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THE GREAT INDIAN LOGISTICS OPPORTUNITY . FTWZs | Rail and Rail Infrastructure | Industrial and Distribution Hubs Forwarding | Supply Chain Technology & Management | Transport & Handling. INDIA’S GROWING CONTRIBUTION TO WORLD TRADE. INDIA’S GROWING MERCHANDISE IMPORTS.

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slide1

THE GREAT INDIAN LOGISTICS OPPORTUNITY

FTWZs | RailandRail Infrastructure | Industrial and Distribution Hubs

Forwarding | Supply Chain Technology & Management | Transport & Handling

slide2

INDIA’S GROWING CONTRIBUTION TO WORLD TRADE

INDIA’S GROWING MERCHANDISE IMPORTS

INDIA’S GROWING MERCHANDISE EXPORTS

%

%

%

%

%

%

%

%

%

%

%

%

2008

2008

2009

2009

2010

2010

2007

2007

Export – India’s % contribution to world trade

Import – India’s % contribution to world trade

India’s world ranking in terms of exporting globally consumed merchandise moved from 26 to 20 during the period 2007 to 2010

India’s world ranking in terms of importing globally produced merchandise moved from 18 to 13 during the period 2007 to 2010

%

%

%

% Growth of imports (2007-10)

% Growth of exports (2007-10)

%

slide4

THE OPPORTUNITY OF INDIA

Per capita consumption

Paper (kg)

PV* (per 1000)

Toothpaste (gm)

2005

227

451

500

2%

High

7%

Upper Middle

127

9

12

28%

Middle

62%

Low

Aluminum (kg)

2010

22

% of households across income brackets

4%

High

13%

Upper Middle

35%

Middle

2

49%

Low

2020E

Cement (kg)

Steel (kg)

Copper (kg)

433

206

2.7

10%

High

32%

Upper Middle

176

Low per capita consumption

Demographic drivers

India Opportunity

33%

55

Middle

0.5

19%

Low

Definitions:

High: Above $10k Upper Middle: $5k-$10k

Middle: $2.5k-$5k; Low: Up to $2.5k

*PV: Passenger Vehicles

slide5

THE INDIAN BUSINESS EVOLUTION

1990 ONWARDS

IT ENABLES INDIA

2000 ONWARDS

A VOICE TO THE PEOPLE

2005 ONWARDS

THE ERA OF INFRA

2012 ONWARDS

WHAT’S NEXT?

1970 ONWARDS

KEEPING IT IN THE FAMILY

1980 ONWARDS

INDIA EMBRACES TRADE

GDP growth from 2012 assumed at 6% p.a.

slide6

MAJOR SUCCESSES OF FTWZ –

‘game changer for global economies’

ATTRACTIVENESS OF JAFZA

JAFZA

JAFZA contributes over 26% of Dubai’s GDP and generates 160,000 direct jobs by servicing over 6,400 companies from the zone and contributes to 25% of Dubai Port’s container traffic

SINGAPORE

Singapore FTZ’s has over 7,000 companies operate through these zones. Due to FTZs this island nation has become the gateway to Southeast Asia & a Global Distribution Hub for international companies

EMPLOYMENT IN JAFZA AND TENANT COMPANIES (2006)

WAIGAOQIAO

Waigaoqiao FTZ in Shanghai has over 9,300 companies registered in the zone, including 135 of the Fortune 500 companies. From an economically backward country in 1970 to its gigantic success, FTZs have been the single most critical macroeconomic factor for China’s rise

Source: PWC report for JAFZA FTZ

slide7

INDIA INCOMPETENT AS A REGIONAL HUB

THE BIG THREE REASONS AS TO‘WHY FTWZ’ FOR INDIA

4.1X

(source: Mckinsey Report)

  • While Consumption in India will grow in real terms from USD 378 billion presently to USD 1.56 trillion by 2025 a fourfold increase, reality is that :
    • India ranks 13th in terms of importing world products, consuming just over 2% of globally produced merchandise, but growing @ 35%
  • While 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 fuelling our ability to become a manufacturing mecca of the world, reality is that:
    • India ranks 20th as per WTO in terms of exporting world products contributing just over 1.4% of globally consumed merchandise, but growing @ 31%
  • India's container throughput in CY10 was around 9 million TEU's, as compared to Dubai (12 million), Singapore (28 million) & China (163 million)
    • Indicating zero penetration to the Value Addition, Hubbing and Re-Export market leveraging our cost and skill arbitrage
slide8

BUSINESS POTENTIAL FOR INDIA

To/From

Singapore

Consolidation / De-consolidation cargo business constitutes approximately USD 12.47 billion to the GDP and 19.2 million TEUs

  • 30% of this potential translates to USD 3.74 billion to the GDP and 5.76 million TEUs for INDIA

To/From

Dubai

  • Consolidation/ De-consolidation constitutes approximately USD 12.08 billion to the GDP and 6 million TEUs
  • 30% of this potential translates to USD 3.62 billion to the GDP and 1.8 million TEUs for INDIA

Thus, if India realizes 30% of Dubai’s & Singapore’s cargo volumes it will translate to an additional USD 7.36 billion (INR 36,000 crores) as a direct contribution to India’s GDP & increase container volumes at Indian ports by 7.56 million TEUs

The extended potential will also generate three times additional indirect revenues due to increased supporting activities and will contribute USD 22 billion (INR 110,000 crores) to India’s GDP

slide9

ABOUT FREE TRADE & WAREHOUSING ZONES (FTWZ)

WHAT IS IT ?

