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LOGISTICS In Emerging Markets. Amerik Haer Managing Director Kuehne+Nagel Saudi Arabia. Emerging Markets. Emerging markets are those markets which are in the process of rapid growth and industrialization. Emerging markets yield enormous market potential . Facts World Population
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LOGISTICSIn Emerging Markets Amerik Haer Managing Director Kuehne+Nagel Saudi Arabia
Emerging Markets • Emerging markets are those markets which are in the process of rapid growth and industrialization. Emerging markets yield enormous market potential. • Facts • World Population • Mature Market – 16% • Emerging Market - 84% Market Capitalization • Mature Market -95% • Emerging Market-5% National Income ( Purchasing Power Parity) • Mature Market -62% • Emerging Market -38%
Characteristics • Regional Economic Powerhouses Large populations, Abundant resource base, and huge markets • Transitional Societies Adaptable to economic and cultural reforms • Great Untapped Potential • World's fastest growing economies • “Key Swing Factor" in the growth of world trade and global financial stability Active participants in the world's major political, economic, and social affairs
Opportunities • Emerging Markets are too big to ignore • Attractive with higher profit margin • Encourage foreign investments • Rationalize the trade relations and capital investment with the industrialized countries • Booming Economies with good Fundamentals • Great potential for FMCG, Pharma & Basic Industrial products • Investment is now switching directions, as appetite for risk and confidence in emerging markets increase
Trends • Capital flow into the Emerging Markets may hit record in 2010 • Emerging Market currencies set to inflate as a result of heavy foreign direct investment • Developed markets are getting hit by high levels of debt declining GDP growth
Logistics Perspective • Identify the technical and cultural obstacles that may hinder the introduction of integrated supply chain management to an emerging market. • Manage effectively the risks associated with emerging market logistics • Research on the market trends and logistic requirements of a given emerging market • Find solutions to overcome the physical infrastructure limitations that slows down free flow of goods • Prepare the market to adapt to sophisticated & IT supported logistic solutions.
Role of a Global Logistic Provider A Global Logistic Provider is expected to : • Reach the emerging markets on time • Offer tailor made solutions • Add flexibility to Supply Chain • Leverage logistic expertise and IT not available internally • Holistic supply chain network and cost optimization