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Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning and Development The Executive Yuan, Taiwan, ROC April 28, 2004

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Page 1: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taiwan as an international logistics and distribution center:

Where your business opportunities begin …

Jennifer Fang-Yu HuangCouncil for Economic Planning and Development

The Executive Yuan, Taiwan, ROCApril 28, 2004

Page 2: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

OutlineOutline

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

Taiwan’s Competitive AdvantagesTaiwan’s Competitive Advantages

Taiwan’s Global Logistics Development PlanTaiwan’s Global Logistics Development Plan

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

ConclusionsConclusions

Page 3: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The GlobalThe Global EconomicEconomic andand TradeTrade EnvironmentEnvironment

Technological advances innetworking,

telecommunication,& information

Economicliberalization

Capital marketformation

The importance of internationaltrade

The importance of port economics

The role ofmultinationalcorporations

Globalization

Globalization

Globalization

Globalization

Globalization

Globalization of world economy bolsters the increasing importance of international trade and the roles of ports and MNCs.

Page 4: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Distrib

ution

centers

Logistics

centers

Transp

ort

centers

Airports

/

Seaports

Networking & Informationalization

Econ

om

ic L

ibera

lizatio

n

Inte

rnatio

naliza

tion

The increasing importance of air-/ sea- ports and MNCsThe increasing importance of air-/ sea- ports and MNCs

The GlobalThe Global EconomicEconomic andand TradeTrade EnvironmentEnvironment

Page 5: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

1. China has increasingly become the big growth engine for global Logistics.

A huge consumer market Manufacturing in China Global sourcing of consumer goods from China

raw materials

goods

Page 6: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

2. The rapid growth of Mainland China in terms of GDP w.r.t. Asia area

East Asia GDP 6.73 trillion USDEast Asia GDP 6.73 trillion USDEast Asia GDP 6.73 trillion USDEast Asia GDP 6.73 trillion USDEast Asia GDP 4.24 trillion USDEast Asia GDP 4.24 trillion USDEast Asia GDP 4.24 trillion USDEast Asia GDP 4.24 trillion USD

Year 1990 Year 2002

JapanJapan3.053.05

(71.9%)(71.9%)

Mainland China 0.39(9.2%)Mainland China 0.39(9.2%)

5 countries of5 countries ofASEAN 0.27(6.4%)ASEAN 0.27(6.4%)

Hong KongHong Kong0.08 (1.9%)0.08 (1.9%)

SingaporeSingapore0.04(0.9%)0.04(0.9%)

South KoreaSouth Korea0.25(5.9%)0.25(5.9%)

Taiwan 0.16(3.8%)Taiwan 0.16(3.8%)

JapanJapan4.174.17

(62%)(62%)

Mainland China 1.16(17.2%)Mainland China 1.16(17.2%)

5 countries of5 countries ofASEAN 0.46(6.9%)ASEAN 0.46(6.9%)

Hong KongHong Kong0.16 (2.4%)0.16 (2.4%)

SingaporeSingapore0.09(1.3%)0.09(1.3%)

South KoreaSouth Korea0.42(6.2%)0.42(6.2%)

TaiwanTaiwan0.27(4.0%)0.27(4.0%)

in trillion USD in trillion USD

Source: International Affairs Weekly (Mar. 27, 2003).Source: International Affairs Weekly (Mar. 27, 2003).

Note: East Asia includes 11 countries: Japan, South Korea, Taiwan, Singapore, Hong Kong, Malaysia,Note: East Asia includes 11 countries: Japan, South Korea, Taiwan, Singapore, Hong Kong, Malaysia, Philippine, Indonesia, Thailand, Vietnam, and Mainland China.Philippine, Indonesia, Thailand, Vietnam, and Mainland China.