  • GOI Introduces the Free Trade & Warehousing Zones Policy, as part of Foreign Trade Policy (FTP) 2004-2009 Governed by the SEZ ACT,2005 & SEZ Rules,2006 Warehousing zone designated as foreign territory within India

WHAT IS IT INTENDED FOR?

  • To make India into a global trading hub like China, Dubai and Singapore

ACTIVITIES ALLOWED WITHIN AN FTWZ

Storage

Handling

Transportation

Packing

Documentation

Labeling

Crating

Strapping

Washing

Bottling

Bubble

wrapping

Tagging

Painting

Cutting

Bagging

Palletization

Quality

Assurance

Consolidation

Repairs & Maintenance

Cartonization

Refurbishment

slide10

BARRIERS TO ENTRY FOR DEVELOPING & OPERATING FTWZs IN INDIA

ENTRY BARRIERS

BUSINESS SCALABILITY BARRIERS

LAND

APPROVALS

RULES

EXPERTISE

SERVICE CAPABILITY

Min 100 Acres contiguous land with 100,000 SqM

built up area at strategic locations

Approvals from State & Central Govt(Informal & Formal Approval, Notification)

FTWZ in a sector specific SEZ cannot cater to any unit outside the sector specific SEZ

Expertise in developing & operating FTWZs and in logistics & supply chain activities

Integrating hard and soft logistics infrastructure to be able to service clients pan-India

Offering ‘one throat to catch’ end-to-end unified logistics & supply chain services to global customers

slide11

INDIA’S FIRST – ARSHIYA’S FTWZ NEAR JNPT (OPERATIONAL)

  • MUMBAI
  • FTWZ
  • MASTER PLAN

165 Acre State-of-Art Facility 24km from JNPT Port featuring:

  • 24x7 On-Site Custom Clearance House
  • State-of-the-Art Infrastructure with World class Safety, Equipment & Maintenance Facilities
  • Connectivity to our Pan-India Rail Network accelerating distribution through aggregation at strategic locations
  • State-of-the-art ICD/CFS facility with superior Safety and Hazardous cargo handling capacity of 10,000+ containers including reefers
slide12

FTWZ – BENEFITS TO CUSTOMERS

FOR IMPORTS

FOR RE-EXPORTS

FOR EXPORTS

  • Flexibility towards end-distribution in India
  • Duty deferment benefits (freeing up working capital)
  • Quality control capability prior to duty- payment
  • Exemption on SAD, VAT & CST on imports through FTWZ
  • Hassle-free re-export regulatory / duty implications
  • Reduced buffer stocks
  • Service Tax exemption on services availed; including transportation inside India
  • Lowered product costs
  • Foreign exchange transaction capability
  • Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers
  • Local Tax Exemption (eg. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ
  • Export quotas able to be met for companies exporting into FTWZ
  • Increased efficiency through lowered reverse logistics through quality control before dispatch from India
  • Foreign exchange transaction capability
  • Increasing supply chain efficiencies (forward & reverse) while enhancing capital cash flow
  • Service tax exemption on all activities conducted inside the FTWZ including rental & labour
  • Exemption from custom and stamp duty on products imported into FTWZ; meant for re-export out of India
  • Income tax exemption on profit where applicable
  • Hassle-free re-export process
  • Permission of 100% FDI for the set-up of units by the unit holder of the FTWZ
  • Ability to leverage India’s cost, skill & geographic positioning advantage as a hub for regional/global distribution post value optimizing activities
slide13

FTWZ - UNIQUE BENEFITS FOR IMPORTS

  • Flexibility towards end distribution in India
  • Duty deferment benefits (freeing up working capital & increasing sales )
  • Quality control capability prior to duty- payment
  • Exemption on SAD, VAT & CST on imports through FTWZ
  • Hassle-free re-export regulatory /duty implications
  • Reduced buffer stocks
  • Service Tax exemption on services availed; including transportation inside India
  • Lowered product costs
  • Foreign exchange transaction capability
slide14

