Ram C Menen Divisional Senior Vice President Cargo Emirates

1. Ram C Menen Divisional Senior Vice President Cargo Emirates Mumbai 17th November 2006

2. Source: Boeing WACF 2006/07

3. For India, the time is right and the environment is right!

4. Current Scenario India’s 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%) Government’s priority is to develop the manufacturing sector.

5. 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.

6. Current Scenario Value of exports: 1995 : US$ 31 billion 2005 : US$ 57 billion India’s FDI is only 1% of the total GDP [about US$5 billion].

7. Challenges Cultural: Some of India’s 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. India’s FDI is only 1% of the total GDP [about US$5 billion] The good news is that the new approach of the government is inclusionary and consensual.

8. Golden Quadrilateral Project Source: wikipedia.org

9. 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.

10. What’s wrong with this plan?? It will not even meet today’s needs !! India needs highways with six lanes on each direction , i.e. 12 lane roads.

11. 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.

12. Direct (Rail) Freight Corridor

13. 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.

14. Mindset must change and bureaucracy must end!!

15. Trucks are the best regional freighters. Flying domestically is expensive because of higher costs .. viz. cost of fuel etc.

16. Freighter Trucking in India & Europe Pax & Freighter EK Online Trucking Offline

17. How efficient is the supply line within your supply chain?

18. Air cargo is used as a planned tool in today’s 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.

19. 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, India’s economic growth will be stunted.

20. J-I-T Assembly Line

21. 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.

22. 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.

23. Multi-modal Int’l 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

24. DC3s transported mail and Nagpur was a mail hub!! • The house of Tata’s 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.

25. A New Era Is Dawning On Us !!

26. 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.

27. Interim Solution Use Dubai & Singapore as a Hub

28. 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.

29. India has now got the chance to leapfrog technology. It should refrain from recreating the past and focus on creating a new future.

30. Thank You !

31. 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.

32. India is the world’s 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.

33. MA = Materials Administration MARKETING Coordination Purchase Production Distribution Supplier Manufacture Customer Warehouse Warehouse

34. 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

35. “Efficient Inventory Control Is Very Critical To Attaining Cost Efficiency In The Supply-Chain”

36. Transportation modes can be leveraged to attain cost efficiency at market entry level Air Sea-Air Sea

37. 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.

38. SERVICE vs MARKET DEMAND + Integrators Airline SERVICE + DEMAND 0

39. Emirates Route Network 2006

40. ECONOMIES OF SCOPE "Leverage economies of scope by leveraging available economies of scale’’

41. “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.”

42. Emirates Route Network 2006

43. Change in Mind Set!!

45. Nagpur slide ..

46. Slides from Alston

49. SPEED

50. Paper-free Era & e-Freight