An Overview of

The Logistics Sector in Thailand

Bobby Rao, Country DirectorCENTURY RESOURCES THAILAND LTD24 Nov 2010, Queen Sirikit National Convention Center, Bangkok

Thailand & its Logistics- Getting There!

Approved Projects & Investments in Logistics

[BOI.CO.TH]

Logistics is key to trade facilitation which fuels economic well being of the nation and its people

Investments in infrastructure will help improve cost efficiencies if tenders are open and transparent and do not account for hidden vested interests

Major long terms events can change the dynamics of Thai logistics:

Kunming-Singapore Asian Rail Network

Myanmar’s Dawei/ Tavoy port to serve Thailand & China

IMGT Logistics framework – Retracing craddle of trade routes in South East Asia

Economic ascension of troubled regions: Isaan & South

National Single Window E-Logistics Platform

• As a data network for information exchange among all stakeholders in the international trade supply chain, & to foster regional integration and realization of an ASEAN Economic Community by 2015.

• Reduction in average trade transaction cycle time from

24 to 15 days• Reduction in costs of compliance with documentation requirements

• Designed to support a single entry of identical data; a singlesynchronous processing of data; a decision-making for the clearance and release of cargoes at a single point; and a compilation of statistics for economic analysis and management. Source: Establishing Interagency Collaboration in Large-Scale Systems Development - Lessons learned from an e-

government project for trade and transport facilitation, by Mr. Somnuk Keretho , Kasetsart University, Thailand

Logistics Cost as % of GDP Comparison

9%

11%

11%

13%

18%

21%

USA

Japan

EU

India

Thailand

China

Thailand’s Logistics Cost to GDP (1999-2007)02468

101214161820

1999

2000

2001

2002

2003

2004

2005

2006

2007

p

Transport cost Inventory carrying cost Administrative cost

%

18.919.118.317.317.618.0

19.520.019.2

Source: Thailand’s Logistics Report 2008, NESDB

Conference Week of the Asia-Pacific Weeks Berlin 2009Global Mobility & Money for The FutureOctober 8, 2009, Berlin, Germany

Danucha PichayananDirector, Logistics Department, Infrastructure Project Office, Office of National Economic and Social Development Board

Does this reflect Cost or Service efficiencies

Or

Does it indicate Maturity Profile of The industry ?

Logistics Performance Index [2010]

The World Bank: Connecting to Compete 2010, Trade Logistics in the Global Economy, The Logistics Performance Index and Its Indicators

Source: Logistics performance survey data, 2009.

Maturity Profile of Countries:Impediments to Logistics Performance

Build on Success

The Thai Logistics Industry has enabled trade growth of 340% in 14 years and manufacturing trade growth of 370%.

The industry has performed well...identify the success factors and hold onto and strengthen them.

Identify impediments to continuing success…and address them

Look to the future

Thai manufacturing will become more sophisticated to serve more demanding international markets

International amenity services can grow alongside travel, tourism and IT industries especially in Gulf region

Logistics services need to be world class for Thailand to win international competitions in goods and amenity services

Match strategy to markets

The Thai logistics sector has many and diverse suppliers, services and customers, and is always changing

Government departments cannot and should not try to micro-manage the logistics sector

Strategy should aim to remove the economic, administrative and infrastructure barriers that prevent logistics markets from working.

Key Challenges

Source: Paul Amos, Transport Advisor, World Bank, Washington DC,“Responding to global logistics trends with a National Logistics Strategy : Bangkok, January 2007”

Seed the Evolution Incentives for local Logistics operators to adopt technology and to collaborate Institute benchmarking and standards in the various modules in logistics and supply chain management;

Licenses [conditional] based on/ subscribing to industry scorecards similar to Hazmat Local operators should seek fresh capital injection and advanced SCM practices from foreign LSP, to adapt to

complex needs of foreign investorsStreamline Regulate Capitalization, activity based Insurance Coverage and HR practices in the industry – Protect all

parties Reduce Duplication in logistics associations, councils, chambers, etc - Wasted resources & talent

Rationalise Competition is necessary but continuous influx of new low-end entrants keeps the industry stagnant at price-

bargaining, instead of advancing towards integration of supply chain management Incentivise Mergers & Acquisitions to rationalize the industry & help evolve from service to solutions

LSPs are not Banks LSP should not bank-roll duty and 3rd party hard charges unless the cost of funds are compensated for. Alternatively, Customers should create automatic drawdown facilities with financial institutions for direct

EFT to Customs and 3rd parties, to help reduce financial burden on LSPs Through direct drawdown facilities, lead time from vessel arrival till delivery to consignee can be reduced;

Ultimately Customers avoid penalties such as detention, demurrage, storage charges, etcSimplify & Empower Avoid Micro-Managing this industry, instead Create frameworks that can self-regulate

Altering the landscape

The Century Logistics Group- An Introduction

The Parent Company At A Glance

Home-grown leading provider of oil & gas logistics, supply chain management and total logistics services, expanding Asia-wide on 3PL & 4PL platform

Listed on Main market of Bursa Malaysia Securities Berhad since June 2001

3PL presence in Malaysia, Thailand, China, India, Singapore & Dubai. Indonesia & Vietnam expansion planned.

4PL Proven Expertise

Oil and gas logistical support services

Total logistics and supply chain management (international freight forwarding, transportation & distribution, warehousing, property development,

logistics parks)

Procurement & assembly services

CENTURY RESOURCES THAILAND LIMITED

Country Office & Distribution Centre/ Warehouse

670 Moo 4, Rojana Ind Park Zone 2, Tumbol U-Thai, Amphoe U-Thai, Ayutthaya Province, Thailand 13120

Tel: +6635746 888 -90 ; Fax: +663574691

Bobby Rao, Country Director ; Email: bobby.rao@century.com.my ; Mobile: +66819200536

CENTURY TOTAL LOGISTICS SDN BHD (Malaysian HQ)

Lot 4, Solok Sultan Hishamuddin, Kawasan 20, Perusahaan Selat Klang Utara, Port Klang, Selangor, Malaysia

Tel : +603-3161 3725 ; FAX : +603-3161 3640

Charles E.L Sebastian, Head of Global Freight

Email : charles@century.com.my ; Mobile: +60123850888

www.century.com.my