ASEAN An Important Growth Engine in Asia By Dr Robert Yap Chairman & CEO, YCH Group Co-Chairman, Chairman, ASEAN Business Advisory Council HKTDC World SME Expo 4 December 2009
Agenda Brief Profile of YCH Group Case Studies / Outlook on Asean: Latest economic development and business opportunities in ASEAN region How Logistics & Supply Chain Management drives the growth of the ASEAN region 2
End-to to-end Supply Chain Mgt YCH provides Integrated Logistics and End-to- End Supply Chain Management services through a holistic suite of supply chain solutions to world-class MNCs. World-Class MNC Clients Consumer Chemicals /Healthcare Award-winning winning Proprietary Innovative SCM Solutions: INTRIBUTION, INTRABUTION, RETROGISTICS Complementary Value-creating Innovations & Solutions: 7PL,, ZIM,, epod, V-Hub,, Y-MergeY Merge Electronics YCH Group YCH Asia Pacific Network North Asia Greater China Tianjin Suzhou, Kunshan, Chengdu ShanghaiHangzhou Xiamen India, Chennai Taiwan, Hsinhsu Shenzhen, Hong Kong Thailand, Bangkok Philippines, Manila Malaysia, Johor, KL,Penang Singapore ASEAN Indonesia, Jakarta, Surabaya, Medan, Cibitung YCH Integrated End-to to-end Supply Chain Management Korea Australasia Perth Sydney Award-Winning Heritage Testimony to Supply Chain Excellence 6 Innovation Dev t Awards Singapore Innovation Class Corporate HR Award IT Leaders Award National Training Award ZD NetAsia SMART 50 Award Singapore Customs STP Cert Supply Chain Asia Asian 3PL of the Year Singapore Quality Class ISO 14001 OHSAS 18001 ISO 9001 ISO28000 escm Award National IT Award Asia Logistics Hall of Fame Award CIO 100 Award Zero GST Licence (Type III) Frost & Sullivan ASEAN 4 Logistics Awards: - Best IT/Electronics LSP (S pore) - Best Domestics LSP (S pore) Ernst & Young Entrepreneur of the Year National Infocomm Award 3
The YCH Story: Shifting the Paradigm 1955 1980s - 1990s 1995 2005 2005 onwards YAP CHWEE HOCK TRANSPORT AND GENERAL CONTRACTORS Your Partner in Total Logistics Passenger Transportation Integrated Total Logistics Service Provider Supply Chain Management Supply Chain Solutions 4
Our Asia Pacific Network Growth Engines of the World Ahmedabad Mumbai Pune Bangalore Cochin Delhi / Noida / Gurgaon Hyderabad Chennai Calcutta INDIA Presence in 13 Key Cities and expanding INDIA CHINA Taiwan Hong Kong Thailand Vietnam ASEAN Korea Philippines Japan CHINA Several gateways to connect the entire Greater China region Specialization Emerging Growth Markets and Developing Countries Malaysia Singapore Corporate HQ r i s e @ ych Indonesia Australia New Zealand 5
To Complement or Compete? With the China Dragon and India Elephant awakening, these massive consumer-driven populations will be next two main engines of growth in Asia Asean is frequently seen as 3 rd engine of growth in Asia With ASEAN straddled between the 2 superpowers China and India, we can either: COMPLEMENT provide complementary services like valueadding, regional distribution to support its manufacturing and production. Plenty of synergy to make entire Asean region more competitive, OR COMPETE band together as a single production base / hub and provide other competitive advantages. (Regional integration and collaboration through various Asean-related schemes, such as APPS, AGL, ASW..) 6
China YCH s Focus Pioneer to enter Chinese market in mid 90s; well-established gateways along coastal regions such as Tianjin, Shanghai, Xiamen, Hangzhou, Guangzhou, Hong Kong and Macau Next step is to tap on the strong potential in second-tier and inland cities, eg: Chengdu City Supply Chain Working with provincial governments to ensure food quality and hygiene, minimize traffic congestion and air pollution, improve SCM best practices in solutions and infrastructure. Also strengthening our VMI and ODM capabilities to help boost manufacturing efficiency increasing trend of global electronics and hi-tech companies outsourcing their manufacturing to ODMs in Taiwan and China Worldwide EMS & ODM industry revenue forecast 2005 to 2013 7
India YCH s Focus Entered India since 2006; presence in 53 Indian cities today Refine last mile distribution and end consumer goods fulfillment processes to streamline the last leg of the end-to-end supply chain Unique IOR and comprehensive freight capabilities Project delivery specialist appointed by Indian Ministry of Education 8