Page 7: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

3. The rapid growth of Mainland China in terms of trade volume w.r.t. Asia area

East Asia trade volume 1.65 trillion USDEast Asia trade volume 1.65 trillion USDEast Asia trade volume 1.65 trillion USDEast Asia trade volume 1.65 trillion USD

Year 1990 Year 2002

Mainland China Mainland China 0.12(7.3%)0.12(7.3%)

Hong Kong 0.16 (9.7%)Hong Kong 0.16 (9.7%)

Singapore 0.11(6.7%)Singapore 0.11(6.7%)

Taiwan 0.12(7.3%)Taiwan 0.12(7.3%)JapanJapan0.520.52

(31.5%)(31.5%) South Korea 0.13(7.9%)South Korea 0.13(7.9%)

Mainland ChinaMainland China0.62(19.9%)0.62(19.9%)

Hong KongHong Kong0.41(13.1%)0.41(13.1%)

SingaporeSingapore0.24(7.7%)0.24(7.7%)

Taiwan0.24(7.7%)Taiwan0.24(7.7%)

JapanJapan0.700.70

(22.1%)(22.1%)

South Korea 0.31(9.9%)South Korea 0.31(9.9%)

East Asia trade volume 3.17 trillion USDEast Asia trade volume 3.17 trillion USDEast Asia trade volume 3.17 trillion USDEast Asia trade volume 3.17 trillion USD

5 ASEAN countries 5 ASEAN countries and othersand others0.49 (29.7%)0.49 (29.7%)

5 ASEAN countries 5 ASEAN countries and othersand others0.65 (20.8%)0.65 (20.8%)

Note: East Asia includes 11 countries: Japan, South Korea, Taiwan, Singapore, Hong Kong, Malaysia,Note: East Asia includes 11 countries: Japan, South Korea, Taiwan, Singapore, Hong Kong, Malaysia, Philippine, Indonesia, Thailand, Vietnam, and Mainland China.Philippine, Indonesia, Thailand, Vietnam, and Mainland China.

Page 8: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

4. Major countries’ (/regions’) direct investments in Mainland China

Year 1995

Total volume: 11.01 billion USDTotal volume: 11.01 billion USDTotal volume: 11.01 billion USDTotal volume: 11.01 billion USD

Year 1992Year 2002

in billion USD

Total volume: 37.52 billion USDTotal volume: 37.52 billion USDTotal volume: 37.52 billion USDTotal volume: 37.52 billion USD

Total volume: 52.74 billion USDTotal volume: 52.74 billion USDTotal volume: 52.74 billion USDTotal volume: 52.74 billion USD

Japan0.71, 6%

USA

0.51,5%

Germany

0.09, 1%

Taiwan

1.05, 10%

Singapore0.12, 1%

Korea0.12, 1%

others0.9, 8% Hong Kong

7.51, 68%

Taiwan

3.16, 8%USA

3.08, 8%

Japan

3.11, 8%

Germany

0.39, 1%

Singapore

1.85, 5%

Korea1.04,3%

others4.83,13%

Hong Kong

20.06, 54%

Taiwan

3.97,8%

USA

5.42,10%Japan

4.19, 8%Germany0.93,2%

Virgin Islands

6.12, 12%

Singapore

2.33, 4%

Korea

2.72,5%

others9.2, 17%

Hong Kong

17.86, 34%

Source: http://stats.unctad.org/fdi/Source: http://stats.unctad.org/fdi/

Page 9: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

5. North America and NE Asia Trade in TEU

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

0

2

4

6

8

10

12

2002 2003 2004 2005 2006

Asia to NA NA to Asia7

22

7 2

98

33

12

64

8

8 5

43

24

9

35

23

87

4

9 5

65

27

4

37

10

74

5

10

39

9 1

71

38

95

50

3

11

21

1 5

25

40

83

30

3

M TEU

Note:NE Asia: China, Hong Kong, Japan, South Korea and TaiwanNorth America: Canada and US

