Empowering Romania as the
Eastgate Re-Export Trade Hub
Export Council meeting 21 June 2011
Robin Martens
Managing Director European Gateways Platform
Agenda
• Value chain developments
• Holland International Distribution Council
• European Gateways project
• How to realize potential
Empowering Romania as the
Eastgate Re-Export Trade Hub
Value Chain developments
Market developments Value Chain
Plan
Deliver
Return
Source
Return
Make
Deliver
Return
Source
Make
Return
Deliver
Source
Return
Return
Make
Deliver
Source
Return
Return
• Time of Supply Chain
• Shorten time-to-market; Compress Supply Chain; Lead-time restrictions
• Cost of Supply Chain
• Off-shoring production; Postpone final production / assembly
SUPPLY CHAIN
• Configuration of Supply Chain
• Outsourcing; Functional change of actors; Agility / responsiveness; Location
of the market
Value Chain composition
Variable volume,
innovative product
Stable volume,
functional product
Gap
Central America
China
H&M
Turkey
China, Bangladesh
Spain, Morocco
China
Spain
China
Nokia
Romania (a.o.)
China
Xerox
Netherlands
China, Malaysia
Poland
South Korea
Mango
Zara
LG
Purchasing Power: Past
Source: NDL
• 72 % of the
European / and
Central
Distribution
Centres are
located in NorthWest Europe.
All in a circle of
100 km around
the ports of
Rotterdam,
Antwerp &
Hamburg.
Purchasing Power: Present & Future
•
•
•
•
Source: NDL
EU entry CEE
states accelerates
purchasing power
development.
Economic weight
shifting to the East.
Delivery
requirements
starting to upgrade
to W-European
levels.
Logistics solutions
leap-frog WEurope.
Trade Routes East - West
Existing route Europe –
Kazakhstan – China
Trans Siberia Line to China
Non-existent today. Opportunity to link South
Europe to Trans Siberia Line. Threat is
coming from Hungary & Slovakia
Kazakhstan, Near Asia, West China
Virtually non-existent today, due to lack of
assembly parks / inland ports in Romania.
Threat is coming from Hungary & Slovakia
In competition with Bulgaria esp RoRo
via Varna. Today Varna wins due to
lack of development Constanta
Silk Route to Near Asia, West China
Trade leads logistics
Direct route to CEE
+ Near-Shoring =
Market Potential for
Romania
Location Requirements
- Comply with international demand 1. Strategic logistic location;
2. Space for growth;
3. Development strategy;
4. Low operational costs;
7
5. High quality transport facilities;
6. Multi-modal transport solutions;
7. Freight villages;
8. Stable & high quality personnel;
9. Facility quality on international level;
10. Simple and straightforward procedures;
11. Availability of residential solutions;
12. Wellness environment (e.g. schools, nature, golf)
1
2
3
5
4
6
Location Requirements
- Outside view on Romania today 1. Strategic logistic location: Yes
2. Space for growth: Yes, but where
3. Development strategy: No
4. Low operational costs: ??
5. High quality transport facilities: No
6. Multi-modal transport solutions: No
7. Freight villages: No
8. Stable & high quality personnel: Yes??
9. Facility quality on international level: No
10. Simple and straightforward procedures: No
11. Availability of residential solutions: No
12. Wellness environment (e.g. schools, nature, golf): No
Cost2Serve: Shanghai to CEE
Distribution costs and throughput time
Rotterdam
Distribution costs and throughput time
Rotterdam
By rail
€ 16.794 ,34,5 days
Venlo
By rail
€ 16.324,34,5 days
By road
€ 16.816 ,36 days
By road
€ 16.338 ,35,5 days
Prague
By road
€ 11.766 ,31,5 days
Constanta
Constanta
Destination
Destination
Shanghai
By rail
€ 11.860,30 days
By road
€ 11.609 ,31 days
Timisoara
Harbour
Harbour
Warehouse / rework
Krakow
By rail
€ 12.089,30 days
Warehouse / rework
Shanghai
Is there a market tomorrow?
Cost2Serve hinterland Constanta
Is there a market tomorrow?
Captive Hinterlands in terms of TEU
Total Container Flows Europe 2005
57,3 million TEU
Status 2007: East European Ports
± 2,5 million TEU
Captive 2007 by East European Ports
± 8 million TEU
Captive 2015 by East European Ports
± 11,5 million TEU
Empowering Romania as the
Eastgate Re-Export Trade Hub
Holland International Distribution Council
Fundament of Dutch success
Port Gateway
Port Gateway &
EDC
RDC
RDC
RDC
RDC
Multi-modal
connections and
Integrated
business &
logistics parks
Inland Ports
The Holland
Distribution
Country model:
Unsurpassed
success
The Dutch road to success
•
•
•
•
•
•
•
•
•
•
Population: 16.5 Million
400,000 people are employed in the Logistics and Distribution sector of the
Dutch economy
Over 25 Billion US$ of gross added value
8% of the GDP
51% market share in European Distribution Centres
Enabling success: Holland International Distribution Council (HIDC /
NDL)
Founded in 1987 by the logistics industry with backing from Government
Mission: Strengthening logistics competitive position of Netherlands within
Europe
Private & not for profit, 500 company members
Activities: Marketing & Matchmaking, R&D, Lobby, Platform
The Feedback on HIDC (NDL)
“The NDL team was an invaluable resource, very helpful
and providing me with guidance in Holland…they really
knew the logistics organizations personally and had
rapport with them”
“They approximately reduced the transition time by 50%
(from 6 to 3 months)”
“I highly recommend HIDC to other businesses who
seek local support for establishing a distribution
presence in the Netherlands”
"I don't think a lot of people realize how simple it is to set up a
distribution center in the Netherlands"
"They (NDL) effectively held our hand during the whole
process"
"There was real value in the efficiency...from start to finish we
got everything going in less than 6 months“
– Logistics director;
Tom’s shoes
– Director of Global Logistics;
Masimo Corporation
“NDL has the specific knowledge about logistics in
general and the Dutch market and players in particular
that logistics investors are looking for ”
“Their knowledge about the Dutch players means that
the leads they provide are valuable and a company
does not have to waste time investigating irrelevant
leads”
– Regional Logistics Manager Europe – Eurasia;
Halliburton
“They are very helpful and knowledgeable“
“I really feel they are trying to make a match with a logistics
provider that is best for me”
“I particularly liked that the first time we met they brought a
tax attorney along, that was very useful”
– Logistics operations manager;
Redwing shoes
18
Lessons learned in Holland
•
Location, Location, Location
•
Infrastructure: Your connection to the World
•
Quantitative & qualitative supply of expertise
•
Collaboration, Communication & Cooperation
Existing Situation Romania
Logistics Market Romania:
•
6,204.9 EURO
2
4
5,799.5 EURO
•
3
8,875,5 EURO
1
4,609 EURO
5
2010
-
350 mln tonnes
-
Almost no transit !!!
