Welcome to MENASA - Healthcare · PDF fileChanging World – Welcome to MENASA ... MENA KSA UAE TR RU BR NL IN FR E-AFT ... Ease of Doing Business

Buck Consultants International

The Netherlands

Phone : +31 24 379 02 22

Mobile: +31 6 24661688

Welcome to MENASA Middle East, North East Africa, South West Asia

Eelco Dijkstra

Senior Strategy Consultant

June, 2014

Buck Consultants International, 2014 1

Linking Strategy to Execution

Strategy Go to market strategy

Business Process

Design Network

Optimisation Network(re)design

Impact key drivers Procurement &

Tender

Management

Supply Chain Data, Modelling and Analysis

Management Consulting in Supply Chain

Implementation

Change mngt

support

Coaching

Volume Development Europe


-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2009 2010 2011 2012 2013

Development N. European Ports in TEU

Rotterdam Hamburg Antwerpen Bremen

Where is the business going?

What’s going on?


Changes to trade flows into

Europe. North European Ports

no longer only option into EMEA

Lower growth consumer

demand Northern Europe

Economic Shift from EMEA to MENASA

Economic growth within the

EMEA and Central Asia (CA)

has shifted from West to East


Source: IMF 2014

Dubai’s natural catchment area

extending from UAE to

MENASA and even to being

part of a global logistics hub Growing Middle Class and

Rising Prosperity

Economic opportunities will

increase towards the

MENASA

MENASA

Population: 2,272 million (1,030 million excl.

India)

Economic growth 2013 : 5.4% (avg.)

Economic growth 2019 : 7.1% (avg.)

Russia, Belarus, Ukraine, Moldova

Population: 201 million

Economic growth 2013: 2.7% (avg.)


Europe

Population: 489 million



Trade Flow and Distribution Changes

The Middle East, Eastern Africa and the Indian region will grow naturally into its own

distribution cluster for logistics services and distribution.

Distribution for this region will gradually change from being serviced as part of the EMEA

region - typically from EDC’s in Western Europe - to having its own stand alone distribution

model in which Dubai is well positioned as logistics and distribution gateway.


Future trade flows where the EMEA distribution model

will split up into new regions including the MENASA.

Traditional trade flow where goods into

the EMEA region first travel to a DC in

the EU and from there are distributed

into the region.

Replenishment will shift away from NL


Western Europe

Africa

Russia & CIS

Middle East

Netherlands past 20 years distribution hub into Europe

Future direction: Inventory volumes for Russia, Eastern

Europe, Middle East, Africa will move closer to markets


Changing World – Welcome to MENASA

Combined GDP > 5,5 trillion USD

(2011)

Fastest growing region

30% of global population

51% under 25 years

55% global oil reserves (2011)

MENASA region: emerging economic

zone made up of the Middle East,

North-East Africa, and South-West

Asia

The Americas EMEA APAC

MENASA FACTS


Flight Times From Dubai –

Connecting the World

As a growing distribution

hub for the MENASA

region, Dubai connects

intercontinental hubs to

regional distribution

points

Key Indian cities can also

be reached from Dubai in

less than 3 hours


= within 1 hr = within 1-3 hrs = within 3-6 hrs

GDP Growth


GDP growth to 2019

Source: Worldbank 2014

*

0%

1%

2%

3%

4%

5%

6%

7%

8%

MENA KSA UAE TR RU BR NL IN FR E-AFT

MENASA accounted for 9% of total world GDP in 2013

This will increase to 10% by 2019

MENASA economic growth outpaces developed economies and even “older”

emerging markets like Turkey, Brazil and Russia.

