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Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'
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Kirill Vlasov, STS/RLS Logistics on 'Segment-based Approaches to the Russian 3PL Market'

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Kirill Vlasov, Strategy Development Director, STS/RLS Logistics delivers a Case Study on 'Segment-based Approaches to the Russian 3PL Market' at the 7th European 3PL Summit in Brussels, November 25th …

Kirill Vlasov, Strategy Development Director, STS/RLS Logistics delivers a Case Study on 'Segment-based Approaches to the Russian 3PL Market' at the 7th European 3PL Summit in Brussels, November 25th 2009.

To download all of the slides from the conference for free visit www.3PLsummit.com/eu_2009ppts

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  • 1. Segment-based approach to Russian 3PL market Kirill Vlasov Strategy Development Director STS/RLS Logistics 7th European 3PL Summit 24 November 2009
  • 2. STS/RLS – a leading Russian 3PL industry player Company profile Created by 2009 merger of STS Logistics and RLS STS/RLS Logistics Key company facts and figures Established in 1990s Focused on Russia and CIS Combined 2008 revenues: ca. USD 350 million Over 1000 clients, among them many Russian and international blue chips Combined staff: 1200 employees in HQ, 25 regional offices in Russia, 4 CIS and 3 overseas offices Warehouse space: 150 000 sq. m. A and B-class in 8 cities of Russia International partner network (China, Germany, Japan, Turkey) Business focus areas Freight forwarding Project logistics Contract logistics Services International and Complex project Integrated LP services Related services domestic freight solutions for oil/gas (transport, > Customs clearance operations (air, sea, and power generation warehousing, services) > Insurance road, rail) industries for FMCG, retail, automotive and > Logistics consulting chemicals industries 1
  • 3. Russia: second largest logistics market in Europe Russian logistics market – international comparisons Size of logistics markets in USD bn (2008) Logistics costs compared to GDP (2008) US 1 300 China2 20,0% Europe1 1 230 Russia 13,4% China2 540 India2 13,0% Germany3 280 US 9,7% Russia 225 Europe Germany3 8,4% Global avg. 150 = 11,7% France3 Logistics costs in Russia are relatively high compared to GDP, under the likely influence vast geography and poor infrastructure 1 EU27+Switzerland and Norway, 2007; 2 2006, estimate; 3 2007 Source: Langley/Capgemini; Fraunhofer Institut 2
  • 4. Russian logistics market has been growing at >20%, but is hit hard by crisis Size and dynamics of STS/RLS market vs. German market and vs. GDP Russian STS/RLS target market vs. GDP German logistics market vs. GDP RUR bn USD bn EUR bn USD bn Drop 08-09FC CAGR 05-08 Drop 08-09FC EUR = -5% RUR = -8% CAGR 05-08 RUR = 7% EUR = >2% 2 250 2 270 26 590 2 150 25 180 24 590 23 290 2 190 21 630 2 120 Drop 08-09FC RUR = -12% Drop 08-09FC USD = -32% EUR = -8% CAGR 05-08 USD = -14% CAGR 05-08 = RUR = 17% 3 520 EUR = 8% USD = 22% 3 200 3 100 USD = 14% 2 560 321 125 142 205 276 189 175 218 2 210 281 200 90 237 98 218 80 2005 2006 2007 2008 2009E 2005 2006 2007 2008 2009E Market in USD bn Market in RUR bn GDP in RUR bn Market in USD bn Market in EUR bn GDP in EUR bn Russian logistics market has suffered strongly from crisis and rouble devaluation Note: conversions at appropriate annual avg. rates for historical points; forecast using USD/RUR = 32,2 (average 2009 to date) Source: Rosstat; IMF; RBC; Fraunhofer Institut 3