GAME CHANGER BENEFITS OF FTWZ

CASE STUDY

BENEFITS OF IMPORTING PRODUCTS INTO INDIA THROUGH THE FTWZ

(DEEMED FOREIGN TERRITORY)

slide15

GLOBAL AUTOMOBILE MANUFACTURER’S CURRENT SUPPLY CHAIN

International Suppliers

Rejection after duty payment

Supply of spares and parts to Dealers in India for after sales and service

Dealers in India

Dealers in India

Dealers in India

Dealers in India

Dealers in India

International Suppliers

Indian

Ports

International Suppliers

India Manufacturing Plant

International Suppliers

Storage of Spares, Parts and Components for after sales & service post duty payment

Rejection after duty payment

International Suppliers

  • Duty paid storage of spares implicating higher working capital of the supply chain implicating higher cost of product
  • Limitations in volume of storage increasing lead time for customer delivery
  • Higher lead time for client delivery creating customers dissatisfaction (unauthorised spares in the market)
  • Quality control post duty payment increasing hassle for re-export and therefore cost
slide16

ARSHIYA’S SOLUTION THROUGH FTWZ

International Suppliers

Rejection without duty payment

Storage of Spares, Parts and Components for after sales & service without duty payment

Dealers in India

Dealers in India

International Suppliers

International Suppliers

International Dealers

International Dealers

International Dealers

FTWZ

International Suppliers

Regional distribution of spares and parts enabling the income tax exemption on the re-export of imported spares and parts

International Suppliers

Rejection without duty payment

  • Duty deferred storage reducing working capital and therefore cost of product
  • Reduction in lead time in supplying the spares for after sales and limitless capability of spares storage
  • Quality control before duty payment enabling hassle free re-export process and therefore lowering
  • of associated supply chain costs
  • Regional Distribution capability leveraging cost/skill arbitrage of India in addition to Income tax exemption
  • of profits from this activity
slide17

FTWZ - UNIQUE BENEFITS FOR EXPORTS

Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ

Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers

Export quotas able to be met for companies exporting into FTWZ

Increased efficiency through lowered reverse logistics through quality control before dispatch from India

Foreign exchange transactions capability

  • Increasing supply chain efficiencies (forward & reverse) while enhancing capital cash flow
slide18

GAME CHANGER BENEFITS OF FTWZ

CASE STUDY

BENEFITS OF EXPORTING PRODUCTS INTO INDIA THROUGH THE FTWZ

(DEEMED FOREIGN TERRITORY)

slide19

GLOBAL FMCG MAJOR’S CURRENT SUPPLY CHAIN

Reverse logistics of rejected materials

Breaking and re-invoicing of units as per different store demands is conducted before dispatches to the stores.

Supplier 1

Store

1

Store

173

Store

2

Supplier 2

Various

Ports across India

DC in Europe

For value

addition

All the SKUs are sent by the suppliers directly to DC in Europe by suppliers

Supplier 93

93 suppliers from India , Karachi(18) Bangladesh(15), & Sri Lanka (4)

  • Distribution Center (DC) in Europe maintained only due to invoicing regulatory limitations where consolidations of products sourced from India is done
  • Increased supply chain cycle lead time and associated costs
  • Company’s India trading arm responsible for any under/over invoicing or customs issues with respect to shipments of suppliers without having any control over process
  • Quality control currently in European DC causing higher product returns
  • European DC doing labeling for products made in India/Asian sub-continent
slide20

ARSHIYA’S SOLUTION THROUGH FTWZ

Supplier 1

Supplier 2

Store

173

Store

2

Store

1

Supplier 93

Supplier

in Pakistan

FTWZ

DC in FTWZ for

Value addition

Supplier in Bangladesh & Sri Lanka

  • FTWZ removes regulatory limitations of consolidating product from suppliers in India, Sri Lanka, Bangladesh & Pakistan in Asia
  • Significant reduction in DC operations costs of India Vs. Europe
  • Value addition for end-distribution to world-wide stores done in FTWZ in India lowering costs.
  • Reduction in suppliers working capital due to faster payment cycle
  • Lowered reverse logistics cost
  • Enhanced control and efficiency in inventory management - closer to the suppliers
slide21

FTWZ - UNIQUE BENEFITS FOR RE-EXPORTS

Exemption from custom and stamp duty on products imported into FTWZ; meant for re-export out of India

Income tax exemption on profit where applicable

Service tax exemption on all activities conducted inside the FTWZ including rental & labour

Hassle-free re-export process

Permission of 100% FDI for the set-up of units by the unit holder of the FTWZ

  • Ability to leverage India’s cost, skill & geographic positioning advantage as a hub for regional/global distribution post Value Addition activities
slide22

GAME CHANGER BENEFITS OF FTWZ

CASE STUDY

BENEFITS OF HUBBING & VALUE ADDITION OF PRODUCTS IN INDIA THROUGH THE FTWZ

(DEEMED FOREIGN TERRITORY)

slide23

GLOBAL MOBILE MANUFACTURER’S CURRENT SUPPLY CHAIN

Supply of Charger, Earphone and packaging material

Supply of completely packaged mobile phones

Indian Subcontinent

CHINA

Middle East

Supply of battery

USA

Far East Asia

Supply of handset

South East Asia

Regional Value Addition,

Hubbing & Distribution

Centre in

Singapore/Dubai

GERMANY

Africa/Eastern Europe

VOS like Labelling, packaging, assembly and consolidation based on the country of export