Source: April 2004 Containerisation International

Q4GR: 16.5%YGR: 11%

YGR:11%

Page 10: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

6. Europe and Eastern Asia Trade in TEU

0

2

4

6

8

10

2002 2003 2004 2005 2006

E to Asia Asia to E2 8

22

471

5 4

26

02

7

2 8

80

222

6 3

28

76

5

3 0

35

458

6 7

63

99

6

3 1

93

600

7 2

04

79

7

3 3

58

136

7 6

50

78

9

M TEU

Note:Eastern Asia = North East Asia (China, Hong Kong, Japan, South Korea and Taiwan) + South East Asia (Singapore, Malaysia, Philippines, Indonesia, Thailand and Vietnam)

Source: April 2004 Containerisation International

The Global Economic and Trade EnvironmentThe Global Economic and Trade Environment

Q4GR:17%

Q4GR: 12%YGR:6%

Page 11: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taiwan’s Competitive AdvantagesTaiwan’s Competitive Advantages

1. Taiwan’s excellent geographical position as an international transportation and commerce hub

Source: MOTC, ROC (Apr. 2001)Source: MOTC, ROC (Apr. 2001)

Page 12: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taiwan’s Competitive AdvantagesTaiwan’s Competitive Advantages

JFKLHR

TokyoSeoul

Shanghai

HongKongManilaTAIPEI

Singapore

Comparison of the average flying time among 8 major airports of the Asia-Pacific Region

124

Singapore Tokyo Shanghai Manila Hong Kong Kaohsuing

53 hour

78

64

110

68

Comparison of the average ship traveling time among 5 major harbors of the Asia-Pacific Region

hour

Sidney Singapore Tokyo Seoul Manila Shanghai Hong Kong Taipei

4:554:15 4:00

3:30 3:253:05 2:55

6:15

2. Transportation advantage

Page 13: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

3. Taiwan’s niches - Global logistics management

Source: Research Reports of the MOTC

Operation mode value-added per container

Whole container transshipping USD 1,625

Simple processing USD 4,750

High value-added transshipping USD 18,500

overseas

overseas

Taiwan’s niche

Taiwan’s Competitive AdvantagesTaiwan’s Competitive Advantages

Page 14: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Source: IDB, MOEA (Apr. 1, 2004)

Keelung(2)

Taipei (58)

Taipei County (43)

Taoyuan (23)

ShinChu (20)

MiaoLi (2)

TaiChung County (12)

NanTo (1)

ChiangHua (7)

YunLin (1)

TaiNan (9)

Kaohsuing (3)

Kaohsuing County (4)

Switzerland Switzerland Samancor AG, Samancor AG, Singapore BayerSingapore Bayer

Applied Materials’ Taiwan, Intel Applied Materials’ Taiwan, Intel Microelectronics Asia Ltd., IBM,Microelectronics Asia Ltd., IBM, Hitachi China Hitachi China Ltd., Fujitsu Microelectronics AsiaLtd., Fujitsu Microelectronics Asia

PingTung (1)

SmartLink Ltd. Taiwan Branch (Israel)SmartLink Ltd. Taiwan Branch (Israel)

International Logistics & Distribution International Logistics & Distribution Centers (8)Centers (8)

Mining Mining industryindustry

Semi-Semi-conductor conductor

equipmentsequipments

ComputerComputerperipheralsperipherals

TelecommuniTelecommunication cation

Component Component sol. plansol. plan

11 11 55 11

KaohsuingKaohsuing TaoyuanTaoyuan TaoyuanTaoyuan TaipeiTaipei

44444455383898983333

Service Industry (17)Service Industry (17)ManufacturingManufacturing

(169)(169)

Enterprise Operation Headquarter (186)Enterprise Operation Headquarter (186)

ME EIT CE TS WR FI TW

ME: Metal & Electrical machine, EIT: Electronics & IT, CE: ChemicalEngineering, TS: Technological services, WR: Wholesale & Retail,FI: Finance & Insurance, TW: Transportation & Warehousing.