  • 5. Russian logistics market most likely to return to growth in sync with GDP Future growth scenarios Optimistic case Base case Pessimistic case (Council of National Strategy) (IMF) (MERT) Market, USD bn Market, RUR bn GDP, RUR bn RUR bn USD bn RUR bn USD bn RUR bn USD bn CAGR 08-12 142 CAGR 08-12 CAGR 08-12 USD = - 4% 3 840 USD = - 8% USD = - 9% 142 3 520 104 93 94 96 99 113 119 96 97 100 101 106 3 520 3 520 3 220 3 340 3 620 3 180 3 420 3 100 3 130 3 260 3 080 2 990 3 020 2008 2009FC 2010FC 2011FC 2012FC 2008 2009FC 2010FC 2011FC 2012FC 2008 2009FC 2010FC 2011FC 2012FC Commodity prices stabilize and continue Commodity prices remain volatile Slow recovery of world economy due to growing but at acceptable current levels unemployment, diminished consumer Government stimulus packages help Economy loses only little momentum after spend, continuously limited credit the economy return to stable growth expiry of governmental stimuli availability, protectionism Banks making credit available, favorable Lacking efficiency of Russian Stagnating commodity prices fiscal and monetary policy make manufacturers makes them slow to Lacking efficiency/competitiveness investments affordable benefit from recovery of world economy of Russian manufacturers If RUR shows weakness, the market may not reach 2008 levels in USD terms in the next 3 years Note: conversions at appropriate annual avg. rates for hist. points. FC with USD/RUR = 32,20112 (YTD 08/11/2009) Source: As indicated, STS/RLS estimates 4
  • 6. Continued outsourcing of logistics may soon offset the effects of crisis Addressable market potential estimates Share of outsourced logistics Addressable market estimates (bn USD) (current vs. forecast) Outsourced logistics 2009 E (Russia) 2014 E In-house logistics (addressable market) Europe 66% 74% 2008 92 50 Asia 62% 70% Pacific Optimistic 65 54 Latin 51% 60% America 2012E Base 57 47 Germany 49% 57% North Pessimistic 55 46 47% 54% America 2014 Forecast Assumptions: by 2012 market gains 60% Russia 30-40% 50-55% of projected increase from 30-40% to 50- 55%; all calculation based on constant USD Depending on market scenario, outsourced logistics market may fully recover the pre-crisis level by 2012 1 Data used for calculation: 35% outsourced in 2008; 52,5% outsourcing level to be reached by 2014 Source: Langley/Capgemini; Fraunhofer Institut; STS/RLS estimates 5
  • 7. STS/RLS serve some of the largest Russian logistics market segments Selected Russian domestic logistics market segments (USD bn, 2008) Estimates FMCG 17,7 20 17,7 1,8 Alcoholic beverages 3,7 3,7 19 1,8 Fashion/Footwear 3,4 3,4 18 2,1 Furniture/DIY 2,2 2,2 17 5,3 Finished consumer goods Consumer/Commercial vehicles 1,7 1,7 16 7,4 Pharma/Biotech 1,7 1,7 15 7,5 Fresh 1,3 1,3 14 9,2 Consumer electronics 0,8 0,8 13 10,8 Machinery, equipment, vehicles 7,0 7,0 12 0,7 Construction components/materials 8,38,3 11 3,5 Industrial products Intermediate goods 3,5 3,5 10 8,3 Parts/Components 0,7 0,7 9 7,0 Coal 10,810,8 8 0,8 Oil, LNG, chemicals (except pipelines) 9,2 9,2 7 1,3 Ferrous metallurgy products 7,5 7,5 6 1,7 Commodities Agriculture products 7,4 7,4 5 1,7 and bulk products Bulk construction materials 5,3 5,3 4 2,2 Ore 2,1 2,1 3 3,4 Forestry products 1,8 1,8 2 3,7 Fertilizers 1,8 1,8 1 17,7 Source: GKS; RZD; Industry research$ STS/RLS analysis 6
  • 8. Vast experience in industrial and complex project logistics Segment profile Industrial and project logistics Service portfolio Key clients Complex project logistics Oil/Gas Power generation Transportation of oversized and overweight equipment Baker Hughes • Boguchanskaya Provision of all types of transport (air, road, rail, Caspian Pipeline Hydroelectric Plant sea) Consortium Bureyskaya Provision of tailored infrastructure solutions CentrCaspneftegaz Hydroelectric Plant > Land transportation in severe conditions Neftegazengineering • Kambaratynskaya (e.g., Arctic) Rosneft Hydroelectric Plant > Temporary installations (jetties, roads, bridges) Tenaris > Lifting of power lines TNK-BP Intermediate storage Project customs clearance, including in all major seaports of Russia STS/RLS is able to deliver any equipment to any destination 7