  • Higher cost of operations in Singapore i.e. Labour, Water, Electricity, Materials etc.
  • Higher charges for Value Optimising Services (VOS) like labeling, packaging, assembly etc. Increasing cost of product
  • Technically skilled manpower expensive and not abundant
  • Cost of economies of scale
slide24

ARSHIYA’S SOLUTION THROUGH FTWZ

Supply of Charger, Earphone and packaging material

Supply of completely packaged mobile phones

Indian Subcontinent

CHINA

Middle East

Supply of battery

USA

Far East Asia

Supply of handset

South East Asia

FTWZ

GERMANY

VOS like Labelling, packaging, assembly and consolidation based on the country of export

Africa/Eastern Europe

  • Lower cost of operations in India i.e. Labour, Water, Electricity, Material etc.
  • Minimum charges for Value Optimising Services (VOS) like kitting, labeling, packaging, assembly etc. decreasing cost of product
  • Local tax exemptions (Excise, VAT etc.) on all the value added service inside FTWZ
  • Abundance of technically skilled manpower
slide25

ARSHIYA’S MUMBAI FTWZ

Main Gate

Custom office Entry

Customs Office

Warehouse External View

Container Yard

Stuffing at Container Yard

Cargo storage inside Warehouse

Docking Area

Docking Area

slide27

ARSHIYA MUMBAI FTWZ : SNAPSHOTS

Warehouse Internal View

Temp. Controlled Area

VOS Area

Marshalling Area

Server Room

Electrical Sub-Station

Generators for Power Backup

CCTV Cameras

Security System at Warehouse

slide28

FTWZ WORLD CLASS INFRASTRUCTURE:

WAREHOUSES AND YARDS

  • World-class Warehouses of 13 M height with G+6 palletized racking system, super-flat flooring & state-of-the-art Material Handling Equipments (MHEs)
  • Dedicated & customized Office space & area for Value Optimizing Services (VOS) within the Warehouse
  • Mezzanine storage area with temperature controlled HVAC system & optional humidity control
  • Container Yard (CY) with Pavement Quality Concrete (PQC) flooring for stacking containers in a G+5 stacking system using state-of-the-art Rubber Tyre Gantry Cranes (RTGCs) & Reach Stackers
  • Maintenance & Repair (M&R) Yard, Scrap Yard & an Empty Container Yard, Food court, Medical dispensary with Ambulance at site
  • Open & covered Over Dimensional Cargo (ODC) Yard with Paver-Block flooring for storage of cargo that cannot be stored in the Warehouse
slide29

FTWZ WORLD CLASS INFRASTRUCTURE

  • Business Ancillary Services: On-site Office spaces, Banks, Insurance, Currency Exchanges & CHAs that reduce operating costs for companies operating in the Foreign Territory
  • Fire & Safety Amenities: Primary & Secondary fire fighting systems along with Tertiary Fire Engine at FTWZ site with trained Fire Fighting Professionals. Personnel having expertise & certification in handling DG Cargo
  • Secure IT Connectivity: Comprehensive IT system with network infrastructure such as server room within each warehouse & a centralized data center with uninterrupted data, voice & video connectivity & 100% back up
  • Supporting Infrastructure: Weigh bridge, road network with up to 6 lanes to avoid congestion, Fuel Station in the processing zone, uninterrupted water & power supply systems & 100% power back-up using DG Sets
  • Earthquake Resistant & Storm Water Drainage System: Warehouses designed as per Seismic Zone 4 requirements. In addition the FTWZ has a capacity to handle rainfall with peak intensity of 156 mm/ hour or 10 cubic m per sec, i.e. 3 times the highest recorded level of rainfall in Mumbai.
  • Corporate Social Responsibility: Ambulance and Fire Tender to service not only Arshiya’s FTWZ but also the residents of the neighboring area
slide30

FTWZ – THERE’S A WAY TO SUSTAINABILITY

At Arshiya, we believe there is a way to contribute to the environment, play a pertinent sustainable role through varied eco friendly and environment effective measures. Here’s a look at few :

STP: By way of a sewage treatment plant, recycled water is used for irrigation purposes

Reutilization of excavated rocks: Excavated rocks are used for project construction thereby conserving resources

Green Zone: At Arshiya we ensure that more than 10% of the project area is covered under green zone along with specific selection of plant species

Natural Lighting & Insulation: Optimum, natural sunlight presence along with provision for ambient temperature at the FTWZ Site via articulate architecture planning/construction ensures optimal electricity consumption and ensures harmony at workplace

Rain Water Harvesting: Bore wells, recharge pits and natural ponds provide for maintenance of ground water level

