LOG.India June 2010 by Frewin Francis

www.logisticsweek.com

June 2010

Vol. 3 - No.09

Rs 100

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Port of Entrée Vijay Kalantri, the CMD of BIPL and Dighi Port Ltd, Maha’s first non-major port, sets the greenfield port rolling >> Page 30 NOW, 7PL 22

AT BAY 38

The YCH Group CEO talks about the legacy with Dell, the concept of 7PL and the India strategy

The $2-bn Indian seafood industry has not enough meat for big LSPs

BUILDING BRIDGES 46 The Yemen-Djibouti bridge can alter the global logistics map

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eDITORIAL

A Light-Bulb Moment

ecently, a friend who heads the Indian arm of an international 3PL confessed to me with a certain degree of frustration, “Boss, it is ridiculously tough to break into industries here.” He attributed this to a host of issues, but two factors stood out among all. The first one, he said, is ‘cartelization’. A few big logistics and supply-chain players corner a major chunk of outsourced work and it is very tough for a new player – no matter how skilled or sophisticated – to get in. However, I reckon this issue is common for any type of business in our markets. Ask any new entrepreneur in any industry and he will tell you the same thing (especially when it comes to aiming for big accounts) that big businesses have corned all the big, lucrative accounts and have closed ranks – this is the same feeling you get when you are new to Mumbai and trying to board a local train: seasoned travelers who have boarded Aanand Pandey the train from earlier destinations have formed groups, blocked the doorway and are Editor allowing in only those they know. Perhaps this phenomenon is the sign of an immature market, where networks and references count much more than merit and the willingness to prove oneself. However, lately many entrepreneurs have become successful in striking out big with clever strategies – offering unprecedented, disruptive cost innovations to customers being one of them. The second problem, more about the nature of our industry, was more intriguing – “Most companies don’t care much for any integrative approach towards supply chain.” Companies outsource piecemeal work – freight forwarding, transportation, warehouse space leasing, etc. They are not interested in looking at integrative solutions. Now this particular friend prides himself on having worked for international electronics and retail giants and I take him for his word. And this is one complaint I have heard not only from him, but very often even from industry leaders during interviews and at various forums. This issue works both ways. Customers, on their part, lament the lack of a true third-party logistics provider (3PL) who comes with a pan-supply-chain view and expertise. In many ways, this is not a misplaced concern. Dell Computers, for example, struggled with its supply-chain in India until it roped in the YCH Group, its Asia Pacific supply-chain partner, to handle its pan-India distribution. The degree of this problem may differ – new, sophisticated industries like telecom or automotive may have a better integrative view; old but underdeveloped domains like seafood logistics may have a totally fragmented approach – but the issue persists. So I was thinking of the root cause of this issue when, reading a study on the evolution of supply-chain management (SCM) in retail (Logistics and Retail Management, Kogan Page, the UK, 2004) done by John Fernie and Leigh Sparks -- both academicians from the University of Stirling, Scotland, UK -- it finally hit me. Consumer empowerment! The answer to the second conundrum lies in which level an industry is in between the two extremes of ‘push’ (supply-driven) and ‘pull’ (demand-driven). In the study, Fernie and Sparks traced the evolution of SCM in retail in the United Kingdom (which has a retail legacy very close to India’s) and propounded, among other things, that consumers demanding faster delivery and cheaper, better products put pressure on the entire supply chain, compelling all the supply-chain nodes to join shoulders and squeeze out better results. Take the example of our own $450-billion retail industry. Barring the 20 percent segment comprising organized players, the rest is a largely a ‘push’ market. Even the few organized players face no serious competition owing to the ban on multi-brand retail FDI. Result: the retail consumer is not as empowered as his developed-market counterpart. Hence retail SCM, despite all the buzz, leaves much to be desired. Even in other more liberalized sectors like auto or electronics, myriad state laws, real estate bubbles and other such inefficient mechanisms ensure that the Indian consumer is still not powerful by international standards. Hence, principals are not as paranoid about integrating supply-chain as they would be operating in developed markets. Admittedly, even though I would like to think I have understood the root cause, I don’t know what the solution to this issue is. Do we –the 3PLs in particular – need to hold back the integrative approach till markets evolve, or should we hone our strengths in disparate areas – warehouse, transportation, custom clearance et al – to survive? If you think you have the answer, please mail me at aanand@logisticsweek.com

Aanand Pandey INDIA |

May 2010 | www.logisticsweek.com 5

Contents 22 Interview

“7PL is Not Just a Concept”

38 Feature

Seafood Logistics: LSPs at Bay Organised logistics service providers have studiously abstained from seafood logistics. However, seafood exporters miss their presence and expertise.

Robert Yap, Chairman and CEO of YCH Group, explains the company’s plans for India during his visit to inaugurate YCH DistriPark.

24 upshot Of Climate and Travel A report on two events in the city. DHL has reduced CO2 emissions resulting in savings of Rs 5 cr in AsiaPac alone. And CONCOR invited rail counterparts to solve the issue of pending containers at ports.

24 38

26 opinion

Retail’s Holy Grail Organized retail is set to boom in India. Padmini Pagadala suggests various methods to catalyze success.

30 Cover story

Building for Change Al Noor Holding Investment will build one of history’s significant bridges between Yemen and Djibouti, once the respective governments give their consent.

Maha’s First Non-Major Port to Roll Non-major ports have a large role to play in the escalation of port traffic. The Dighi port may tread the same path to growth.

30 6

46 INDIA |

June 2010 | www.logisticsweek.com

June 2010 54 BaCK to BasICs

ADVeRtIseR InDeX

BullWhip, Kitting and saw tooth

Barcode India .......................................................41

The above-mentioned words are everyday logistics terms. Starting this month, we will revisit terms which are in the news in the supply chain industry.

BLR Logistics ...................................................... 53 Capricorn ............................................................ 55 CeMAT 2010 ....................................................... 49 Demag Cranes & Components India .....................13 DHL Express....................................................... IFC Everest Industries.................................................. 3 Exide Industrial.....................................................11 Frost & Sullivan Strategy Workshop .................... 33 Grace Worldwide Movers......................................17 Green Earth Translogistics ................................. IBC Infolog Solutions.................................................. 21 Institute of Supply Chain Management ................ 45 Logisticsweek.com.............................................. 55 Orange City Logistics Park .................................. 29 Piaggio Vehicles ...................................................19 Round the Clock Logistics ................................... 51

56 BooK eXtraCt

Safexpress ............................................................ 9

Mixed Blessing

Saudi Transtec .................................................... 59 Schaefer Systems International ............................15

Companies in specific markets work together to achieve new levels of efficiency and costsavings.

Tata Bluescope Steel ........................................... BC Vijay Logistics ....................................................... 4

May 2010

Vol. 3 - No.08

Rs 100 Germany

www.logisticsw

May 2010

eek.com

VRL Logistics ...................................................... 25

Bulgaria

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LE A

ConsolidatioD n

How Allcar go Global Logis Kiran Shett y built an LCL tics CMD Shashi continents dominion across from scrat ch >> Page 34 ADIEU, DR PRAHA LAD 26

The great managem ent thinkerâ&#x20AC;&#x2122;s ideas corporate think helped rural

reGuLars

58 panoraMa

news

LOGISTICS BY MIGHT 44

Everything you to know about wanted Chinaâ&#x20AC;&#x2122;s logistics industry

HANDLE WITH FINESSE 64

Why material handling is so mission-critical

events

JUNE 2010

Books, Blogs and Journals A section that will capture books, blogs and journals that talk about the supply chain industry and logistics. INDIA |

June 2010 | www.logisticsweek.com 7

< news

TRAIN OF THOUGHT

We have an engagement strategy for India and want to make it part of our international supply chain. We have signed 13 MoUs with Indian companies and are looking at SMEs too. — vivek lall vice-President and India country head, Boeing’s Integrated defense systems, on plans to bid for defence projects up to $30 bn in India

The supply chain is highly unorganized to the tune of about 60 per cent in India. Of late, we are seeing a lot of consolidation in this space. MNCs are looking at third party logistics players and will acquire companies which meet their needs. — Param desai research Analyst (logistics), Angel Broking on consolidations expected in the logistics sector

The supply chain is one of the big challenges. We are willing to invest whatever it takes in the supply chain, at the back-end. But that in itself won’t deliver all the efficiencies. — raj Jain wal-mart (India) chief on India’s inadequate storage and processing facilities thus leading to huge wastage of food and grains

OPERATIVE INDEX* Hitachi Transport, Flyjac, Nippon, Mitsubishi Logistics, Gateway Distriparks, Snowaman Frozen Foods, MJ Logistics, TAKE Supply Chain, OCLP, Gayatri.................................... 12 DHL, Danmar Lines, Cadbury India, TNT,NMPT, TAKE Solutions ................................ 14 Larsen & Toubro....................... 16 Sterlite, Sical Logistics, Chettinad Logistics, ABG, GPPL, JSPL, Simplex, Srei, Gammon, Sara, LILFS, Maritime Infra, Punj Lloyd, Sew Infra, Pembinann, IMC, ITD, Leighton .................................18 *Key entities mentioned in the news section

Pan-India Permit: UP, Orissa Play Truant The 15-K national permit regime for transport operators was to be implemented from May 8, but three key states like Uttar Pradesh, Orissa and Jammu & Kashmir are playing hard to get. Then there is red tape, reports Jayashree mendes Mumbai

he announcement of Rs 15-K national permit in mid-April brought a wave to relief to both national and regional transport operators. Under the previous rules the operators were paying Rs 20,000 per truck for the first four states and Rs 5,000 for each additional state. With the new rule, all that could become part of history. According to industry sources, the move could save truck operators an average of Rs 10,000 annually per truck, not to mention the time and resources spent in pushing through the labyrinthine transport procedures involved at various state RTOs. However, most big and key

INDIA |

states were ambivalent on the subject. This, despite the fact that the Transport Development Council, which passed the resolution comprised transport authorities and commissioners of each of these reluctant states. Also, a notification was sent afterwards to the said transport authorities requesting the latter to implement the rule. At the time of reporting (May 27), barring Uttar Pradesh, Orissa and Jammu & Kashmir, all other states have begun issuing the new permits to its transport operators. This is an improvement considering that for almost a month the entire North (barring Delhi) and And-

June 2010 | www.logisticsweek.com

hra Pradesh in the South had put off adhering to the new rule. So why are these three states refusing to comply?

who moved my Pelf A transport ministry ofﬁcial speaking to Log.India on condition of anonymity said that the

issue is about dilution of authority at the state level, which could translate into less opportunity for pelf for local transport authorities. “Power,” asserts the ofﬁcial “is what these people do not want to lose.” Notably, a Transparency International report published

Punjab Takes Permit Online Punjab claims to have become the first state to launch an online National Permit system. At the launch, deputy chief minister Sukhbir Singh Badal handed over permits to truck operators soon after they filed applications over the Internet. Badal also has a unique SMS service. This service would come to the aid of any driver who has been illegally stopped by any authority. An SMS by a operator would elicit an immediate reply by the Punjab Transport Department confirming the authenticity of the truck permit.

Driving the Warehousing Revolution NAGPUR LOGISTICS PARK Over 11,90,000 sq. ft. of warehousing space. Strategically located on NH 6.

AHMEDABAD LOGISTICS PARK Over 2,74,000 sq. ft. of warehousing space. Strategically located on NH 8A.

GURGAON LOGISTICS PARK Over 1,95,000 sq. ft. of warehousing space. Strategically located on Sohna road.

KOLKATA LOGISTICS PARK Over 1,84,000 sq. ft. of warehousing space. Strategically located on NH 2.

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< news two years ago said that for every kilometer covered on the road, trucks pay 0.70 paise in bribe. RTO and Police, two key enforcement agencies get almost 90 percent of the total bribe involved in trucking operations of which RTO gets 41.2 percent. The panIndia permit could severely dent RTO’s share of the pie. Transport operators in general complain of the high level of corruption prevalent in the North -- a key factor that could apparently explain the reluctance of these states. Bal Malkhit Singh, president of Bombay Goods Transport Association says: “Truckers have shelled out up to Rs 2,000 per truck at check posts on an average travelling from Mumbai to North and East India. Now their (the North and East Indian states) unwillingness to toe the line shows how deep the rot is.” Vishwanathan Karamadi, National Head (Operations), VRL Logistics, a company with pan-India operations says: “Our trucks passing through North India are constantly scrutinised. Particularly in Uttar Pradesh, our drivers are forced to bribe officials at RTO for petty things like lack of uniform, some lights here or there not working, and smudged papers.” Observers are also worried

that this issue could impel drivers to bypass the non-compliant states and take long country routes to reach their destinations. “This way they will avoid being checked,” says Karamadi. The states in the East and the North, knowing that they may have to comply sooner or later with the new regime, are busying themselves with amending the State Motor Vehicle Act. Once this happens, they should start with issuing the national permit, say local press reports.

