Ram C Menen

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• Ram C Menen
• Divisional Senior Vice President Cargo
• Emirates

17th November 2006
Mumbai
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Source Boeing WACF 2006/07
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For India, the time is right and the environment
is right!
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Current Scenario
Indias strengths are language and highly
advanced and skilled pool of labor force
India current split in activity Manufacturing
20 (China 50) Services          80 (China
30)

• Governments priority is to develop the
• manufacturing sector.

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Current Scenario

• Current population split is 30 urban and 70
  rural
• Urban population is ideally suited for the
  services sector, rural population is perfect
  for manufacturing.
• Over 30 of in the population is middle
• class India is a retailers dream.

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Current Scenario
Value of exports 1995 US 31
billion 2005 US 57 billion
Indias FDI is only 1 of the total GDP about
US5 billion.
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Challenges
Cultural Some of Indias old traditions can slow
and impedes growth. However, the good news
is that the younger generation is breaking
through the barriers led by being on the
receiving end of outsource in the services
sector. Unlike China, India has not had the
benefit of political continuity which has
resulted in greater bureaucracy and slow
decision making process. This has led to less
confidence and lower FDI than China. Indias FDI
is only 1 of the total GDP about US5 billion
The good news is that the new approach of the
government is inclusionary and consensual.
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Golden Quadrilateral Project
Source wikipedia.org
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Road Network
Inputs on the road project National highway
authority of India ( NHAI ). NHDP - NATIONAL
HIGHWAY DEVELOPMENT PROGRAMME has 7 phases in
all. 1 2 PHASE NORTH - SOUTH Corridor and
EAST - WEST Corridor will be 100 complete by
2007. PHASE 3 9 Projects of 10,000 kms of 4
lane traffic. PHASE 4 20 Projects of 1,000
kms of 2 lane expressways. PHASE 5 of 1,000
kms of expressways. PHASE 6 of 5,800 kms of
Golden Quadrilateral of 6 lanes.
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Whats wrong with this plan??
It will not even meet todays needs !!
India needs highways with six lanes on each
direction , i.e. 12 lane roads.
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Rail
The new dedicated freight corridor (DFC) for
rail freight is a good start. However, this only
connects the cosmopolitan points (slide) and not
very efficient for transportation of air cargo as
it adds on more processes which will add to the
overall costs.
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Direct (Rail) Freight Corridor
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Today, because of the lack of proper
distribution capability, Indian imports are
better served via hubs in Dubai and Singapore,
reaching the internal industrial areas directly
from these hub. e.g. it is quite difficult to
distribute from the current airports like Bombay
to Bangalore or Hyderabad cumbersome transit
procedure as well as time taken to truck between
any two points in India.
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Mindset must change and bureaucracy must end!!
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Trucks are the best regional freighters.
Flying domestically is expensive because of
higher costs .. viz. cost of fuel etc.
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Trucking in India Europe
Pax Freighter
EK Online
Trucking Offline
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How efficient is the supply line within your
supply chain?
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Air cargo is used as a planned tool in todays
supply chain management. Time is a very
critical part of any business decision and the
higher cost of airfreight adds economies to the
over all supply chain.
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Growth in air freight is roughly twice the growth
in the GDP of a country. At the current GDP
growth of 8-10 air cargo should be growing at
16-20. If facilities are not provided to cater
to this growth, Indias economic growth will be
stunted.
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J-I-T Assembly Line
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Ground infrastructure is critical to developing
air logistics activity. Proper investment in air
side facilities as well as a proper road
infrastructure is very essential to create a
seamless distribution network. China is an ideal
model to follow where the infrastructure was
built before the opening up the market for
growth.
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Creating an air cargo hub in Nagpur is a great
idea. Along side this, there has got to be an
industrial development which in itself will
create origin/destination traffic. Ideally a
major free trade zone is a good catalyst. It will
be a greenfield development, hence, can be
developed quite quickly.
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Multi-modal Intl Hub Airport at Nagpur
MIHAN
Manufacturing and assembly plants
Special economic zone
World class health city
IT park
MRO and training facilities
Attractive fiscal and tax incentives with
friendly labour laws

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DC3s transported mail and Nagpur was a mail
hub!!

• The house of Tatas was always closely associated
  with Nagpur by way of Empress Mills (one of the
  first business ventures by Tatas, established
  1877).
• The association also goes back to early Air India
  days (Tata Airlines) when
• in 1935, February 25, Tata Sons made a trial
  flight Bombay / Nagpur / Jamshedpur / Kolkata
  with Fox Moth VT- ADZ (pilot Mr. Nevill
  Vincent).
• scheduled services started only in 1945,
  April 16th when Tata Airlines began twice weekly
  Bombay / Nagpur / Kolkata service with DC-3s.

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A New Era Is Dawning On Us !!
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India has now opened up its skies, however, it
has not invested in infrastructure at airports
and cargo areas. Unless the task force created by
the Civil Aviation Ministry moves in a
fast-forward mode, it will always be in a catch
up mode. This is less than ideal environment for
developing freight.
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Interim Solution
Use Dubai Singapore as a Hub
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The air logistics in India will now have to
transition from traditional forwarding to that of
supply chain management. Multinationals are going
to change the scene in the logistics industry.
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India has now got the chance to leapfrog
technology. It should refrain from recreating the
past and focus on creating a new future.
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Thank You !
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Future

• BRIC Brazil, Russia, India and China, in the
  next 50 years are expected to be the largest
  economic force.
• BRIC economy will be larger than the G6 in the
  next 40 years and will create the largest
  consumer markets in the world.

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• India is the worlds largest diamond exporter.
  Nearly 7 out of 10 diamonds in the world are cut
  and polished here (Surat).
• Other commodities Chemicals, pharmaceuticals,
  auto parts, textiles, IT, biotechnology and now
  also microchips and semiconductors.

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MA Materials Administration
MARKETING
Coordination
Purchase
Production
Distribution
Supplier
Manufacture
Customer Warehouse
Warehouse
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India Emerging Market
India is becoming an integral part of the global
pharmaceuticals value chain in a simulated
environment.
Clinical trials accelerating 30-40 lower cost
compared to US/Europe
Indian government stimulating the development
With tax and customs incentives.
Multinationals cooperating with Indian companies
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Efficient Inventory Control Is Very Critical To
Attaining Cost Efficiency In The Supply-Chain
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Transportation modes can be leveraged to attain
cost efficiency at market entry level
Air Sea-Air Sea
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TIME
In this millennium TIME has integrated with the
other three dimensions. Time is now firmly the
4th dimension. Time as a dimension results in
lack of shape or form, i.e. results in
fluidity. The state of fluidity can be seen in
inventory and resource management.
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SERVICE vs MARKET DEMAND

Integrators
Airline
SERVICE

DEMAND
0
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Emirates Route Network 2006
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ECONOMIES OF SCOPE
"Leverage economies of scope by leveraging
available economies of scale
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• India is at the right time and at the right
  place. It must, now, move in a fast-forward mode
  to take advantage of the opportunities.

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Emirates Route Network 2006
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Change in Mind Set!!
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Nagpur slide ..
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Slides from Alston
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SPEED
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Paper-free Era e-Freight
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How efficient is your transportation?
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Biggest Challenge!!!???
US100 A barrel?
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VALUE CHAINTOTAL SOLUTION
Providing total solution to the customer through
commercial alliances with various service
providers
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Forecasted Oil Prices