Singapore Air Cargo Industry

Singapore Air Cargo Industry

During the 1990s, Asian Tigers comprising high powered economic growth for Thailand, Singapore and Taiwan dominated the headlines. Airports together with national carriers were fast developing as well for rapid expansion of freighter fleets. China's rise put the Asian tigers growth pale in comparison. Cargo volumes at Changi Airport fell 3.2%, with overall growth for the 1st 7 months of 2013 rising a mere 1.3% in tonnage. Singapore will be parking a B747 freighter in June. Mr. Kelvin Wong, director of logistics for EDB sees static volumes for airfreight as success indicators. This is due to Singapore moving up the value chain for logistics, with products becoming smaller in size. Singapore used to export bulk boxes of printers and computers. Now it is transporting cutting edge medical devices, aerospace components and microelectronics. Businesses are always looking for ways to be more efficient and lower costs. A shift to sea freight is taking place as well. Hence flying is regarded as 2nd choice in terms of cost savings. A solid volume base is a sign of still healthy sector.

Air cargo enterprises are thriving in Singapore, due to its strategic hub location and World Bank has consistently ranked Singapore as top 2 best places for logistics. Singapore is a popular destination for being foreign companies' Asia hub. For instance, Texas Instruments just partnered DHL and Swisslog to launch Autostore, a high end automated logistics system.

Dyson, a UK based electrical goods maker famous for its vacuum and fan, has been churning products form Singapore since 2004 and will continue to invest in a new manufacturing facility. Medtronic, a pacemaker company for human heart is also launching a worldwide centre of excellence, adding base to its Asia Pacific HQ.

Rolls Royce launched its Trent engine for Boeing Dreamliner, a first in Asia. Cargo for air gets bigger at the same time. Logistics is in Singapore's DNA and a pillar of support for Singapore's economy. Sound economic planning ensures simultaneous development in its air, sea and custom clearing development with minimal friction. Singapore's seaport is known to be the largest transshipment hub. Strong custom agreements with global economies put cargo clearing in Singapore within minutes. All a freight operator needs is one portal to satisfy all regulations.

Many logistics players are expanding their footprint in Singapore. Panasonic recently transferred its whole purchase and logistics department from Japan Osaka to the island state. Infineon will partner as its exclusive supply chain manager. About 10% of world silicon wafers output and 40% of hard disk devices originated from Singapore. Established forwarders like SDV are rapidly expanding, with the latest opening of a 42,000 square meters huge warehouse aiming for servicing the luxury segment, health care, oil & gas and aerospace. DB Schenker, another heavyweight will also launch as even bigger 54,500 square meters logistics centre targeted at the electronics, automotive and healthcare segment, estimated to begin operations by Q2 2014. Singapore will emerge as the control tower for supply chain management based in Asia. Singapore has all the perks and infrastructure to make a supply chain more responsive due to expertise honed by its skilled industry veterans.

Many raised doubts about the space for new development as Singapore is already saturated and crowded. Wong has no qualms about the issue as EDB is always proactive in factoring all concerns into their master planning and resourcing plans. Changi Airport will be seeing new 4th and 5th terminal being built and fully operational by 2020 and expanding current runway no.3 into one full length 4000m commercial ones. The expansion plans will see passenger capacity doubling, and space extension for higher air cargo volume. It will be a win win solution for air freight operators wanting more space and airside facilities.

FedEx has just launched in prior years.

EDB has provided full support for its e-freight at Singapore project, which is a project involving government running a centralized database for forwarders and carriers to exchange trade information. 17 companies had shown full commitment to this initiative and 37 more have shown huge interest. All participants are committed to IATA goal for attaining 80% routes covered by e-freight by 2016. Singapore has shown tremendous potential as a favorite airfreight hub due to India and China. ASEAN, with its 600 million strong population has as big an economic region compared to Shanghai, Beijing, and Guangzhou. It has the same scale as South America.

ASEAN plans to have a unified economic integration by 2015 and this will double trade flows with 25% occurring within Asia. Markets in Asia are key to many companies. ASEAN will be as important economic bloc as China.