Wheels of Change Old System n Truck operators could purchase a permit offering access to

four states at the time of buying the vehicle n For every additional state, an operator had to pay Rs 5,000 n In the case of last-minute permits, they could avail of a one-

week permit n There was much loss of revenue to the government as

underhand dealings were rife and bribery common n State authorisation fee of Rs 500 had to be paid to the RTO

New System n Truck operators have to approach the district RTO to apply

for the permit n A sum of Rs 15,000 has to be paid to the assigned SBI

Bureaucratic Approach The processes of fee collection and issuing of permits are complex and reveal that little thought has gone into putting proper systems and processes in place to ensure smooth implementation. RK Gulati, the joint secretary of the Delhi-based All-India Motor Transport Congress says: “We are happy that the national permit rule has come into being, but the ministry has appointed only one bank across the country to collect the permit fee.” The government has authorized State Bank of India (SBI) to collect the permit fee. Gulati added that locating the pay-in centre is a big headache because the SBI has authorised only 248 out of its 18,000-odd branches across the country. For the whole

The national permit will ensure a smooth ride for truckers

branch which will issue a receipt n The bank will then send an online notification to the nearest

RTO for verification n The RTO will send across an SMS to the operator informing

him about the status of the permit n Operators can save on revenue as the new rule will do away

with long hours at check posts n The question of availing a one-week permit has been ruled out n The state authorisation fee has been increased to Rs 1,000

of Delhi city, for instance, only one SBI branch has been authorised, whereas a relatively small and less busy state like Goa has six branches. Gulati says the bank is to add 63 branches to ease the pressure on transporters. “But that cannot happen in a day,” he says. It is understood that issues like one-week permit and additional payments for each additional state as per the old norms have been the roots of constant harassment. Bullying, false promises and financial squeezing have been rampant. The sort of single-window system promised now can curb these practices but the half-baked implementation is causing confusion among transporters. The government has been apprised of the irregularities, but very little has been done because, as the ministry official implies, “it is a

case of wheels within wheels”. Meanwhile, onlookers fear that the applications from transporters could pile up in the concerned transport departments because there is no mechanised system in place, yet. The transport ministry official informed Log.India that “We have discussed the matter with the National Informatics Center about developing a web-based system to issue the national permits, starting from operators applying for the permit, and then processing of the payment of Rs 15,000 as annual fee per truck to SBI.” As per the proposed system, the banks, as per the web-based system, will then send an online notification to the concerned RTO office where the application has been received. After verification, the applicant will be notified by SMS explaining the status of his application.

Over 66% of Indian Railways’ revenue comes from freight 10

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June 2010 | www.logisticsweek.com

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< news Company News

Hitachi Transport Acquires Flyjac in All-Cash Deal Mumbai

itachi Transport System, an offshoot of Japan’s Hitachi, has acquired Mumbai-based Flyjac Logistics for Rs 250 crore in an all-cash deal. The transaction with Hitachi Transport will open the large India-Japan logistics business to both companies. The new company in India will continue as Flyjac in India and add large Japanese giants to the existing list of Indian and European customer base of Flyjac. The takeover will offer Hitachi Transport a stronger presence in the Indian freight market. The deal will trigger consolidation including strate-

gic alliances and joint ventures in an otherwise unorganized freight forwarding sector. The deal propels Hitachi to the top 10 Indian logistics companies alongside big players such as DHL, Panalpina and Kuehne+Nagel. Flyjac Logistics, which is focused on ocean and air freight forwarding facilities, operates from 26 offices and 19 warehousing locations in India and has 650 employees. The company posted a profit of Rs 14 crore last fiscal on revenues of Rs 300 crore. Tokyobased Hitachi Transport has 235 offices in Japan and 190

overseas and specializes in third-party logistics and warehousing. The company’s main focus is heavyweight cargo distribution. Hitachi is the latest in a long line of Japanese companies to enter India. In 2007, Japan’s Nippon Express acquired JI Logistics to enter India, while Mitsubishi Logistics Corporation is a partner alongside Gateway Distriparks in South Indian cold-chain logistics company Snowman Frozen Foods. NYK, another big player from Japan, too, is present in India.

MJ Logistics Opens 4000-Tonne Cold Storage Warehouse in Haryana Mumbai

J Logistic Services Ltd (MJ), a third party logistics solutions provider, has commenced operations of its 4,000 tonne capacity cold storage warehouse and distribution facility at Palwal in Haryana. The cold storage is part of the 200,000 square feet logistics centre offering temperature controlled chambers from 18 degrees to -25 degrees centigrade and will offer services to customers across northern India. At present the facility is host to customers in the frozen food and specialty products segment like McCain’s Foods India and Danisco India.

The dearth of organized supply chain in cold storage in India is a major bottleneck while supplying fresh and quality perishable produce. MJ Logistics, through their technology driven cold storage warehouse expect to address the complexity in cold storage management by helping reduce waste and cost of handling, increase shelf life, and storage of perishable products through efficient management. The facility boasts of having 5000+ pallet positions for freezer & chilled products, fully-equipped multi-temperature control and is built to provide

handling and shipping of temperature-sensitive products. A unique feature is the intelligent storage systems capable of handling frozen and chilled products including humidity controls for food and vegetables. With separate storage areas for vegetarian and non-vegetarian products, the warehouse has provisions for chiller rooms that are capable of maintaining temperatures between 0°C and 18°C with a RH ranging from 65 to 90. As part of its green initiative, the high-tech warehouse has an ammonia based system with variable frequency drive.

TAKE Supply Chain Awarded Top 100 Logistics IT provider Chennai

AKE Solutions Ltd’s division TAKE Supply Chain has earned recognition as a Top 100 Logistics IT Provider by Inbound Logistics magazine. Drawn from a pool of more than 300 companies, using questionnaires, interviews, Inbound Logistics selected companies that are leading the way in 2010.

OCLP to Build Logistics Park Nagpur

range City Logistics Park (OCLP) is constructing two warehouses at Nagpur. Spread over 90 acres, the warehouses measure one lakh sq ft each. OCLP is committed to building 10 warehouses altogether. The company has also kept the provision of cold storage to cater to the pharmaceuticals and FMCG sectors.

Gayatri Bags Road Projects Worth Rs 2,200-Cr Mumbai

ayatri Projects has secured a road project worth Rs 2,200 crore from the Andhra Pradesh Road Development Corporation for four-laning the Hyderabad-KarimnagarRamagundam Road on buildoperate-transfer mode. The work is scheduled for completion in 30 months. The concession period is 25 years.

Indian logistics market saw revenues of $75 billion in 2009, about 6.2% of the GDP 12

INDIA |

June 2010 | www.logisticsweek.com

< news

DHL Boosts Freight Services From India Mumbai

HL has opened its new ocean freight terminal in Kochi. Simultaneously, the company has launched weekly direct Less than Container Load (LCL) consol services connecting Kochi, India to Europe, North America and emerging markets via DHL’s multinational gateway in Colombo, Sri Lanka. Operated by Danmar Lines, DHL’s in-house carrier, the new service from Kochi via Colombo will reduce transit times of up to three days. Kochi is a major port on the west coast of India and serves not just the state of Kerala, but also the neighboring states of Karnataka and Tamil Nadu, all of which are seeing considerable growth rates in foreign trade. With most key

DHL Wins Best C&F Agent Award Mumbai

DHL is strengthening its LCL business in India

infrastructure projects linked to the setting up of its transshipment terminal being close to completion, Kochi is expected to become a major hub of maritime export and import trade. Port authorities expect to handle 600,000 TEUs in the

first year and an impressive 3 million TEUs by 2014. For DHL, LCL is a crucial part of the total ocean freight product and the company is strengthening its position through resources to system development and maintenance.

DHL has been conferred “Best CFA of 2009 - North Region” by Cadbury India Ltd in recognition of its supply chain services. The award is a testimony of DHL Supply Chain’s commitment to implement best practices at Cadbury’s site at Delhi. DHL Supply Chain and Cadbury India have emerged stronger strategic partners over the past three years.

TNT Beefs up Infrastructure in Eastern India Bengaluru

NT has launched a high growth strategy to enhance infrastructure and connectivity across India. The company plans to add over one lakh sq ft to the existing facilities in eastern India. Recently, the company set up new facilities in Patna,

Jamshedpur, Bhubaneswar and Ranchi. It also plans to strengthen existing facilities in cities like Kolkata, Howrah, Behragowda, Siliguri, Guwahati, and Cuttack. Additionally TNT will also improve connectivity of the region within India with its other regional hubs as well as international sectors, especially China and Europe. The company plans to capitalize on the huge potential in eastern India, both from an outbound and

From the East to nearby countries is a step away

inbound perspective, and has thus decided to upgrade and

expand its infrastructure in the region.

Appointments NMPT Gets New Deputy Chairman TSN Murthy has been appointed as Deputy Chairman of New Mangalore Port Trust (NMPT) by the Government of India. He assumed charge early last month. Prior to this, Murthy was Additional Commissioner of Income-Tax in Mysore. Murthy, an IRS officer, holds a masters degree in literature and is a graduate in law. TAKE Solutions Names Shobana NS as CFO TAKE Solutions has appointed Shobana NS as chief financial officer. Shobana has over 15 years of expertise in strategic and operational aspects of management with experience in Supply Chain Management and General Management roles. She began her journey with TAKE Solutions since its incorporation in 2000. In this period of 10 years, her proficiency in both strategic and operational roles helped her promotion to VP finance & accounts before being promoted to her new role.

Container traffic at ports increased at a CAGR of 15.67% over the past 5 years 14

INDIA |

June 2010 | www.logisticsweek.com

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< news ROAD

Infra Projects Worth Rs 14,000 Crore Approved New Delhi

he Cabinet Committee on Infrastructure has approved the expansion of 12 National Highway projects and development of a multi-purpose berth at Paradip Port. The expansion is expected to cost around Rs 14,000 crore. Some of the major projects approved include the four-laning of the 174-km long NagpurBetul section of NH 89 in Madhya Pradesh and Maharashtra at a cost of Rs 2,499 crore. The Cabinet also approved the implementation of two laning of Dindigul-Theni section of NH45 and Theni Kumli

section of NH 220 and the six laning of 59.87 km long HosurKrishnagiri section of NH-7 in the Tamil Nadu at a total cost of Rs 1,036 crore. Simultaneously, it approved a proposal to build multipurpose berths to handle clean cargo including containers at Paradip Port on BOT basis at a cost of Rs 387.31 crore. Other major projects approved included the four-laning of the 65-km long Chhapra Hazipur section of NH 19 in Bihar, four laning of SambalpurOrissa/Chhattisgarh section of NH-6 and Bhubaneswar-Puri section of NH 203 in Orissa and

The government is moving fast on enhancing infra projects

the four-laning of the 126.62km long Karnataka/Kerala Bor-

Traffic Management Board Bill Introduced in Parliament New Delhi

he Road Transport and Highways Minister, Kamal Nath, introduced the National Road Transport and Traffic Management Board Bill in the Lok Sabha last month. According to the new bill, the board will recommend standards regarding highways, operations, and maintenance and safety requirements of vehicles. Based on the recommendation of the Board and after consultation with the National Highways Authority of India (NHAI), the Centre will notify standards with regards to national highways and vehicles. In case the standards are not maintained, as notified by the Centre regarding vehicles and highways, the board can fine up

to Rs 10 lakh. The Bill proposes creation of a National Road Safety and Traffic Management Fund for meeting the expenses of the Board. The Fund will receive one per cent of the revenue from the cess on diesel and petrol allocated under Central Road Fund. According to the Bill, the board will recommend the minimum design, construction, operation and maintenance standards for the national highways. It will also recommend minimum standards for establishing and operating trauma facilities and para-medical facilities for dealing with traffic related injuries on the national highways; conduct safety audits to monitor compliance with standards noti-

fied by the Central Government. The Board will recommend minimum safety requirements and standards for the design and manufacture of vehicles, and define load capacities of vehicles.

Safety measures l Set up an independent body to draft safety provisions for national highways l The body will also draw safety standards in road designs l Create National Road Safety and Traffic Management Fund l Conduct regular safety audits of national highways

der- Kannu section at Rs 1,563 crore among others.

L&T Bags Rs 1,450cr Road Project Mumbai

arsen & Toubro has bagged a Rs 1,450 crore contract from the NHAI for six-laning 148.30 km of the Krishnagiri-Walajahpet Highway (NH 46) in Tamil Nadu. The project will be executed on design, build, finance and operate (DBFO) basis. As part of Phase-V of the National Highways Development Programme, NHAI is widening four-lane stretches of the Golden Quadrilateral project to six. This corridor forms the main road connectivity between Chennai and Bangalore and serves both commercial and passenger movement between the two cities.

Road freight will rise from 3,000 mt in 2009-10 to 3,700 mt by 2013 16

INDIA |

June 2010 | www.logisticsweek.com

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< news PORT

Tuticorin Port Shortlists 9 Cos for Berth Project Chennai

he Tuticorin Port Trust has shortlisted nine out of a total of 22 firms that responded to RFQs invited for construction of a 7 mtpa capacity dry bulk cargo berth, known as North Cargo Berth Two, by way of publicprivate partnership. The firms include Sterlite, Sical Logistics, Chettinad Logistics and ABG. The names have been sent to the Union Government for security clearance. The berth, estimated to cost Rs 312 crore, will handle copper concentrate for Sterlite and industrial coal.

