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Logistics Cities World Forum

Logistics Cities World Forum. Michael Proffitt Laredo 29 th May 2013. AGENDA. Introduction Overview Share Personal Experiences: - Dubai Logistics City - India Key Learnings. FIRST OPTION. “Build it and they will come”. SECOND OPTION. UNDERSTAND YOUR MARKET.

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Logistics Cities World Forum

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  1. Logistics Cities World Forum Michael Proffitt Laredo 29th May 2013

  2. AGENDA • Introduction • Overview • Share Personal Experiences: - Dubai Logistics City - India • Key Learnings

  3. FIRST OPTION

  4. “Build it and they will come”

  5. SECOND OPTION

  6. UNDERSTAND YOUR MARKET

  7. Procurement Supply Management Demand Planning Sales Data BuildPlan Distribution Component Suppliers Manufacturers Customers Supply Chains – Visual Representation

  8. Key Supply Chain Issues - Summary • Forecasting • Extended supply chains • Environmental issues • Collaboration • Visibility through the Supply Chain • Customs • Corruption • Security / Risk • Infrastructure

  9. Complexity of Developments • Logistics Clusters • Logistics Parks • Logistics Villages • Logistic Cities

  10. Why Develop? • Support Ports and Airports • Enable Efficient Transit Movement • Enable Efficient National Distribution • Provide Stockholding Opportunities • Allow Value Added Services to be Performed • Support Reverse Logistics

  11. Key Parties Involved in Developments Users/ Customers Governments Developers Investors

  12. What is Required? • Adequate Road Network – inside the zone and outside • Proximity to Railways • IT Infrastructure • Adequate Power • Container Park and Support Services • Truck Facilities • Commercial Support Facilities • Over-Dimensional Cargo Areas • Warehouses • People

  13. Game Changer Articulate Value Proposition

  14. The 4P’s/SAVE PRODUCT/ SOLUTION PLACE/ ACCESS MARKETING MIX PROMOTION/ EDUCATION PRICE/ VALUE

  15. 6P’s/SAVE PUBLIC OPINION PLACE/ ACCESS PRODUCT/ SOLUTION MARKETING MIX PROMOTION/ EDUCATION PRICE/ VALUE POLITICAL AUTHORITY

  16. Dubai – Development of an Airport City and a Logistics City

  17. Images of Dubai

  18. Finance & Banking Tourism Oil & Gas Trade & Logistics Dubai: Sustainable Growth Through Diversification • 2 bn consumers in greater region, and growing • Healthy growth, liberal business environment • Prominent geographical location Create an integrated logistics platform to establish Dubai as the leading hub for the region

  19. A Unique Opportunity • A visionary approach • Thinking long-term • Strengthen Dubai as hub for the greater region • Create the best trading and distribution environment “Build the world’s first truly integrated logistics platform, with all transport modes, logistics and value added services, including manufacturing and assembly, in a single bonded and Free Zone environment.”

  20. Dubai as a Logistics Hub for the Region • 2 Billion consumers • Solid growth rates • The most liberal business environment in the Region • The most professional location for distribution business • Next step into the future: Integrating logistics into a single platform – a quantum leap for logistics

  21. 90.0 82.3 79.3 76.3 80.0 73.2 70.1 67.0 70.0 64.0 60.9 57.7 60.0 54.4 50.8 46.9 50.0 42.9 38.4 40.0 33.7 28.8 30.0 24.8 21.7 18.1 20.0 16.0 13.5 12.3 10.8 9.7 9.1 10.0 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Projected Passenger Growth Dubai International Airport

  22. Dubai – An Excellent Location for Innovative Logistics… For global supply chains As a hub for the region

  23. Jebel Ali Port and Free Zone Dubai World Central International Airport Dubai’s Logistics Platform Dubai Logistics City

  24. Jebel Ali Port and Free Zone • 14 m. TEU in 2012 • #8 world-wide • Area of 100+ square kilometers • 100,000+ tons sea-air via DXB • 7,000+ companies in JAFZA