Environmental Consciousness: At Arshiya it is our constant effort to emit no Industrial effluents and contribute towards maintaining sanctity of the environment through Waste Disposal Units

slide32

FACILITIES IN THE FTWZ

  • STANDARD WAREHOUSE

ODC YARD (OPEN & COVERED)

  • CONTAINER YARD (CFS)
  • CHILLER/FREEZER

HAZARDOUS STORAGE

  • TEMPERATURE CONTROLLED STORAGE

STRONG ROOM

OFFICE INFRASTRUCTURE

slide33

VALUE OPTIMISING SERVICES (VOS) IN FTWZ

VOS ON PALLETS /

BREAK-BULK OF PALLETS

HIGH END VOS

VOS ON CONTAINER

  • Carting & Shifting of the Pallets
  • Palletization
  • Carbonization
  • Strapping
  • Shrink Wrapping
  • Packaging / Re-packaging (into smaller parcels/cases /cartons)
  • Labeling / Re-Labeling
  • Bar-Coding
  • Strapping, refurbishment
  • Tagging, shrink / stretch / bubble wrapping etc.
  • Customs Documentation
  • Incoming & Outgoing Transportation (Port to FTWZ & return)
  • Gate Coordination (incoming & outgoing)
  • Survey of Cargo/Containers
  • (incoming & outgoing)
  • Handling / Loading & Unloading (inbound & outbound)
  • Weighment of Containers
  • Fumigation of Containers
  • Scanning of Containers
  • Lashing / Unlashing Services etc.
  • Quality Control (QC)
  • Sorting / Assorting
  • Kitting / De-kitting
  • Bottling/ Blending
  • Assembling
  • Cutting & Threading
  • Consolidation
  • Agglomeration
  • Repairs & Maintenance
  • CKD/ SKD assembly
  • Cutting/ Polishing
  • Painting/ Coating
  • Filming/ Re-sizing
  • Splitting
  • Threading
  • Coupling, etc.
slide34

HOW DO WE CHARGE OUR CUSTOMERS

  • Understanding of client’s business model and Pain areas

Creating consolidated business proposal specific to client’s business model with one price inclusive of all elements like Transportation to and from FTWZ, Storage, VOS etc..

Pricing strategy based on client’s VOS scope and throughput

  • Also based on client’s industry standard pricing practices e.g.,
    • For Steel Industry: Per ton basis
    • For Wine Industry: Per case/piece basis
    • For Large Importers and Exporters: Per Container Basis (Movement from Port to FTWZ and back including storage and all other services)
slide35

MAJOR INTERNATIONAL CUSTOMERS

All above logos are property of respective owners

slide36

MAJOR INDIAN CUSTOMERS

All above logos are property of respective owners

slide37

3PL CUSTOMERS

All above logos are property of respective owners

slide38

REVENUE MODEL OF AN FTWZ CLIENT

Per Piece Rate – INR 6.99

34% reduction on current cost for customer

slide40

SOURCES OF REVENUE THROUGH THE FTWZ

THROUGHPUT

FORWARDING

RAIL & RAIL INFRASTRUCTURE

INDUSTRIAL & DISTRIBUTION HUBS

REVENUE FROM UNIFIED SUPPLY CHAIN INFRASTRUCTURE SOLUTIONS

REVENUE FROM VALUE OPTIMISING SERVICES (VOS) ON CONTAINERS AND PALLETS

VOS ON CONTAINER

VOS ON PALLETS

SUPPLY CHAIN TECHNOLOGY & MANAGEMENT

REVENUE FROM RENTALS OF WAREHOUSE, CHILLER/FREEZER, CONTAINER &ODC YARD, OFFICE SPACE

RENTAL

HIGHER END VOS

TRANSPORT & HANDLING

slide41

INDIAN LOGISTICS IN-EFFICIENCIES

LOGISTICS SPEND AS A % OF GDP

INEFFICIENCIES IN LOGISTICS IN INDIA

  • Absolute Value inefficiency & market potential of USD 80 Billionon USD1.6 Trillion GDP owing to excess spending on Logistics
  • India burns nearly USD 2.5 Billion of fuel due to trucks idling on interstate check-posts
  • Avg time to clear cargo at ports in Singapore is 3-4 days vs 19 daysat ports in India

% OF CONTAINERIZATION OF TRADE

SHARE OF ROAD VS RAIL TRANSPORT

An Economies of Scale problem requires an Economies of Scale solution

slide42

CAPITALIZING ON INDIA’S LOGISTICS & SUPPLY CHAIN OPPORTUNITY - WHAT DOES IT TAKE?