Jan de Nul, the Belgium dredging major, had been selected for undertaking capital dredging to improve the draft from 10 m to 12 m. In the current fiscal, the Tuticorin Port is estimated to handle 25 million tonnes of traffic against 23 mt in 2009-10. The port handles about six million tonnes of coal for the Tamil Nadu Electricity Board, another six mt of container traffic and two mt of copper concentrates and the balance being fertilizers, cement and other cargos.

Pipavav Port to Invest Rs 200 Cr on Infra Ahmedabad

ujarat Pipavav Port Ltd (GPPL) plans to invest nearly Rs 200 crore, out of the capital market proceeds, on further development of infrastructure at the port. The company, which is awaiting the SEBI nod for its proposed IPO, will use the proceeds to repay Rs 300 crore worth of debt and Rs 200 crore for acquiring a crane, developing rail sidings,

a container yard and building of roads at Pipavav. GPPL had so far invested Rs 1,500 crore at Pipavav. APM Terminals has a 58 percent stake in the port it runs while the rest is with the financial institutions. The port’s current capacity is handling of six lakh TEUs of container cargo and 500 million tonnes of bulk cargo, but only half of this capacity is being used at present.

Expanding facilities could help GPPl use maximum capacity

Construction of the new berth is expected to cost Rs 312 cr

Centre Clears Paradip Port Plan for MultiPurpose Berth Kolkata

aradip Port Trust’s proposal for a multi-purpose berth through the public-private partnership mode has received the approval of the Union Government. The 5 mtpa capacity berth, to be built to handle clean cargo and containers, is estimated to cost more than Rs 370 crore. The Port Trust is yet to receive the security clearance. However, it plans to open the price bids subject to the security clearance. There were 10 bidders for the RFQ (request for qualification) – nine of them in consortia. Eight of them have been shortlisted for price bids and these include Mundra Port SEZ, JSPL-Simplex-Srei, Gam-

The 5 mtpa capacity multi-purpose berth is expected to cost more than Rs 370 crore mon-Sara International, ILFS Maritime Infrastructure-Punj Lloyd, Sew InfrastructurePembinnan idzer sdn BHD, IMC-ITD Cementation and Sterlite-Leighton. Meanwhile, PPT is preparing documents for the proposed oil berth for submission before the Economic Finance Commission. The berth would be built by the port itself at an estimated cost of Rs 180 crore or so.

IndIA’s mArIne PrOducts eXPOrts crOssed $2 BIllIOn In 2009-10 18

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June 2010 | www.logisticsweek.com

< news RAILWAYS

Railways Freight Earnings Rise 9.7 pc New Delhi

ndian Railways has started the 2010-11 fiscal on an optimistic note. In April 2010, the Railways’ total earnings were at Rs 7,292.25 crore, up 9.69 per cent against Rs 6,648 crore in April 2009. The cheer factor for the Railways is the good growth in the freight earnings, which account for over 65 percent of the total earnings. It mopped up Rs 4,948 crore of freight earnings in April 2010, up 9.57 percent over the corresponding period last year. Rail freight earnings, in April 2009, had registered a

The Railways’ freight earnings account for over 65 pc of its total earnings subdued growth rate of 3.25 percent over April 2008. The total passenger earnings during April 2010 were Rs 2,066 crore against Rs 1,853 crore during the same period last year, registering 11.49 per cent growth. The Indian Railways has also increased freight charg-

es for iron ore exports by Rs 100 per tonne. With this, it expects to mobilize an additional Rs 450 crore this f iscal if the charge were to be retained throughout 201011 and the Railways were to meet the iron ore export targets. In 2010-11, Indian Railways aims to move 46 million tonnes of iron ore for exports and earn Rs 4,756 crore. In another move, the Government had raised the export duty on iron ore lumps to 15 per cent from 10 per cent to improve local supplies of the raw material used in steel production.

ECoR Awaits Directive on Ore Loading Kolkata

ast Coast Railway is looking to the Orissa Government for guidelines to resume rake loading of iron ore in the state’s Nayagarh and Daitari areas. The validity of the guidelines issued earlier expired last month. The resumption of iron ore loading in some of the private sidings as well as government goods sheds has helped ECoR, in that more rakes carrying iron ore for exports are now arriving at Paradip port than before and to that extent ECoR is not being required to move the empty rakes to facilitate backloading of coal imported through the port. At Gangavaram port, the volume of coal imported through the port is much larger than the volume of iron ore exported through it. As a result, only one rake of iron ore arrives every day as against the requirement of four to five rakes a day.

Increasing freight charges on iron ore exports will mean an additional Rs 450 cr in kitty

AIR CARGO

Air Freight at New High on Rising Volumes, Ash Cloud Chennai

ir freight rates to Europe from India have reached a new high even as the ash from an Icelandic volcano continued to disrupt ﬂ ights across the UK and into Europe. The rates are 25-30 percent more than the base price. For cargo of over 500 kg to Europe, the base price was Rs 140 a kg

while some of the premium European freighters charge ‘express’ and ‘ﬂash’ rates for cargo that need to be sent urgently with the increased rate. Rates are usually based on demand and supply. Last year, airlines discounted rates when the volume was poor. But with growth in export, there is a

huge demand for space. Added to this problem is the ash that

has created a backlog. Shippers are sending cargos to southern Europe and from there need to negotiate a truck or rail move to northern or central Europe, thus leading to an increase in rate.

chInA eXPOrted gOOds wOrth $119 BIllIOn In APrIl 2010, ImPOrts tOuched $118 BIllIOn 20

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< INTERVIEW

“7PL is Not Just a Concept” R obert Yap, the chairman and chief executive officer of Singapore based SCM company, YCH Group, was in Chennai on May 6 to attend the opening of YCH India’s 525,000 sq ft YCH DistriPark in Sriperumbudur, in the Special Economic Zone (SEZ) of the State Industries Promotion Corporation of Tamil Nadu (SIPCOT). YCH Group lists some of the world’s largest companies viz. Dell, Motorola, Canon, ExxonMobil, B. Braun, LVMH, Acer and Royal FrieslandCampina along with noted Indian companies such as HCL and the Murugappa Group etc. among its clientele. The DistriPark, located along the Chennai-Bangalore highway, is reportedly the first green warehouse facility in India and has been awarded the Gold Status for Leadership in Energy and Environmental Design (LEED) certification by the Indian Green Building Council. YCH India began operations at the end of 2006 in Chennai, providing freight and customs clearance support to Dell. Now YCH distributes Dell’s finished goods across India and also caters to Dell India’s manufacturing. Robert Yap spoke to Aanand Pandey during his India visit about YCH India’s nearterm plans and goals, as well as some of the concepts the company is said to have pioneered. Excerpts: Can you elaborate on your relationship with Dell Computers? We have partnered with them in other parts of Asia – Singapore, Malaysia, Thailand, China, etc – for long, and the India foray has been a part of that relationship. Dell wanted better On-Time Delivery and visibility in India, so we started a freight and customs process for them in 2006 and now we are distributing their product all across India. We have 11 satellite hubs at all the major cities and another 53 cross-docking locations in the smaller towns. This is the kind of infrastructure that we have set up over the last three and a half years. About a year ago, Dell Computers said it

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And this solution is highly scalable as well as transferable and we can do it for any number of customers. We are doing it for big telecom players like Nokia and Motorola – whom we are working for in China – and Samsung. We can also provide this solution for automotive customers whom we are approaching in India. That is where our base in this region is significant, as Chennai is the Detroit of India. This hub is very critical in terms of kicking off a very efficient VMI program and taking it to the next level.

Robert Yap Chairman and CEO, YCH Group wanted to set up manufacturing here, so we looked into the solution of bringing a VMI (Vendor Management Inventory) solution for them to Chennai. Today, we have a true VMI hub operation running here. This facility supports the moving products of all Dell suppliers into India. We scaled the processes for them to be working on an hourly basis – the manufacturing, the Bill-to-Order, the lastmile distribution processes, among others. Can you tell us more about VMI? What are the other industries or areas it is applicable to? A lot of companies like Nokia use the importer record to bring the products in, mainly because they don’t have a true VMI program, so we have implemented VMI for them where the inventories are owned by 50 of their suppliers. It’s a technology-driven system where the backend manages inventory transfer. For example, the manufacturer could be pooling in products from 40 to 50 suppliers for assembly every hour and such a hub keeps these inventories to the production line. One pool can have products from about 30 suppliers, and one has to manage every component, every Proof-ofDelivery, etc so that suppliers, at the point of transfer, can invoice their computers. There are a lot of technology drivers in that part of the equation.

June 2010 | www.logisticsweek.com

How do you propose to make inroads into India’s auto segment which is highly competitive and cartelized? We see huge opportunities in the Indian auto sector. We serve the Information Technology (IT) sector globally. The IT sector is highly competitive and also very complex in terms of production, scalability and redundancy. This is more or less true for the automotive segment too where we can bring in our tried and tested solutions from the IT segment. We are focusing particularly on the automotive electronic sector, which is a big part of the auto industry. This is the area where we feel we can bring a lot of value, where we can help the companies have a more efficient inventory flow, efficient costs, etc. Have you had experience of working in the automotive sector in any other part of the world? Yes, we do. For example, we support Hyundai in South Korea in moving components to the production line, for assembly of cars. But we are beginning to focus on automotive segment supply-chain now in a big way. Warehousing is a big part of your India blueprint. However, the road to the Indian warehousing sector is beset with challenges such as poor urban planning, ownership issues, etc. Being a new entrant, how do you propose to make your mark in this sector despite such odds? In this particular warehouse (DistriPark), greening is high on our agenda. In

fact, we are the first Gold Status LEED certified warehouse in India and we intend to put a network of such warehouses throughout India. Our facilities are highly sophisticated with facilities for high-value goods as well. A network of this kind is very important because when we go to many other cities, today we see many small warehouses – which we sometimes rent – which is the best we could do (in cities besides Chennai) at this moment but over the next few years, we need to have highly sophisticated warehouses there as well, in keeping with the highly demanding services that our multinational clients seek in India. In 2008, your company won Singapore’s National Infocomm Award for an RFID-enabled project developed along with Motorola and Y3 Technologies. That legacy, however, may be tough to find root in India as RFID services are still to gain traction here because of high costs. How do you see the future of RFID implementation in the Indian logistics sector? You are right. We have done RFID implementation for some big companies like LVMH, Dell, Dom Perignon Champagne, and some big facilities in Chain and in other parts of Asia.

The journey to RFID implementation is dependent on a positive cost-benefit ratio. It is as true for India as it is for Singapore and many other parts of Asia. A couple of years ago, RFID was too expensive, now the cost has come down tremendously and will continue to come down. That said, RFID implementation is a volumes game. In India, the cost-benefit ratio

Can you tell us a bit about the concept of the ‘logistics superhighway’ that you have been propagating lately? Logistics is mostly the physical flow of goods, but without an accompanied flow of information with the material, the flow is incomplete. We are integrating financial flow with the former two. We do it for Dell, for instance, integrating the financial

We are focusing particularly on the automotive electronic sector. We can bring a lot of value, where we can help companies have a more efficient inventory flow, efficient costs, etc.

does not fit the bill, so you don’t have a huge growth, but in certain inventories, like computer chips and other high-value products on the move, where the inventory turn is very fast, we require tracking and visibility capabilities and that is where RFID becomes imperative.

Singapore’s Foreign Affairs Minister, George Yeo inaugurating YCH India’s first Green DistriPark, accompanying him is Robert Yap

transactions involving hundreds of million dollars worth of inventory with the sourcing (from suppliers) and delivery (to customers). So a logistics superhighway is where all the three components are integrated seamlessly. YCH talks about the 7PL approach. We have heard of 3PL and 4PL… That concept comes from a white paper I presented about ten years ago. Today we are walking the talk. When we sell our solutions to customers, we sell them like 7PL and not 3PL. A 7PL comes in, looks at the requirement, finds a solution, then commits to executing the solution. The execution part is 3PL. The other part – consulting, presenting a solution, creating the IT support – is the task of 4PL, the two services combined is what comprises the 7PL approach. And this is not just a concept – we have won many innovation awards with this approach.