  25. Jebel Ali – Terminal Expansion • Demand-led investment, able to cater for Suezmax + vessels (12,000 TEUs) • Adjacent to Terminal 1 and, therefore, the Free Zone also • Maintain leading position in customer service having the most advanced infrastructure and superstructure • Extension of existing Terminal 1, with total additional capacity of 5m TEUs • Phase 1 will consist of 1.6km of quay, 4 berths, 17m depth alongside, 2.0m TEUs capacity • Phase 2 will consist of additional 1km of quay, 3 berths, 17m depth alongside, 3.0m TEUs capacity • Estimated Phase 1 operational commencement: July 2007 Future Possibilities Terminal 2

  26. Dubai: Integrated Logistics and Freedom for Business FREE ZONE: • No customs duties • No taxes • Liberal visa policy • Free capital transfer • 100% ownership • Logistics know-how • Quality labor at competitive cost • Abundant space Integrated Logistics- Platform

  27. Jebel Ali Port and Free Zone Dubai World Central International Airport Linking DLC and JAFZA Main road Port – DLC (bonded, within Free Zone) Dubai Logistics City

  28. Dubai Logistics City

  29. Dubai Logistics City Master Plan

  30. India – Infrastructure Game Changer

  31. OVERVIEW OF THE INDIAN ECONOMY • India has experienced a consistent GDP growth of over 6% in the last decade, • and a 7% growth in 2011 (India’s Central Statistical Organization) • India has been one of the 10 fastest-growing economies in the world in the last • two decades • Domestic consumption is the largest contributor to the GDP (58% in FY’11) • Foreign exchange reserves totals over US$ 250 billion (as of Dec’11) • India ranks 26th in terms of world exporters, contributing over 1.3% of globally • consumed merchandise, with exports growing at a rate of 22% • India ranks 17th in terms of world importers, consuming over 2% of globally • produced merchandise, with a consumption rate growing at 35% (WTO) • India’s urbanization rate is the fastest growing in the world. By 2030, over 40% of • India’s population will be living in urban areas (U.N. Population Fund)

  32. GROWING CONSUMERISM & EVOLVING MIDDLE CLASS • By 2025, India will have a middle class population of 583 million people, becoming the • world’s 5th largest consumer market (McKinsey Global Institute) • Consumption in India will grow in real terms from US$ 378 billion presently to US$ 1.56 • trillion by 2025 – a fourfold increase • By 2020, India is projected to have an additional 47 million working population, almost equal • to the total world shortfall, with an average Indian age of 29 • Comparatively, the average population age of other economies at that time will be 37 in • China, 45 in the U.S. & Western Europe and 48 in Japan • 66% of India's 1.1 billion population is currently under the age of 35 & is expected to outpace • China by 2030 • The estimated size of India’s real estate market in terms of total economic value of • development activity is US$ 40-45 billion, representing 5 - 6 % of GDP, growing at 30% p.a • Residential property constitutes almost 75% of the real estate market in India

  33. INDIA’S EMERGING MIDDLE CLASS • 2 out of the top 5 most populous cities in • the world are in India (Mumbai 13 mil & • Delhi 12.56 mil) • Population in major metro cities in India • which exceed 4 million, including the • above, are Bangalore, Chennai, • Hyderabad, Kolkata, Ahmedabad & Pune • Additionally there are 48 agglomerations • with a population of 1 million or more • By 2030, India will have 68 cities with a • population of over 1 million, 13 cities • of over 4 million & 6 megacities of over • 10 million • In 2030, India's largest cities will be • bigger than many major countries in both • population and economic output Ahmedabad Pune Population > 4 million

  34. STRATEGIC POSITIONING Mumbai Singapore

  35. BUT IT’S NOT ALL OPTIMISM ……….

  36. CHALLENGES OF DOING BUSINESS IN INDIA • As per World Bank’s 2010 survey, India is ranked 134th amongst 183 economies in • terms of ‘Ease of Doing Business’, • - It includes variables such as Starting a Business, Registering Property,Paying • Taxes, Trading Across Borders, Enforcing Contracts & Closing a Business • As per the Transparency International's Corruption Perception Index, 2010, India • ranked 87th out of 178 countries in terms of corruption in public & private sector • Delay in legal proceedings & litigations • Lack of implementation & enforcement of intellectual property laws • Inadequate or lack of infrastructure for supporting the fast pace economic growth, • specially in transportation (Road & Rail) and logistics (Ports, Warehousing, • Distribution, Hinterland Connectivity & Domestic Consolidation Hubs) • Complex Tax structure (Direct & Indirect) • Archaic labour & property ownership laws

