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080827_Vietnam Logistics Summit 2008_Vietnam Logistics in Motion
 

080827_Vietnam Logistics Summit 2008_Vietnam Logistics in Motion

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    080827_Vietnam Logistics Summit 2008_Vietnam Logistics in Motion 080827_Vietnam Logistics Summit 2008_Vietnam Logistics in Motion Presentation Transcript

    • Vietnam Logistics in Motion Prepared for: Vietnam Logistics Summit 2008 Prepared by: Spire Research & Consulting Date: 27 August 2008Prepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 1
    • Global Outlook & Growth Drivers Growth to continue but at a slower rate in 2008 & 2009 World growth will slow to ~4% in 2008, with emerging markets remaining as lead growth drivers While weaker US demand and a weakening US$ will make a big impact on the more export dependent economies of TW, HK & SG… … other growth drivers in the region - including healthy domestic demand, exports to non-US markets, foreign direct investments (FDIs), and fixed asset investment (FAI) – remain on track Real GDP Growth (Y-o-Y) Based on PPP Weights Difference from Current Projections Oct 2007 IMF Update 2005 2006 2007 2008 2009 2007 2008 World Output 4.4 5.0 4.9 3.7 3.8 -0.3 -1.1 United States 3.1 2.9 2.2 0.5 0.6 0.3 -1.4 Euro Area 1.6 2.8 2.6 1.4 1.2 0.1 -0.7 Germany 0.8 2.9 2.5 1.4 1.0 0.1 -0.6 China 10.4 11.1 11.4 9.3 9.5 -0.1 -0.7 India 9.1 9.7 9.2 7.9 8.0 0.3 -0.5 Source: IMF, World Economic Outlook, April 2008Prepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 2
    • Global Outlook & Growth Drivers (cont‟d) Growth to continue but at a slower rate in 2008 & 2009 Foreign Direct Investment (FDI) inflows into AP remain strong, including for Vietnam China FDI will probably exceed US$70b for 2008 Indian FDI has been surging since 2006 and is likely to hit US$25-35b for 2008 Vietnam‟s FDI surge (~US$30b likely in 2008) continues unaffected by the inflationary crisis, due to continuing political stability & a likely easing of the DongPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 3
    • Regional Overview for Logistics Robust but slowing growth in 2008 Developing Asias trade performance in the last two decades has been remarkable Asia now accounts for 40% of the worlds total output in PPP terms, and this percentage is expected to rise to 60% with the rapid output expansion in China and India The Asian transportation market is projected to grow from US$700 billion to over US$1.3 trillion by 2020*, with most of the growth coming from the North-east Asian mega marketPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 4
    • Air/Ocean Freight Growth will continue but at a slower rate compared to 2007 Fuelled by strong trans-Pacific and East Asian trade, air and ocean freight volumes have been increasing steadily Long-term growth prospects are bright By 2025, 2,990 aircraft will be added to freighter fleets Double-digit growth in demand for international container shipping services in 2007… Cape-size ships, the largest type of bulk carrier, have almost tripled in price to US$96m from 1998 Container shipping on the Asia-EU and Asia-US routes have slowed in 1Q-2Q 2008, though intra-Asian routes have not been badly affectedPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 5
    • ASEAN Initiatives ASEAN integrates further into single market ASEAN logistics market: upward trend for the past 3-4 years, and is expected to continue growing strongly over the next five years Under the ASEAN Free Trade Area (AFTA), significant progress has been achieved in reducing goods tariffs 99.8% of goods under the Inclusion List for the Asean-6 countries are in the tariff range of 0-5% ASEAN Open Skies Agreement in 2008 China implemented the China-ASEAN Trade in Goods (TIG) Agreement in July 2005 China-ASEAN trade, which grew annually by 23% from 1997-2005 to reach US$130.5b China‟s trade with ASEAN 9% of total in 2005, making ASEAN its fifth largest trading partner Vietnam was admitted as a member of WTO in 2007Prepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 6