Taiwan’s Competitive AdvantagesTaiwan’s Competitive Advantages4. Enterprise operation headquarters in Taiwan

Page 15: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Formulating institutionsFormulating institutions

ConstructinginfrastructureConstructinginfrastructure

To make Taiwan become the best location for regional operation headquarter for Taiwanese Businesses and MNCs

To make Taiwan become the best location for regional operation headquarter for Taiwanese Businesses and MNCs

GoalsGoals

Challenge 2008 – The 6-year National Development PlanChallenge 2008 – The 6-year National Development Plan

1. Planning free ports2. Providing incentives for

enterprise operation headquarters

1. Planning free ports2. Providing incentives for

enterprise operation headquarters

1. Constructing joint air-/sea- port

2. Barrier-free customs clearance

3. Global E-logistics

1. Constructing joint air-/sea- port

2. Barrier-free customs clearance

3. Global E-logistics

Taiwan’sTaiwan’s GlobalGlobal LogisticsLogistics DevelopmentDevelopment PlanPlan

Page 16: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Free PortsFree Ports Planning single-window administrationfor free ports

Planning single-window administrationfor free ports

Providing favorable measures for taxation and land

Providing favorable measures for taxation and land

Providing digital single-window trade platformto simplify trade procedures and documents

Providing digital single-window trade platformto simplify trade procedures and documents

Strengthening infrastructure and integrating multi-modal transportation linkage

Strengthening infrastructure and integrating multi-modal transportation linkage

Barrier-freeCustoms

Clearance

Barrier-freeCustoms

Clearance

JointAir-/Sea Port

JointAir-/Sea Port

Establishing global e-supply chain system to enhance competitiveness

Establishing global e-supply chain system to enhance competitiveness

GlobalE-Logistics

GlobalE-Logistics

EnterpriseOperation

Headquarters

EnterpriseOperation

Headquarters

Taiwan’sTaiwan’s GlobalGlobal LogisticsLogistics DevelopmentDevelopment PlanPlan

Page 17: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

資料來源 : 經建會法協中心整理

PolicyPolicy MeasuresMeasures andand ImplementationImplementation Results Results The planning of Taiwan’s free ports breaks through the existing administrative and operational restrictions.

Free p

ort

Ship or airplane arrival

Area for simple processing, warehousing, and transshipping

Movement of imported or exported goods

Customs territory, bonded zone

In-Depth value-addedprocessing area

BusinessService center

Movement of people

The breakthroughs:

1.Exemption from customs clearance

2.Tax exemption3.Granting selective

landing visa for foreign business personnel

4.Autonomous management

Source: CEDI, CEPD, the Executive Yuan

Page 18: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Facilitating business activities

(streamlining procedures for granting entry and issuing landing visas to business personnel; providing exhibition facilities and services)

Ease of financial operations

(permitting setup of holding companies for offshore investment, and allowing OBUs to handle foreign-currency transactions)

Rooting deeply in Taiwanwhile deploying globally

Within national territory, but outside the customs territory

(autonomous management; exempted from customs checking and

inspection, as well as cargo tracking and escort)

Duty & tax exemption(exempted from customs duties,

commodity tax, sales tax, tobacco and wine excise tax)

Relaxing hiring ratiofor foreign workers

Allowing in-depth value-added processing

(e.g. assembling, packaging,

manufacturing)

Free Ports

Source: CEDI, CEPD, Executive Yuan

The incentives for attracting businesses to free ports

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Page 19: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taxation measures for Free portsTaxation measures for Free ports

Customsterritory

Other free ports

Gate

Bonded zones,EPZs,

Science parksFree Portenterprise

Free Portenterprise

Tax exemption for transshipping goods and facilities used by the businesses

In compliance with regulations for bonded goods

0 Sales Tax

Exempted taxes :

Customs duties,

commodity tax, sales tax,

tobacco and wine excise tax, public health and welfare dues on tobacco products, trade promotion service fees, and harbor service dues

In compliance with regulations for exported goods

Gate1. In compliance with regulations for imported goods

2. Special regulations for goods processed within FP and transported back to FP

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Tax exempted

FreePortArea

Page 20: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

FP accessvia specifiedlocations

off

board

Foreign business personnel

Free Port

Visa-free (21countries)

Landing visa (24 countries)

Visa (stay 、 residing)

Selective landing visa(not restricted to countries without embassy or counselor)

