DMIA PART OF A MEGA LOGISTICS HUB
With visionary-thinking and a heartfelt-desire to further the countries economic growth, the ultimate recompense is yet to come to Clark. President Arroyo, implemented by CIAC, has worked-out and moved-to facilitate a plan to establish DMIA as part of a mega-logistics hub for central Luzon and the Clark/Subic Corridor.
The Center for Research and Communications, Transport and Logistics Institute (CRCTLI), figures the worldwide Logistics Market Value at $3.5 trillion. With much of the manufacturing and movement of goods moving to the Asia Pacific Region, this is expected to grow by 3 to 10 percent per year over the next 10 to 15 years. In Asia alone, CRCTLI places the logistics market at $1 trillion.
With 40 percent of the value of world trade being moved by air and growing yearly, a bright future is seen for DMIA in the logistics sector.
The focus of the Philippine government, CIAC and the SBMA Port Authority is to develop the Clark and Subic Corridor to the point of being considered the best and most competitive logistics and international service center in Southeast Asia, bar-none. This will develop and enhance synergy between airport and industrial development with raw goods and finished products efficiently transferred through the supply chain.
Considering the newly-provisioned deep-water Subic Sea Port along with the state-of-the-art-equipped Clark Airport, connection of the two with a new four-lane divided mega-highway, and the proactive attitude of the Philippines government, we feel we are about to see the Clark/Subic corridor explode into a world-class logistics and supply chain hub.
In our analysis, considering the multi-national companies focusing manufacturing and support services to the Asian Pacific Region, understanding that the Philippines is but 2 hours by air from the fastest growing economy in the world with 1.3 billion people learning what entrepreneurship is all about, we believe the Philippine government will be hugely successful in obtaining its goal, bringing with it tremendous job growth and economic-prosperity.
UPS IN CLARK AND EXPANSION EFFORTS
As one of the first logistics companies in Clark, building their initial facility in 2002, you will find the well-known United States based, multi-national outfit called United Parcel Service (UPS).
Their inter-Asia hub is already servicing well-over 90 flights per week to destinations of cargo from Clark to locations such as Hong Kong, Mumbai, Dubai, Cologne, Cebu, Kansai, Narita, Penang, Kuala Lumpur, Shanghai, Singapore and Taipei.
Back in 2005 UPS spent an additional 1.5 million US dollars to expand the facility’s capacity to process 7,500 packages per hour. This 7 million US dollar facility is modular in design and able to be quickly expanded to accommodate the anticipated growth in the logistics field.
As the logistics opportunities at CIAC expand and new companies become part of the Clark Logistics Center, we expect UPS to once-again increase their capacity to follow suit.
U.S. COMPANY/CIAC – PARTNERS IN NEW-AGE LOGISTICS CENTER
An agreement has been signed between a major U.S. Corporation and CIAC to develop the first phase of a 15,000 square meter logistics and supply chain management complex on the grounds of the Clark Airport aviation complex. Later another 15,000 square meters is to be added.
Essentially, a consolidation warehouse operation, this large warehousing center will offer temporary storage for trading companies in Clark, Subic and Central Luzon. This huge facility will hold products for delivery to all worldwide locations. Based on a well-founded cost-reduction and speed-enhancing logistics model used in other worldwide logistic corridors, participants will enjoy the best the Philippines have to offer.
KUWAIT INVESTMENT GROUP KGL/CIAC SIGN AGREEMENT FOR MASSIVE LOGISTICS FACILITY
April 08, 2008 can be looked at as a pivotal day for the Clark International Airport, its management, and quite possibly the country. This day an agreement was reached, bringing-closer the Philippine government’s dream of the Clark/Subic Corridor becoming a Mega Logistics Hub.
On this date, the KGL Investment Company division of the KGL Group of Companies of Kuwait and CIAC, with President Gloria Macapagal-Arroyo looking-on, signed an agreement to develop 167 hectares of mixed-use land in Clark Zone into a new large-scale master-planned, logistics project opening-up a new era of growth and investment for this former U.S. Military base.