Asean s Key Trading Partners China-Asean Cooperation China-ASEAN Free Trade Agreement would be put in place by 2010 as planned Chinese Premier Wen Jiabao announced in April 2009 that the Chinese government would set up a 10-billion-U.S. dollar "China-ASEAN Fund on Investment Cooperation" to support infrastructure development in the region, and also plans to offer a credit of 15 billion dollars to ASEAN countries and provide 270 million yuan (39.5 million dollars) in special aid to less-developed ASEAN countries. India-Asean Cooperation In Aug 2009, India and Asean also signed a free trade agreement, which will kick in from January 1, 2010, to allow duty free trade of 4,000 products ranging from steel to apparels to sugar and tobacco over time. Expected to boost trade by USD 10 billion in the very first year The pact opens a 1.7-billion consumer market to the member countries with a combined GDP of USD 2.3 trillion 9
Asean YCH s Focus Boosting cold chain and FMCG (fast moving consumer goods) capabilities in large consumer markets like Indonesia and Philippines Optimization of complex transportation networks to simplify consumer distribution and ensuring food freshness and product quality Value-adding to world-class manufacturers and suppliers in the hi-tech and consumer electronics industries Partnership and scalability in Asia Pac network Ensuring seamless end-to-end flow of goods 10
General Outlook on Asean When realized by 2015, the AEC (Asean Economic Community) would represent a single market and production base of 556 million people and a combined gross domestic product (GDP) of over US$1.17 trillion. Although IMF sees contraction in Asean due to current economic recession, it forecasts growth for the region from 2010 once economy recovers. Some 90% of businesses in Asean today are SMEs > this represents many growth and expansion possibilities through organic growth, or mergers and acquisitions 11
Our Asean Landscape The rise of emerging economies, particularly China and India, has reinforced ASEAN s determination to create a stronger, more united and cohesive ASEAN for sustainable growth - Asean Charter > ASEAN is rapidly developing and evolving (a) from subsistence farming to more diversified economies and (b) from command economies to more open, market-based economies > Some Asean countries are endowed with abundant but relatively unexploited natural resources > developing these markets and their related infrastructure/logistics become extremely essential > A large, untapped potential market > not just in consumer spending but also talent development to fuel growth of logistics industry in Asean 12
Supply Chain Management in Asean Good Synergy among Asean countries to provide a seamless value chain: While some countries like Indonesia and Vietnam are low cost manufacturing and production bases, others like Singapore, Malaysia and Thailand offer valueadded/tertiary services, good infrastructure, ports and hubs for superior connectivity Trade Facilitator: Due to its nature of cross border exchange and movement, Logistics/SCM encourages the creation of various business diasporas in the region 13
Asean s 12 Priority Sectors Electronics Air Travel Wood-based Products Healthcare Hospitality & Tourism Rubber-based Products Automotives Logistics & SCM Agro-based Products Textiles & Apparel E-Asean Fisheries These sectors were selected on the basis of comparative advantage in natural resource endowments, labour skills, cost competitiveness, and value-added contribution to ASEAN s economy. 14
Conclusion Transport and Technology Trigger Trade Good logistics network, infrastructure and well-integrated systems are the success factors that allow businesses to Scale and Grow in a very short duration World Bank states that improving (1) Port Facilities and (2) Competitiveness in the Internet services sector could expand Asean trade by up to 7.5% (USD 22 billion) and 5.7% (USD 17 billion) respectively, far more than the 2% by cutting applied tariffs Apart from being identified as one of Asean s Priority Integration Sectors, regional Logistics/SCM is also a key enabler of business growth in Asia Contract logistics in Asia has grown at 11% over the past 3 years It provides Efficiency, Speed, Resource optimization and Costsavings to fuel Asia s growth 15
Think Global, Act Local To successfully do business in ASEAN/Asia, companies must first align with local interests and culture attributes For YCH, what has worked for us: Last mile partnership, developing local talents, investment in strategic long-term assets, and leveraging industry initiatives in a timely manner By bringing in best practices in infrastructure and SCM capabilities, local government authorities welcome us to invest in their countries and in return, help us acquire strategic locations or licenses. Benefits to government, business community and the indigenous population > Our CSR (Corporate Social Responsibility) approach 16
where suppl ychain connects Visit us at www.ych.com 17