  37. INDIA’S LOGISTICS REALITIES: Leading to Strategic & Operational in-efficiencies for doing business in India • Logistics cost in India is high – at around 14% of GDP against 8% - 9% in most • developed nations. • On a GDP of USD 1.6 trillion, this represents an absolute value of in-efficiency • (and therefore logistics market potential) of over USD 65 billion • India's level of containerization is less than 25% as against a global average of 60% - 70% • The average time taken to clear import & export cargo at ports is about 19 days in • India against 3 to 4 in Singapore • India's container throughput in CY10 was just over 7.7 million TEU's as compared to • Dubai (12 million), Singapore (24 million) & China (186 million) • India burns nearly US$2.5 billion worth of fuel on account of trucks standing idle on state check-posts • World Bank’s 2010 Logistics Performance Index (LPI) ranks India 47th in terms of logistics • in-efficiency as compared to 130 countries globally – in terms of • - Customs Clearance, Infrastructure, Timelines, Shipments, Logistics Competences, • Tracking & Tracing

  38. Transport Challenges

  39. CAPITALIZING ON INDIA’S LOGISTICS OPPORTUNITY What does it take? • Free Trade Warehousing Zones (FTWZs) • To enable EXIM cargo Consolidation, Value Addition and allowIndia to become a Regional Trading Hub • Domestic Distriparks • For Domestic distribution, cargo value addition and consolidation for Rail transportation to remove dependency on road • Rail Infrastructure Solutions • Comprising of innovative Customized Containers for specific product types, Service Level agreements on timeline and deliver with Key Performance Indicators • State-Of-The-Art Rail Terminalsat strategic locations across India with modern equipment to increase speed of loading/unloading • Integrate Logistics Infrastructure with Global Logistics, Domestic Supply Chain Management, Transport & Handling and IT • Global ocean & air logistics, domestic forward and reverse supply chain management with ownership on reduction of working capital and product visibility & control, through technology

  40. ARSHIYA’S PAN-INDIA INFRASTRUCTURE FOOTPRINT • 5 FTWZs – Rail Connected, Planned Pan-India • Mumbai (Operational since Nov’10), Delhi (Go Live Q2FY’12) followed by Nagpur, Chennai & one in the East • 5 Domestic Distriparks - Planned Pan-India, Complimenting the FTWZ Network • First of the Domestic Distriparks (in Khurja near Delhi) operational by Q2FY’12 • 150 Train Pan-India Rail Operations • Providing unique and customized solutions to marquee customers with long term contracts • Inducted 15 trains since FEB’09 and one of the most profitable Private Container Train Operators (PCTO) • Pan-India Rail Terminal Network complimenting each FTWZ, Domestic Distripark & Rail Operations accelerating cargo distribution through aggregation

  41. INDIA’S FIRST - ARSHIYA’S FTWZ IN MUMBAI • 165 Acre State-of-the-Art facility 24 kms from JNPT Port featuring: • - 24x7 On-Site Custom Clearance House • - State-of-the-Art Infrastructure, Equipment & Facilities • - Connectivity to our Pan-India Rail Network accelerating • distribution through aggregation at strategic locations

  42. MUMBAI FTWZ - JULY 2009

  43. MUMBAI FTWZ - JULY 2009

  44. SAME VIEW – AUGUST 2010

  45. CONTAINER YARD - AUGUST 2009

  46. CONTAINER YARD - SEPTEMBER 2009

  47. CONTAINER YARD - JULY 2010

  48. ARSHIYA’S MUMBAI FTWZ – Warehouse & Main Access Road

  49. ARSHIYA’S MUMBAI FTWZ – Customs Office

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