Top 10 Cargo Airports in the World


Source: CAPA, 2013

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000Millions tonnes

Dubai Largest Non Asian Sea-Port


0

5

10

15

20

25

30

35

nu

mb

er

of

TE

U*

(x 1

,00

0)

* TEU = Twenty-foot Equivalent Units, 2013

MENASA - Young and Populous Region


MENASA region is young: India accounts for 20%, MENA for 5% and East Africa

for another 5% of all the children in the world

Children (0-14 yr) in Million

0

50

100

150

200

250

300

350

400

Source: Worldbank, IMF, BCI Source: Census

MENASA Age distribution

European Union Age distribution

0% 5% 10%

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

90-94

100+

0% 5% 10%

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

90-94

100+

Ease of Doing Business


Doing business in United

Arabic Emirates and Saudi

Arabia is easier than in

Netherlands or France

India and East Africa has its

challenges

1

2

3

4

5

6

7

8

9

10

23

26

28

38

96

116

125

129

134

145

149

Singapore

Hong Kong

New Zealand

USA

Denmark

Malaysia

South Korea

Georgia

Norway

UK

UAE

KSA

Netherlands

France

Turkey

China

Brazil

Ethiopia

Kenya

India

Tanzania

Sudan

Ease of doing business ranking

Source: Doing business report/ World Bank 2014

Gulf Co-Operation Council GCC


Our Main Focus cluster

High prosperity

Cultural similarity

Islamic sensitive

Strong international accounts

Big retail square meters

Excessive spending

Total population: 41M

Total children: 11M

Average GDP (PPP): 49K USD

Primary Focus Countries: United Arab Emirates

Kingdom of Saudi Arabia (KSA)

7,8

1,1 1,0 0,7 0,4 0,3 0,0

5,0

10,0

KSA UAE Oman Kuwait Qatar Bahrain

GCC Kids Population Mil.

PORTS AND CONNECTIVITY


Dubai/UAE as MENASA Gateway


Dubai

Global Ranking:

# 3 Airport in passenger numbers

# 5 Airport in freight

# 9 Seaport in TEU

May 2014, Dubai launches World

Free Zones Organisation #1 Globally

Strong Infrastructure Developments


The countries of the Gulf

Cooperation Council (GCC)

plan to invest USD 968

billion in major projects

over the next ten years. This

investment includes 1,638

projects

Just for roads and railways,

the oil-rich countries plan to

direct $ 97 billion from 2011

to 2020, U.S. $ 79 billion for

rail, including trains,

subways and trams.

The most ambitious project,

valued at U.S. $ 30 billion, is

the railroad that will connect

all the countries of the GCC,

For roads construction,

investments are put at $ 18

billion.

Airport Seaport

Riyadh

Kuwait

Bahrai

n Doha

Jeddah

Amman Port Said

Istanbul

Bandar Abbas

Salalah

Dammam

Aden

Mersin

Alexandria Damietta

Haifa

Sohar

DISTRIBUTION

BUSINESS CASE


Industry Characteristics and Trends


Source: Euromonitor International

Shifts in demand

Higher GDP growth in

Middle East, South Asia

and Africa vs Europe and

US

New challenges and

opportunities in supply

set up

Demand Shift away from Matured Markets

Focus is on Accelerated Growth


Business

Challenge is

how to facilitate

high growth

coming 10-20

years in

MENASA region

?

Distribution Model as

Enabler to growth: Re-assess

commercial model

region

Develop regional

inventory

replenishment point

Develop regional

distribution

capabilities with

partners

EMEA Multi Hub Distribution Concept

22 Buck Consultants International, 2014

Catchment area Central EMEA

distribution hub

Catchment area from Benelux hub

Catchment area Dubai Hub

Hubs replenished directly from

production sources


Dubai as MENASA Gateway

Rotterdam

Shanghai

Dubai

Traditional route: Asia – Rotterdam/Amsterdam – EMEA DC – air or sea freight back to

Middle East for distribution

Alternative route: Asia – Dubai DC – distribution MENASA region

MENASA

Airfreight

Seafreight

Amsterdam

Dubai is located mid

way between Asia and

W. Europe.

Lead-times:

