Frost & Sullivan Overview of Port Logistics Infrastructure Development in ASEAN

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Frost & Sullivan analysis on port logistics infrastructure in ASEAN presented by Gopal R, Vice President Transportation & Logistics Practice - Asia Pacific at the 10th ASEAN Shipping & Ports, Jakarta - Indonesia, on May 30th, 2012.

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Frost & Sullivan Overview of Port Logistics Infrastructure Development in ASEAN

  1. 1. Overview of Port Logistics InfrastructureDevelopment in ASEAN10th ASEAN Shipping & Ports, Jakarta, Indonesia | May 30, 2012 Presented by: Gopal R, Vice President Transportation & Logistics Practice Frost & Sullivan Asia Pacific
  2. 2. AgendaPORTS AND TRADE IN ASEANKEY INITIATIVES AND CHALLENGES FOR DEVELOPMENTFUTURE OUTLOOK AND OPPORTUNITIES 2
  3. 3. PORTS AND TRADE IN ASEAN 3
  4. 4. Trade: Life blood of economies Spice trading played an influential role in (Southeast Asian) civilization 4
  5. 5. The Trade Influenced Transition: Hong Kong Hong Kong, Now Hong Kong,1898One of the busiest ports in the world; Key factor for HK’s economic development 5
  6. 6. The Trade Influenced Transition: Singapore Singapore,1960 Singapore, Now From tiny fishing village to international transshipment hub 6
  7. 7. The Trade Influenced Transition: Shanghai Shanghai, 1843 Shanghai, Now Critically important as transport hub for Yangtze River 7
  8. 8. ASEAN has a population of approximately 600 million people and atotal nominal GDP of US$ 2.09 trillion Population, 2011 (Est.) (Million) Nominal GDP, 2011 Countries (est.) (US$, Billion) Population in ASEAN expected to grow at an average of 1.6 percent annually Indonesia 822.63 Myanmar 54.3 Thailand 332.47 Laos 6.3 Vietnam Singapore 253.74 90.5 Thailand Philippines Malaysia 247.78 66.7 94.1 Philippines 227.74 Cambodia 14.8 Vietnam 122.57 Myanmar 51.26 Brunei Brunei 16.31 0.4 Cambodia 13.00 Malaysia 28.4 Laos 6.95 Singapore 5.2 Indonesia 237.4 Source : ASEAN.org, International Monetary Fund, World Bank, Analysis: Frost & Sullivan 8
  9. 9. Major ASEAN Countries Continue to DominateASEAN GDP split in 2011 GDP Growth in Major ASEAN Countries 2007-2011 0.6% 0.6% 1.4% Indonesia 0.4% 5.8% Thailand 15.0% Indonesia Malaysia Singapore 10.0% Malaysia 10.9% Philippines Singapore 43.3% Viet Nam 5.0% 12.8% Thailand Myanmar Brunei Darussalam 0.0% 13.0% Vietnam Cambodia 2007 2008 2009 2010 2011 19.5% SEA Lao PDR -5.0% • Indonesia, Thailand, Malaysia, Singapore and Vietnam account for 85% of the ASEAN GDP • Thailand’s economy in 2011 shrank due to flood crises in 2011 Q3 but expected to rebound in 2012 Source : ASEAN.org, World Bank , Analysis: Frost & Sullivan 9
  10. 10. Key ASEAN ports handled more than 66.3 millions TEUs in 2011, accounting for about 80 percent of the total container throughput in ASEAN Container Throughput at Major ASEAN Ports, 2011 (million TEUs) Hai Phong Port 1.2 Port of Manila 3.5*Laem Chabang Saigon New Port Port 5.7 3.0Penang Port 1.2* Port of Singapore Port Klang 29.9 9.5* Port of Tanjung Pelepas 7.5 Port of Tanjung Priok 5.7 Source: From various publications and port authorities 10
  11. 11. Major ASEAN Ports Gearing for Expansion Where Current Capacity (million TEUs) Expansion Plan (million TEUs) Year Port of 29.9M 55M 2018 Singapore Port Klang 8.0M 10M 2013 Port of Tanjung Pelepas 8.4M 10M 2013 Laem Chabang 2015 Port 10.5M 18M Port of 2017 Tanjung Priok 5.9M 11M Source : Port authorities and various publications 11
  12. 12. Asian Ports Gear Up to Accommodate Higher Trade Flow 12