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June 2010 | www.logisticsweek.com 23

< upshot

Industry Events

Change in Climate

(L-R): Christopher Ong, VP (Business Development), DHL AsiaPac, Eastern Europe, ME and Africa; John Pearson, CEO, AsiaPac; and Malcolm Monterio

Date : May 12, 2010 Event: Reduction of CO2 Emissions Organiser: DHL India Venue: DHL Express (India) P. Ltd, AK Marg, Bandra East, Mumbai

nter a DHL office and you cannot miss the GoGreen display boards that greet you everywhere. The company with a logistics presence in over 60 countries is playing a serious role in reducing its carbon footprint. At a press briefing at its office in Mumbai, DHL announced that its Express division in AsiaPac has reduced CO2 emissions by 13 million kilograms for FY 2009, thus representing a 9 per cent reduction of CO2 emissions and resulting in savings of Rs 5 crore. The company has even developed software internally that calculates the emissions generated from transporting shipments. DHL Express, which began carbon footprint assessment program in 2008 covering 1,000 facilities in 27 markets Asia Pacific, recorded best scores in the region. In India, DHL Express's initiatives included optimising delivery routes, switching to clean fuels and consolidating facilities. Other

measures included encouraging staff to switch off the lights when not required, adjusting the air conditioning, phasing out excess printers and photocopiers, auto hibernation of PC monitors, and prudent use of Material Handling Equipment (MHE). DHL Express India saw a reduction of 1.7 million kilograms of CO2 emissions across close to 150 sites of operations. "Optimising our fleet was a key area. We reviewed areas where we predominantly deliver documents and replaced over 60 vehicles with 75 motorbikes. Blue Dart, which operates over 5,000 vehicles, worked on substituting air routes with intercity road line haul," said Malcolm Monteiro, senior vice president and area director, South Asia for DHL Express. DHL offsets emissions by reinvesting in certified carbon management programs such as alternative fuel vehicle technology, solar panels and wind energy.

A Meeting of Minds

he Bombay Chamber of Commerce and Industry (BCCI) organized a meeting with officials of Concor, Indian Railways, MbPT and JNPT on May 13, 2010. Present at the meeting were Anil Gupta, Managing Director, CONCOR; Rahul Asthana, Chairman, MbPT; Niraj Nabh Kumar, Chairman, JNPT; Ravindra Nath Verma, GM-Western Railways; BB Modgil, GM-Central Railways; and Nasser Munjee, Chairman, Development Credit Bank Ltd. Several issues were raised. The primary one was the pending containers at Nhava Sheva and Tughlaqabad. CONCOR suggested decentralizing traffic around Tughlaqabad by diverting nonDelhi cargo to neighboring centers. It

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was also pointed out that an additional 120 trains would be required. The movement of empty containers from ICDs was brought up. A solution was c onsol id at i ng cargo and reducing royalty fees BCCI organised a meeting with officials of CONCOR, Indian railways, MbPT and JNPT for users. Date : May 13, 2010 Members of the audience expressed Event: Meeting with Concor, Indian Railways, JNPT that the sudden increase in tariff from and MbPT 8th January 2010 with a notice period of four days was not sufficient to noOrganiser: BCCI tify overseas exporters. Venue: Bombay Chamber's Conference room

June 2010 | www.logisticsweek.com

< OPInIOn

Retail’s Holy Grail

Since Indian retail is emerging from the global economic downturn, Padmini Pagadala gives parameters for success

R PADMInI PAGADALA General Manager, TPG Consulting, Mumbai

RECENTLY I HAD the opportunity to attend the opening of one of India’s largest retail stores in Mumbai. The store spans forty thousand square feet and is full of books and electronic media. The store itself is by no means ahead of the market nor is it alone in its bold innovations. In the very same premises a large toy store opened not too long ago, so along with the new retail store, there is more choice for consumers. Organized retail is starting to boom again. I think it’s time for us to be able to hope that. I remember reading very promising reports back in 2006 asserting that organized retail was finally here to stay in India. As customers just when we started getting excited at the thought of a wide variety of choice and huge price reductions, the economy hit its worse ever trough in decades. Organized retailers were forced to rethink their strategy. Worse, some of them had to shut shop, while others returned to their home countries. Today, if by chance you are caught in a mall on a Sunday evening, you wouldn’t doubt for a minute that the recession is fading and that the worst is over.

Retail Magic What is the magic about organized retail? Why is it considered hot? Don’t we get our kitchen supplies and vegetables from the kirana shop

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June 2010 | www.logisticsweek.com

next door? Why does a Big Bazaar or a Hypercity excite us? The choice of products can’t be the only possible answer. Better quality of product? More competitive prices? A mass merchandiser has the capacity to buy huge volumes of products from manufacturers at one go. In this way they can negotiate with a Proctor & Gamble or a Unilever to give them bulk discounts that small buyers can only dream of. But in reality many retailers don’t yet have the buying power that a Wal-Mart has with the power to squeeze suppliers down on price to a major degree. In the retail industry, logistics costs must be measured with precision and regularity. Look at a retail category such as general merchandise (grocery). The margins are not great if you are undercutting the small retailers, paying your employees more for greater specialisation and returning a decent profit to your shareholders (as you should!). General merchandise margins are thin and are tied to great sales volumes to keep the business profitable, but even with great sales volumes, it will be impossible to deliver lower or even at market prices and make money if costs are not tightly controlled.

The Holy Grail The cost of logistics for a retail chain as a percentage of the cost of goods sold (COGS) has to

be close to four or five percent for warehousing and transportation together. This is the standard that an international general merchandiser would target and Indian retailers must aim for this as well. This is easier stated than done. Achieving this level of efficiency requires overcoming a large number of challenges in India. The legendary three key factors to successful retailing are “Location, Location and Location.” But it is more than just where the store is located. Efficiency in retail is built on big stores and large distribution centres that can receive deliveries from big trucks and also process goods purchased in large quantities. Land of this nature is easy to find in the United States and not too difficult to get in Europe, but obtaining large pieces of real estate for hypermarkets in major cities or industrial real estate suitable for 100 acre distribution centres is NOT easy in India. You cannot be successful in modern retail and achieve targeted costs if you store lots of inventory either. For every pallet of material you have to build 13 more square feet and invest Rs. 13,000-Rs. 2,00,00 lakh more in a building if you are lucky to get it for that price. There are lots of other additional costs associated with storing merchandise too. If you “flow it” through, that is, if you could bring the product in, deconsolidate it and ship it in less than 24 hours, you only touch it three or four times, but if you store a product you must touch it six or seven times, so the labour and equipment costs are much higher if you store it. Even worse, if you store it you also have to come up with the cash to pay for that inventory; this is inventory that just sits in the distribution centre, waiting for a sale to justify it being shipped which only adds to your holding cost! These additional costs are acknowledged by most Indian retailers. What many don’t acknowledge or don’t work hard on is achieving the ability to flow through the slow movers as well as the fast movers. Most of the inventory in a retail business is tied up in the slow movers. That is how the retailers provide the consumer greater product choice in the stores. Driving this investment down takes precision both in planning as well as in execution – which many are yet to achieve. While it is understood that the road network or for that matter any other means of transport is highly unreliable, we must keep in mind the savings that a flow through facility can bring to your P&L.

Creating a Smart Transport System It is a well documented fact that the price Indians pay for many fruits and vegetables is higher as a percentage of the farmer’s cost than in most developed countries. It is also well documented that the farmers in India are getting less as a share of the retail price than in most countries, so where is the money going? Middlemen? Well, yes, but not exactly.

There are certainly savings in cutting out the profits of the middlemen, but these are sometimes exaggerated. What is really important is for a modern retailer to replace the inefficient supply chain connecting the middlemen to the consumers of these items. A modern retailer needs a “smart”, modern transport network that can deliver goods to a store at a noticeable discount. This network needs to move freight in large, full trucks over much of the distance between the supplier’s factory or the farmer’s farm and the retail store. Relying on distributors or a manufacturer’s local DC to supply products to the retailer’s Distribution Centre (DC) or stores does not save money.

Good People are the Key As an Indian it is also tempting to view supply chain efficiency as a series of straightforward engineering problems, but that would be a great mistake. It is apparent

In retail the capital deployed is huge, but the people working in it have a much greater impact on the venture’s success on an on-going basis that there are cultural challenges that are holding back at least some modern retailers from achieving supply chain success. India is familiar with the success of large corporates, but apart from software, much of this success lies in heavy industry. Also, in these businesses “who” is working in the plant or “what” they are doing has less to do with success than the huge capital that has been deployed. Retail differs radically from this business model. The capital deployed is huge, but the people working in it have a much greater impact on the venture’s success on an ongoing basis. Monitoring and guiding tens of thousands of people every day without smothering them is not easy. In India, this question requires as much attention as any of the engineering issues surrounding a business. I recently visited a warehouse where the pickers were equipped with the latest technology and equipment; this site closely resembled some of the modern distribution centres overseas. However, what was different was how the technology was being used. One employee was picking up cases and putting them on a pallet, while the other one checked the list of pallets on a computer and told the other employee what to pick. In a western DC there would

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June 2010 | www.logisticsweek.com

< Opinion have been just one person doing the job, but since there are cultural differences, reading and doing manual labour are incongruent in India. This experience reflects one of the many cultural challenges in achieving high levels of productivity on the sub-continent, but these challenges are not limited to just the worker level. My favourite is the old hierarchical Indian manager who makes all the decisions and doesn’t allow his subordinates a voice in the process. The place is paralysed until he makes a move. Unfortunately, there are just too many decisions on a daily basis for a retailer to operate that way. Modern retailers must invest in their employees to achieve efficiency Retailers need to find employees and managers who believe otherwise. To attract such unequivocally in charge. They call the shots. The IT and employees, Indian retailers need to follow the advice of supply chain personnel are more like their subordinates, enlightened outsourcing leaders such as Vineet Nayar of rather than business partners. However at Wal-Mart, this HCL, who says such ‘blasphemous’ things as the “employ- is not the case. The supply chain people have incredible ees are first, customers second!” (Ironically, this is also the influence over such decisions as replenishment quantimantra at Wegman’s, a very successful grocery store chain ties, whether or not a product is brought into a particular in the US). Modern retail must attract sharp, enlightened category, when the product will be marked down, etc. At leaders just like the MNCs and the big outsourcing compa- Wal-Mart, the supply chain people have to think like mernies do. They must also invest in their employees at every chants and supply chain professionals at the same time. level to achieve the efficiency that modern retail business The result is an operation that is extremely focused on one models require. This might seem crazy, but it really pays goal – the lowest price. It strikes me that culturally price is probably the first off. There is growing evidence that employee satisfaction, profits and customer satisfaction are all correlated. prerequisite for the Indian consumer. If a modern retailer is really going to pursue the masses, they may need to shift the power of their organisation in the direction of the supStreamlining Supply Chain In almost every major retail chain the CEO has risen ply chain. Obviously, this won’t work for all retailers. I do from either merchandising, store operations or finance. not expect (nor do I want!) Prada to turn over their comThe great exception is Wal-Mart. Mike Duke (a fellow pany to their warehouse manager, but it is important to Georgia Tech grad like me) was an engineer. He came success in retail to explore where the boundary between out of the supply chain organisation at Wal-Mart like supply chain power and merchant power will be drawn. It is by no means an easy task to make sure you run most of its past CEOs. There is a reason for this and I believe it has not been given nearly as much credit for your supply chain costs at five percent. Five percent is a benchmark for a general merchandiser and the logisWal-Mart’s success as it should have. When people think of Wal-Mart and why they are so tics cost as a percentage will increase if the value of your successful, they often talk about the incredible software product is low. It takes years to bring your logistics cost systems that they possess. I am not sure this is where the as a percentage to a single digit. If western companies praise should really go. Their systems are not necessarily run their costs close to this, it’s only because they have all that great compared to the best tools available. I know spent years trying to perfect their model and they have this from talking to many former employees. As a student I now built what it takes to maintain the costs at that level. also toured their distribution centres. They weren’t all that Fortunately for us, we can borrow their learnings, implespectacular or different from the other places I had visited. ment them wherever applicable and of course, customise What is quite exceptional about the company, how- it to our home ground. ever, is the way they make decisions. Among most retailers, the merchants and store operations executives are The author can be reached at padminimp@theprogressgroup.com.

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June 2010 | www.logisticsweek.com

< Cover Story

maha's First non-major Port to Roll Dighi port will be Maharashtra’s first greenfield non-major port. Vijay Kalantri, CMD, discusses the project with Pamela Cheema

shock of white hair and an easy avuncular manner characterise Vijay Kalantri, chairman and managing director of Balaji Infra Projects Ltd (BIPL). The genial demeanour masks an ambitious entrepreneur who will commission Dighi port in June 2010, Maharashtra’s first greenfield port in Raigad district. India has a 7,517 km long coastline with 12 major ports and 187 minor ports, of which only 61 are functional currently. Dighi is a minor port (also referred to as a non-major port), situated strategically 175 kms.

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from Mumbai and 45 nautical miles off south Mumbai. Dighi Port Limited is the ﬂagship project of the Group which has recently signed two agreements, with the Container Corporation of India Ltd, (CONCOR) for providing rail support services to Dighi and Maharashtra Maritime Board (MMB), which has handed over 77 hectares of land for the development of the port. BIPL has also been granted a 50-year concession on a BOOST (Build-Own-Operate-Share-Transfer system) basis by the state government to develop and operate Dighi port.

