 2007 2008 2009 Cars 260 240 220 200 180 160 140 120 100 80 Denmark-Germany Sweden-Germany Sweden-Poland 2001 2002 2003 2004 2005 2006 2007 2008 2009 227 118 115 220 200 180 160 140 120 100 80 Denmark-Germany Sweden-Germany 205 Sweden-Poland 122 87 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Cruise & Ferry Info Assignment Background Market information Tonnage/Concept Economy Summary Page 10

Harbours and tonnage The three harbours in Nexø, Kolobrzeg, and Ustka are all characterised by the fact that they are built for relatively small ships in relation to ferry operations. Data for the three harbours is shown here in the table: Data for the 3 harbours Max. Length Max Beam Max Draught Nexø 78 m 21 m 4,7 m Kolobrzeg 80 m 13 m 4,7 m Ustka 58 m 11,5 m 4,5 m The harbour in Ustka is absolutely the smallest of the three harbours, but the harbour in Kolobrzeg also poses significant limitations on the size of the ships, due to the maximum width of 13 metres. Thus, it is only possible to sail ships from Nexø to Kolobrzeg that are no more than 80 metres long and 13 metres wide. Due to these limitations, the number of suitable ferries is very limited and those that are possible would in many cases not be able to secure permission to sail on the open seas in the Baltic Sea. Examples include ferries such as Thor Sydfyn and the like. The Vesborg ferry, with a width over 15 metres, would not be able to dock in Kolobrzeg harbour according to the available information. Contrary to the very limited selection of smaller Ro-pax ferries, there is a large and accessible market for used high speed catamaran passenger ferries. Thus, it would be relatively simple to obtain a high speed ferry with space for about 400 passengers and a service speed of 28-32 knots. These ferries are typically equipped with two main motors at about 4000 kw. A high speed ferry of this type is about 40 metres long, 13 metres wide and has a draught of about three metres. Thus, it would be possible to sail to the three harbours in question without problems in relation to the size of the ship. The price of such a ferry would be between USD 3-5 million, depending on the size, age and condition. It should be noted that there are different regulations for sailing with high speed ferries, and that it is highly important that the ferry in question can fulfil the applicable regulations for Port State approval. Austal passenger high speed ferry with a capacity of 400 passengers and a service speed of 28-32 knots. Assignment Background Market information Tonnage/Concept Economy Summary Page 11

Concepts The sailing schedule for a car ferry route between Kolobrzeg and Nexø is a challenge. The modernisation of the infrastructure in Poland means that the most significant north-south traffic corridor in the future will be located at a significant distance away from Kolobrzeg. Therefore, it must be expected that the Polish one-day traffic will continue to be the most significant customer segment on the route. To spend a day in Bornholm, it is necessary to sail from Kolobrzeg in the morning and return from Nexø in the late afternoon/evening, as is now the case. For car customers not residing in Kolobrzeg, this means that they either have to drive at night or stay the night in Kolobrzeg in order to be able to take the ferry to Bornholm. At the same time, a late departure from Bornholm does not make much sense if the route is to be used by residents of Bornholm to travel to Polish and Eastern European destinations. It should also be noted that the sailing time for the two ships, Vesborg and Thor Sydfyn will be 5 and 5.5 hours, respectively. This is clearly too long, especially in relation to one-day traffic. In comparison, the sailing time from Rønne-Sassnitz is 3.5 hours and the route is turned the right way, so that it sails from Rønne in the morning and from Sassnitz in the middle of the day. An alternative to a year-round car ferry route would be the development of the current passenger route concept. A passenger high speed ferry could reduce the sailing time to Kolobrzeg and/or Ustka to 2-2.5 hours, which appears to be more attractive. This also means that it would be possible to sail two daily double trips. On some days, it would be possible to sail in a triangle, as illustrated in the figure to the right, where there is a double trip to Ustka, with the ship still docking in Nexø harbour before returning to Kolobrzeg in the evening. Crossing time 02:15 Dep. Kolobrzeg 08:00 Arr.Nexø 10:15 Dep. Nexø 10:30 Arr. Ustka 12:45 Dep. Ustka 17:30 Arr. Nexø 19:45 Dep. Nexø 20:00 Arr. Kolobrzeg 22:15 This would be capable of attracting residents of Bornholm or visitors to Bornholm to take an excursion or shopping trip to Poland, and may also attract customers from Gdynia/Gdansk to take an overnight trip to Bornholm. It would also be possible on some days to sail from Ustka in the morning, so that oneday traffic from Ustka is also secured. It would still be a summer route, but the current 76 double trips (Jantar 2009) could be expanded to about 150 double trips. In addition, the shorter sailing time and a more attractive product should also improve the opportunities for achieving a higher average price. Assignment Background Market information Tonnage/Concept Economy Summary Page 12