Quoting Saeed Dashti, Chairman of KGL Group of Companies of Kuwait, and board member of KGL Investment Company, the investment arm division signing the contract, "Our business plan calls for the development of a master planned, mixed use Logistics and business center of excellence which will be known as Global Gateway Logistics City (GGLC). It will host business enterprises and operations with priority given to aviation and logistics related businesses, including warehousing, distribution, transportation, light industrial, manufacturing, business offices and complimentary commercial and retail operations all integrated into one."
As the alternative investment arm of the KGL Group of Companies and established in 2006, KGL Investment Company, the signatory of on this deal, is involved in private equity, investment banking and venture capital to leverage KGL Group’s brand, experience and expertise in private equity opportunities around the world. With over 50 years of experience in transportation, logistics, passenger transport, warehousing, supply chain management and port operations, KGL Group is a worldwide leader in logistics.
KGL Group’s investment vehicle for this project is known as "The Port Fund." This fund was launched to invest in mid-sized, high potential port management and logistic-related businesses in some of the world's fastest growing, most promising locations.
This project is to be developed in two stages. Roads, lighting, landscaping, sidewalks and utilities compromise the $30 million first phase, while the second phase will see the actual logistics park take-shape with facilities and buildings rising from the former ashes of Mount Pinatubo. The total expected expenditures for this mega-project is significant at $1 billion.
Marsha Lazareva, Vice Chairman and Managing Director of KGL Investment Company performed as signatory of the agreement. Ms. Lazareva had the following to say about the company’s involvement in the Philippines: "We are excited about our first major logistics investment in the Philippines. We have been studying opportunities in the Philippines for some time now and we believe that our partnership with CIAC and development of GGLC is the ideal investment, especially with the concomitant development of the DMIA Airport and surrounding area. We continue to look for other investments in the Philippines to compliment our global strategy".
Ms. Lazareva continued saying, "The Philippines is the ideal location for any international company from the west, as well as Japan, Korea, Taiwan, Singapore and Australia, all of whom are looking for offshore operations, distribution centers or manufacturing sites because of higher labor and land costs in their own respective countries, and perhaps more importantly today, because it positions them on the door step to China, rapidly becoming the world's largest economy".
The most positive pro-Philippines quote Ms. Lazareva made during the signing process was as follows: “The Philippines has assumed its leadership position over Thailand, Malaysia, Vietnam and Indonesia because of its reputation for providing a reliable English speaking workforce that is highly educated and internationally recognized with 9 million Filipinos working overseas. Hence the Philippines has emerged as the best location for more industrialized nations to locate their off-shore manufacturing, logistics, distribution centers and warehousing in addition to other back-room management and business activities such as accounting, record keeping, engineering, animation, IT, programming and other administrative functions".
Realizing the accelerated growth and promise of Clark, KGL is waiting only for the plans to be approved by CDC to begin construction work at the site. Phase-one is due for completion within 24 months of groundbreaking with the beginning of phase-two commencing even prior to the completion of phase-one.
Anticipating an estimated 35,000 new jobs created by the time the project is completed; Global Gateway Logistics City should have a significant positive impact on the economy of Clark and the surrounding Pampanga province over the next few years.
MAJOR CARGO AGREEMENT SIGNED BETWEEN CANADA AND CIAC
The planes are on the runway and the cargo is ready to flow, at least on paper. Clark CIAC has been awarded a very important piece of paper indeed, allowing for up to 200 tons of cargo a day moved between the Philippines and Canada.
Jose Luciano of CIAC has once again been hard at work, this time on weekend-duty, May 17 through 18, 2008, securing an agreement, essentially allowing for unlimited air cargo between these two nations. Part of the agreement addresses the right for the Philippines to include, lift and deliver cargo from other third-party countries; this is commonly referred to as Fifth Freedom Rights in the logistics world.
A major agreement like this is in-line with the Philippine Government’s plans to inspire more growth in the logistics and aircraft maintenance sector for Clark’s DMIA and for the Philippines in general.
DMIA is obviously on a determined-path, focused on ensuring a steady growth of cargo in support of the Gateway Logistics City concept for Clark and the Mega Logistics Hub for the Clark/Subic corridor.
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