Dry weather to affect production output

Dry weather to affect production output

There is a burning question mark on the impact of the dry weather, brought about by the El Nino phenomena on palm oil plantation companies palm oil trees output. Dry weather still continues to affect all households around South East Asia especially Malaysia and Indonesia. There is a consensus among plantation research analysts that expects production for palm oil to increase and effectively bidding farewell to the longest dry spell ever witnessed around South East Asia. Average sale prices (ASP) for crude palm oil will see a short term boost until production output recovers to normalized levels and inventories being restored.

UOB KayHian, a Singapore based brokerage firm, published a report on plantations with the report detailing analysis on expected production recovery for 2016. The dry spell caused a lagged impact to production output in 2nd quarter of 2016. As the dry spell ended, production witnessed a recovery. In the western and central parts of Kalimantan, rainfall is still happening regularly where conditions are viable for palm oil trees to bloom and less stress on the flowers.

Total production output accelerated marginally in 2016. Plantations firms have varied tree profiles. Younger age trees will see higher production recovery while older age trees will be severely affected by the dryness. Those with older trees will witness slower rally in output volume. The average sale price for Crude Palm Oil (CPO) creeped up slowly from 2nd quarter of 2016 onwards. In actual fact, palm oil prices started its uptrend.

One must note that zero export duty was imposed for the same quarter in year 2015, hence any price increments were not  felt in 2nd quarter of 2016. Only on Q2 for 2016 can one see the impact of higher palm prices. The new Indonesia's export duty rates kicked in for palm oil production since July 15 2015. This minimized any impact on financial results. The duty collected will be utilized for its ambitious biodiesel mandate, assisting plantation smallholder with replanting exercises and facilitating deeper research for new palm seed discovery.

Another side of the plantation equation is export figures. Palm prices have not rallied hard as usually happens during severe El Nino scenarios as there is a marked slowdown of palm oil exports to top consuming countries China and India. Prices for palm oil may see a boost which will draw down stockpiles. Should there be continued production cuts, prices will definitely be well supported. For the first time CPO output will actually witness a year on year negative growth due to the severe dry spell hitting main plantation countries Indonesia and Malaysia. These 2 countries combines produces almost 90% of the whole global output for palm oil and weather patterns have immense impact on the palm tree yield and oil extraction rates.

There is still a lot of uncertainty in the outlook for CPO production. Lagged impact may be felt in the coming months but production may recover fast. La Nina has been widely speculated to follow suit which has historically been a production output booster to palm oil output. Plantations firms are closely watching the weather forecasts and patterns in the coming months to better manage their production operations.

Most of the world's palm oil is currently being produced in Malaysia and Indonesia but now The Guardian news reports

Brazil's ambition to become a palm oil commodity giant. Palm oils is used in toothpastes, soaps, and detergents and many packaged foods. There are some ethical questions around deforestation for palm oil profit, so we hope the companies involved are responsible for sustainable cultivation. The non-profit World Wildlife Fund (WWF) launched a new alliance in Singapore that aims to boost demand for sustainable palm. The vision of the Alliance is to make CSPO the norm to stop the haze as well as deforestation and habitat loss in the region. It aims to provide a platform for companies to come on a sustainable journey towards producing, trading and using certified sustainable palm oil. The Singapore Alliance for Sustainable Palm Oil is supported by five founding members, who together produce some of the most popular everyday brands used by Singaporeans. The five founding members are Unilever, Danone, Ayam Brand, IKEA and Wildlife Reserves Singapore.

SG HK CN Entrepreneurs

SG HK CN Entrepreneurs

Owning a global business, with a highly lucrative market in regions such as China and Hong Kong exposes you to world diversities and people from all walks of life. In the way of business, some of stakeholders one comes across will prefer some cities more compared to some.

Some of the clients, business gurus and associates expresses more liking for the Far East cities as Hong Kong and Shanghai as compared to extent of consideration for Singapore as an option. These business associates will want to travel, make trips and stop by at their own pleasure in Singapore but not startup businesses or run their business from there.