Economy - Income Freight The largest export companies and transport companies in Bornholm have been contacted: Espersen Fisk, Tingsted Savskæreri, Beck Packing, Mejeriet i Klemmensker, Danish Crown, Bech Hansen og Studsgaard, Vips Transport and Ole Holm Transport. This represents a broad foundation for estimating the potential quantity of goods to be shipped to and from Poland. The following quantities appeared in the analysis: Number of semitrailers Nexø- Kolobrzeg Kolobrzeg- Nexø Period Yearly Espersen Fersk 160 160 Feb.- April 320 Espersen Frost 23 23 All year 46 Danish Crown 672 0 Nov.- June 672 Tingsted Savskæreri 50 100 All Year 150 Total 1188 All of this transport involves semi-trailers, requiring equipment in the harbours that can handle these semi-trailers. This includes parking spaces, electricity for refrigeration, and machinery for loading and unloading. It is extremely important that it is possible to offer stable transport, with daily departures; cancellations due to the weather are not acceptable, as most of the goods transported are fresh goods. Today, the existing ferry and goods transport systems are utilised, and these are integrated into the large European goods management systems that are characterised by their efficiency, dependability and low cost. A price of DKK 2,500 per semi-trailer would produce annual revenue of about DKK 3 million. Revenue from traffic from Poland to Bornholm is assessed to be less significant, as the Bornholm market is too small with only about 40,000 residents. Passengers and cars For the car ferry route, it is assumed that the current passenger base can be maintained and that year-round sailing will result in an increase in passenger traffic of about 30%. The potential car traffic is difficult to estimate, but a guess could be 5,000 cars, or about 7 cars per departure. The average prices (one-way) are assumed to be at the current level, i.e. DKK 125 per passenger and DKK 750 for a car and 5 passengers. Also calculated is the net contribution from onboard sales of DKK 20 per passenger. The passenger base for the high speed ferry is assumed to be 75,000 passengers annually. The shorter sailing time is assumed to result in an increase in traffic from Kolobrzeg of 50% and a total traffic base of 25,000 passengers is calculated for sailing to/from Ustka. The average price is increased by 20% (to DKK 150) in relation to the current level, but a smaller net contribution of DKK 10 is added for onboard sales, due to the shorter sailing time. Assignment Background Market information Tonnage/Concept Economy Summary Page 13

Economy - Expenses Assumptions and comments on the calculation of operational costs: Two known ships were selected for the calculations for traditional ferry transport: Vesborg and Thor Sydfyn. They represent the respective extremes of the price scale for used tonnage and therefore also of two different quality levels to customers. As already mentioned, there is a very limited offering of these types of ferries and the two mentioned ships are thus not necessarily the right ferries, but are used as examples of tonnage, as these two ferries have known expenses for acquisition price, operation and maintenance. In addition, both ferries are close to the largest possible ferry that can sail into the harbour in Kolobrzeg. The ferry Vesborg is calculated as having a purchase price of DKK 25 million, which is depreciated to 10 million over a period of 10 years. Thor Sydfyn s purchase price is set at DKK 7.5 million and this ferry is depreciated down to 2 million over 5 years. The high speed ferry would be purchased for DKK 20 million and depreciated to 7.5 million over 8 years. These write-off horizons and remaining values are determined based on the applicable norms in the industry. All three examples are calculated with an interest rate of 6%. It should be noted that the pricing of new and used tonnage has been particularly unpredictable in the past two years, which is a result of the crisis in the financial sector. Therefore, a good offer may suddenly pop up on the market, which could significantly reduce the calculated capital expenses. Oil expenses are calculated in proportion to motor power, service speed, distance sailed and the number of departures, and an oil price of DKK 3.50 per litre of marine gasoline is used. It is assumed that the staffing will be Poles, based on local collective agreements; thus the wages calculated are based on Polish wages, as these are significantly lower than Danish wages, including DIS pay. Ship and product fees are based on available information from the harbours; however, it should be noted that significant savings would be expected by entering into a fixed agreement with the Polish harbours. It would be necessary to invest in ramp and docking facilities, and there will also be expenses in connection with the start up. These are written-off at the same rate as the ferries, though without the remaining value, as these facilities are seen as specific to the ferry and harbours, and therefore without value as soon as the ferry is moved or operations cease. Great savings can be had by buying sales and booking services from a partner with these facilities already in place. The expenses for land administration, sales and booking are held to a minimum, as it is assumed that there is a cooperation with the existing capacity in the three harbours. Assignment Background Market information Tonnage/Concept Economy Summary Page 14

