SPEECH BY MR YEO CHEOW TONG, MINISTER FOR COMMUNICATIONS & INFORMATION TECHNOLOGY, AT THE LAUNCH OF THE AIRPORT LOGISTICS PARK OF SINGAPORE (ALPS) ON FRI 24 NOVEMBER 2000, 4 PM.

Distinguished guests

Ladies and Gentlemen

Good afternoon

1. The twin forces of globalisation and technology have resulted in an increasingly complex and challenging environment for global manufacturing and logistics industries. The Internet has facilitated the emergence of an even more competitive global marketplace. It has led to the radical reconstruction of production and distribution models, and enabled companies to achieve significant savings from the efficient management of their supply chain.

2. Today, manufacturers and businesses are looking to third party logistics providers (3PLs) for supply chain management, time-critical deliveries and innovative fulfillment solutions. Given this backdrop, the air cargo and logistics industry is set to grow globally. In particular, Asia will see a substantial piece of the action. Many of the world’s leading MNCs have already established manufacturing bases in the region to tap the growing markets and resources.

3. Global air cargo volume is expected to grow at a long-term average rate of more than 6 per cent per annum. Asian air cargo traffic will grow by some 8 per cent per annum. By the year 2018, the volume of Asian-related air cargo is expected to constitute 50 per cent of global air cargo. Asia will then overtake the United States as the primary region of the world’s airfreight activities. Much of the growth in Asian volume is expected to come from the increase in pharmaceutical and IT-related shipments. At present, more than 90 per cent of these high value-added products are distributed by air cargo.

4. Singapore is well poised to be a leading air logistics hub today. We have excellent connectivity, world class infrastructure, efficient customs clearance, reliable ground handling, and presence of leading 3PLs and global manufacturers. To facilitate further growth in air cargo and value-added air logistics, JTC, CAAS, EDB and Customs will jointly develop a 26-hectare logistics park at the airport - the Airport Logistics Park of Singapore (ALPS).

5. ALPS was conceived to promote quick turnaround and value-added logistics activities. These include postponement, configuration, sub-assembly, returns and repairs, vendor-managed inventory etc, for time-sensitive products. ALPS is therefore strategically located within the airport free trade zone (FTZ). This means that 3PLs can undertake rapid, value-adding replenishment and fulfillment activities for the entire region with greater efficiency since time and manpower relating to transportation and documentation will be reduced. ALPS will meet the needs of the industry and further strengthen Singapore’s reputation as an innovative logistics hub. It demonstrates our commitment and determination to stay ahead at the forefront as a logistics hub.

6. I am happy to see the equally strong and supportive industry participation. Companies have submitted plans to set up their facilities in ALPS even before it was officially launched; amongst them are Fritz, KWE-Kintetsu, and YCH. These are leading 3PLs from US, Japan and Singapore, respectively. These leading 3PLs and others are keen to leverage on ALPS to create better value propositions for their customers. This is important as the success of ALPS is measured by the value it brings to the industry. EDB has indicated that it is in active discussion with other leading players with strong global network and capabilities in value-added logistics to co-locate at ALPS, and expects another 5 companies to commit by the middle of next year.

7. Today’s launch of ALPS and the MoU signing also signify the excellent partnership among government agencies in combining their competencies to facilitate new value creation in the knowledge economy. CAAS will ensure the fast, integrated and seamless flow of air cargo to and from ALPS within the airport. JTC will ensure that ALPS offers quality infrastructure and environment to meet logistics and industrial needs. The Customs and Excise Department has provided invaluable inputs and support in the conceptualisation and implementation of ALPS.

8. Many other government ministries and agencies are also closely involved to ensure the success of ALPS. The combined effort and commitment of all the various agencies demonstrate the government’s single-minded determination to proactively work with the logistics industry here in tapping growing business opportunities in the new economy. Looking back at the past 35 years of Singapore’s economic development, we have learnt time and again that the key to our continued success is looking ahead, anticipating change and remaining relevant in a fast-changing world.

9. With that, let me conclude by wishing all parties involved in the park every success.

10. Thank you.