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   Vol. 14  No. 28
Friday March 27, 2015

Bali And The Jokowi Factor

     At this time of year, the approach to Jakarta’s Soekarno-Hatta International Airport passes over vast areas of flooded coastland. Shallow sea walls offer little in the way of defense for farmland. On arrival, a half-built terminal stands bereft of workers, its completion years behind schedule.      Immigration queues are lengthy and obvious processing shortcomings remain unaddressed.
     A lack of planning and investment are clear deficiencies at this key gateway to Indonesia, South East Asia’s biggest economy and the fourth most populous country in the world with some 250 million people.
     A first glimpse of Soekarno-Hatta offers an accurate overview of the challenges facing what some analysts believe could, with the right reforms and investments, be one of the fastest growing logistics and air freight markets in the world over the next decade.
     Roads to and from the airport and nearby Tanjung Priok port are rundown, flooding is common, and elderly, overloaded trucks belch toxins, adding to the transport chaos and further damaging the decrepit roads they rely on. Indeed, large swathes of Jakarta were under water for much of January and February thanks to poor river defenses.
     In this congestion-clogged and monsoon-flooded mega city—Greater Jakarta is thought to now have a population of almost 30 million—half-completed transport projects are common, including the pylons for a ten-year monorail project that has now been abandoned, leaving industrial statues across the city.
     “There have been countless projects and blueprints designed to improve transport in Jakarta and Java, but not many ever happen,” comments one executive at a leading global contract logistics provider from his office in the capital. “Outside of Java on the other islands it is even worse. The roads and trucks are in a terrible state and the whole forwarding and transport sector is fragmented, so it’s very hard to find partners.”
     But hope may be on hand in the statesmanlike form of ‘Jokowi,’ the popular name for Indonesia’s new President, Joko Widodo. Having reduced Indonesia’s crippling fuel subsidies at the start of the year, he has promised to invest much of the proceeds in urgently needed transport infrastructure. New ports, roads, railways, and airports are in the pipeline. He has also pledged to embrace trade facilitation measures, tackle corruption, and even find ways of removing the State from the large swathes of the transport business it currently dominates.
     “If Jokowi can reduce the logistics burden so there is at least some certainty supply chains can be managed effectively then Indonesia could win a lot of the manufacturing production that is now finding coastal China too expensive,” said the logistics executive. “It has cheap land and labor and a huge domestic market, it’s just very hard to do business here.”
Jan Willem Winkelhuijzen     A recent McKinsey study forecasts Indonesia rising from position 16 to position 7 of the world’s largest economies by 2030. Jan Willem Winkelhuijzen, (right) Indonesia Country manager at DHL Supply Chain, said the archipelago remained one of the world’s most attractive markets for consumer products. “However, challenges exist, most importantly mastering the ever-present staff shortages, employing expats, tedious administration and procurement processes, inefficient authorities, and lack of transparency.
     “But due to high profit margins and continuously rising revenues, most multinational companies have committed to Indonesia for the long-term, a trend that is likely to be followed by SMEs as well.”
     This optimism is echoed elsewhere. A new report launched this month by Transport Intelligence argues that if Jokowi can improve the country’s logistics performance, which currently costs around 24 percent of GDP each year, then the transport industry will be a major beneficiary.
     ‘Indonesia Transport & Logistics 2015 – A New Dawn?’ concludes that Indonesia’s overall freight forwarding market will expand by an average of 11.7 percent per year from 2013 to 2019. But this could leap to 14.9 percent if Jokowi can improve his country’s logistics performance substantially by investing in new infrastructure and committing to trade facilitation reform. Likewise, the air freight forwarding market could grow by 11.5 percent CAGR and the express market by 21.5 percent over the period.
     Should he fail to improve Indonesia’s dilapidated infrastructure, however, then Indonesia could miss out on a huge opportunity to boost economic growth and the ‘high’ figures mapped out in Ti’s 60-page analysis will be drastically reduced.


Pharma India Rampage Growth     Recent figures indicate that India’s pharmaceutical industry will grow to $55 billion by 2020.
     With export of pharmaceutical products to more than 200 countries, India expects to cross the Rs one trillion (U.S.$16.17 billion) mark this year. According to Pharmaceutical Export Promotion Council (Pharmexcil), the growth would be around 15 percent and will be driven by formulation exports. During 2013-14, pharma exports stood at Rs 90,000 crore (US$ 14.55 billion). Of this, the share of formulations was 71 percent while the other categories were drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs), bio-pharmaceuticals, and clinical services.

Qatar Ramps Up

     Pharmaceutical airfreight is expected to grow at a faster pace than general cargo.
     This has led many carriers to start new facilities for this fast growing segment.
     Airlines have already started ramping up flights out of India. Qatar Airways Cargo, for example, recently announced the launch of the seventh freighter destination in the country,
     Last month on February 3, Qatar Airways Cargo commenced freighter services to Ahmedabad in Gujarat.
     The city has textiles, chemicals, automobiles, and pharmaceuticals industries and over the last few years it has seen a growth in biotechnology with the presence of more than 50 biotechnology companies and around 66 support organizations.
     Incidentally, Qatar Airways is the only international carrier to provide freighter services to Ahmedabad.