NotifyingForeignAirline

company

Documentscheck

Luggageclaims

Customsinspection Arrival

Urgent casesapproved and submitted via FP

management agency

MO

FA

(3 workdays)

Streamlining procedures for granting entry and issuing landing visas to business personnel (§32 I)

Source: CEDI, CEPD, Executive Yuan

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Page 21: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Port of Keelung (approved)

Port of Mailiao

Port of Taichung

Port of Taipei

Taoyuan Air Cargo Park

Port of Kaohsuing (approved)

Nan-ShinFree Port

(Kaohsuing City)

Changbing Industrial District

Southern Free Port (Tainan County)

An-Ping Free Port (Tainan City)

Port of Hualieng

Economic Processing Zones(being under review)

2

3

Source: CEDI, CEPD, Executive Yuan

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Page 22: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Port of Keelung

East Container Warehouse

East14 to 22 Wharf

East 6 & 7 Wharf

West 29 to 33 Wharf

West 11 to 15 Wharf

West Container Warehouse

1. The development area: East 6 to 22 Wharf and West 11 to 33 Wharf

2. Being approved by the FPC on Mar. 8, 2004.3. Formal operation to be launched on Sep. 1, 2004.

Page 23: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

The Port of Kaohsuing

1. The development area: the 1st to the 5th container centers.2. Being approved by the FPC on Mar. 8, 2004.3. Formal operation to be launched on Jan. 1, 2005.

Page 24: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Far Glory Air Cargo Park

Taipei

Keelung

Taoyuan

ChungLi

CKS International Airport

Taipei County

ShingChu Highway

HSR

Port ofTaipei

Expressway

Port ofKeelung

Railway

MRT

Taoyuan Air Cargo Park

Page 25: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taoyuan Air Cargo Park

Logistics Center

Operation Center

Internet

Warehouse

Cargo Transport Station

Value-added Park

Data Center

Taipei Data Backup CenterPark backbone

Outbound connection

Dedicated data lines

Page 26: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Foreignenterprise

Tax Incentives for Facilitating the Establishment of International Logistics and Distribution Center in Taiwan:

1. Statute for Upgrading Industries (Article 14-1) 2. Regulations for Encouraging Foreign Profit-Seeking

Enterprises to Establish International Logistics and Distribution Center in Taiwan (Article 3)

The total selling prices

of exported cargos > 100 Million NTD

The total selling prices of exported cargos

>= 10% of the aggregate selling

prices of the cargos

The total selling prices of cargosdistributed or released by such

center in a year>= 200 Million NTD

International logistics& distribution center/Bonded warehouse

Policy Measures and Implementation ResultsPolicy Measures and Implementation Results

Page 27: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Foreign Enterprise (business items)Foreign Enterprise (business items) Distribution Center (location)Distribution Center (location)

11 Switzerland Samancor AGSwitzerland Samancor AG (mineral sand) (mineral sand) UNITOP CorporationUNITOP Corporation (Kaohsuing) (Kaohsuing)

22 Applied Materials’ TaiwanApplied Materials’ Taiwan (Semi-conductor (Semi-conductor equipment)equipment)

UPS International Inc., Taiwan BranchUPS International Inc., Taiwan Branch (Singapore) (Taoyuan)(Singapore) (Taoyuan)

33 Intel Microelectronics Asia Ltd. Taiwan Intel Microelectronics Asia Ltd. Taiwan BranchBranch (computer parts and peripherals) (computer parts and peripherals)

UPS International Inc., Taiwan BranchUPS International Inc., Taiwan Branch (Singapore) (Taoyuan)(Singapore) (Taoyuan)

44 Fujitsu Microelectronics AsiaFujitsu Microelectronics Asia (Singapore) (Singapore) (computer parts and peripherals)(computer parts and peripherals)

Amigo Logistics CorporationAmigo Logistics Corporation and and DHL DHL (Taoyuan)(Taoyuan)

55 Hitachi China Ltd. Taipei BranchHitachi China Ltd. Taipei Branch (computer parts and peripherals)(computer parts and peripherals)