ViJAY KAlAnTRi, CMD, Balaji Infra Projects Ltd. and Dighi Port Ltd. June 2010 | www.logisticsweek.com

Photos: Vikram Barwal

< Cover Story Natural Harbour Dighi port is a natural harbour surrounded by low, lush green hills with a water channel – whose surface is skimmed playfully by black and grey dolphins – which has a depth of 14.5m. The port will also have a multi-product Special Economic Zone (SEZ) with a Free Trade Warehousing

tivity to Dighi will be complete in 18 months, while road connectivity will be ready in two years. In any case, even now five state highways connect to Dighi port.” The first phase when it is fully operational by 2011 will witness a hefty investment of Rs 2000 crore. The second phase will also witness a generous investment of Rs 1000 crore, with a Rs 600 crore investment in the SEZ and FTWZ. “Investment in the third phase can’t be predicted,” says Kalantri. “It really depends on how prices change and vary.”

The Maharashtra government had identified seven minor ports for development and Dighi was one of them. So we thought of doing this project

Mixed Fortunes

Vijay Kalantri with his eldest son, Vishal Kalantri, Director, BIPL and Dighi Port Ltd.

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Zone (FTWZ). It is also part of the Dedicated Freight Corridor and the Delhi-Mumbai industrial corridor projects. The Dighi Port project will be established in three phases, with the last phase being rolled out in 2017 when approximately 17 berths will be ready for commercial use. “The Maharashtra government had identified seven minor ports for development and Dighi was one of them,” says Kalantri. “So we thought of doing this project. The rail connecJune 2010 | www.logisticsweek.com

Vijay Kalantri’s stewardship and the prospects of the Dighi Port Limited (DPL) project contrast sharply with his days as a young business entrepreneur, when he established a textile woollen mill in 1976 in Thana. The mill catered to the markets of the north, especially Punjab; when politics boiled over into business due to the grim militancy in Punjab, Kalantri’s business floundered. Thereafter, he dabbled in finance and established a leasing and finance company and attempted to set up a power plant with the assistance of the government of Maharashtra. “But due to various reasons the PPA could

not materialise,” he admits. However, the Dighi Port Limited project, Kalantri’s latest business initiative, appears to be on firmer ground. It is a public-private-partnership (PPP) between Balaji Infra Projects Ltd., the Maharashtra Maritime Board and the government of Maharashtra, has achieved financial closure and received necessary clearances from the ministry of environment as well. According to industry sources, Kalantri’s entrepreneurial skills have received a decisive leg-up from his socio-political career and his putative networking skills. He began his socio-political career with the Youth Congress and has thereafter helmed several noted industry associations. He is the President of the All India Association of Industries, Vice Chairman of the World Trade Centre, Mumbai and Director International, World Trade Centre, New York. He has also been on the Board of Directors of several nationalised banks, such as Canara Bank and Dena Bank.

Potential Boon While Kalantri’s business ventures have undoubtedly benefited from his successful social forays, the Dighi Port Limited project has intrinsically all the seminal advantages of a business initiative, which if handled expertly, could be a financial bonanza for its promoters and various beneficiaries. At CII’s Logistics Outsourcing Summit in Delhi on March 18, the minister of shipping, G K Vasan, mentioned that the capacity of non-major ports would scale up to 580 million tonnes by the end of the 11th five year plan in 2012. He also pointed out that the combined capacities of both major and non-major ports would be about 1.5 billion tonnes by 2012. Industry sources have also analysed that while the trade share of major ports fell to 65 percent in 2009, the share of minor or non-major ports increased significantly by 35 percent. Buoyed by a promising future, several

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< Cover Story maritime states are actively developing their non-major ports; since these ports fall in the Concurrent List of the Constitution, the primary responsibility for developing their capacities rests with their respective states. Also, the shipping ministry, under the National Maritime Development Programme (NMDP), will take up projects worth Rs 5,163 crore relating to non-major ports. Crisil Research, India’s largest independent integrated research house, is also firmly convinced about the economic viability of non-major ports. In its view, these ports will increasingly drive port traffic in the future, due to the plethora of constraints which are paralysing the growth of major ports. Most major ports do not have enough mechanised equipment, have a painfully slow turnaround time, with vicious labour unions which roil the situation further. The Tariff Authority for Major Ports (TAMP) which controls their tariffs also limits their revenues stringently. Ajay D’souza, Head, Crisil Research, believes that “if a nonmajor port is strategically located, has a good turnaround time, is able to attract customers and has manufacturing activity like a SEZ around the port, it could lead to success.” Kalantri certainly thinks so. “Dighi port is the gateway to Maharashtra,” he declares. “There are more than 100 industrial clusters within 100kms-150 kms of Dighi, so our users will have a port which is close by and efficient. Maharashtra has a lot of thermal power plants and since JNPT and Mumbai port can’t handle coal due to various reasons, it can go through Dighi port. Besides, Dighi is an all-weather port with a protected harbour – Gujarat’s highly successful Mundra port is not so – hence I do believe that if business sentiment is turning in favour of non-major ports, it will be good for Dighi and its users.”

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Major ports are like our elder brothers. We want to survive together!

Dighi port is the gateway to Maharashtra, There are more than 100 industrial clusters within 100kms-150 kms of Dighi, so our users will have a port which is close by and efficient.

In the second phase we may dilute some of the promotersâ&#x20AC;&#x2122; equity at proper valuation. We may also think of an IPO in the next two or three years.

Maharashtra has a lot of thermal power plants and since JNPT and Mumbai port canâ&#x20AC;&#x2122;t handle coal due to various reasons, it can go through Dighi port. INDIA |

May 2010 | www.logisticsweek.com 35

< Cover Story

The first phase when it is fully operational by 2011 will witness a hefty investment of Rs2000 crore

Construction work in progress at the harbour

Advantage in Cooperation The rise of non-major ports will not dim the prospects of major ports. “Major ports are like our elder brothers,” says Kalantri heartily and with complete seriousness. “We want to survive together!” The Dighi Port project has been evolved and structured in all its complexities by Vishal Kalantri, the Cardiff educated son of Vijay Kalantri, who as Director, BIPL, shoulders the major responsibility of leading the project to fruition. Vishal who is steeped in the economics of the project, swiftly reels off figures to prove its financial vi-

Timeline

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ability. “By 2013-14 we expect Dighi port to give us revenues of around Rs500 crore. This refers only to money which will accrue from immediate port activity. But we are also establishing a hinterland for more productivity, like the SEZ and the FTWZ, from which we are expecting revenues to cross Rs1500Rs2000 crore.” Unlike major ports which receive generous subsidies and benefits from the government, nonmajor ports are self-reliant and very capital intensive. The success of the Dighi Port project depends on heavy and continuous cash

f lows. The Karaikal port, another non-major port which is a wholly owned subsidiary of MARG, the Chennai based infrastructure company, is planning an IPO in the financial year 2010-2011. The Kalantris are acutely aware of the financial equations of the project. “Although in the first phase we have used our own equity and debt from banks, in the second phase we may dilute some of the promoters’ equity at proper valuation, “ says Vijay Kalantri thoughtfully. “We may also think of an IPO in the next two or three years.” To increase his port’s competitiveness, Vishal Kalantri is planning a turnaround time of less than a day and an average throughput of 250,000 tons per hour. “To achieve this our jetties will have land access,” says Vishal and then adds cheekily, “we are learning from the mistakes of others!”

Imposition of TAMP What could strangle the competitiveness and the entrepreneurial vim of non-major ports is the unilateral imposition of TAMP. While this regulatory mechanism could be justified in major ports which are the beneficiaries of the government’s largesse in several spheres, its implementation in non-major ports could ultimately throttle Indian shipping which has revived in good measure due to these ports.

To increase his port’s competitiveness, Vishal Kalantri is planning a turnaround time of less than a day and an average throughput of 250,000 tons per hour

Currently, the policy is being discussed and mulled over in official circles, but Vishal Kalantri bristles at the thought of its implementation. “The government keeps coming up with these things time and again, but they are not giving any benefits to non-major ports, all the benefits are going to major ports,” he says bluntly. “The government has not even provided non-major ports the mechanisms that major ports have, so don’t regulate them the same way, because it does not work. Be fair, balance it out, make it a level playing field. And if they still want to regulate, please give back my investments at parity.” Even more disturbing is that the ministry of shipping has been unable to create a non-lapsable budgetary fund of Rs500 crore for rail and road connectivity to the hinterland in maritime states across the country. This scheme was proposed at a meeting held at Goa in January 2008, but subsequently the files appear to be gathering dust in the ministry of finance. With India and China driving the global economy, the prospects for Indian shipping are positive, with non-major ports decisively amplifying the volume of Indian trade. It is in the interests of both Indian shipping and the country’s economy that nonmajor ports are nurtured with care as this will only lead to an escalation in India’s growth. With inputs from Crisil Research. INDIA |

Dighi has a depth of 14.5m

June 2010 | www.logisticsweek.com

< feature

SeafOOD LOGIStICS

LSPs at Bay Seafood exports are thriving. And it’s happening without the involvement of big-name logistics companies. Jayashree Mendes takes stock of the market and explores why LSPs are ﬁghting shy of this highly lucrative sector

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ast year, the Indian seafood exports business crossed the $2-billion mark in 200910. The figures come from the Marine Products Export Development Authority (MPEDA), a body under the ministry of commerce that coordinates with various government establishments engaged in fishery production and allied activities. About 6,63,603 tonnes of seafood worth Rs 9,921 crore ($2.1 billion), the highest so far, was exported last fiscal. But this large industry operating across Indiaâ&#x20AC;&#x2122;s coastline, calling for uninterrupted transportation and logistics, sees little involvement from the logistics service providers (LSPs). There are a more than 800 seafood exporters in the country. Some 100-odd companies control a majority of the business. The companies pick up raw materials from any part of the country where they have their agents. The agents could be based anyplace near the countryâ&#x20AC;&#x2122;s vast coastline of 7,517 INDIA |

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< feature Seafood Logistics: Highlights The Market Size of seafood exports: Rs 9,000 crore Major Types of Fish Exported Shrimps, Prawns, Lobster, Cuttle-fish, Squid, Tuna, Shark fins, Fish maws, Clam, Mussel, etc. No of Exporters 650 (Number of EU approved exporters) No of LSPs Present Very few. Snowman Frozen Foods is the only well known cold chain logistics company in the business No of Processing Plants* 399 No of seafood cold storages in the country*: 461 *Source: MPEDA

The floating processor R.M Thorstenson at the Icicle Seafoods plant in St. Petersburg

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km and an even more elaborate network of inland waterways like rivers, canals, backwaters and creeks totaling 14,500 km. “The catch must be kept fresh,” says Sandu Joseph, secretary of Seafood Association of India (SEAI), an organization supervising the welfare of companies in the seafood business and encouraging international trade of seafood from India. “It is the demand of a tropical climate. So agents quickly transport the catch to the exporter in reefers (refrigerated vans and trucks). Here is where our LSPs can play a crucial role internally.”

Challenges as Opportunities Unbeknown to the logistics companies, this reluctance on the part of the big players has created a small, parallel transportation and logistics industry that is quietly thriving. Some large exporters have begun transporting their own supplies

and also outsource the vehicles to others of their ilk. Most of them operate with one or two trucks. Three Asian companies have seen an opportunity where others did not. Singapore-based Gateway Distriparks, Japan-based Nichirei Logistics Group and Mitsubishi Corporation formed Snowman Frozen Foods Ltd, a joint venture to offer transportation and storage, handling and retail distribution for frozen foods in India way back in 1997. It is most likely the only joint venture catering to seafood logistics needs across the country through 16 cold storages. More Singapore companies are likely to enter this sector, say media reports. So what is keeping Indian logistics companies at bay? Allcargo Global Logistics’ Rahul Rai, executive assistant to CEO Shashi Kiran Shetty, says, “LSPs have considered venturing into this business. But the lack of assured business and the long gestation period is disheart-

< feature

Small-time exporters have sought to be independent of LSPs in transporting raw materials from the harbour to the processing unit

ening. Investments in cold storage and reefers seem to go well with companies who are serving retail chains. The cold chain business is not enticing anymore. This business runs well with those who own land banks bought earlier.” But the presence of Indian LSPs is sorely missed. Chandrakant Dhanu, Chief Executive Officer (CEO), Danda Foods, a seafood exporter based out of Mumbai, says, “We would like established LSPs to be involved in this business. Currently, my agents in places like Goa transport the catch. Most times, by the time the consignment arrives, we have to discard 20 per cent of the raw material. Small transporters are ill-equipped to handle perishables.” Small time transport companies are unable to maintain consistent controlled temperatures within the vehicles and warehouses.

