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BHP Billiton Completed Transport and Logistics Review

President BHP Billiton Transport and Logistics Bruce McGowan today welcomed finalisation of the Company's strategic review of its Transport and Logistics requirements.

Mr McGowan said: "Completion of the review is a major step forward and provides increased certainty for our customers, suppliers and employees. All the major components of BHP Billiton's Transport and Logistics group now know their future in relation to the merged entity."

Several months ahead of schedule, BHP Steel has determined the Transport and Logistics services and capabilities it will incorporate within its business portfolio in order to maximise Steel's competitive advantage ahead of its public listing. Those services include:

  • Land distribution contracts and capabilities in Australia, Malaysia, Thailand and Indonesia.
  • Bulk raw materials handling facilities for its Port Kembla Steelworks operation.

This will result in the transfer of key operating facilities, and about 250 employees globally, from BHP Billiton Transport and Logistics to BHP Steel.

As part of the review, BHP Billiton will also seek to divest several Transport and Logistics businesses that continue to perform well, but no longer strategically fit the future plans for either BHP Billiton or Steel.

BHP Billiton will begin seeking expressions of interest, with the aim of divesting the following businesses:

  • Australian portside breakbulk stevedoring operations in Port Kembla, Whyalla, Western Port and Bell Bay, operated by subsidiary BHP Stevedoring Pty Ltd.
  • Stevedoring and warehousing operations of BHP Transport (New Zealand) Ltd in Tauranga, Napier and Lyttelton.
  • Darwin Offshore Supply Base, which delivers a wide range of supplies to participants in the offshore oil industry in the region.
  • International Marine Transport Lines, which operates breakbulk liner shipping services between Australia, New Zealand, west coast USA and Canada.

Mr McGowan said: "BHP Billiton recognises it is no longer the best owner of a break-bulk and port operations business. These are excellent businesses that will achieve their full potential under more suitable ownership," he said.

"A more suitable owner in each case will ensure a dynamic, competitive provider with the opportunity to grow and reinvest to the ongoing benefit of its customers and employees.

"We are absolutely committed to ensuring all our existing customers in BHP Steel, and in the external market, continue to receive the level of service and support they need to meet their business objectives." As announced in July, BHP Billiton is retaining a specialised Transport and Logistics capability closely integrated with its Hague-based marketing function. The group's key role is Sea Freight Management, supported by a Melbourne-based team focusing on Marine Services, Handysize Chartering and Logistics Solutions.

In addition, the planned ship management partnership between BHP Billiton and Teekay Shipping is underway, together with divestment of BHP Billiton's Marine Fuels operations in Port Kembla and Gladstone.

BHP Billiton management will be working closely with employees and customers throughout the implementation of the divestment and transfer processes.