IAG One & Only

     Last year, IAG Cargo introduced B787s in its London Heathrow and Hyderabad, Chennai flights.           The B787s have helped the pharma industry.
     The plane’s forward cargo hold has air conditioning, making it ideal for shipping temperature-sensitive pharmaceutical products.
     This has made IAG Cargo the only European operator to offer daily flights on these routes.

Airport Action Upgrades

     For their part, airport authorities have brought in equipment and created facilities at some of India’s major international airports. Two airports—Mumbai International Airport (MIAL) and Delhi International Airports Ltd. (DIAL)—have upgraded the air cargo facilities to handle 80-90 percent of the export and import trade of pharmaceuticals.
     In association with the Organization of Pharmaceutical Producers of India (OPPI), the custodians of the two airports have taken initiatives to do away with the bottlenecks that delay the transport process.
     Among the enhancements are the creation of cold room space, training and refresher courses for the staff that handle pharma products at the airport, and storage.
     In fact, MIAL has installed four new cold rooms for pharmaceuticals while DIAL has enhanced the cold room capacity considerably.
     Meanwhile, other airports are getting into the act.
     At the international airport at Vishakhapatnam recent introduction of direct flights from Visakhapatnam to Kuala Lumpur by Malindo Air has given rise to speculation amongst larger pharma exporters that a proper air cargo terminal at the airport—with special facilities for pharma exports—will be put up.
     In addition to the privately held international airports, the government has also taken major steps.

Made In India A Factor

     The India Brand Equity Foundation (IBEF)—a trust established by the government’s Ministry of Commerce and Industry with the primary objective to promote and create international awareness of the ‘Made in India’ label in markets overseas—recently announced the efforts being made by the pharmaceutical industry and the government to sustain the export growth trajectory.
     The focus will now be on Argentina, which has of late opened up its U.S.$6 billion drug market to Indian companies. The move will raise the country’s present contribution of around 8 percent to the Latin American region.
     Other moves include a more export-friendly ecosystem for the Indian pharmaceutical industry. One of the first few countries to launch the Trace and Track mechanism for its pharma products, India has started putting barcodes on the primary, secondary, and tertiary level packaging labels in phases.
     In fact, the system is already in place at the secondary and tertiary level of packaging.
Tirthankar Ghosh

Chuckles For March 27, 2015


Fruit Logistica Is Top Banana
Fruit Logistica Innovation Awards

     Fruit Logistica held in Berlin February 4-6 blew the doors off the venue, attracting a record 65,000 people from more than 135 countries, with 2,785 exhibitors from 83 countries.
     Needless to say, the fresh produce industry was on the half shell here as business was booked, networks were expanded, and everybody agreed it was a peach of an event.
     Dr. Christian Göke, CEO of Messe Berlin GmbH, was understandably overwhelmed: “In addition to its undisputed position as a business platform, this year's event strengthened its leading role for innovation to the international fresh produce trade.
     “Exhibitors and trade visitors praised the excellent opportunities to make contact with wholesalers, retailers, fruit and vegetable growers, importers and exporters, and suppliers,” he said.

Pictures At A Fruit Logistica 2015

Innovation Awarded

     “Innovation Awards” (FLIA) showcased the products and services released over the last 12 months, and an event at Fruit Logistica called “Future Lab” recognized projects that could supply the fresh produce sector with innovations over the next two to five years.
     “Spotlight,” a new feature at this 2015 edition, afforded companies an opportunity to present the latest and improved products and services. The first Spotlight featured no fewer than 34 world and 9 European premieres.
     Fruit Logistica Berlin chose the “Aurora Seedless Papaya,” produced by Aviv Flowers Packing House Ltd. in Israel, as the winner of the Fruit Logistica Innovation Award 2015.
     Along with the remarkable fact that it is completely seedless, this unique papaya is characterized by its delicate fragrance and firm, full-flavored pulp.
     Even after it is sliced, the fruit maintains its excellent consistency for a long time.
     The Aurora Papaya is the product of natural selection and crossing different varieties. Target markets include the European Union, Switzerland, and Canada. The weight of the fruit ranges from 200 to 1,000 grams.

Some Tomato

     Second place FLIA winner chosen by trade professionals was a “Lemoncherry” tomato. Developed by BelOrta, a growers’ co-operative based in Belgium, this yellow, sweet-tasting cherry vine tomato features a distinctive, lemony aroma.
     Third place honors went to the “DIY Fresh Packs” produced by Bakker Barendrecht in the Netherlands.
     These products are designed for consumers who want to use fresh ingredients to prepare a full meal, soup, or side dish for four people.
     The next Fruit Logistica takes place on February 3-5, 2016.
Sabiha Arend


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Bird Strikes Labor For Answers
Beer For Breakfast
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