  • Free Trade & Warehousing Zones (FTWZs) :
  • To enable EXIM cargo Consolidation, Value Addition and allow India to become a Regional Trading Hub
  • Industrial and Distribution Hubs:
  • For Domestic distribution, cargo value addition and consolidation for Rail transportation to remove dependency on road
  • Rail and Rail Infrastructure:
    • Comprises innovative Customized Containers for specific product types, Service Level agreements on timeline and deliver with Key Performance Indicators
    • State-Of-The-Art Rail Terminals, at strategic locations across India with modern equipment to increase speed of loading/unloading and churn
  • Unified Logistics & Supply Chain Infrastructure with Supply Chain Technology & Management, Transport & Handling and Forwarding :
  • Global ocean & air logistics, domestic forward and reverse supply chain management with ownership on reduction of working capital and product visibility & control, through technology
slide43

ARSHIYA INTERNATIONAL LTD.

  • Capitalizing on India’s mammoth logistics
  • opportunity through Unified Supply Chain
  • Infrastructure & Solutions
  • Partnering towards
  • FTWZs with integrated ICD/CFS
  • Rail and Rail Infrastructure

Industrial & Distribution Hubs

  • Supply Chain Technology & Management
  • Forwarding
  • Transport & Handling
slide51

SUCCESS OF FTWZ - GAME CHANGER FOR GLOBAL ECONOMIES

DUBAI

DUBAI

  • Established in 1985, Jebel Ali Free Trade Zone (JAFZA) is spread across an area of 48 sq kms, with over 6,400 companies operating in the zone, including 120 of the Fortune Global 500 enterprises
  • Accounts for 25% of all container throughput at Jebel Ali port & 12% of all air freight at Dubai International Airport.
  • Over the years it has created over 1,60,000 direct jobs in the UAE through its companies
  • Increased its revenue at an average of 34% year-on-year
  • Contributed to Dubai’s GDP at 25% on a year-to-year basis
  • Accounted for more than 50% of Dubai’s total exports
  • Accounted for 20% of all FDI inflow into the UAE
  • Grown its customer base by over 60% in the last four years

Even with an economy which is purely a transhipment hub, with comparatively low level of domestic consumption, FTWZ has been a game changer for Dubai

slide52

SUCCESS OF FTWZ - GAME CHANGER FOR GLOBAL ECONOMIES

CHINA

CHINA

  • FTZs are operational since 1980
  • Waigaoqiao FTZ in Shanghai is spread across an area of 10 sq kms & over 9,300 companies registered in the zone, including 135 of the Fortune 500 companies
  • Other zones being - Zhuhai (3 sq kms), Ningbo (2.3 sq kms), Xiamen (5 sq kms),
  • Futian (1.35 sq kms), Shatoujiao (0.27 sq kms) & Yantian Port (0.85 sq kms)

From an economically backward country in 1970 to its gigantic success, FTZs have been the single most critical macroeconomic factor for China’s rise

SINGAPORE

SINGAPORE

  • FTZs were first established in the island nation in 1969, today the entire country is a Free Trade Zone
  • Notable FTZs being – Keppel (2.59 sq kms), PasirPanjang (0.65 sq kms), Jurong (0.61 sq kms),
  • Sembawang (0.19 sq kms) & Air Logistics Park of Singapore at Changi Airport
  • Over 7,000 multinational companies operate through these zones

Due to FTZs this island nation has become the gateway to Southeast Asia & a Global Distribution Hub for international companies

slide53

INDIA’S STRATEGIC POSITIONING

Dubai

Mumbai

Singapore

At present, majority of product hubbing & value addition is done in Dubai & Singapore

70% to 80% of these value additions, is done for products meant for Indian market

Compared to Dubai or Singapore, India is much larger market for product consumption and is an emerging manufacturing hub

India has tremendous advantages in terms of cost & skill arbitrage vis-à-vis Dubai & Singapore

Due to its strategic positioning, India is much better suited for being a Transhipment , Value Addition & Global Distribution hub than other economies

slide54

FTWZ : A GAME CHANGER FOR INDIA

India is world’s 2nd largest developing & fastest growing economy just behind China

With a population of approx 1.1 billion, our domestic consumption comprises 58% of our GDP

Strategically located between South East Asia & Middle East, we have 7,000 kms of coastline & unlike China our population is evenly spread across hinterland

Unlike Dubai, India has a strong manufacturing base where global companies are producing products for domestic as well as export opportunities

Logistics infrastructure is the single largest challenge as well as the biggest opportunity for sustaining India’s fast paced GDP growth

slide55

LOGISTICS INFRASTRUCTURE A MAJOR HINDRANCE TO INDIA’S GROWTH

In-efficiencies due to lack of logistics infrastructure & organized logistics, costs India an additional USD 65 billion per year

India loses approximately INR 55,000 crores per year of food produce due to lack of logistics infrastructure

In a growing economy if logistics infrastructure doesn’t grow at faster pace than the GDP, it would cost India very dearly

