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Indonesia Logistics Industry Outlook                       2013: An Executive InsightPresented by:Gopal RGlobal Vice Presi...
Agenda  1      Indonesian Logistics Market  2      Market Projection, Drivers and Restraints  3      Freight Movement in I...
Indonesias Logistics Sector Offers Growth Opportunity                        Growth of GDP and Service Segment, 2008 - 201...
Transport and Storage segment contributes 3.5 percentto the economy                               Indonesian Transportatio...
Total transportation & logistics market in Indonesia           estimated at IDR 1426.9 trillion in 2012                   ...
Transportation & Logistics market in Indonesia: The Evolution                    Transportation & Logistics Market Size, 2...
Agenda  1      Indonesian Logistics Market  2      Market Projection, Drivers and Restraints  3      Freight Movement in I...
Key drivers and restraints for Indonesia transportation& logistics market             Strong economic growth fuelled by hi...
Agenda  1      Indonesian Logistics Market  2      Market Projection, Drivers and Restraints  3      Freight Movement in I...
Freight movement in Indonesia                                                 Freight Traffic, 2008 - 2013Tons, Millions  ...
Agenda  1      Indonesian Logistics Market  2      Market Projection, Drivers and Restraints  3      Freight Movement in I...
Transportation & Logistics Market: Key Trends            Service Trend             • Higher inclination toward outsourcing...
Agenda  1      Indonesian Logistics Market  2      Market Projection, Drivers and Restraints  3      Freight Movement in I...
National Logistics Blueprint, 2010 - 20256 key drivers to promote the success of the logistics revitalization programs    ...
Master Plan for the Acceleration and Expansion of Indonesian     Economic Growth (MP3EI), 2011 - 2025            TARGET: T...
ASEAN Economic Community(AEC) in 2015 will amplifythe export value to ASEAN countriesAEC free flow of goods and service re...
Moving forward…              Current                                INDONESIA                                            N...
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Frost & Sullivan Indonesia Logistics Outlook 2013 and Beyond

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Frost & Sullivan analysis on Indonesia's logistics market outlook for 2013 and beyond, presented by Gopal R, Global Vice President, Transportation & Logistics, Frost & Sullivan presented at the "Indonesia Logistics Outlook 2013 and Beyond Media Briefing", 6 March 2013 in Jakarta.

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Transcript of "Frost & Sullivan Indonesia Logistics Outlook 2013 and Beyond"