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The Cost-Investment Paradox Logistics players also bring in a certain amount of professionalism to the business. Besides a fleet of reefer trucks, their warehouses would contain the necessary plate freezers, IQF (Individually Quick Frozen) freezers, spiral, tunnel and retention time freezers, cryogenic freezers, etc. The warehouses would need to maintain 3000-5000 metric tonne fully panelized and computer controlled cold storage – all adhering to the new European Union (EU) guidelines. However, a majority of exporters who belong to the small to medium category can’t afford big-ticket professionals. Kochi-based Geo Seafoods CEO KG Lawrence, who had approached LSPs to engage themselves in this segment and came away disappointed, says, “Engaging the services of small time transporters is beneficial as costs are

low. There are more than 400-small time exporters who would think twice about involving LSPs now, as it might mean higher outlay. It is better for exporters to provide logistics service than have logistics service providers cater to the exporters.” In other words, LSPs may need to think of low-cost, customised solutions to enter this domain. LSPs on their part say that seafood logistics require big capital investment and continuous business to justify the cost. Spears Logistics’ business sales manager, Shivkumar Nair, says, “We have studied the business. Investments are a deterrent. We have quite a few large companies that could venture into this arena, and smaller players could always piggyback on them.” He adds that a 7-tonne reefer van would set one back by Rs 18-20 lakh. But LSPs are conspicuous by their absence in exports of seafood

also, considering that 90 percent of the consignment is sent by sea. Air cargo consignments travel mainly to the Middle East. Dr KV Prasad, Proprietor, Sandhya Marines, and Vice-President of SEAI, says that sending freight through less-than-

container load (LCL) would be beneficial. Most cargo now goes through 20- or 40-feet containers.

Demands of the Trade The EU guidelines are stringent for seafood. There are three standards

to be followed to export seafood. There is the EU standard where the exporter is required to furnish a health certificate (of the fish) and a test showing that the products are free of banned ingredients. Early this year, the EU introduced a regu-

EU Guidelines: Tough Act

he European Community (EC) has laid down joint conditions for trade of foodstuffs of animal or plant origin, taking into account the need not only to protect consumer health, but also to protect the territory of the Union from the introduction of animal or plant diseases. The European Commissionâ&#x20AC;&#x2122;s Directorate-General for Health and Consumer Protection is responsible for food safety in the EU, its import rules for fishery products seek to guarantee that all imports fulfil the same high standards as products from the EU Member States, with respect to hygiene and consumer safety and, if relevant, also the animal health status. Hence, it is very important that interested countries and business should understand the fundamental principles and philosophy of the European Food Law, which form the basis for EU import rules, in order to ensure that imports can take place smoothly and efficiently. The EU bases its systems on government-to-government assurances, without the intervention of any private type certification, or the standards such as ISO. Therefore, efforts as producers are conditioned to the good performance of whichever authority (the Competent Authority - CA) in the exporterâ&#x20AC;&#x2122;s country assumes the responsibility of giving the EU the official guarantees it requires. One way to understand some of the key issues around EU market access and the systems of official guarantees is based on the attestations that the CA signs in the official health certificate required to enter the EU.

The Health Certificate Seafood products that are exported to the EU must be accompanied by a health certificate emitted by the CA of the country of origin. For all fishery products, countries of origin must be on a positive list of eligible countries for the relevant product. The eligibility criteria are: n Exporting countries must have a competent authority which is responsible for official controls throughout the production chain. The Authorities must be empowered, structured and resourced to implement effective inspection and guarantee credible public health and animal health attestations in the certificate to accompany fishery products that are destined for the EU. n Live fish, their eggs and gametes intended for breeding and live bivalve molluscs must fulfil the relevant animal health standards. This requires that the veterinary services must ensure effective enforcement of all necessary health controls and monitoring programmes. n The national authorities must also guarantee that the relevant hygiene and public health requirements are met. The hygiene legislation contains specific requirements on the structure of vessels, landing sites, processing establishments and on operational processes, freezing and storage. These provisions are aimed at ensuring high standards and at preventing any contamination of the product during processing. n Specific conditions apply for imports of live or processed bivalve molluscs (e.g. mussels and clams), echinoderms (e.g. sea urchins) or marine gastropods (e.g.

sea-snails and conchs). These imports are only permitted if they come from approved and listed production areas. The national authorities of exporting countries are required to give guarantees on the classification of these products and the close monitoring of the production zones to exclude contamination with certain marine biotoxins causing shellfish poisoning. n In the case of aquaculture products, a control plan on heavy metals, contaminants, residues of pesticides and veterinary drugs must be in place to verify compliance with EU requirements. n A suitable control plan must be designed by the competent authority and submitted to the European Commission for initial approval and yearly renewal. n Imports are only authorised from approved vessels and establishments (e.g. processing plants, freezer or factory vessels, cold stores), which have been inspected by the competent authority of the exporting country and found to meet EU requirements. The authority provides the necessary guarantees and is obliged to carry out regular inspections and take corrective action, if necessary. A list of such approved establishments is maintained by the European Commission and is published on its website. n Inspections by the Commissionâ&#x20AC;&#x2122;s Food and Veterinary Office are necessary to confirm compliance with the above requirements. Such an inspection mission is the basis of establishing confidence between the EU Commission and the competent authority of the exporting country. Source: European Commission, DG Health and Consumers (http://ec.europa.eu/food/ international/trade/)

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< feature

Freezing seafood in plate freezers at -80 0 C is the most common method of storing

A reefer van can cost upwards of Rs 18 lakh

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lation of a validated catch certificate, especially on consignments to those countries. This should state the area from where the catch was shipped, the trawler used, the method of fishing and all processing details. Exporters are peeved as this is a longer process and would require the entire chain – from fishermen to harbour men to exporters – to work together to validate this certificate. The Indian government has also chipped in through the Food & Drug Administration (FDA) and insists on certification as a safety measure to safeguard it against any quality issues that might crop up. The certification is equivalent to an HACCP (Hazard Analysis Critical Control Point), a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of

the finished product. It is valid in the Middle East and smaller South Asian countries where the EU rules do not apply, while the US market is content with an HACCP. Demand for Indian fish comes from the European Union, US and Asia. Fish that finds demand in these countries are the shrimps (largest exports), cuttle-fish, squid, mackerel, tuna, and lobsters. Demand is highest from the European Union (EU), followed by China, Southeast Asia, Japan and the US. This may be happy news, but Indian players are not feasting. They are unhappy about the EU tendency to look askance at Indian consignments. Atlas Fisheries’ chief executive officer, R Ashok, said: “Consignments to the US and EU come under constant investigation and sometimes meets rejection. There are set guidelines like quality control and technology standards we adhere to, considering that the products are consumed by countries where these factors rate high.” Maybe the US got a little suspicious when Indians started exporting seafood (shrimp and scampi) at lesser prices two years ago. Early this year, Indian seafood companies were rocked after the US Department of Commerce imposed an anti-dumping duty on shrimp exports from India. Seafood exporters along with the SEAI had to submit detailed replies to the US International Trade Commission and the US Department of Commerce to revoke the antidumping duties on shrimp exports to the US. But, Joseph of SEAI says in spite of this, exports to the US have fallen from Rs 950 crore to Rs 611 crore. Geo Seafoods’ Lawrence says that most of the export issues would have been non-existent if large logistics players had played a crucial role in seafood exports. Are LSPs listening?

< Feature

Building for Change 46

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Plans for a bridge connecting Yemen to Djibouti have the potential to transform the way the world moves its goods. But the future of the project hangs in the willingness of the countries’ respective governments, as well as the international community, to give it their ‘OK’, Mohammed Al Ahmed, Chief Executive Officer, Al Noor Holding Investment, tells Kathryn Semcow

“T

here are three types of people,” says Mohammed Al Ahmed, Chief Executive Offcer, Al Noor Holding Investment. “The frst person looks at a great thing and wonders how it happened. The second person says, ‘I could do that.’ The third person is thinking of something else because he has already done it. ”The third person he is referring to is his boss Sheikh Tarek Binladen, the Chairman and owner of Al Noor. One of the eldest sons of Sheikh Mohammed Awad Binladen, the founder of the Binladen business empire, Sheikh Tarek is a principle shareholder of Saudi Binladen Group. In his more than 40 years of business experience, he has made himself known for mak-ing high level construction and real estate dreams come true. Binladen’s current dream is to build a 28.5 kilometre bridge stretching from the East African country of Djibouti to the West Coast of Yemen. The COWI-designed bridge will cross

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< Feature over the Red Sea and will be one of the world’s most challenging engineering projects, with its foundation reaching 300 metres deep and its height sitting more than 200 metres above the water line. But it could also be one of history’s most signifcant bridges. “We are linking Asia and Africa,” explains Al Ahmed. “You can look at it as a new Suez Canal, but hanging in the air.” He emphasises the strategic location of the project, with the 23,000 sq kilometre country of Djibouti as the main access to the sea to the more than 1 million sq kilometre landlocked Ethiopia. “Ethiopia has a population of 86 million,” he says. “Their biggest problem is no gateway to the sea. They are using Eritrea, they are using Somalia, they are using Djibouti. But right now Djibiouti is the gateway to Addis Ababa.” On the Yemen side of the bridge will sit a 1,500 kilometre city known as Al Noor City Yemen and on the other side, a 1,000 sq kilometre Al Noor City Djibouti. Both will contain all the infrastructure of a major cargo hub, as well as the services of a modern, cos-mopolitan city. “Many people have said, ‘Why don’t you just build the bridge?' says Al Ahmed. “But we want to have the two cities as a buffer zone for the bridge – for security, for protection.” Plans include a “frst-class” rail-

An artist’s impression of the planned 28.5 kilometre bridge to link Yemen with Djibouti

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way, ideally the beginnings of a panAfrican network. “The railway will start from Al Noor City Yemen, across the bridge, and from Al Noor City Djibouti, all the way to Addis Ababa and scattered all over Africa,” says Al Ahmed. “We are going to do it in stages, of course.” An airport and seaport are also on the list. “We need to make it the largest seaport in the world,” says Al Ahmed. “I assure you it is not going to be enough.”While Ethiopians are making use of Djibouti’s existing Doraleh and Djibouti Ports, and to a lesser extent Eritrea’s Massawa and Assab and So-malia’s Berbera, he points out that the Ethiopian market offers more than enough potential demand to keep plenty of ports busy. “Saudi Arabia has a population of 22 million,” he says to back up his argument. “They have several ports, yet

We are linking Asia and Africa. You can look at it as a new Suez Canal, but hanging in the air

they are still not enough. It is more likely that Addis Ababa with 86 million people will require not only Djibouti’s existing ports, but they will require at least 10 ports.” He emphasises the necessity of developing such infrastructure in Africa, “the forgotten continent.” “Africa is a rich continent,” he says. “It has a population of almost 1 billion people, the Nile, minerals, uranium, gold, potassium, greenery and agriculture.” “Africa has a lot to offer,” he adds. “But the problem is logistics, logistics, logistics. The Noor Cities of Yemen and Djibouti are going to be the real gateway to Africa by creating a major cargo distribution hub for the entire continent.” A lifestyle Al Noor also seeks to offer the highest quality of living on the continent. “While some other countries may be created by default, our city is being created by design from the beginning,” says Al Ahmed. “You can see how the city is going to look like in 20 years. Not many people could say that.” He lists the qualities of a utopic environment – a tax-free, environmen-tally-conscious, highly secure smart city with “freedom of a human being and respect for a human being. People are going to come from all over the world,” says Al Ahmed. “The whole city will be a free zone. That means no taxes, no barriers, nothing to stop people from coming in.” The free zones would have wellthought-out legal and governance systems, with participation from the governments of Yemen and Djibouti. “There will be, of course, a committee to govern the cities,” says Al Ahmed. He describes the cities as “like Dubai, but in a different fashion.”“Actually, we learned from Dubai,” he adds. “Dubai is a role model for everybody. It is changing the entire Middle East.‘There are a lot of good things about Dubai, but I’m sure there are some shortfalls.