Traditional: 30-40 days

Alternative: 15-18 days

Goods via Northern

Europe travel twice

50% too far using

the traditional model

-

5

10

15

20

25

Dubai Amsterdam

Outbound

Pick DC Occupancy

Pick DC Labor

Inbound

Life Sciences: MENASA

24

Inte

gra

ted

Su

pp

ly C

ha

in C

ost in

M$

Catchment area Central

EMEA distribution hub

AMS

Hub W Europe

N America

MENASA

Region

MENASA Region

21% cost saving

DXB

Hub W Europe

N America

MENASA

Region

Buck Consultants International, 2014

Hubs replenished directly

from production sources

India from Dubai v Europe

25

ME

Hub W Europe

N America India

Weighted Ave Hub

to Market lead-time

Lead-times out of Dubai are much shorter due to the close proximity of Dubai to India. Due to cold chain

requirements much easier to manage frequent order patterns out of Dubai than out of Amsterdam (again

due to close proximity).

Holding inventory in Dubai allows companies to route orders directly to key Indian cities/states due to the

excellent connectivity between Dubai and Indian cities. Using Dubai v in-country storage allows

companies to bypass local Indian bureaucracy and infrastructure bottlenecks.

Inte

gra

ted

Su

pp

ly C

ha

in C

ost in

M$

Catchment area ME Hub

-

1

2

3

4

5

6

7

Dubai Amsterdam

Outbound cost

Pick DCOccupancy

Pick DC Labor

Inbound cost

33%

lower

Buck Consultants International, 2014

Take Aways

• Dynamics of the EMEA region is changing due to upcoming Emerging

Regions and demographic changes.

• In the Healthcare sector the MENASA region will show HIGH growth

as more and more people get access to doctors, medicines and

hospital care.

• Accelerated growth model requires ability to fulfil orders quickly and

more frequently whilst managing distribution costs. Holding an

inventory point in the region in combination with postponement

concepts will support growth model.


Contact details

Buck Consultants International

Eelco Dijkstra

Senior Strategy Consultant

T: +31 24 3790222

M: +31 624661688

E-mail: [email protected]


mailto:[email protected]

ANNEX


India


Delhi

Mumbai Calcutta

Population: 1,242 million (74x Netherlands)

GDP: USD 1,871 B (2.3x Neth.)

Economic growth 2013 : 5.9% (in USD)

Economic growth 2019 : 8.4% (in USD)

India: middle class driver for

retail growth


2nd largest population,

forecasted to be number 1 in

2028 overtaking China

Strong developing Middle class,

expected to grow to over 300

million in 2025

Resulting in increased retail

spending. 2015: India = 7 x Dutch retail spending

Carrefour, Metro, Tesco, and

Walmart have recently entered

the Indian Market

Population (in M)

Source: Deloitte 2013, UN, IEMS, BCI

518 869

1.748

2012 2015 2020

Retail sales (in B USD)

50 100 200

325

0

500

1.000

1.500

2012 2015 2020 2025

Poor Middle class

India: growth also translates

into healthcare spending


Healthcare spending is low as a

percentage of GDP compared to

other countries

Healthcare is forecasted to show

strong growth – growing to

US$ 276 Billion in 2020

79

100

160

276

0

100

200

300

2012 2015 2017 2020

Healthcare spending (in B USD)

Source: Worldbank 2014, IBEF 2014, BCI

18%

10% 10% 9%

6% 4%

0%

5%

10%

15%

20%

US EU World Brazil Turkey India

Healthcare as percentage of GDP (2012)

India: explosive growth in

E-commerce


Indian e-commerce revenue

projected to reach USD 125-

260 Bn for the year 2024-25

Current revenue: USD 10 Bn

Number of people below

the age of 35 to reach

828 Mn by 2015

~450 Mn smartphone

users to by 2015

~100 Mn 3G users by

2015

~376 Mn unique

internet users by 2015

Current users: 120 Mn

~USD 900 Bn worth

retail sector by 2016-17

Current contribution of

online sales: only 0.47%

Huge Retail

Industry

Favored

Demographics

Growing Smart

Phone Adoption

Growing Internet

User Base USD

125-260 Bn

Source: Zinnov, BCI

Documents

Welcome to MENASA - Healthcare · PDF fileChanging World – Welcome to MENASA ... MENA KSA UAE TR RU BR NL IN FR E-AFT ... Ease of Doing Business