  1. 1. Indonesia Logistics Industry Outlook 2013: An Executive InsightPresented by:Gopal RGlobal Vice PresidentTransportation & Logistics PracticeMarch 6, 2013
  2. 2. Agenda 1 Indonesian Logistics Market 2 Market Projection, Drivers and Restraints 3 Freight Movement in Indonesia 4 Key Industry Trends 5 Strategic Roadmap 2
  3. 3. Indonesias Logistics Sector Offers Growth Opportunity Growth of GDP and Service Segment, 2008 - 2013 • With dynamic industrial activities, Indonesia’s 30,0% real GDP in 2013 is estimated to witness an Growth (%) 25,0% increase above 6.5 percent, slight increase 20,0% from last year’s 6.3 percent. 15,0% • Services segment will follow the pace of the 10,0% economy, as sectors such as financial 5,0% 0,0% services, hotels, hospitals, retail, 2008 2009 2010 2011 2012(e) 2013(f) telecommunications and airline are Nominal GDP Services Real GDP Years experiencing continuous expansion 25,0% Growth of Service Segment, 2008- 2013 • The rise in Indonesia’s middle class will result 20,0%Growth (%) in profound changes, including growth 15,0% opportunity for transportation & logistics 10,0% industry • Transportation, storage and courier segment is 5,0% expected to expand 13.1 percent next year, 0,0% 2008 2009 2010 2011 2012(e) 2013(f) aided by the growth in exports and Services Transportation, storage and courier Years manufacturing sector as well Source: Indonesian Statistical Agency, World Bank, analysis by Frost & Sullivan 3
  4. 4. Transport and Storage segment contributes 3.5 percentto the economy Indonesian Transportation and Storage Segment Indonesia Economy, 2012 Distribution, 2012(e) (IDR 287.36 trillion) Transportation makes up 85.5 percent of the total transportation, storage and courier market Source: Indonesian Statistical Agency, analysis by Frost & Sullivan 4
  5. 5. Total transportation & logistics market in Indonesia estimated at IDR 1426.9 trillion in 2012 Logistics Expenditure is hidden in:Transportation & Logistics Agriculture, forestry Manufacturing Construction and fishing (IDR 280.14 trillion) (IDR 122.26trillion) Transportation, (IDR 169.04trillion) storage and Market courier Mining & quarrying Trade Communication (IDR 287.4 (IDR 137.83 trillion) (IDR 134.82trillion) (IDR 37.17trillion) trillion) Other services (IDR 258.27trillion) Market Value IDR 287.4 trillion IDR 1139.5 trillion Potential market for the outsourced / contract Source: Indonesian Statistical Agency, analysis by Frost & Sullivan logistics service providers in Indonesia 5
  6. 6. Transportation & Logistics market in Indonesia: The Evolution Transportation & Logistics Market Size, 2007 - 2012 27.8 (5.8) 14.3 13.4 14.2 Growth (%) IDR, Trillions Years Source: Indonesian Statistical Agency and other sources, analysis by Frost & SullivanTransportation & Logistics market in Indonesia has grown by a Compound Annual Growth Rate (CAGR) of 12.7 percent between 2007 to 2012 6
  7. 7. Agenda 1 Indonesian Logistics Market 2 Market Projection, Drivers and Restraints 3 Freight Movement in Indonesia 4 Key Industry Trends 5 Strategic Roadmap 7
  8. 8. Key drivers and restraints for Indonesia transportation& logistics market Strong economic growth fuelled by high domestic consumption Government’s initiatives in economic transformation and developmentDRIVERS of logistics industry Relocation and strong flows of capital drive manufacturing activities and boost logistics demandRESTRAINTS Availability of qualified logistics industry professionals Geographically dispersed market increases logistics cost Underdeveloped logistics infrastructure and slow pace in addressing infrastructure bottlenecks Source: Frost & Sullivan 8
  9. 9. Agenda 1 Indonesian Logistics Market 2 Market Projection, Drivers and Restraints 3 Freight Movement in Indonesia 4 Key Industry Trends 5 Strategic Roadmap 9
  10. 10. Freight movement in Indonesia Freight Traffic, 2008 - 2013Tons, Millions Years• Seaports handle more than 90 percent of total non-road freight traffic in Indonesia• Cargo transportation in Java-Sumatra region is still dominated by the freight trucks accounting more than 80 percent for the movement of mining, industrial, plantation and agricultural products Source: Indonesian Statistical Agency, analysis by Frost & Sullivan 10
  11. 11. Agenda 1 Indonesian Logistics Market 2 Market Projection, Drivers and Restraints 3 Freight Movement in Indonesia 4 Key Industry Trends 5 Strategic Roadmap 11
  12. 12. Transportation & Logistics Market: Key Trends Service Trend • Higher inclination toward outsourcing variety of value added services • Logistics service providers need to work toward more value-added services while strengthening the intermediate services Customer Trend • Service quality and reliability are top priorities when selecting logistics service providers • End users are moving toward integrated supply chains with professional service providers Economic Trend • Growth of Indonesian logistics market fuelled by growth of external trade and sustained inflow of FDI • Rising intra-Asia trade favors the transportation & logistics industry Business Trend • Oil & Gas Logistics • Infrastructure Project Logistics • Food & Fresh Produce Logistics 12
  13. 13. Agenda 1 Indonesian Logistics Market 2 Market Projection, Drivers and Restraints 3 Freight Movement in Indonesia 4 Key Industry Trends 5 Strategic Roadmap 13
  14. 14. National Logistics Blueprint, 2010 - 20256 key drivers to promote the success of the logistics revitalization programs Indonesia’s logistics to Laws & Regulations be Locally Integrated & Human Information, Logistics Key Globally Resources & Communication Service Commodity Connected Management & Technology Providers Focus effectively & efficiently, for national competitiveness by Logistics Infrastructure 2025 Indonesia is determined to become an important player in international trade & markets. The government focuses particularly on 6 key areas with the objectives of: • ensuring the availability of strategic commodities • promoting low cost economic activities • strengthening national competitiveness Source: National Logistics Blueprint, Asia-Pacific Economic Cooperation 14
  15. 15. Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI), 2011 - 2025 TARGET: Transforming Indonesia into one of the 10 major economies in the world by 2025The implementation strategy of MP3EI will integrate 3 Aims and objectives of the National Connectivitymain elements: Strengthening1. Developing the regional economic potential in 6 1. Connecting the centers of major economic growth Indonesia Economic Corridors; based on the principles of integration and not (Sumatra Economic Corridor, Java Economic Corridor, similarity, through “inter-modal supply chain systems” Kalimantan Economic Corridor, Sulawesi Economic Corridor, Bali – Nusa Tenggara Economic Corridor, and Papua – 2. Expanding economic growth through accessibility Kepulauan Maluku Economic Corridor) improvement from the centers of growth to the2. Strengthening national connectivity locally and hinterland internationally 3. Distribute the benefits of economic development by3. Strengthening human resource capacity and improving the quality of connectivity to the less national science & technology to support the developed areas, isolated areas, and border areas in order to achieve equitable economic development development of main programs in every economic corridor Source: Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI) 2011 – 2025 15
  16. 16. ASEAN Economic Community(AEC) in 2015 will amplifythe export value to ASEAN countriesAEC free flow of goods and service regulation will enable Indonesia leverage low export trade countries in ASEAN bounderies Low export value in several ASEAN countries. Eg:Myanmar, Laos, Brunei and Cambodia Indonesia has not fully capitalized ASEAN market opportunities Gateway Opportunity: Indonesia coordinates 5 potential products out of 12 priority products in “ASEAN Economic AEC regulation scheme, namely Community Agricultural,Electronics, Fishery,Woods and textile products (AEC) in 2015” Accelerating the Development of Transportation & Logistics Industry in the region 16
  17. 17. Moving forward… Current INDONESIA Next Step Domestic Logistics Locally Integrated, Focus Moving toward Globally Connected • Specialized logistics solutions for specific industries (e.g• Focus on basic logistics services with common value- FMCG, construction, mining) added services • Develop a logistics network of industrial centers on the• High traffic congestion in Jakarta results in longer lead outskirts of Jakarta for improved access to the Port of time, shipment delay and inefficient supply chain Tanjung Priok• Underdeveloped infrastructure and poor connectivity lead • Integrate transportation hubs (seaports, airports, terminals, to increased logistics costs distribution centers) with the transport network and develop state-of-the-art logistics infrastructure for efficient distribution• Growth of logistics market is not supported by the growth of professional human resources • Strengthen human resource capability with professional and experienced logistics personnel along with the market• Overlapping regulations at the central and local expansion government levels as well as among sectors and institutions cause hassle and inefficiency • Improve cross sector regulations and streamlining permit applications 17
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