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The ASEAN Smart Logistics Network (ASLN)

The ASEAN Smart Logistics Network (ASLN)

One year ago, on November 14, 2020, during the 37th ASEAN Summit the President of Vietnam and former Prime Minister Nguyen Xuan Phuc, and the Singaporean Prime Minister Lee Hsien Loong launched the ASEAN Smart Logistics Network (ASLN) together with its first project, the Vinh Phuc Inland Container Depot (ICD) Logistics Centre. Also known as the SuperPort. This article provides an overview about its goals, projects initiated, and potential opportunities for foreign investors.

ASLN – Enhanced Logistics in the ASEAN Region
Source: YCH Group

The ASLN serves as a platform which aims to promote logistics interconnectivity and integration within the member states of ASEAN. Moreover, it seeks to encourage the use of smart and sustainable logistics infrastructure. Also, the ASLN is a supportive means to ASEAN’s economic integration efforts and initiatives, such as the ASEAN Connectivity Master Plan 2025. A policy, which’s vision it is to connect and integrate ASEAN members seamlessly and comprehensively to promote competitiveness, inclusiveness, and finally a greater sense of community. Seamless logistics is one out of five strategic areas elaborated in the Master Plan. The area is focusing on two strategic objectives: lower supply chain costs and make the supply chains faster and more reliable in each ASEAN member state.

According to the Master Plan the previous initiatives have not reached the goals set in terms of logistics improvements. The reasons evaluated were named as a lack of coordination between government departments and sharing of best practices.

With the launch of the ASLN, the ASEAN is aiming to provide greater collaboration between logistics organizations, academic institutions, and the ASEAN member states with the shared goal of smart and sustainable growth.

Besides the ASEAN Connectivity Master Plan 2025, the ASLN is also assisting the ASEAN Smart Cities Network, and the ASEAN Integration Initiatives.

Vinh Phuc ICD Logistics Centre (SuperPort) in Vietnam
Source: Delco Construction

The inauguration of the ASLN was also the kickoff for its first logistics project in Vietnam. The SuperPort is going to be one of Vietnams largest logistics centers, which is situated in the northern province of Vinh Phuc near Hanoi. Not only will it serve as an inland transit point for domestic goods, imports, and exports. But also, as an inland container depot and a facilitator for customs clearance services for imports and exports.

The logistics center connects 20 industrial areas by road, rail, air, and sea. Furthermore, it is providing connectivity to the city of Hanoi, Hai Phong International Airport and China’s Yunnan Province, where the goods are transported via the Lao Cai border gate along the Hanoi-Lao Cai economic corridor.

The project is operated by the T&T Group of Vietnam and Singapore’s YCH Group. The investment made amounts to USD 166.68 million.

Phnom Penh Logistics Complex in Cambodia
Photo credit: Ministry of Public Works and Transport

The second project under the ASLN has been released by Cambodia’s Ministry of Public Works and Transport, and again by the YCH Group from Singapore.

The Phnom Penh Logistics Complex project will start in 2022 and follows the concept of the SuperPort in Vietnam. The costs for the logistics project are estimated at USD 200 million.

The aim is to build a state-of-the-art logistics complex, using latest technology to enhance resilience, visibility, and the process flow of the logistics. Moreover, it will feature a training academy and startup hub to train employees in the logistics sector of Cambodia.

Opportunities for Foreign Investors and Businesses

The Singaporean YCH Group is managing both ASLN projects by providing their expertise for the development of the logistics infrastructure. This example implicates the support needed from more developed countries to excel in the complex projects initiated.

Even though the main partners involved will be from the ASEAN region, foreign companies may contribute with consulting services, goods and services for the development of the logistics infrastructure, and with other kinds of collaboration. Furthermore, the funding of the projects might also be attractive for foreign investors who are or want to be involved in the ASEAN region.

Even if not directly engaged, these businesses will also profit from the implemented projects: greater integration within the ASEAN will lead to more efficient and faster logistics. This will benefit the trade in goods and services across the region and lower costs.

Outlook

So far, two major projects have been launched under the ASLN, which is said to improve logistics in the ASEAN region significantly. With the expertise of the Singaporean YCH Group and the willingness to collaborate, these projects are most certainly going to succeed and implemented as planned. More sustainable projects will follow, and further improve logistics infrastructure, which will not only benefit the ASEAN member states and their businesses. New and attractive opportunities will emerge even for foreign companies and investors.