    • Asia‟s Infrastructure Initiatives New infrastructure & systems will aid logistics growth in Asia China Road & Rail 23% more in the next 5 years; highway from Hanoi to Kunming Construction of 100,000 km of new rail lines Hong Kong Air World‟s busiest airport for international cargo since 1996 Air cargo reached 3.6mil tonnes & express air cargo grow 13% annually India Road & Rail USD12b road project through National Highway Authority of India Privatizing rail infrastructure Korea Sea Gwangyang and Busan ports Air Incheon International Airport: 4th largest air freight handler, expanded to 429,000 m2 by 2020 Malaysia Air Senai Airport Terminal Services: M$1b upgrade to increase throughput to 328,000 tons Philippines Road & Rail US$430m project "logistics hub" as part of the Luzon Urban Beltway super regions blueprint Singapore Sea World‟s largest container port, connecting 123 countries and >600 ports A full range of logistics and supply chain management capabilities Taiwan Logistics: revenues of NTD 791.9b Government policies streamlining trading, customs clearance & shipping procedures Thailand Road & Rail East-West Economic Corridor (road); North-South Economic Corridor (rail) Sea e-logistics and RFID electronic container and seal systemsPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 7
    • Vietnam‟s Infrastructure Investment VN is committed to investing heavily in logistics Logistics volume continues to rise In 2007, ships & cargo going through Vietnam‟s sea ports 88,619 with a total of 320,176 million tons of goods Strong growth in key economic hubs such as Hai Phong (47.32%), HCMC (17.41%) and Da Nang (27.27%) Noi Bai and Cat Bi airport will be enlarged to enhance capacity Roads will be upgraded to meet international or national standards The Asian Development Bank soft loans totaling US$880m to Vietnam, helping three projects on building expressways and roads this year.Prepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 8
    • Vietnam‟s Infrastructure Investment (cont‟d) VN is committed to investing heavily in logistics MOUs were signed between 16 companies from both the south of Vietnam and the city of Zhanjiang of China regarding a number of projects worth a total of US$158m in seaports and other industriesPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 9
    • Country Outlook – Commodities & Logistics Vietnam logistics and infrastructure set to ride on commodities boom Vietnam has set an ambitious target of earning more than US$58b from exports in 2008, an increase of around 20% from 2007Prepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 10
    • Country Outlook – Commodities & Logistics (cont‟d) Vietnam logistics and infrastructure set to ride on commodities boom Rising commodity prices are lifting Vietnam‟s booming commodities exports and, together Vietnam‟s share of world markets for with a post-WTO surge in manufacturing FDI, agricultural/wood commodities, 2000 helping turn the country into a global export exports Share of Change in powerhouse Commodity (USD world market share mil) market (1996 – 2000) Vietnam‟s produce – particularly seafood, rice and coffee Rice 360.2 5.9% -30% The Ministry of Fisheries plans to export US$2.3b Coffee 585.4 4.8% +38% worth of seafood this year, $380m from Ca Mau Spices 130.4 4.8% +88% Province alone Shellfish 820.8 4.3% +80% The second largest coffee exporter in the world – Natural revenue of US$1.8b in coffee exports, rubber 140.0 2.9% +94% Demand for specialized handling and Pulpwood 39.7 1.5% +38% transportation will rise significantly – especially in Tea 30.7 1.2% +67% the area of integrated cold chain Source: Comtrade Public refrigerated warehouse (PRW) investment will increase storage capacity by more than 90,000 pallet positions Haisan Resources invested US$3.6m to set up a temperature-controlled logistics facility in southern VietnamPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 11
    • Country Outlook – Collaboration Vietnam‟s collaborations with Singapore Vietnam is collaborating with Singapore in developing integrated port and logistics facilities in Vietnam At least four new container sea ports projects with Singapore PSA‟s joint venture with Saigon Port to develop a container terminal in the Ba Ria-Vung Tau province NOL Group has a stake in the Vietnam International Container Terminals, the first dedicated container port in VietnamPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 12
    • Country Outlook – Collaboration (cont‟d) Vietnam‟s collaborations with Singapore A Vietnam-Singapore joint venture kicked off construction of Vietnams first petroleum bonded warehouse in Van Phong Bay of Khanh Hoa Province on the central coast A JV with PB Tankers of Singapore, total investment US$170 million in Van Phong petrol terminal With the most advanced equipment, comparable to any other storage terminals in AsiaPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 13