  13. 13. Intra ASEAN Trade Remains Strong35% ASEAN top trading partners Intra/Extra ASEAN trade 100%30% 1993 Intra-ASEAN 2008 80%25% Extra-ASEAN20% 2010 60%15% 2011 40%10% 2012 (forecast) 20%5%0% 0% 1993 2008 2010 2011 2012 forecast • Trading among ASEAN countries continue to dominate with 27% of total trade in 2011. • With weakening demand from US and Europe and continued efforts in trade facilitation among ASEAN members, Intra- SEAN trade is expected to grow from 27% to 29% moving into 2012. Source : asean.org, Analysis: Frost & Sullivan 13
  14. 14. KEY INITIATIVES AND CHALLENGES FOR DEVELOPMENT 14
  15. 15. ASEAN Connectivity InitiativeIts Objective……. Promotes Economic Growth of ASEAN Pooling Resources Narrows Development and Sharing Benefits Gaps Among Member with Other Groups States Intra-ASEAN Connectivity Enhancement Initiative To reinforce ASEAN’s Enhances the position as the hub of Competitiveness of Creates a Unified the East Asia region Bonding Among ASEAN ASEAN Member States and Rest of the World Source : asean.org, Masterplan of ASEAN Connectivity, Analysis: Frost & Sullivan 15
  16. 16. ASEAN: Key Trading Obstacles Lack of Border Management Capabilities Current Key Trading ASEAN Lack of Trade Connectivity Barriers Among Facilitation Initiative ASEAN Members Competency Level in Infrastructure 16
  17. 17. Lack of Border Management CapabilitiesDevelop procedures ofborder management • Cross-border movements needs to be improvedacross ASEAN across ASEAN Member States to facilitate trade movements • No standard practice in place to control relatedSynchronized control agencies; i.e. Customs, Immigration and Quarantine,and processes at across ASEAN to manage cross-border movementsborder • Lack of implementation in harmonization with processes at regional level to strengthen conformity • Lack of awareness to simplify and expeditePromote “One SingleInspection and procedures and promote paperless practice acrossProcessing Point”practice 17
  18. 18. Lack of Trade FacilitationNational SingleWindow & ASEAN • Low adoption level across ASEAN of National SingleSingle Windowinitiative Window practice. Only major ASEAN members have started; Singapore, Malaysia, Thailand and Philippines are among them • Latest ranking by World Banks’ LogisticsImprove quality ofcustoms services Performance Index 2011, with a diverse ranking of SEA countries, range from 2 to145 • The potential to achieve economies of scale among ASEAN members looks bleak if tariff liberalization isTariff liberalization not put in placeacross ASEAN 18
  19. 19. Variation of Competency Level in InfrastructureLogistics developmentplan to further improve competency • Part of the ASEAN Economic Community Blueprint needs to be initiated as soon as possible to spur Remove restrictions • Trade facilitation on trade • Inner-state transport facilitation and • Multi-modal transport practice across ASEAN Liberalization of ICT services across ASEAN 19
  20. 20. Port Development: What are the priorities? Current Future Singapore Malaysia Indonesia Thailand Vietnam• Continuous • Continuously • Improvement • Improve port • Improve on effort to improving in port infrastructure fundamental achieve a port infrastructure to compete port sustainable infrastructure with SG and infrastructure port • Invest on MY • Constant quality road • Regulating• Increase port innovation in networks • Develop more body needs capacity to customs between dry ports to to play a facilitate process to ports stimulate bigger role expansion facilitate trade among trade • Exercise neighboring • Invest on strict and countries road & rail • To attract transparent especially networks more main policy in Vietnam, line operators customs Cambodia, processes to Laos and attract Myanmar foreign trade 20
  21. 21. FUTURE OUTLOOK AND OPPORTUNITIES 21
