Regional Industrial Project Presentation for Djibouti & Ethiopia (Horn of Africa)

666 views

Published on

Regional Industrial Project Presentation for Djibouti & Ethiopia (Horn of Africa) by A.ELMI.AHME & DJ.ALEMAYEHU SEPTEMBER 2012

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
666
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Regional Industrial Project Presentation for Djibouti & Ethiopia (Horn of Africa)

  1. 1. By A.ELMI.AHMED & DJ.ALEMAYEHU East Africa Regional Border Industrial Zone Economic Development in Djibouti
  2. 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. 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. 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. 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. 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. 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. 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. 9. Infrastructure and support capabilities Attribute Current State Implications Future State Airport capabilities Djibouti and Addis Ababa airport capacity; frequent Direct flights; available capacity for dedicated and belly cargo freight Less congested; draw for global fulfillment operations; dedicated air freighter and belly cargo to accommodate 100% screening rules Utilize Regional airports and other local airports Highways Current and new planned roadsoffer less congested alternatives Good connectivity from Djibouti, to Ethiopia, to Sout Sudan Exploit current capacity and expand network 1 of 2
  10. 10. Infrastructure and support capabilities Attribute Current State Implications Future State Railroad network No functioning railroads. Results in congestion on other capabilities Railroad infrastructure is being planned by Ethiopia to connect Southern Sudan to Djibouti Intermodal transportation capacity Several dispersed facilities with excess capacity Djibouti less congested; good connection to regional cargo Potential for more centralized intermodal facility Distribution facilities Good private, leased, and public warehouse capacity Physical capacity and labor available for new business activity Extend competitive advantage; Build consol/deconsol, cross-dock centers 2 of 2
  11. 11. Strategy Elements Ability to serve regional and global markets Infrastructure and support capabilities Government regulations Higher weight limits Carrier permitting process
  12. 12. Government regulations Attribute Current State Implications Future State Higher weight limits Favorable to some shippers and industries Lower transportation costs; favorable for intermodal particularly in transition from rail intermodal Extend competitive advantage Carrier permitting process Multi-agency system Cumbersome process; not favorable for carriers and shippers Need “one stop shop” permit process; need reciprocal, bi- national permitting
  13. 13. Availability of human, land, supplier, and financial capital Attribute Current State Implications Future State Land and facility availability Competitive real estate prices Advantage over other states Land is cheap; good place for DC’s Financial Capital Lack of venture capitalists and angel funding Problem for start- up firms Invest in hub; need long-term capital and policy commitment from users to occupy land Supplier and support capabilities Strong supply base Nearby supplier locations Extend competitive advantage 2 of 2
  14. 14. Economic competitiveness and lowest total cost to serve Attribute Current State Implications Future State Hub operations cost Higher cost to operate Are there offsetting productivity advantages? Lowest cost to serve; lowest weather risk during transportation Hub service levels Managerial and skilled labor may create advantages; northern fringe location may inhibit access to entire U.S. Service advantages could offset cost disadvantages Better service potential for combined Djibouti/Ethiopia market for intermodal imports Outbound empty trucks Trade imbalance; excess empty containers Low outbound rates Fill outbound trucks
  15. 15. Supply chain sustainability Attribute Current State Implications Future State Customer service and reliability Increased uncertainty due to congestion Increased cost and reduced service Customers requiring more reliability and closer suppliers to lower cost and improve service Security Consumers and regulators expecting increased security Increased freight monitoring Need technology and facilities to monitor freight Green/ environmental aspects Firms strongly focus on low cost suppliers Firms looking for suppliers who can minimize environmental impact Firms looking for closer suppliers or transporters that have less environmental impact
  16. 16. Attribute Current State Implications Future State One integrated regional plan Regional support from all stakeholders of the integrated plan Champion Need a “champion” or major player to act as an anchor; early investment and commitment Collaboration and partnership
  17. 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. 18. Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential
  19. 19. Economic Model: Industry Sectors 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. 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
  20. 20. Target Industries Transportation & logistics Alternative energy Aerospace Medical devices Regional Security and Defense Advanced Manufacturing
  21. 21. Target Industries  Alternative Energy  Automotive Engineering  Life Sciences  Security and Defense  Advanced Manufacturing  Agro Industry
  22. 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. 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. 24. Industrial Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential Economic and Job Creation Impact
  25. 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. 26. Supply Chain Hub Strategy Creation Strategy Elements Industries offering Value Add Potential Economic and Job Creation Impact Economic Development
  27. 27. Presentation Outline Project Background Project Objectives andWorkshop Deliverables SCM Strategy,Targeted Industries, and Economic Impact Economic Development Policies and Collaboration and Communications Recommendations and Next Steps
  28. 28. Enabling Economic Development  Global markets  Infrastructure  Regulations  Tax climate  Capital availability  Economic competitiveness  Supply chain sustainability  Collaboration strategy elements Targeted industries Industry Value Proposition Economic development Job creation •Heavy manufacturing •Light manufacturing •Distribution
  29. 29. Enabling Economic Development strategy elements Targeted industries Industry Value Proposition Economic development Job creation Policy refinements
  30. 30. Enabling Economic Development strategy elements Targeted industries Industry Value Proposition Economic development Job creation Policy refinements Collaboration and communications
  31. 31. Enabling Economic Development: Policy Refinements SCM strategy elements Targeted industries Industry Value Proposition Economic development Job creation Policy refinements
  32. 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. 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. 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. 35. Enabling Economic Development: Collaboration and Communications strategy elements Targeted industries Industry Value Proposition Economic development Job creation Policy refinements Collaboration and communications

×