As different people have different tastes and preferences when it comes to where they would love to base their businesses, some will express their total confidence in cities such as Hong Kong and Shanghai while the latter will hold their total confidence in Singapore.

Discussed below are some of the factors to consider when deciding on the location on their business hub in pacific Asia.

1. Connection to the internet

With the digitalization in the world of business, the speed, accessibility and reliability of an internet connection is paramount. Some business hold their core to the power of the social media, while keeping in touch with staff and other clients from any part of the globe. Internet is important to entrepreneurs as much of research work, sending and receiving emails as well as international calls are all dependent on it. With that into consideration, some cities such as Singapore will offer any entrepreneur with the most efficient internet connection as compared to other cities as Hong Kong and Shanghai.

2. Censorship

When it comes to the rule of the law, different states view different aspects of the social media different from the other. For some states, all search engines such as Google, Bing, Yahoo amongst others are all accessible for use at any one given time. For some other states, it is a subject of scrutiny and might find out that some of the online sites are inaccessible while in the said states. For this case, there are technological break through that might help you bypass such restriction and access your sites such as using the virtual private network. Such restrictions will give some cities in the pacific Asia more credit such as Singapore than Shanghai and Hong Kong.

3. Coworking

Space gives the best platform for business people to network, connect and share ideas with ease. It is therefore of essence to have buildings that reflect the best designs , are well managed , spacious , giving ample room for social and business oriented Coworking space. This is a very vital consideration for all entrepreneurs across board. Entrepreneurs will consider cities in pacific Asia that offer spaces that give them productive working spaces. The consideration for cities such as Singapore being more ecstatic is because it has better entrepreneurial space as compared to Hong Kong and Shanghai.

4. Government support

Support for entrepreneurial growth is paramount to the growth of any business. The ability and willingness of the government to give entrepreneurs incentives to favor their growth is very important. From one city to another, the policies set out by the government are different. In shanghai for example, most of the high profile entrepreneurs will have an issue with the free trade zones. In Hong Kong, businesses are run in family cartels that are very hard core when it comes to policy making policies that might jeopardize them unfavorably. In Singapore, government support, incentives is overwhelming.

5. Weather

Different cities around Asia pacific experience different weather patterns and seasons. If the type of business is not in any way affected by the type of weather or season present, then there no worries whatsoever. It is only a factor to consider if the productivity of the business will be influenced in any way. Shanghai and Hong Kong experiences such seasons and might affect some of the business associates as well as their business. If so, Singapore, does not experience such and might be more suitable for them

ST Telemedia and Tata

ST Telemedia and Tata

ST Telemedia and Tata Communications complete the Singapore data centre joint venture transaction. Both partners to power ahead to grow and strengthen the Singapore and India data centre business.

Tata Communications announced in Feb 2017 the successful completion of the Singapore data centre joint venture transaction with ST Telemedia (STT), a global investor in communications, media and technology businesses.

In May 2016, both companies announced their entry into definitive agreements whereby STT, through its wholly owned subsidiary, ST Telemedia Global Data Centres (STT GDC), agreed to acquire a 74% majority stake in Tata Communications' data centre business in India and Singapore, with Tata Communications holding the remaining stake as a minority shareholder. The India data centre joint venture transaction was successfully completed on October 19th, 2016.

The completion of both Singapore and India transactions reinforces the strategic partnership between the two dynamic companies, working closely and drawing on each other's complementary capabilities and experience to accelerate growth in the vibrant data centre markets in Singapore and India.

Since the May announcement, both companies' management teams have been working closely to identify areas for business integration to enhance customer service and realise the full potential of the business partnership. Both partners remain committed to ensuring a smooth transition for existing customers and employees of Tata Communications' India and Singapore data centres into the broader STT GDC platform.

The Tata Communications Global Network reaches more than 240 countries and territories, 99.7% of the world's GDP, millions of businesses, and billions of people. It includes the world's only fibre ring around the world ST Telemedia is an active investor igniting growth opportunities emerging from the digital convergence of users, communities, content and services. Focused on four business segments – Communication & Media Services, Enterprise Services, Data Centres, and Emerging Technologies.