Economy - Overview Below is a diagram of the operating economy in a normal operation year, i.e. year 2 or 3 after the establishment of the route. As shown, the sailing of Nexø-Kolobrzeg with a ro/pax ferry appears to be far from commercially sustainable. Contrary to the revenue estimates for passengers and shipping, there is great uncertainty regarding the estimate of car-related revenue. But the estimated car revenue would have to increase by 400% before the route would begin to be profitable. And this level appears to be unlikely in the short term. The operating budget for a high speed passenger ferry route appears to balance better, as the revenue potential is assessed to be on level with the potential for a car ferry route, while the cost level is only half as much. Operating economy (DKK) Vesborg Sydfyn Fast Cat Income Passengers 5.800.000 5.800.000 12.000.000 Cars 4.050.000 4.050.000 Freight 3.000.000 3.000.000 Total income 12.850.000 12.850.000 12.000.000 Expences Charter 2.550.000 1.300.000 2.340.000 Fuel 4.721.640 2.836.050 1.650.250 Wages 6.650.000 6.650.000 2.508.000 Other ship related costs 3.500.000 3.500.000 2.400.000 Harbour Fees 2.139.647 1.802.776 763.470 Harbour investments 1.040.000 1.804.000 35.000 Administration 2.450.510 2.450.510 1.500.000 Marketing 1.000.000 1.000.000 750.000 Total Expenses 24.051.797 21.343.336 11.946.720 Operating result (11.201.797) (8.493.336) 53.280 Assignment Background Market information Tonnage/Concept Economy Summary Page 15

Summary The result of the analysis conducted shows that it would not be financially sustainable to operate a traditional ferry with cars and shipping capacity between Nexø and Poland. The underlying market at the current time is not large enough on either side (Bornholm or Poland) to support a year-round route. Furthermore, the development of the infrastructure in Poland means that north-south traffic corridors towards Gdansk and Sassnitz in Germany will be strengthened significantly. The harbour in Kolobrzeg in particular will thus become very isolated with a limited local surrounding market. Traffic between Poland and Bornholm is marked by one-day passenger traffic in the absolute peak season (July and August) when tourists flock to the Polish Baltic Coast. Outside of this peak season, only the shipping revenue can support the route, and the conversations with Bornholm s business world indicate an insufficient level of shipping traffic. It should also be noted that the Polish harbours are relatively small and significantly limit the size of the ferry that can be used. Thus, it would not be possible to operate with a ferry that is more than 80 metres long and about 13 metres wide. Likewise, the harbours infrastructure is not planned to handle large amounts of driving traffic, and therefore problems would quickly arise with regards to traffic especially in a harbour like Kolobrzeg. On the other hand, the analysis shows that the installation of a high speed passenger ferry in the high season would be able to generate a result close to break-even. To achieve this result, the ferry must serve the routes Kolobrzeg-Nexø and Nexø-Ustka. This allows access to a significant expansion of the current market potential, making it easier to attract the approx 75,000 passengers necessary for the route to turn a profit. An important requirement for the success of the route will be a close cooperation with a Polish partner. This will provide the necessary market knowledge and also make it possible to utilise existing facilities and expertise, thereby keeping costs at a minimum. A high speed passenger ferry would also require far fewer changes in the infrastructure, meaning fewer investments in harbour logistics in the chosen harbours, as this type of ferry can basically sail using the existing facilities. A possible development strategy for the route could be to enter into a cooperation with a Polish partner as soon as possible, and then begin a more effective market preparation on the Polish market, i.e. a focused campaign to increase the number of passengers to a level where it would be natural to increase the capacity and service levels with a high speed passenger ferry, which would reduce the sailing time to about three hours. As the awareness and passenger totals increase, it will also be possible to choose the right time for the financial venture of investing up to DKK 20 million in a high speed passenger ferry. Like all other markets, the Polish market will develop with increased prosperity and the need for shorter holiday periods will also increase. These factors will be beneficial for a ferry concept that offers comfortable and quick transport from Poland to Bornholm, and can therefore eventually form a stable and sustainable basis for a passenger-based ferry route. Assignment Background Market information Tonnage/Concept Economy Summary Page 16