  • 9. Ability to provide complex, tailored solutions inside Russia and CIS Industrial and project logistics Transportation of generator wheel for Airlifting of generator wheel Kambaratynskaya HEP for Bureyskaya HEP (Russia) (Kyrgyzstan) Delivery of railway engine from manufacturing Transportation of sodium powder plant in Russia to Iraq Using sealed containers 8
  • 10. Wide range of services in parts’ logistics Segment profile Automotive and parts logistics Service portfolio Key clients Cargo pick-up at consignee warehouse Consumer/Commercial Industrial Transportation between distribution centers Break-bulk cross-docking Ford Komatsu Delivery to final destination Mazda OTIS Handling of large SKU assortment (> 30k SKUs) Pirelli Transportation and storage of special goods > Oversize (above standard pallet size) > Fragile (glass) > High value (delivery in cages) Customs clearance Value-added services > Insurance (freight, liability) > Shipment tracking > Return of proof-of-delivery documentation Storage and delivery of rubber tires Our flexibility allows us to provide tailored solutions to most of our clients 9
  • 11. Ability to cover door-to-door supply chain of our clients in Russia & CIS Automotive and parts logistics 10
  • 12. A leading LSP for Russian FMCG and retail industry Segment profile FMCG and Retail logistics Service portfolio Key clients Transportation using all modes of transport FMCG Retail FTL, FCL, LTL solutions Warehousing Baltika Auchan > Network of A-/B-class warehouses in all cities Beiersdorf Metro with population over 1 million Efes X5 Retail Group > Storage and cross-docking Kraft Handling of large SKU assortment (> 30k SKUs) L’Oreal Transportation and storage of special goods Mars > Temperature control Nestle > Humidity control PepsiCo Customs clearance Procter & Gamble Value-added services SCA Hygiene > Insurance (freight, liability) > Shipment tracking …and 500 more > Return of proof-of-delivery documentation companies STS/RLS is serving (or have served in the past) a large part of Russia’s FMCG leaders 11
  • 13. Tailored solution for transportation and warehousing FMCG and Retail logistics 12
  • 14. Our drive for quality and high service level never stops Summary CRM/ERP (IWIS, developed locally) IT systems WMS (Logistic Vision) development E-services (tracing of shipments and client notification) Commercial department includes a team of Key Account Managers (KAMs) Key account KAM fulfill the roles of “one-point-of-contact problem solvers” for clients management KAM role split based on industry specialization Certified by Bureau Veritas ISO 9000:2001 Maintained since 2004 Fast receipt of proof-of-delivery documentation Customized Availability of document scans for accelerated client notification solutions One bill of lading for complex transit shipments Quarterly client surveys conducted to measure service quality Client satisfaction measurement Surveys linked with quality KPIs, which form an integral part of STS/RLS performance management and quality assurance systems 13
  • 15. We are open for international cooperation Contact information Our clients focus on their business We take care of logistics Kirill Vlasov STS/RLS Logistics Strategy Development Director +7 (495) 775 02 02 stsmow@stslogistics.net +7 (495) 933 00 33 moscow@rls.ru +7 (985) 760 2209 (mob.) kvlasov@rls.ru www.stslogistics.net www.rls.ru 14

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