< Feature Smart people learn from other people. We don’t need to repeat the same mistakes with an experiment.” He emphasises the amount of work his company has ahead of itself. “You are building a city from scratch,” he says, pointing out that it will need everything from a needle to a crane. “Not only a city, but a modern city.” He says it could take 15 to 20 years for the Al Noor cities to solidify. “I will call it the ‘evolution of the city’. Not Darwin’s evolution,” he says, laughing. “Let’s say we start building the port and airport,” he explains. “We build a camp for the workers and for the engineers and the executives as they start working. But after a certain period of time, these guys are going to bring their family. They require a hospital, they require a school for the kids. This is what I call an evolution. The city will evolve by itself, slowly but surely.” Al Ahmed says Sheikh Tarek Bin-laden’s vision includes developing Al Noor cities around the world. “The concept of Al Noor is actually a revolutionary concept that will change the way we think in terms of economics and politics,” he says. “Our Chairman is actually franchising cities and he doesn’t mind if someone takes over this concept and does it himself.” Making moneyWhile Al Ahmed admits the invest-ment landscape is not what it was in 2008 when the project and its US$200 billion price tag was announced, he says he is confdent in the ability to secure funds for the project. “With this climate, with these f-nancial challenges, we have found that there are a couple interested parties,” he says. “China is number one. They are interested in Africa and they need a large magnitude project like this. China has a lot to offer – people, technology and money. They have a lot of cash and they have to use it.” Much of the infrastructure, he says, will develop on a build-operatetransfer model. “If somebody wants to build the port, it will require maybe seven years to build, seven years to get

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their money back and an additional two years for their proft. That means they will bring their own technology, they will bring their own money. They invest, they manage, they operate it. They get their money and then bring the development back to us.” He insists this is a strong business case. “This is a model that any shrewd investor will jump into,” he says. While Al Noor Holdings is the main investor, pledging US$1 billion in 2008 to jumpstart the project, Al Ahmed says the intention is about more than making money. “The motive of our Chairman is to really help humanity – not just to make money,” he says. “Of the profit he makes, he is going to take 97.5 per cent and inject it back into the cities. He will only take 2.5 per cent.”Ultimately, the development is about creating a stable, prosperous region. “Poverty is the worst enemy for any human race,” says Al Ahmed. “When you get up in the morning and you have no job, your kids have no school, your children are sick and you need a hospital and you cannot take them, what kind of person will you become? You become a problem for the country, for the people, because you need a solution. Creating Al Noor city will help the people of Yemen and Djibouti.” Al Ahmed says the governments of Yemen and Djibouti have already committed to the project through a Memorandum of Understanding signed in 2008. “The location of the city, the coordinates and all, have already been given to us,” he says. “The land is just desert – nothing else – except maybe there are a couple huts for fshermen on the Yemeni side. But in Djibouti there is nothing on the land.” His team is currently working out further legal details. “We have engaged the largest law frms in the world to cre-ate an international agreement between us and the Government of Yemen, be-tween us and the Government of Dji-bouti, and we created a bilateral agreement between

June 2010 | www.logisticsweek.com

Mohammed Al Ahmed, CEO, Al Noor Holding Investment

Biography A Saudi National, Mohammed Ahmmed Al Ahmed began his career with Saudi Aramco as a Project Engineer. He later spent ten years with the National Shipping Company of Saudi Arabia (NSCSA), where he became President and Board Representative, managing managed more than 200 offices worldwide and growing the business into the USA, Far East, Indian subcontinent, Europe and Middle East. Prior to assuming leadership at Al Noor Holding Investment, Al Ahmed also held senior management positions at a number of companies in the Middle East and Africa region, including Al-Rushaid Investment Company and leading global IT and security firm DynCorp International.

< Feature

A conceptual plan for Al Noor Djibouti

The Noor Cities of Yemen and Djibouti are going to be the real gateway to Africa by creating a major cargo distribution hub for the entire continent

the two countries, which they need to sign, because there will be activities between them,” says Al Ahmed. “We have offcially submitted this agreement to both governments, and we are waiting right now for them to invite us to come back, to sit down at the table, to negotiate it, to discuss it clause by clause, word by word, and then come up with a solution.”He says his team designed the agree-ment for Al Noor to take the land as a 99-year concession with the sovereignty of the respective governments in mind, as well as the potential for African-style

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June 2010 | www.logisticsweek.com

regime changes. “Whether or not the regime changes, we are signing the agreement with the government of the country,” he says. “That is why we are having it as a con-cession, not ownership. We are thinking in detail, ‘What if? What if?’” “We also don’t want to put the Governments of Yemen or Djibouti in an awkward situation where someone, maybe in 15 or 20 years, asks them, ‘Why did you sell our land?’” he adds. The existing framework outlines how the city will run. “The agreement is also to give comfort to investors from all over the world, as well as the contractors and citizens of Al Noor,” says Al Ahmed. “It is to tell the whole world that this city is really an international city, of course, without touching the sovereignty of the countries.” Al Ahmed says his team submitted the document to the respective govern-ments several months ago, but is yet to hear back from either country. “We are waiting for their response,” he says. “We believe they need to discuss it with their lawyers and review it. We are ex-pecting that any time they will call us to discuss the details.”He cannot see any reason for either Yemen or

Djibouti to say no, as the project requires very little effort on their parts. “We just need them to okay the agreement. That is all. Or we need them to ask us to come and discuss and negotiate the agreement. We are not asking them to put a penny. We are not asking them to put in anything.”He says he is confdent that both sides will see the benefts to their citi-zens. “Look at the unemployment ratio in Yemen, even Djibouti,” he exclaims. “For any government, anywhere in the world, the number one issue is employ-ment. When we are creating Al Noor, we will train the people, we will em-ploy the people and they become an as-set for the country, itself.” “I must emphasise that we as a com-pany have a lot of faith and confdence that these two governments will overcome whatever problems they have,” he adds.Meanwhile, he waits for their calls. “When they give us the green light and we negotiate and sign the agreement, then the real work will start.” A conceptual master plan completed by Korean companies Samsung, Hyundai, Hein and Herim is ready to go. “The only obstacle we have right now is when and how fast can we sign this agreement,” he says. “We have already a team waiting to move forward, but they cannot move forward until we prove to them that we have the concession or the framework has been signed.” In the meantime, Al Noor is faced with the task of winning the support of neighbouring countries such as Somali and known-to-becantankerous Eritrea, which sits close to Al Nour Djibouti’s border. Of course, they also need the international community on their side. “This project is going to change the world only if the world is willing to change itself,” says Al Ahmed. “If you build a city by scratch, you cannot do it by one country or one company. You require cooperation from all over the world.”

< primer

Back to basics Starting this issue, we will revisit some basic concepts – everyday logistics and supply-chain terms that need a brush up (or an update) every now and then

The Bullwhip Effect

n January this year, the Wall Street Journal (WSJ) reported that the “Bullwhip Effect” is “reverberating across the US economy” (‘Bullwhip Hits Firms as Growth Snaps Back’, Jan 27). The WSJ article gave the example of Caterpillar Inc, the US-based company which is the world's leading heavyequipment maker, which told its suppliers that it will “more than double its purchase of metal this year”. This, despite the fact that Caterpillar’s sales haven’t quite “rise(n) an iota”. The journal attributed Caterpillar’s intriguing behavior to the bullwhip effect. What’s the bullwhip effect?

According to Kevin Dooley, the professor of supply chain management at the W.P. Carey School of Business (knowledge@WPCarey, March 10, 2010), “"When a signal comes from the market that represents a change in demand – either an increase or decrease in demand – the volatility and the potential for overreaction to that market signal is larger the farther upstream you go in a supply chain." In other words, it is called a bullwhip because much like a whiplash, a small increase in demand can cause a big snap at the manufacturer’s end of the supply chain.

Kitting

Saw Tooth Diagram

he Business Dictionary says that Kitting is the process in which individually separate but related items are grouped, packaged, and supplied together as one unit. For example, in ordering a PC online, a customer may select drives, peripherals, and software from various choices. The supplier then creates a customized kit that is assembled and shipped as one unit. Kitting reduces the need to

maintain an inventory of pre-built products. According to Global Kitting Systems, a US-based manufacturer of component tray and bin systems, kitting is “an effective means to achieve air-tight inventory control and is practically made-to-order for managing” supply chain. The site points out that kitting has been misunderstood and underutilised in the manufacturing process, “a victim of traditional thinking that says inventory control is a matter for the shop floor”. The new way is to integrate kitting into ERP (Enterprise Resource Planning) where shop floor information can be used by the front office where the planning happens. It cites the example of cult bike-maker Harley-Davidson that receives bike parts in various sized containers to reduce the volume of disposable packaging materials and protect the parts transit.

n the book, “Kanban for the supply chain”, author Stephen C. Cimorelli calls a Saw Tooth Diagram a “powerful visual tool” that depicts the material usage and replenishment cycle typical to a manufacturing environment. In other words, a Saw Tooth Diagram is used to analyse inventory behavior over a period of time. The saw tooth diagram on this page shows the inventory level for a typcial part number, depicting the reduction in inventory over time as it is consumed (descents) then increasing (ascents) as replenishment orders are received. Quantity

Depicts inventory usage and replenishment over time

Key OP = Order Point (OP) SS = Safety Stock (SS) DLT = Demand through Lead Time LS = Lot Site

OP LS

DLT SS Time

Saw Tooth Diagram depicting the inventory level for a typical part number. Source: Kanban for the Supply Chain, Author: Stephen C. Cimorelli

Can you help us with more such terms – used everyday but seldom revisited? Please mail your suggestions to aanand@logisticsweek.com. If chosen, we will be happy to publish your suggestion with due credit. (Section concept: Rakesh Singh, Founding Dean, NMIMS School of Economics) 54

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Domestic & International

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& Supply Chain

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Dinesh Mishra dinesh@logisticsweek.com Sumit Bajpai sumit@logisticsweek.com

< BOOK EXTRACT

Mixed Blessing It's the continuous measuring and adjusting that make the activities of delivery scheduling and order fulﬁlment into a core competency

ow that conscious design and real-time management of a company’s supply chain is possible, how does a company use this ability to its competitive advantage? A well designed and managed supply chain will enable a company to offer high levels of customer service and at the same time hold its inventories and cost of sales to levels lower than its competitors. This chapter will lay out a process to use for defi ning the supply chain management opportunities available to a company.

The Supply Chain as a Competitive Advantage

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June 2010 | www.logisticsweek.com

As companies such as Wal-Mart and Dell Computer have so clearly shown, if a company can design and build a supply chain that is responsive to market demands, it can grow from a small company to become a major player. Efficient supply chain operations are central to being able to satisfy market demands and to do so in a way that is profitable. Where once markets were shaped by the availability of product, now they are shaped by the evolving demands (some might say whims) of the end customers. Availability of most products is now taken for granted. So in addition to the product itself, the market has a host of other requirements in the areas of customer service, demand ﬂexibility, and product development. A company needs to understand where it fits in the supply chains oif the markets it serves. Then it needs to decide which activities it will focus on to deliver value. Supply chains that deliver the best value to their end use customers generate a strong demand for products and services. They are good places for producers, logistics providers, distributors, and retailers to do business. The efficiency of the entire supply chain greatly affects each company’s ability to prosper, so standards

of performance evolve in these supply chains over time. New companies cannot enter unless they can meet these standards. What this means is that companies who are good at their core supply chain operations work together in self-selecting supply chains to deliver the greatest value to the end use customer. It also means that there is a great profit potential to be had for companies in a supply chain that learn to cooperate to generate efficiencies and cost savings for all. Skilled companies in specific markets that learn to work together to achieve new levels of efficiency and cost savings will create supply chains that grow faster than other supply chains in their markets. We may even begin to look at a market in terms of the competing supply chains that support it instead of just the competing supplier companies within the market. Just as now rate individual companies by their profitability and customer service levels, we may begin to measure entire supply chains onj their overall performance in these areas.

Identify the Business Opportunity and Define the Goal Supply chain opportunities generally come in one of two categories. The first category is to fix or improve something already in place. The second category is to build something new. In both categories you have to first define the goal and then set about to accomplish that goal. Depending on which type of opportunity you are pursuing, the way to accomplish the goal will be different. If you are pursuing an opportunity that is in the category of “fix or improve something already existing,” then use Mr Goldratt’s theory of constraints as your guidelines for taking action. These guidelines are summarised in an executive insight section earlier in the book. If you are going after an opportunity in the “build something new” category, then use the process outlined in this chapter. New markets emerge, existing markets evolve, and mature markets fade away. A market creates a demand for a bundle of products and services to support it. Over the life span of a market its supply chain evolves in response to the forces of supply and demand. Companies that supply a market must evolve along with the demands of that market. What are the markets your company serves and who are the end use customers in these markets? Who are the producers in these markets? Who are the distributors, the logistics providers, and the retailers? What are the products and services demanded by this market?