    • Case study 1 Views from Vietnam‟s manufacturing/exporting companies Industry Furniture Garment Electronics Exports Sales 100% – 200 containers a month 70% 0% but planning to export mainly to Europe and Asia Imports Raw materials – wood and cloth Raw materials – cloth (60- Electronic parts (50%) 70%) mainly from Asia Current Logistics Sea freight Sea freight Warehousing Requirements Bonded warehousing Bonded warehousing Land transport Land transport Land transport Tracking System Manual JIT 60% software, GPS 40% manual Challenges Faced Time lapse between date Slow loading and Poor stock management of ship arrival and date of unloading periods due to Poor traffic conditions on warehouse entry at port strain on sea port the roads lead to delays Shipping company infrastructure Limited equipment for appointed by clients Complicated custom loading and unloading Frequent changes in shipping procedures company addresses without Limited warehouse space proper channel of updating at any one time Few companies provide full service because of heavy responsibilities Future plans To invest in inventory software To invest and upgrade To separate the logistics inventory software, using arm from the parent barcodes and scanners company To build own warehouse To invest and upgrade inventory software Preference for bonded warehousesPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 14
    • Case study 2 Views from foreign logistics companies in Vietnam Industry Yusen Air & Sea Service SP-PSA International Port Co. Ltd. DHL-VNPT Express Ltd (Vietnam) Ltd Logistics Yusen (Vietnam) currently SP-PSA‟s new container port in DHL-VNPT Express is a joint-venture Asset in provides services such as Air & Vung Tau province, Vietnam will be between DHL and VNPT Group. The Vietnam Sea operations, international developed in two phases, with the venture‟s US$14 million project freight forwarding, 3PL services, first phase becoming operational involves: warehousing, bonded in 2009 3,140 sq m service centre in warehousing and customs Phase 1 construction of the Dong Nai, Southern Vietnam clearance terminal will be handled by A fleet of 100 vehicles, currently The company has a Penta-Ocean Construction the largest fleet in the express warehouse leasing Co. Ltd from Japan industry in Vietnam subsidiary near Hanoi as Courier depots in Hai Phong City, well as a bonded Vung Tau and Da Nang warehouse in Hai Duong DHL service centre in Hanoi by province Dec 2008 Future Yusen will focus more on The terminal is projected to To continue to make more plans staff development by have an annual capacity of 2 investments in Vietnam to help providing them with million TEUs and will be expand network and connect adequate training capable of receiving vessels of Vietnam‟s key economic centers up to 80,000 DWT Customizing their approach The company has shown interest in overcoming regulatory Connected by an extensive in investing more in Binh Duong limitations road and inland waterway and Dong Nai, network to Ho Chi Minh City & Eyeing investment South Vietnam‟s industrial opportunities to expand parks their business furtherPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 15
    • The Concluding Picture Vietnam Logistics Is in Motion! Ride On This Fast Motion Asian economic growth will slow in 2008 and 2009, before going up again in 2010 Asian domestic demand to cushion against weaker exports, so what Asia will see is probably a slowdown, not a 1998-style recession The outlook for international trade and logistics is positive – governments and private companies in Asia are prepared to invest in transport and logistics infrastructure including in Vietnam In spite of an inflation induced slump in domestic consumption, Vietnam will continue to grow its export sector, particularly in commodities & manufacturingPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 16
    • The Concluding Picture (cont‟d) Vietnam Logistics Is in Motion! Ride On This Fast Motion The logistics and infrastructure sector will become an important economic sector for Vietnam in the next 3-5 years, capable of contributing up to 15% of the national GDP and offering many opportunities to private business, both local and foreign Sizeable growth in industries such as warehousing (including refrigerated storage), specialized transportation (e.g. refrigerated trucks or “reefers”), distribution parks (“distri-parks”), ports, airports, road infrastructure, power generation and water treatment Transportation alone accounts for 40-60% of logistics costs – this sector will see more investment, with maritime transport growing to take up a larger share of domestic cargo transport Commodities trading, especially in food products, will boom in Vietnam, requiring specialized material handling systems Technology advancement in supplies tracking and bonded warehousing will be the next big thing in demand by Vietnam„s locally-based manufacturers/exportersPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 17
    • Tel: (65) 6838 5355 Fax: (65) 6838 5855 78 Shenton Way #20-01 Singapore 079120 sg.info@spireresearch.com www.spireresearch.comPrepared for: Vietnam Logistics Summit 2008 Date: 27 August 2008 Page 18