CTW Logistics CorporationCTW Logistics Corporation (Taoyuan) (Taoyuan)

66 Singapore BayerSingapore Bayer (South East Asia) Pt. Ltd. (South East Asia) Pt. Ltd. (Chemistry & Pharmaceutical Industry)(Chemistry & Pharmaceutical Industry)

Bayer Polyurethanes Taiwan Ltd., Bayer Polyurethanes Taiwan Ltd., UNITOP UNITOP CorporationCorporation, Trends Pacific Chemical , Trends Pacific Chemical Corporation Corporation (Kaohsuing)(Kaohsuing)

77 IBM IBM (computer parts and peripherals)(computer parts and peripherals) UPS International Inc., Taiwan BranchUPS International Inc., Taiwan Branch (Singapore) (Taoyuan)(Singapore) (Taoyuan)

88 SmartLink Ltd. Taiwan BranchSmartLink Ltd. Taiwan Branch (Israel) (Israel) (Telecommunication components solution (Telecommunication components solution plan)plan)

SmartLink Ltd. Taiwan BranchSmartLink Ltd. Taiwan Branch (Israel) (Israel)

Policy Measures and Implementation ResultsPolicy Measures and Implementation ResultsThe following enterprises are qualified to enjoy the aforementioned tax benefits:

Source: Bureau of Industrial Development, MOEA (March 2004)

Page 28: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

Traditional paradigm -Outsourcing SC

in order to lower cost

New paradigm -Outsourcing SC for strategic &

competitive advantage

customer

Man

ufac

turin

g

War

ehou

sing

Com

plia

nce

Tra

nspo

rtat

ion

Dis

trib

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n

GlobalIntegrated logistics

Logisticsproviders

Ord

er m

anag

emen

tcarrier carrier

carrier

Source: Council of Logistics Management (March 2004)

customer

Page 29: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

The 5 stages of supply chain evolution and the tools to enable its excellence

Individualsupply chain

alignedsupply chain

integratedsupply chain

extendedsupply chain

networkedsupply chain

ERP system

Solutions for in

tegrated information & visibility

Optimization

Global integrated logistics Global integrated logistics

Complete visibilityEnd-to-end solutionsCustomized & flexible

Trading Partner Integration HighLow

Sup

ply

Cha

in V

alue

HighGlobal integrated logistics

Source: Council of Logistics Management (March 2004)

Page 30: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

55

24

70

29

5156

3236

10

61

23

75

30

51

61

4539

9

0

20

40

60

80

NBPC DT PC MB Server CDTMNT

LCDMNT

ODD DSC Projector

2001 2002

%

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

The Global Market Share of Taiwan’s Major IT Hardware Products

Source: MIC IT IS Project (Nov. 2002)

Page 31: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

55

3427

18

73

15

6564 67

39 39

70

51

6676 73

46

71 70 6679

0

20

40

60

80

100

NIC WLAN Switch Soho Router AnalogModem

xDSLModem

CableModem

2000 2001 2002

%

Hub3%

LAN Output Ratio

SOHO Router24%

Switch28%

WLAN27%

NIC10%

Others 8%

WAN Output Ratio

xDSL Modem39%

Cable Modem26%

Analog Modem34%

Others 1%

Source: MIC IT IS Project (Nov. 2002)

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

The Global Market Share of Taiwan’s Major Computer Networking Products

Page 32: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

2.29.6 12.9

28.8

42.5

153.1

123.5

98.1

65.7

0.82.3

3.3

7

9.5

13.6

18.9

21.7

24.6

0

20

40

60

80

100

120

140

160

180

1999 2000 2001 2002 2003 2004 2005 2006 2007

0

5

10

15

20

25

30

Taiwan’s Mobil Phone Sales Prediction: 1999-2007Taiwan’s Mobil Phone Sales Prediction: 1999-2007

%

Million

Source: MIC IT IS Project (Nov. 2002)