Indian economy is losing around 1.5% in GDP growth, due to lack of logistics infrastructure

slide56

ARSHIYA’S PAN-INDIA INFRASTRUCTURE FOOTPRINT

North

Central

East

West

FTWZ

  • Rail Connected, Planned Pan-India

INDUSTRIAL & DISTRIBUTION HUBS

South

  • Planned Pan-India, Complimenting the FTWZ Network

RAIL & SUB HUBS

  • Planned 150 Train Pan-India Rail Operationswith Rail Terminals at strategic locations
slide57

ARSHIYA’S KHURJA FTWZ : LOCATION ADVANTAGE

  • 18 km from the new Yamuna
  • Expressway connecting Noida to
  • Agra
      • 12 km from proposed
      • international airport at Jewar  in
      • UP
      • Sikandarabad – the neighbouring
      • Developed Industrial City is < 30
      • km from the FTWZ
      • Tughlakabad – 80 km
      • Dadri – 60 km
      • Bulandshahr – 20 km
      • About 70 km away from the
      • National Capital Region (NCR)
slide58

ARSHIYA’S KHURJA FTWZ

Khurja Integrated Infrastructure Masterplan

  • 315 Acre Comprehensive Facility 90 km from Delhi
  • Side-by-Side FTWZ (135 Acres - launched in Jan 2012) and Industrial & Distribution Hub (130 Acres)
  • Arshiya Rail Infrastructure (50 Acres), including on-site Rail Siding
  • Operations live as of H2FY’12 to be joined by similar models in Central, South & East
  • State-of-the-art ICD/CFS facility with superior Safety and Hazardous cargo handling capacity of 10,000+ containers including reefers
slide61

CURRENT FREIGHT TRANSPORT DISTRIBUTION IN INDIA VIS-À-VIS USA & CHINA

Mode Share (percent of Ton-Km)

Share estimated for 2007 excluding pipelines

5,275

billion ton-km

5,930

billion ton-km

1,325

billion ton-km

100% =

Freight Transport in India is dominated by road

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

…. shows India’s high dependency on roads as compared to US/China who have developed rail infrastructure ….

slide62

ASSESSMENT OF INDIA’S RAILWAY EFFICIENCY

With almost same network length as India, China was carrying more than 4 times India’s Tonnage.

The real parameter is NTKM or Tonne –Km (Tonnes multiplied by Km travelled). In utilizing the network, China was 5 times more efficient and Russia was 4 times more efficient. (Ton-Km divided by Network Length)

As far as wagon efficiency is concerned (Tonnage carried X Distance carried), China is 67 % more efficient than India and USA is 150 % more efficient than India.

China’s ratio of Wagons to Locomotives is worse than India (33 against 25), still it had better wagon utilization efficiency.

slide63

OVERVIEW OF ARIL

EXISTING ROUTES

PROPOSED ROUTES

BACKGROUND AND OPERATIONS

  • Acquired Category I pan-India rail license in 2008, permitting it to transport containerized cargo throughout India
  • Provides pan-India customized container rail freight movement, and rail terminal services and facilities for transporting domestic and EXIM cargo
  • Currently has 20 rakes, 4,500 containers and a rail terminal siding at Khurja (New Delhi)
  • #1 Company in the domestic container segment; #2 PCTO in terms of number of operational rakes

SELECTED CLIENTS AND AWARDS

2012: Private Train Operator of the Year - 2nd Indian Supply Chain & Logistics Excellence Awards 2012

2011:Private Rail Operator of the Year – Gateway Excellence Awards: Supply Chain Management & Logistics

Private Rail Operator of the Year, Domestic Cargo – Maritime and Logistics Awards

PCTO of the Year – 5th Express Supply Chain and Logistics Award

Rail Operator of the Year – Gateway Media

SCOPE OF OPERATIONS

slide64

CUSTOMIZED CONTAINERS

  • Customized Containers for Steel Cargo
  • Enhanced Security Arrangement
  • Customized Solutions (Auto Shipments)
  • Multi-purpose containers for dry-cargo increasing return utilization
  • Enhanced cargo locking facility inside the containers
  • Customized containers for carrying various types of cargo
  • Open top containers increasing speed of loading heavy cargo
slide65

ARSHIYA’S INTEGRATED SERVICE ADVANTAGE

INDUSTRIAL AND DISTRIBUTION HUBS

Strategically located warehousing hubs and rail consolidation across India

TRANSPORT & HANDLING

RAIL AND RAIL INFRASTRUCTURE

First and last mile domestic transportation services

Customized and Chartered Pan India Rail Freight services and state-of-the-art Rail terminal facilities

FREE TRADE & WAREHOUSING ZONES

Implementation and operations of Free Trade & Warehousing Zones (FTWZs)

FORWARDING

Logistics solutions including end-to-end freight management & transportation services in over 150 countries world-wide

SUPPLY CHAIN TECHNOLOGY & MANAGEMENT

Provides end-to-end supply & demand chain solutions

slide67

Revenue

EBITDA

PAT

EBITDA Margins

166%

164%

428%

Financial Year ending 31 Mar

* Excluding income from sale of software marketing rights at ₹38.89 cr

slide68

SEGMENTAL REVENUES

Q4 FY 2010

Q4 FY 2011

Q4 FY 2012

₹ 168.89 Cr.