Sources

https://www.businesstimes.com.sg/asean-business/new-asean-network-to-build-logistics-infrastructure-0

http://kinhtetapdoan.vn/trung-tam-logistics-icd-vinh-phuc-chinh-thuc-duoc-khoi-dong-d9510.html

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Theme and On-Site Trip Destinations

Theme and On-Site Trip Destinations

The world is a complex value chain, a network of organizations that works collaboratively to transfer products and services from producers to consumers. The conditions we have become accustomed to is inconceivable without an international supply chain. During the 7th edition of exploreASEAN we will dive into this complex world of global value chains and the positioning of ASEAN+ in those growing dynamics. Learn more about our theme and the destinations chosen for the on-site trip.

Over the last several years, ASEAN (the Association of Southeast Asian Nations) maintained strong and steady economic progress showing the enormous potential that lies in this region. As a result of closer economic and political collaboration – the establishment of trade agreements combined with the promotion of peace and stability – poverty declined significantly, and GDP rates grew rapidly.

During the 7th edition of exploreASEAN we will dive into the complex world of global value chains and the positioning of ASEAN+ in those growing dynamics. Herewith, we proudly present this year’s project theme:

ASEAN+ in the Global Value Chain: Gain and Sustain

The world is a complex value chain, a network of organizations that works collaboratively to transfer products and services from producers to consumers. The conditions we have become accustomed to is inconceivable without an international supply chain. Due to this reason, we want to dive into the intricate field of the global value chains and the positioning of ASEAN+ in those growing dynamics. Due to the rapid development, sustainable potential, and fast pace of innovation, the value chain of ASEAN+ is an exciting destination for tomorrow’s investors.

For this year’s edition we have incorporated South Korea in our project. The unprecedent inclusion of an ASEAN+ country was based on the growth and influence South Korea has gained in the global market in recent decades. South Korea’s economic success cannot be overlooked and therefore will be an exciting and remarkable addition to this years exploreASEAN.

Gain

Value chains exist to connect producers and consumers in an ongoing exchange of value. As a result, innovations in value chain drive innovations in the rest of the economy. According to a research conducted by the APEC Policy Support Unit, a 1% gain in logistics performance and competitiveness may result in a 3% boost in export growth. This fraction already shows the immense potential in the ASEAN market. Hence this project will investigate the position of ASEAN+ in the global value chain and how their role might be strengthened or challenged.

Sustain

Value chains are to human civilization what oxygen is to life; when they work well, no one notices them. It is only when they start to fail that we realize there is a problem. Therefore, one can say that the value chain is an integral part of a company which is commonly faced with many challenges. Whether it is in the day-to-day operations or more significant adaptations like the transformational change, which are gaining on importance in the forthcoming years. The growing volatility in the business environment motivated us to explore the difficulties, innovations, and opportunities that might face ASEAN+ and how their competitiveness can be sustained in the constant evolving environment.

On-Site Trip Destinations

The journey of this year’s exploreASEAN edition will lead us to two founder nations of ASEAN – Singapore and Thailand – and to one of ASEAN’s main partners and ASEAN+ member state, South Korea.

Singapore – World-Class Global Connectivity

Thanks to state-of-the-art technology and a strong Free Trade Agreement network (25!) and a reliable, highly advanced, and efficient logistics and supply chain management hub, Singapore has one of the best logistics performances in the world and plays a crucial role in the global value chains.

Even in times of the pandemic, which severely disrupted supply chains, Singapore’s strong maritime performance could be relied upon. This is a clear indication of how it has strengthened its status as a global logistics center.

Thailand – ASEAN’s Manufacturing Hub

Manufacturing is one of the most important sectors of ASEAN second-largest economy Thailand. Therefore, it is not surprising that Thailand is one of the largest manufacturing hubs in Southeast Asia. The country produces a variety of goods such as textiles and apparel, footwear, electronics, machinery, including computers, automobiles and parts, gems, and rubber.

Thailand’s government currently is investing in four major infrastructure projects with the aim of transforming Thailand into a leading ASEAN investment and business center.

South Korea – ASEAN’s important trade partner

A country with big multinational corporations such as Samsung, LG or Hyundai has raised global importance in the value chain within the last few years. With its 17 Free Trade Agreements, including ASEAN, EFTA and EU, South Korea is a major international trading partner.

The country is looking to expand its presence in Southeast Asia and has recently launched talks with ASEAN to update its FTA. The recent Regional Comprehensive Economic Partnership (RCEP) free trade agreement between the ASEAN and ASEAN+ member states is expected to reduce import and export costs significantly and will help facilitate international supply chains.

Today, ASEAN is the second-largest trading partner of South Korea.

The Current Pandemic Situation

Due to the current pandemic situation, our team is faced with planning uncertainties. As a result, we allow ourselves to keep the option open to visit other significant and relevant countries, which play a vital role in the global value chain if the prevailing restrictions make it impossible for us to complete our mission in the countries listed above. Possible alternative destinations are Vietnam, Indonesia, and Malaysia. In the worst-case scenario, we might visit key European hubs in terms of the global value chain.