Characteristics
-
Bucharest (70%)
-
No logistic networks
-
No inland ports / hubs
-
Fragmented
-
No trade policy
-
No multi/inter-modality
-
Absence of infrastructure
-
No clustering
Is there a market tomorrow?
Market requirements
Potential Market Romania:
•
?? EURO
2
4
•
?? EURO
2020
-
Domestic: +50%
-
Transit/trade: HUGE
Requirement
-
Path of Least Resistance
3
?? EURO
1
?? EURO
5
EGP project
=
•
Romania competes head on
with other European
Countries:
-
Hard infrastructure
-
Soft infrastructure
-
Trade policy
-
Marketing & Sales
Empowering Romania as the
Eastgate Re-Export Trade Hub
The EGP project
Foundation
European Gateways Platform
•
Develop in cooperation with Romania the corridor Constanta
- Rotterdam
•
Cooperate & Support Romanian public authorities in
formulating & preparing Policy, Plans & Projects
•
EGP is a PPP between the Dutch Government and
companies & entities
•
Launching members of EGP:
•
•
•
•
•
•
•
•
•
Archicom
Baggerbedrijf de Boer
Boskalis
Centrum Transport / Essers
ECON group
HITT
Koninklijke Saan
KLG Europe
MHC
• Multraship
• Price Waterhouse Coopers
• Rotterdam Maritime Group
• Seacon Logistics
• Syncera MWH
• Van den Herik
• Wim Bosman CEE
• Nederland Distributieland
• Transport en Logistiek Nederland
Objectives
• Constanta Logistics Hub: Eastgate of Europe
• Romania Trade & Assembly Hub of Europe
EU Strategy Ports & Hinterland
EU2020
EU TEN-T
EU Danube
Strategy
EU
Transport
Policy
EU Green
Policy
Business case
Benefits:
• GDP contribution: € 10.7bln
• Tax income State: € 1.6bln
• Jobs: 176.000
• External cost savings for Europe: € 120mln/year
Cost:
• Investment: € 500mln for period 2011 - 2020
Develop Romania Logistics Corridor
Market Potential Romania 2030:
-
Domestic: 600mln tonnes
-
Transit/trade: 200mln tonnes
Freight villages
N1) Constanta
N2) Giurgiu - Ploiesti
N3) Craiova - Pitesti
N5
N4
N4) Targu Mures - Cluj
N5) Timisoara - Oradea
Infrastructure
N3
Road
N2
N1
Rail
IWT
NEW
Loss per Day
Loss per
DAY
TEU
Romanian
State
Romanian
businesses
2011
50,000
€ 92,000
€ 286,000
2012
100,000
€ 184,000
€ 572,000
2013
250,000
€ 460,000
€ 1,430,000
Effect of VAT-deferment
Per 100,000 TEU
Total additional income to State
€ 67.500.000
Customs duties
€ 24.500.000
Salary taxes & unemployment savings
€ 33.000.000
Corporate taxes & VAT
€ 9.000.000
Spin-off to companies in Romania
€ 210.000.000
Empowering Romania as the
Eastgate Re-Export Trade Hub
• Constanta Logistics Hub: Eastgate of Europe
• Romania Trade & Assembly Hub of Europe
Potential Realization
Way forward
1. Adopt EGP-project as a Project of National importance
2. Establish Integrated Project Unit:
•
Responsible for execution of the Project
•
Implement defined measures (next slide)
•
Market Romania & acquire investors
•
Visualize strategy through presentation documents
•
Develop and deploy support tools
•
Define masterplan Romanian Logistics Corridor
Measures to be implemented
• VAT deferment
• Change of Order 500/2007 & Customs Code
• Global Fiscal Representation
• Change of Methodological Norms 2004
• Authorized Economic Operator
• Change of Order 2243/2006 & 5465/2007
• Extended Customs Gate
• Execute Pilot project
• Inter-Modal Strategy
• Invest ± € 200mln up till 2020
• Inland Ports
• Implement Inter-Modal Strategy
• Extend South Port Constanţa
• Develop container terminal & logistics park
• Supply chain & logistics education
• Direct ESF funding for “strategy project”
Contact details
European Gateways Platform
Mr. R.J. Martens
B-dul Aviatorilor 51-53
Sector 1
Bucharest
Romania
T
M
E
W
+40 – (0)21 – 210 90 24
+40 – (0)726 – 79 24 35
robin.martens@archicom.ro
www.europeangatewaysplatform.nl