₹ 237.06 Cr.

₹ 313.40 Cr.

FTWZ

FTWZ

Rail

Others

Rail

Rail

Others

Forwarding

  • Forwarding
  • Forwarding

Others

FY2010

FY2011

FY2012

₹ 525.89 Cr.

₹ 821.52 Cr.

₹ 1057.33 Cr.

FTWZ

FTWZ

Rail

Rail

Others

Others

Rail

  • Forwarding
  • Forwarding
  • Forwarding

Others

slide69

PROJECT SUMMARY (in INR Cr.)

Notes :

Company has invested further ₹ 93 croreas equity in Arshiya Central FTWZ (Nagpur) for land acquisition purpose.

slide70

INDUSTRY RECOGNITIONS

2012

Private Container Rail Operator of the Year-Domestic Cargo 2011

Best Rail Operatorof the Year 2011

Private Rail Operatorof the Year 2011

Leading Business Woman of the Year 2011

SAP ACE 2011 –

SAP Implementation Award

Best Managed Company

in India 2012

CFO 100 Roll of Honour 2012

Achievement Award for Best Project-Urban Infrastructure (2011)

2011

Private Train Operator of the

Year 2012

Institute of Public Enterprise (IPE) HR Leadership Awards 2012

2nd Shine Awards 2012

slide71

INDUSTRY RECOGNITIONS

2010

Emerging Rail Operatorof the Year 2010

Employer of theYear 2009-2010

Emerging Company & Visionary of the Year 2010

2009

Logistics Company of the Year 2009

ELSC Face of the Year 2009

Visionaryof the Year 2009

Supply Chain InnovationYear 2009

slide73

ARSHIYA’S GLOBAL ADVISORY BOARD

Prof. AshutoshVarshney

Professor of Political Science at Brown

University, Former Advisor to World Bank & United Nations Development Program(UNDP), Carnegie Scholar & Winner of Guggenheim Fellowship Award

James Beltran

Chief Executive Officer & Director,Malaysian Assurance Alliance Berhad (MAA) International Assurance Ltd

Ashok Kacker

Chief Commissioner, Indian Revenue Services (Retd.)Executive Director, SEBI (1995-2001)

Group President & Advisor,Indiabulls Group of Companies

Independent Director, Mahindra Satyam

Dr. John L Gattorna

Chairman & Advisory Board-Macquarie Graduate School of Management (MGSM) Institute for Logistics & Supply Chain Management, Former Managing Partner for over 36 years at Accenture - Supply Chain Practice

Flemming Jacobs

Former Partner & CEO

AP Moller Maersk, AdvisoryCouncil Member of Port of Singapore & On Advisory Board of Panama Canal Authority

Michael Proffitt

Former CEO Dubai Logistics City, Logistics Director for Danzas Switzerland, Director of Logistics & Supply Chain Group – Dubai, Over 25 years of experience in Logistics & Supply Chain

Dr. Frank-Jürgen Richter

President of Horasis: The Global Visions Community ,Former Director of World Economic Forum (WEF), Economic Columnist for The International Herald Tribune & The Wall Street Journal

Paul W Bradley

Chairman & CEO, Caprica International, Vice Chairman, Supply Chain Asia, Senior Leadership position at Li & Fung Group, NYK Line & BDP Asia

Prof. G Raghuram

Professor: Indian Institute of Management,

Ahmedabad(IIM A), Author of Books on Logistics & Supply Chain & Public Private Partnerships

Richard Taffet

Partner, Bingham McCutchen LLP and Co-Chair, Bingham's Intellectual Property Litigation and Patent Prosecution Group

Dr. Jerry (Yoram) Wind

Wharton School of Business – Lauder Professor of Marketing Strategy, Founder & Director of SEI Center for Advanced Study in Management at Wharton, Founder & Academic Director Wharton Fellows Program

William P Adamopoulos

President & Publisher: Forbes Asia, Former Publisher & Managing Director The Asian Wall Street Journal

slide74

EXECUTIVE DIRECTORS

Ajay S Mittal

Group Chairman and

Managing Director

Archana Mittal

Joint Managing Director

  • SandeshChonkar
  • Executive Director
slide75

EVERYTHING YOU HEAR ABOUT INDIA . . .

6TH JANUARY, 2O12

11th JANUARY, 2O12

slide76

THE OPPORTUNITY OF ARSHIYA

  • Delivered with ready state-of-the-art hubbing and rail infrastructure
  • The FTWZ claiming business from other regional hubs like Dubai and Singapore
  • Ten year services legacy leveraged with infrastructure offering a ‘one stop shop’ logistics solution for customers
  • Fully unified logistics and supply chain delivery capability
  • Rightly positioned to enable and capitalize on India’s growth