What is the supply and demand situation in the markets you serve? The supply chain opportunities available to a company depend on which quadrants the markets it serves are in. Use the market analysis framework to determine which market quadrants your company deals with. Which quadrants are your markets in today? Which quadrants do you think they will be two years from now? Compare your organisetion against competing organisations in your markets. Identify whether you lead, equal, or lag your competitors in the areas of: n Customer service n Internal efficiency n Demand flexibility n Product development

If a company can design and build a supply chain that is responsive to market demands, it can grow from a small company to become a major player

Each market is best served by some combination of performance in these four areas. Define whether your company needs to lead, equal, or even excel in each of these areas. Identify the position your company needs to take in the four areas to best align itself with the demands of the markets it serves. A company must lead in demand flexibility if its customers are in a mature market, and it must lead in internal efficiency if its customers are in steady markets. A company must excel in product development if it serves developing markets, and companies must meet high customer service standards in all the markets they serve. Set the performance targets your organisation needs to achieve alignment with the markets it participates in. These performance targets influence the goals a company selects and they become the measures of its success. INDIA |

June 2010 | www.logisticsweek.com

< PAnoRAMA

OFF ThE ShELF

The 5 Steps That Drive Real Value

“T

he New Supply Chain Agenda”, explains how to reinvent your supply chain and discusses ways of turning it into a tool that produces economic gain. The book provides an approach on how to deliver products at the right place, time and price, with the lowest possible cost and working capital. Timely action in a supply chain is well understood, but doing it efficiently minimises the risks of losing customers and suppliers without losing control of fi xed costs. These are some of the topics discussed in this book. The authors show how to activate the five levers to attain supply chain excellence which are, putting the right people with the right skill

sets on the right job; leveraging supply chain technologies such as system optimisation and visibility tools; eliminating cross-functional disconnects, including SKU proliferation; Collaborating with suppliers and customers to generate a seamless ﬂow of information and supply chain improvements and managing supply chain projects skillfully. new Supply Chain Agenda: The 5 Steps That Drive Real Value By Reuben E. Slone, J. Paul Dittmann, John T. Mentzer Price: $35

Shipping and Logistics Management

n “Shipping and Logistics Management”, the authors show how the term shipping has evolved since the word was first coined. Initially shipping was only associated merely with ships and seaborne trade, but today this refers to any mode of transport that moves goods between two points. This is a clear implication that over the years shipping has become dynamic and complex. The book examines the strategic and operational issues that affect entrepreneurs in this industry. The authors look at the role of logistics service providers and how using information technology

can help improve shipping operations. The publication also answers several frequently asked questions in the shipping industry, such as how are freight rates determined, what are the shipping cost structures, what are the patterns of sea transport, and how do companies in the shipping industry operate. Shipping and Logistics Management By Y.H. Venus Lun, Kee-hung Cheng and T.C. Edwin Cheng Price: $169

Green Supply Chains

tuart Emmett and Vivek Sood in “Green Supply Chains: An Action Manifesto” discuss how green supply chain management has emerged as a key approach for enterprises seeking to make their businesses environmentally sustainable. The green supply chain planning framework discussed in the book also introduces a systematic way of putting environmental considerations in the centre of decision making, whilst making it profitable. An interesting chapter in the book is on green marketing, its elements, importance and chal-

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lenges. The authors have included various case studies in the book providing the readers with on-the-job experiences from which one can draw inferences and several take-aways to suit individual requirements. Green Supply Chains: An Action Manifesto By Stuart Emmett and Vivek Sood Price: $55

June 2010 | www.logisticsweek.com

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< panorama

Blogosphere The Walmart Sustainability Value Chain

should be taken to achieve a process that will reduce the carbon footprint. Web address: www.interorganisational.org

Blogger: Steve Banker, Director of Supply Chain Research, ARC Advisory Group When Walmart began selling dual flush toilets, it required an innovative model to sell it in the US. Walmart’s goal was to sell this toilet at the same price as regular toilets. On packaging, they moved from rectangular cardboard boxes to trapezoid boxes with 16 percent more fiber that made the boxes stronger. It also helped in improving the image of Walmart as a company that cares about the environment. Web address: www.logisticsviewpoints.com

Turning Green into Gold Blogger: Keith Burgess and Simon Glass, IBM

Carbon Footprints & the Sourcing Decision

Burgess and Glass with their experience at IBM explain how the real winners in the current climate of supply chain will be those who recognise that developing sustainable business practices are fundamental to preparing for the future and to saving money now. Process improvement coupled with innovation, underpinned with prudent cost control, is the key. Web address: www.ibm.com/in/en/

Blogger: Dr Arni Halldorsson, Academic Director of MBA, School of Management, University of Southampton

In the desert

Halldorsson in his post “Carbon footprints & the sourcing decision: make-buy-or-sell” talks on how just-in-time operations which was the idea for “pushing inventories upstream” the supply chain, into the hands of the suppliers which effectively did not reduce stock but merely “re-located” it. He debates whether this also happens with carbon emissions. With carbon credits gaining value what steps

The next 747-8 freighter to come out of Boeing will undergo testing in California. The desert provides one of the best flight test facilities and ideal weather. Two flight test 747-8 freighters will be heading to Palmdale to continue approximately 3,700 hours of testing on the ground and in the air.

Journals, Case Studies, Research Reports

Resource Center Managing a Diverse Supply Chain By Penske Logistics Whirlpool Corporation has annual sales of over $19 billion, with 80,000-plus employees in more than 170 countries. Whirlpool's innovative products are marketed under Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Bauknecht and other major names. With such varied inventory, effective supply chain management is critical for Whirlpool's continued growth. Since naming Penske Logistics its lead logistics provider (LLP), Whirlpool has achieved cost savings and increased customer satisfaction, and found a partner to help integrate its recent acquisition, Maytag. Web Address: www.penskelogistics.com/casestudies

Enhancing the Transportation Network at Ford Mexico By Caterpiller Ford of Mexico has sought to improve supply chain visibility and optimise transportation of domestic distribution

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Blogger: Randy Tinseth, Vice-President (Marketing), Boeing Commercial Airplanes

of parts and accessories to Ford’s dealers. This will be done through shorter product-to-market cycles and a strategic redesign of Ford of Mexico’s transportation network. Cat Logistics implemented an array of logistics services that began with a network and facility redesign, and included warehousing and distribution, inventory and materials management, order and transportation management, state-of-the art logistics information systems, and business process engineering. Web Address: http://logistics.cat.com/cda/components/full Article?m=119073&x=7&id=867079

Supply Chain Optimization at Hugo Boss By Ananth Raman, Nicole DeHoratius, Zahra Kanji This case study evaluates the impact of a supply chain pilot implemented at Hugo Boss. The pilot entailed altering the way in which Hugo Boss orders from its suppliers. It explores the challenges of assessing the impact of supply chain

June 2010 | www.logisticsweek.com

change, the link between operational performance and firm performance, and the relationship between sales, inventory, and product availability. Web Address: http://hbr.org/product/supply-chain-optimization-at-hugo-boss-a/an/609029PDFENG?N=0&Ntt=Sup ply+chain+management

Timing of RFID Adoption in a Supply Chain By Seungiin Whang This paper studies the incentives behind radio-frequency identification (RFID) in a supply chain. RFID tags once attached on the items at an upstream location can be reused at downstream sites at lower or zero cost. This creates an interesting, one-sided “free-rider” problem for the downstream location. Using a stylized game-theoretic model, the study characterises the equilibrium strategies of the two firms. Web Address: http://portal.acm.org/citation. cfm?id=1735069.1735080

Launchpad

New Products, Technologies, Solutions

Honeywell Unveils Revolutionary Area-Imaging Scanners

ith the Xenon series, Honeywell launches its sixth generation of hand-held area imaging scanners. It is designed to cater to the healthcare, retail, manufacturing, postal/courier and government sectors. Xenon is available in two variants -- a corded 1900 and a Bluetooth-enabled 1902 which will start shipping this month. Xenon is the first Honeywell scanner to combine two of its tried-and-tested technologies, Adaptus Imaging Technology and Omniplanar’s SwiftDecoder decoding software. Adaptus Imaging Technology 6.0 enables reading high density linear bar codes, 2D bar codes and those found on surfaces like the screen of a mobile device. It provides image capture capabilities, including auto-cropping, resolution enhancement and sharpening filters. Combined with the SwiftDecoder, it improves Xenon’s ability to decode damaged and hard-to-read bar codes. The Xenon hosts Honeywell’s TotalFreedom development platform and expands functionality by allowing image processing, decoding and formatting application plug-ins to be loaded

directly to the scanner instead of the host system. It is compatible with Honeywell’s Remote MasterMind (ReM) scanner management software. Honeywell’s new scanner configuration software EZConfig has been launched along with Xenon.

HEVs Join UPS Fleet in Houston

PS has deployed 25 of its 200 hybrid electric vehicles (HEVs), its next-generation hybrid electric delivery trucks, in Houston. The HEVs are expected to reduce fuel consumption by roughly 176,000 gallons and bring down CO2 gases released in the atmosphere by 1,786 mt annually. The HEVs use regenerative braking ie, the energy generated from applying the brakes is captured and returned to the battery as electricity. The HEVs features chassis from Freightliner Custom Chassis Corporation and a hybrid power system from Eaton Corporation. The trucks use lithium ion batteries. The f leet uses compressed natural gas, liquefied natural gas, propane, electricity, and hydraulic hybrid technology.

UHF Gen 2 RFID Reader with Eight Antenna Ports

AO RFID Asset Tracking has launched their latest offering, the UHF Gen 2 RFID reader with 8 antenna ports: 4 for reading and 4 for listening. With its IP55 protection rating, this reader can be used in warehousing, distribution, on the shop f loor, in harsh manufacturing and processing environments and also outdoors. This RFID reader is an ultra-high frequency device operating over a frequency range of 902MHz to 928MHz. It supports multi-detection and has a maximum operating distance of 7m. The device is powered by POE (Power over Ethernet) technology eliminating the need for two cables (one for power and one for the Ethernet). The device offers an N-type female coaxial antenna connection and provides communication interfaces via Ethernet TCP/ IP, DHCP and GTTPS. GAO RFID is a provider of RFID readers, tags and software. Its products are used in asset tracking, supply chain & logistics, inventory control & management, etc. — Compiled by Frewin Francis INDIA |

June 2010 | www.logisticsweek.com

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June 2010 03-05 June 2010 Metal Buildings & Steel Structures Expo 2010 Auto Cluster Exhibition Centre, Pune Metal Buildings & Steel Structures Expo 2010 is Indiaâ&#x20AC;&#x2122;s leading exhibition of metal buildings and steel industry. The expo is intended to encourage the utilization of metal in construction and a platform to demonstrate the latest products and cutting edge innovations in building systems. MBSS 2010 offers an opportunity for exhibitors for displaying their current collection and launching new products in the midst of trade visitors. The expo will attract potential buyers, decision makers, architects, civil & structural engineers and designers from across the country and abroad. Metal Buildings & Steel Structures Expo 2010, displaying innovative metal roofing systems, structural steel fabricators, roofing steel machinery and tools, structural steel supplies and welding machines, will offer a market place for the industry. Profile for exhibits will include: estimators, fastening / fixing systems, floorings, insulations, metal cladding, metal profiles, metal roofing systems, prepainted metal coils, roofing/structural steel machinery & tools, software solutions, structural steel fabricators, structural steel suppliers and welding machines. Organized by: INIS Enterprises Private Limited Limited, Tel: 022 28763111 17-21 June 2010 ACMEE 2010 Chennai Trade Centre, Chennai The 9th Machine Tools and Auto Components Exhibition 2010 is a technology-oriented fair devoted to machine tools and auto components sector. ACMEE 2010 will exhibit a variety of products, including manufacturing technologies, equipment, tools and methods of assembly. Auto Components and Machine Tools Engineering Exhibition 2010 will also include seminars and presentations by participants and industry leaders, thereby offering a good forum for exchanging diverse product information, technical details and developing business contacts. The profile for exhibit in the event includes: special purpose machines, hydraulics & pneumatics systems, material handling, safety equipment, storage systems, bearing, barcodes & general engineering, instrumentation & controls, measuring & testing equipments, automation, automotive components, auto components, process machinery, IT in manufacturing, technology and online products, automobile and allied services, and machinery and machine tools. Organized by: AIEMA Technology Centre (ATC) Tel: 91-044-26258731

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24-27 June 2010 Commvex Chennai Trade & Convention Centre, Chennai Commvex is characterized as an entrusted place for commercial vehicles sector. The show will be classified as a platform which will facilitate display of latest trends and innovations of automotive industry. Profiles for exhibit include buses and vans, trucks, construction equipments, industrial vehicles, aviation and airport utility vehicles, safety and security vehicles, h ospitals and emergencies, municipal and utility (Trash trucks, dump trailers, sweepers), agriculture (tractors, farm and landscape equipment), cranes, Spare parts and Accessories (tyres, paints, oils, lubes, paints, cosmetics, electronics, etc). Organized by: Associated Business Media Tel: +91 80 32468571

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25-27 June 2010 AUTOCOMP 2010 Chennai Trade Centre, Chennai AUTOCOMP 2010 is devoted to the sector of automobile components, parts and accessories. The event features all-inclusive product range, new innovations and leading-edge technologies from top suppliers. This International Exhibition on Automobile Components, Parts & Accessories will draw together international & national auto component manufacturers and traders and distributors. AUTOCOMP 2010 will be a platform for demonstration of latest products, to network with top professionals and to create and nurture business relations. The targeted exhibitors includes engine system, chassis system, electronic system, telematics, auto inner ornamental system, repairing, testing and diagnosis equipment, cleansing and maintaining devices, wheels, racing products, materials & components IT & management. Organised by: Associated Business Media Tel: +91 80 32468571

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25-27 June 2010 Hitex International Gems & Jewellery Expo Hyderabad International Trade Exposition Centre (HITEX), Hyderabad HITEX International Gems & Jewellery Expo (HIGJE) is an exclusive destination and a channel to bring together the gems & jewellery manufacturers, dealers, retailers, wholesalers, designers, importers, exporters etc under one roof to showcase, launch & market the collection of jewellery to the audiences. The HIGJEâ&#x20AC;&#x2122;10 will have a range of jewellery and gem stones by renowned jewelers in India and abroad. Organized by: Hyderabad International Trade Expositions Limited Tel: +91-40-23112121 / 22 / 23

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