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

Page 33: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

16.1

0

11.1

57.5

3025.77

11.6

52

39

47.5

12.1

54

0

20

40

60

80

PDA Game Console Digital STB Thin Client

2001 2002 2003

%

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

The Global Market Share of Taiwan’s Major IA Products

Source: MIC (Dec. 2002)

Page 34: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Global SCM Market Scale Prediction (Year 2000-2005)Global SCM Market Scale Prediction (Year 2000-2005)

Market revenue($M USD)

53086658

8988

12494

16866

21083

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005year

Source: AMR Research & Survey Institute (2001)

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

YGR: 32%

Page 35: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Worldwide SCM Market Grow Rate Prediction(%)Worldwide SCM Market Grow Rate Prediction(%)

20002000 20012001 20022002 20032003 20042004 20052005

NorthNorth

AmericaAmerica2727 2323 3131 3434 3030 2121

EuropeEurope 4343 3333 4141 4545 4141 3030

Asia-Asia-PacificPacific 9797 4343 4545 4848 4343 2929

Central Central AmericaAmerica 4949 3535 4343 4646 4242 3131

OthersOthers 4949 3030 3737 4141 3737 2727

TotalTotal 3636 2828 3535 3939 3535 2525

Growth rateRegion

Source: AMR Research & Survey Institute (2001)

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

2.68 B USD

Page 36: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Taiwan’s ERP,SCM,CRM Market Revenue PredictionTaiwan’s ERP,SCM,CRM Market Revenue Prediction Year 2001-2003 Year 2001-2003

Source: MIC (2001)

6.13 7.5210.07

13.518.09

0.751.47

2.47

4.14

6.97

3.18

4.15

6.43

9.97

1.12

0

10

20

30

40

1999 2000 2001 2002 2003

ERP SCM CRM

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

Billion NTD

Page 37: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

2001 2003 Year

Billion NTD

1.4

768%

68%

Global Logistics Trends and Business OpportunitiesGlobal Logistics Trends and Business Opportunities

Taiwan’s SCM Market Value EstimationTaiwan’s SCM Market Value Estimation Year 2001-2003 Year 2001-2003

Source: Supply Chain Management: Insight & Cases (ARC Consultants Ltd.)

Page 38: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

ConclusionsConclusionsThe Smiling Curve of Taiwan’s Industrial Development

High-Tech Island Global Logistics Center

Knowledge-based Services

High Value-addedManufacturing Center

IR&DC GLC

Traditional Industries

Ad

ded

Valu

e

IndustryValueChain M

ark

et

Surv

ey

Innovati

on

R &

D

Desi

gn

Ass

em

bly

Logis

tics

Finance

Mark

eti

ng

Serv

ices

Bra

nd

High Added-valueLow Substitution

Man

ufa

cture

r

Page 39: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

ConclusionsConclusions1. Taiwan’s niche services and local network plus international 3PL and 4 PL providers

E-BusinessManagement of all parties of the supply chain + e-Business

Supply-Chain ManagementManagement of the whole supply chain

Forwarding/Contract Logistics

Traditional transport & warehouse management

Producers’ own operation of logistics

5PL

2PL

1PL

4PL

3PL

Source: Revised from APL Logistics (2004).

Page 40: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

customer retailer distributorLogisticsprovider

manufacturerrawmaterialsupplier

SupplerRelationshipManagement

Supply Chain ManagementCustomerRelationshipManagement

Goods flows (reverse goods flows)

Information flows

Money flows

ConclusionsConclusions2. Dynamic Value Chain Management

Source: Supply Chain Management: Insight & Cases (ARC Consultants Ltd. + i2 Technologies)

Page 41: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

ConclusionsConclusions3.Possible areas of cooperation between Taiwan and Singapore

– The Twin Hub System for the Asia-Pacific Region

Training & Development

Professional networking

Information exchange

Logistics portal linkage

Page 42: Taiwan as an international logistics and distribution center: Where your business opportunities begin … Jennifer Fang-Yu Huang Council for Economic Planning

Council for Economic Planning and DevelopmentThe Executive Yuan, Taiwan, ROC