  22. 22. Global Population in 2020: Out of 2.56 Billion Population Between 15-34 years, >61% from Asia 2010 2 World Population: Breakdown by Region (Global), 2020 2020 1.8 Around 37% of 15-34 7.55 Billion Population Will Live in India 1.6 and China Alone 1.26.83 Billion 0.47 1.4 0.16 Population in Billion 0.09 1.2 2.1 0.19 0.07 1 0.47 0.57 0.33 0.8 0.63 0.22 2.56 0.12 0.6 0.37 0.44 0.23 0.21 0.51 0.4 0.07 0.13 0.26 0.22 0.2 0.44 0.36 0.33 1.69 0.11 0.22 0.14 0.07 0.13 0 Africa Rest of Asia Latin America, North America Europe India China Caribbean and Oceania 65 Years and Above 35-64 15-34 0-14 Population in Billion Source: US Census Bureau, 2010 and Department of Economic and Social Affairs of the United Nations 22
  23. 23. Beyond BRIC: The Next Game Changers in 2020 – Asian Countries Russia: $7 Trillion China: $8 Trillion Vietnam: $175 India: Billion $4.5 Trillion The Philippines: Brazil: $2.7 $250 Billion Trillion Indonesia: $800 Billion BRIC Countries Note: The figure denotes GDP at Next Game Changers includes: Mexico, Argentina, Poland, Egypt, South Africa, Turkey, Indonesia, market prices Philippines, Vietnam 23
  24. 24. Ports play an important role in supporting trade and economic growth of the country Nominal GDP Growth, 2008 – 2012(f) External Trade Growth, 2008 – 2012(f)16.0% 50.0%14.0% 40.0%12.0%10.0% 30.0%8.0% 20.0%6.0% 10.0%4.0% 0.0%2.0% 2008 2009 2010 2011 2012(f)0.0% -10.0% 2008 2009 2010 2011 2012-2.0% -20.0%-4.0% -30.0% Indonesia Malaysia Singapore Thailand Vietnam ASEAN Source : IMF, Monetary Authority of Singapore, Department of Statistics Malaysia, World Bank, asean.org, UN 24
  25. 25. Moving ForwardIndonesia Port of Tanjung Priok will benefit from the MP3EI through the development of Greater Jakarta Area and the improvement of national connectivity MP3EI: Master Plan for the Acceleration and Expansion of Indonesian Economic Growth Malaysia Momentum likely to continue for Malaysia’s port sector supported by steady external trade volume and government’s efforts in IMP3 and ETP IMP3: Third Industrial Master Plan ; ETP: Economic Transformation ProgrammeSingapore World-class infrastructure, excellent connectivity and pro-business environment will continue to drive the growth of Singapore’s port sector Thailand Thailand’s port activities are expected to pick up from second half of 2012 onwards, after recovering from its recent flood situation Vietnam Vietnam’s port sector has a lot of potential with ample capacity to accommodate future growth. Underdeveloped supporting infrastructure remains as the main setback to the industry 25
  26. 26. Trade The Growth Recovery and Growth Considerations for Ocean Hinterland improvement Freight need to match Seaside improvements Security & Manage Carbon Increasing Emission number of ChallengesUncertainties 26
  27. 27. ABOUT FROST & SULLIVAN 27
  28. 28. A Global Growth Partnership Company Founded in 1961 Over 1,700 Consultants / Analysts across 40 global locations 10,000+ clients worldwide including emerging companies, the global 1000, and the investment community Offer the exclusive Growth System including: Growth Partnership Services, Growth Consulting and Growth Team Membership Developers of T.E.A.M. Methodology, proprietary process to ensure that clients receive a 360o perspective of technology, markets and growth opportunities 28
  29. 29. Transportation & Logistics Consulting Competencies Forwarding, Contract Logistics Supply ChainSupply Chain Services Transportation Express and Services Technologies Support Services Ports Infrastructure Equipment Services Strategy Development Freight Markets Air Ocean Land Business Planning Training M&A Analysis Rail Transportation Systems Aftermarket Customer Assessment Market Opportunity Analysis Addressing Trends & IssuesUrban Transportation Systems Support Services Competitive Benchmarking Technology Benchmarking Product / Service Concept Intelligent Customer Satisfaction Surveys Transportation Systems Systems Growth Coaching & Workshops 29

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