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2002
> Exel Singapore awarded Business Headquarters Award; ALPS Facility groundbreaks
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Exel Singapore awarded Business Headquarters Award; ALPS Facility groundbreaks |
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12 November 2002
Speech By Mr Teo Ming Kian, Chairman, Economic Development Board, At The Exel Singapore Business Headquarters Award Presentation And ALPS Facility Groundbreaking Ceremony On 12 November 2002 At 12.30 P.M., Pan Pacific Hotel
Mr C K Lee, CEO Exel Asia Pacific
Distinguished Guests
Ladies and Gentlemen
Good Afternoon
Introduction
- It gives me great pleasure to be here this afternoon to present the Business Headquarters Award (BHQ) to Exel in recognition of your commitment to further deepen your presence in Singapore. Exel is today one of the largest third party logistics (3PL) companies in Singapore. Being the first Europe-based 3PL to be conferred the BHQ status in Singapore, this is indeed a significant milestone both for Exel and for Singapore.
Tremendous Growth Potential in SCM in Asia.
- Despite lingering uncertainties in the global economy, there is tremendous growth potential in the logistics/Supply Chain Management (SCM) industry in the Asia-Pacific region. The global SCM market is estimated to grow to US$173.7 billion by 2005, with a compound annual growth rate of 10 per cent. In Asia, the SCM market is poised for even more robust growth, 15 per cent annually, as compared to 10 per cent in North America and seven per cent in Europe. Logistics outsourcing activities in Asia are expected to grow fourfold to reach US$80 billion by 2012.
- These high growth rates for Asia are confirmed by a recent JP Morgan Research survey which revealed that Asian companies are showing strong interest in revamping their supply chains and integrating them with operations worldwide. We believe Singapore is well-positioned to capitalize on the tremendous growth potential in Asia.
Singapore - a leading logistics and SCM Nerve Centre in Asia Pacific
- Singapore has worked hard over the last 40 years to build on its inherent advantages and constantly improve on its position as a leading transport hub, with the world's best airport and one of the busiest container ports in the world. But what is perhaps less well-known to the public is Singapore's development over the years into a leading logistics and SCM nerve centre in the Asia-Pacific region.
- What do we mean by an SCM nerve centre? Take the human brain as an analogy. The brain is the critical part of our central nervous system that acts as the command and control centre. Weighing just around three pounds, the brain is composed of about 10 billion nerve cells, each linked to the others. Together, they are responsible for the coordination of all mental and bodily functions.
- Similarly, though small in size geographically but well-connected to the rest of the world, Singapore has grown to become the regional SCM nerve centre for many leading logistics service providers and manufacturers. These companies in Singapore undertake key management activities such as procurement, supply chain planning and coordination, data management as well as regional distribution activities for the Asia-Pacific region. Some manufacturers here have also leveraged on Singapore's strengths in SCM and set up a "control tower" here to efficiently coordinate the supply chain between their Singapore and other global manufacturing facilities.
- In fact, recognizing Singapore's strengths and potential as a leading logistics and SCM nerve centre in Asia-Pacific, the Economic Review Committee (ERC) Working Group on Logistics recommended that Singapore should continue to cultivate knowledge-intensive activities that will deepen and broaden Singapore's competencies across the entire logistics value chain. EDB will continue to encourage, and work closely with, companies in Singapore to embark on more knowledge-intensive supply chain management activities to innovate and develop new supply chain offerings and creative business models for the region.
Exel's HQ expansion is a good example of leveraging Singapore as an SCM nerve centre
- The expansion of Exel's regional headquarters in Singapore is a very good example of how companies have leveraged on Singapore as the regional SCM nerve centre. For instance, Singapore will host Exel's strategic think-tank that comprises its Asia Pacific management team which manages and coordinates business activities in the entire Asia-Pacific region. Exel has also set up a Supply Chain Innovation Centre in Singapore, its first in Asia-Pacific, to collaborate with leading SCM technology companies here and develop and test-bed new SCM applications for the Asia-Pacific market.
- In addition, Exel also plans to set up a 30-man Supply Chain Solutions team here. All these activities undertaken in Singapore are exceedingly knowledge-intensive and high in "brainpower". They will help build up market knowledge and thought leadership for Exel and provide its Asia-Pacific clients with effective, market leading solutions from Singapore. Exel will also make Singapore the base for its regional IT hub to host critical IT functions, data and support services.
- I am also very pleased to know that Exel's Board has approved an investment proposal to build a mega logistics facility in Singapore at the new Airport Logistics Park of Singapore (ALPS). This will enable Exel to expand its contract logistics business and serve the growing Asia-Pacific region. I applaud Exel for having the foresight to be one of the pioneer companies to take advantage of ALPS. This investment decision certainly signifies the company's continued confidence in Singapore as a leading integrated logistics and SCM hub. Exel's significant plans to expand its Asia-Pacific HQ activities are expected to increase its total headcount by another 330 staff by year 2005.
Conclusion
- In closing, I would like to extend my heartiest congratulations to Exel Singapore on your outstanding performance and wish you every success in the years ahead. We are proud to be home to Exel's regional headquarters in Asia-Pacific and we look forward to Exel's successful expansion from Singapore. It now gives me great pleasure to officiate at your ALPS facility groundbreaking and present you with the Business Headquarters Award. Thank you.
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