Presentation December , 2011 Turkey

1. By MCA Djibouti PresentationDecember , 2011Turkey East Africa Regional Border Industrial Zone Economic Development

2. Introduction to the Opportunity • Grow cross-border trade and increase the demand for trade services supported by both the public and private sector; • Develop the human capital to design, guide and operate a 21st Century global supply chain hub by providing education and training to build a world class workforce; • Advocate for policy changes at the local, federal and state levels to provide business incentives, improve the region’s transportation infrastructure, and support smooth operation while assuring border security; • Develop a research agenda and clearinghouse for related research to assist companies and policy makers; and • Increase the number of jobs in the sector.

3. Opportunity Assessment Key Activities • Identification and design of forward thinking innovative features of the industrial supply chain hub to become differentiated as a world class hub; • Economic analysis to assess the economic multiplier impact for job creation; • Rationalization of opportunity of the supply chain management hub concept; and • Documentation of the appropriate products and industries and critical success factors for the regional supply chain hub.

4. Industrial Supply Chain Strategy • Building on the unique characteristics, identify the industries that we can focus infrastructure, regulation, policy, and communication resources to attract firms that can use a industrial supply chain hub or interchange for East Africa. • The industrial supply chain hub is, in reality, a collection of industrial supply chain facilities or mini-hubs: • Air freight to motor freight • Rail freight to motor freight • Value added services

5. Industrial Supply Chain Strategy • The Strategy involves multiple areas: • Build differentiated industrial supply chain hub(s) which will stimulate economic growth and job creation • Attract industries to the supply chain hub • Industries with a heavy manufacturing focus • Industries with a light manufacturing focus • Industries with a distribution and value added services focus • Facilitate development of hub with private/public sector partnership • The Strategy Elements (design dimensions) outline the necessary and the differentiated capabilities of the Strategy

6. Strategy Elements • Ability to serve global markets • Infrastructure and support capabilities • Government regulations • Competitive tax climate • Availability of human, land, supplier, and financial capital • Economic competitiveness and lowest total cost to serve • Supply chain sustainability • Collaboration and partnership

7. SCM Strategy Elements • Ability to serve global markets • Djibouti – Ethiopia – S. Sudan trade corridor • International transport links • Access to ports • Customs house, forwarding, and related services • Foreign trade zone facilities

8. Strategy Elements • Ability to serve regional and global markets • Infrastructure and support capabilities in Djibouti • Airport capabilities • Interstate highways • Railroad network • Intermodal transportation capacity • Distribution facilities

9. Infrastructure and support capabilities 1 of 2

10. Infrastructure and support capabilities 2 of 2

11. Strategy Elements • Ability to serve regional and global markets • Infrastructure and support capabilities • Government regulations • Higher weight limits • Carrier permitting process

12. Government regulations

13. Availability of human, land, supplier, and financial capital 2 of 2

14. Economic competitiveness and lowest total cost to serve

15. Supply chain sustainability

16. Collaboration and partnership

17. Synthesis of Strengths and Weaknesses of Strategy Elements • Strengths • Good potential for cross-border distribution hub away from congestion of Djibouti – Ethiopia – S. Sudan • Good potential for trans-loading heavy imports • Good airport and highway infrastructure with limited congestion • While wage rates are high, skilled management and labor talent is readily available • Land and facilities readily available • Relatively inexpensive outbound motor carrier capacity • Weaknesses • Infrastructure barriers and custom processes, particularly at border • Current industry sectors in recession • Poor perception of current capabilities • Lack of public/private partnership authority • Absence of regional government authority to coordinate and promote supply chain initiatives

18. Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential

19. Economic Model: Industry Sectors 31 Water transportation 32 Truck transportation 33 Transit and ground passenger transportation* 34 Pipeline transportation 35 Other transportation and support activities* 36 Warehousing and storage 37 Publishing including software 38 Motion picture and sound recording industries 39 Broadcasting and telecommunications 40 Information and data processing services 41 Fed. Reserve banks, credit intermed. & related svcs 42 Securities, commodity contracts, investments 43 Insurance carriers and related activities 44 Funds, trusts, and other financial vehicles 45 Real estate 46 Rental, leasing svcs. & lessors of intangible assets 47 Professional, scientific, and technical services 48 Management of companies and enterprises 49 Administrative and support services 50 Waste management and remediation services 51 Educational services 52 Ambulatory health care services 53 Hospitals and nursing and residential care facilities 54 Social assistance 55 Performing arts, museums, and related activities 56 Amusements, gambling, and recreation 57 Accommodation 58 Food services and drinking places 59 Other services* 60 Households 1 Crop and animal production 2 Forestry, fishing, and related activities 3 Oil and gas extraction 4 Mining, except oil and gas 5 Support activities for mining 6 Utilities* 7 Construction 8 Wood product mfg. 9 Nonmetallic mineral product mfg. 10 Primary metal mfg. 11 Fabricated metal product mfg. 12 Machinery mfg. 13 Computer and electronic product mfg. 14 Electrical equipment and appliance mfg. 15 Motor vehicle, body, trailer, and parts mfg. 16 Other transportation equipment mfg. 17 Furniture and related product mfg. 18 Miscellaneous mfg. 19 Food, beverage, and tobacco product mfg. 20 Textile and textile product mills 21 Apparel, leather, and allied product mfg. 22 Paper mfg. 23 Printing and related support activities 24 Petroleum and coal products mfg. 25 Chemical mfg. 26 Plastics and rubber products mfg. 27 Wholesale trade 28 Retail trade 29 Air transportation 30 Rail transportation

20. Target Industries • Transportation & logistics • Alternative energy • Aerospace • Medical devices • Regional Security and Defense • Advanced Manufacturing

21. Target Industries Alternative Energy Automotive Engineering Life Sciences Security and Defense Advanced Manufacturing Agro Industry

22. Target Industries: Synthesized from Workshop Two • Automotive Renewal • Alternative energy • Battery technology • Bio fuels • Wind • Solar panels • Beverage and alcohol distribution • Carbon fiber manufacturing • Chemical processing • Defense • Electronics - industrial • Food processing • Medical technologies • Retail importing and value add • Water technologies • Waste Management

23. Target Industries: Cluster Descriptors • HEAVY: Heavy Manufacturing and industrial cluster attracted to hub for resource efficiency and differentiation • Automotive renewal • Alternative energy • Carbon fiber manufacturing • Chemical processing • Defense • Electronics – industrial • LIGHT: Light Manufacturing and industrial cluster attracted to hub for resource efficiency and differentiation • Food processing • Medical technologies • Water technologies • DISTRIBUTION: Warehousing and consumer based industry attracted to hub market location for distribution and value added services • Beverage and alcohol distribution • Retail importing and value add • Waste management

24. Industrial Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential Economic and Job Creation Impact

25. Economic Activity • Activities involve multiple areas: • Build differentiated supply chain hub (s) which will stimulate economic growth and job creation • Attract industries to the supply chain hub • Industries with a heavy manufacturing focus • Industries with a light manufacturing focus • Industries with a distribution and value added services focus • Facilitate development of hub with private/public sector partnership • Air freight to motor freight • Rail freight to motor freight • Value added services

26. Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential Economic and Job Creation Impact Economic Development

27. Presentation Outline Project Background Project Objectives and Workshop Deliverables SCM Strategy, Targeted Industries, and Economic Impact Economic Development Policies and Collaboration and Communications Recommendations and Next Steps

28. Enabling Economic Development • Global markets • Infrastructure • Regulations • Tax climate • Capital availability • Economic competitiveness • Supply chain sustainability • Collaboration strategy elements Targeted industries Economic development Job creation Industry Value Proposition • Heavy manufacturing • Light manufacturing • Distribution

29. Enabling Economic Development Policy refinements Economic development Job creation Industry Value Proposition strategy elements Targeted industries

30. Enabling Economic Development Policy refinements Economic development Job creation strategy elements Targeted industries Industry Value Proposition Collaboration and communications

31. Enabling Economic Development: Policy Refinements Policy refinements Economic development Job creation SCM strategy elements Targeted industries Industry Value Proposition

32. Policies to Enable Economic Development • Ability to serve regional and global markets • Infrastructure and support capabilities • Streamlined government environment • Competitive tax climate • Availability of human, land, supplier, and financial capital • Economic competitiveness and lowest total cost to serve • Supply chain sustainability

33. Policies to Enable Economic Development Ability to serve global markets Infrastructure and support capabilities Create development incentives associated with transportation assets Tie economic development and site location to transportation assets Allow private investment in transport infrastructure Coordinate between all modes of transportation

34. Policies to Enable Economic Development Ability to serve regional and global markets Infrastructure and support capabilities Streamlined government environment Incentivize use of brownfield properties for transportation and distribution “One stop permitting” Neutral entity to implement and drive logistics

35. Enabling Economic Development:Collaboration and Communications Policy refinements Economic development Job creation strategy elements Targeted industries Industry Value Proposition Collaboration and communications