His Excellency Mr Franklin Lavin, US Ambassador to Singapore

Mr Robert Bianco, President, Menlo Worldwide Logistics

Distinguished guests,

Ladies and gentlemen,

Good morning.

I am delighted to join you today for this official opening of Menlo Worldwide’s Regional Logistics Hub. This is a significant milestone for the Airport Logistics Park of Singapore, also known as ALPS. Today is a day of several firsts. In a few minutes, we will witness the opening of Menlo’s first dedicated logistics facility in Singapore. Menlo will become the first company and the first third-party logistics player to operate in the new ALPS. They are certainly well positioned to take advantage of expansion opportunities in the region from here.

Despite uncertainties in the global economy, there is tremendous growth potential in the Asia-Pacific region. In the recently published Boeing World Air Cargo Forecast 2002/2003, world air cargo is forecast to grow at a 6.4% average annual rate for the next two decades. Asian air cargo markets will continue to lead in the freight segment, with intra-Asia traffic expected to grow at 8.4 per cent per annum. The share of world air trade connected to Asian markets will also increase to 55 per cent by 2021. These figures certainly reflect a very bullish future for this industry in Asia.

In Singapore, we have seen an upswing. For the first eight months of this year, total air cargo throughput registered 1.07 million tons, an increase of 8.1 per cent compared with the same period last year.

The forecast for the growing supply chain management (SCM) market is also encouraging. The global SCM market is estimated to grow to US$173.7 billion by 2005. This represents 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 7 per cent in Europe. Logistics outsourcing activities in Asia will grow fourfold to reach US$80 billion by 2012.

Against this backdrop of strong growth potential in the Asian air cargo and logistics industries, we believe that Singapore has a vital role, which we will enhance by leveraging on our existing infrastructure and developing new infrastructure such as this airport logistics park, ALPS.

While we all are well aware of Singapore’s achievements as a leading transportation hub—world’s best airport, and busiest container transhipment port, what is little known and rarely heard is Singapore’s development over the years as the leading logistics and SCM hub, in Asia. The recently released Economic Review Committee report from the Working Group on Logistics remarked that Singapore should do a better job marketing Singapore as a logistics and SCM hub. We need to tell the world about the breadth and sophistication of the logistics and supply chain management capabilities we already have and are continuously developing in Singapore.

Beyond numbers, on what do we base our claim that Singapore is the leading logistics and supply chain management hub in Asia? Let me share with you some facts:- Just look at Changi South, and you will see a concentration of all the world’s leading logistics companies, many with their regional headquarters in Singapore as well. Singapore is also the regional distribution hub of numerous MNCs, ranging from electronics to service parts to chemicals to fast moving consumer goods.

Singapore is already at the forefront of logistics/supply chain management capabilities and we will continue to push the boundaries. The Airport Logistics Park of Singapore – combining our excellent airport infrastructure with our logistics/supply chain management capabilities — is an example of how we will continually raise the bar. Launched in year 2000, ALPS has already spawned many similar efforts all over the world.

ALPS, a joint effort by the Civil Aviation Authority of Singapore, Customs, JTC Corporation and EDB, will help companies fully capitalize on the growth potential in Asia. ALPS, strategically located within the airport free trade zone, enables quick turnaround value-added logistics and regional distribution activities, and leverages on the excellent connectivity and superior handling efficiency of Changi Airport.

The ability to provide fast turnaround is vital in the logistics business. Given that much of Asia’s growth is based on intra-Asian trade, there will be increasing demands on air transportation in this region to facilitate the distributed processing and assembly of manufactured goods. Raw materials, components and sub-assemblies must move quickly between the various regional manufacturing centres in order to take advantage of specialisation and just-in-time inventory management practices.

This is where ALPS plays a key role. Capping off the whole development of ALPS will be the official gazetting of ALPS as a Free Trade Zone in early 2003. In establishing ALPS, we bring together a unique combination of two of Singapore’s strongest attributes in international trade – our strategic global connectivity, and our fundamental belief in free trade. Logistics companies like Menlo strengthen our open economy framework even further.

I applaud Menlo Worldwide for having the foresight to be the first to take advantage of ALPS. Menlo’s official opening today marks an important milestone in Singapore’s logistics industry. Menlo will go down in history as being the first to operate a dedicated logistics facility in ALPS, and we appreciate this decision to locate here, as it signifies the company’s confidence in Singapore as a leading integrated logistics and SCM hub in the Asia-Pacific region.

I would like to assure Menlo and all our business friends that many government ministries and agencies have and will continue to work together to ensure the success of ALPS, to provide Menlo Worldwide what it needs to be successful, in terms of good infrastructure and service. I am confident you will soon be able to reap the full competitive advantage that this "plug and play" facility has to offer to your clients in the Asia-Pacific region.

On this note, let me extend my heartiest congratulations to the management, staff and partners of Menlo Worldwide on the opening of your new facility in ALPS. We look forward to Menlo’s successful expansion from Singapore. Thank you.