25 YEARS IN SOUTHEAST ASIA

SPECIAL EDITION

panoramaThe Magazine of the M+R Spedag Group

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CONTENTS

Cover Nightfall over Bangkok

Editorial 3

Guest Article 4PriceWaterhouseCoopers reports about Southeast Asia, a rising star of the global Market

25 Years in Southeast Asia 7How it all began - looking back at 25 years presence and continuedgrowth in Southeast Asia

Southeast Asia Organization 10A graphical overview of M+ R in Asia and Southeast Asia in particular

The countries of Southeast Asia 12Do you know all the countries that make up Southeast Asia? A briefintroduction of all the main countires in this important part of the world

Switzerland - China Relations 14In 2014, Switzerland and China signed a Free Trade Agreement - an important step in further boosting the relations between the 2 countries

Slum Soccer 16An indestructible football serves as a tool for social improvement and empowerment. M+ R is proud to have been part of the ongoing project!

Projects Logistics 18 Special services for XXL Cargo in China

PANORAMA - THE MAGAZINE OF THE M+R SPEDAG GROUP

Special Edition (November 2014)Publisher M+ R Spedag Global AG, Kriegackerstrasse 91, 4132 Muttenz / Switzerland Editor Bernadette Jourdan Design + Layout Stephan Schneider Copyright M+ R Spedag Global AG. Contact panorama@mrspedag.com Internet www.mrspedag.com

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‘Two thirds of Southeast Asia is covered by rainforest. The rest by M+R.’This was our motto in 1989 when we opened offices in Bangkok and Jakarta. In

those days, Southeast Asia also included the Tiger States Singapore, Hong Kong and Taiwan, and the expression Far East stood for Japan. With this extremely confident slogan we wanted to say that we had now opened branches in all the potentially industrial countries of Asia.

These days, the term ‘rainforest’ has come to stand for something quite differ-ent. Ecological themes, the deforestation of the rainforest and the exploitation of natural resources. Activists hold governments and big business conglomerates re-sponsible for the destruction of the rainforest. But actually this picture falls short in some way, as, ultimately, who are the real profiteers? We all belong to this group, always wanting to buy the cheapest products we can. The end products land on the Western markets through price wars. The approach of ‘Always low prices, always’ hardly permits us to handle such resources in a sustainable way. Everything has to be paid for at some time, but we often forget who has to pay for it in the end.

Let’s take the CO2 issue: China is depicted as the biggest polluter in the world. But isn’t it absurd to compare countries that are ten times larger or have five times more inhabitants? And still, sharing this per head of the population is not right. The average Chinese person cannot afford a car at all. The key is always to look at the whole life cycle assessment of a product. China is the largest production site in the world, and its CO2 pollution comes from industry. The products, however, mainly land in the West. They are produced in China because labor costs are low there, the workers even being exploited by western multinationals, and, last but not least, their environmental standards are not as restrictive as those we have imposed on ourselves in Europe and North America. Their regulations lag behind those of the West – although the word ‘lag’ is rather misleading. When lagging behind you can-not spark off the same dynamism as China has had in the last 25 years. China will make up ground there too, as the government cannot afford to expect its people to continue putting up with the pollution from which we in the West profit.

And so I urge you: Don’t follow the ‘Expect more... pay less’ philosophy blindly. Because someone always has to pay the bill, and when we’re talking about the en-vironment, that’s all of us together.

But back to Southeast Asia, or rather Thailand and Indonesia, the two countries in which we opened branch offices 25 years ago. Both countries are known not least for their unspoiled countryside, and are, for most of you, associated with posi-tive memories of relaxing holidays. You imagine pictures of beautiful beaches, tur-quoise water or fascinating temples and pagodas. Or you hear the sound of exotic music and seem to smell the local food or the flowers in your hotel room – but the list is far too short. The most important thing in Southeast Asia is the hospitality of these wonderful people. I should like to express my great admiration and thanks to them all for the past 25 years.

Daniel Richner

GUEST ARTICLE

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SOUTHEAST ASIA ON THE RISEThe article ‘The Tigers Roar Again - This Time For Real’, published in their ‘Marketmap’ magazine on emerging mar-kets, PriceWaterhouseCoopers reports about Southeast Asia being a rising star of the global market, led by its five fastest growing countries: Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

As advanced economies continue to limp out of recession, Southeast Asia, like many other emerging markets, is a rising star of the global market, led by its five fastest growing Coun-tries: Indonesia, Malaysia, the Philippines, Thailand, and Viet-nam. After decades in the making, economic, political, and market factors, combined with a landscape more focused now than ever on attracting capital and development, have converged to create a mature environment ripe with oppor-tunity-though still fraught with complexity and challenges.

Southeast Asia, home to nearly 9% of the global popu-lation, is also home to a large and growing pool of highly skilled, low-cost workers, shaped over years of domestic and foreign capital investment. Compared to China, the growth of Southeast Asia’s labor force in the ‘fastest five’ (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) has been more than twice China’s growth rate each year from 2005 to 2009. This confluence of advantageous factors has rallied Southeast Asian development and remains its greatest com-petitive strength.

Local industries and foreign multinationals eager to capital-ize on the region’s favorable labor profile have also spurred growth and sophistication in manufacturing and licensing agreements there. This emphasis has rendered Southeast Asian business partners more reliable and boosted their ap-peal to foreign investors. A growing number of companies are also seeking to tap into Southeast Asia’s middle class, which is gaining in population and wealth, stoking domestic demand for and consumption of goods and services.

Foreign investors looking to capitalize on these revenue and operational opportunities are progressively seeking local business partners, as evidenced by increasing levels of for-eign direct investment (FOI) and a fast-paced trend toward closing international deals with local businesses. In fact, the growth rate of FDI inflows into Southeast Asia has outpaced that of China in 2010.

Companies are increasingly using local partners’ market knowledge and relationships with customers and govern-ments to adopt international business and put Southeast

Bustling traffic in Mandalay (Myanmar)

Asia’s manufacturing competitiveness into the service of global demand. With momentum shifting toward Southeast Asia, early movers stand to reap the benefits. In PwC’s 15th Annual Global CEO Survey 2012, half of CEOs based in de-veloped markets believe that these emerging economies are more important to their company’s future.

But opportunities are not risk free. For starters, the region’s governments have only recently accelerated liberalized trade and investment policies and introduced transparent regula-tions to combat corruption and ease the landscape for doing business. Increased progress toward risk reduction will occur over time, not instantly. Companies should be prepared to proceed with appropriate caution, for example, by perform-ing risk. assessments of local contractors’ activities as they pertain to possible corruption.

Small businesses in these economies still tend to oper-ate without the benefit of well structured industrial processes and organizational procedures. Such weak internal organi-zational structures heighten the risk of counterfeiting and asset misappropriation. Similarly, technology infrastructure deficits can breed cybercrime, reinforcing the importance of risk monitoring and mitigation. In the case of licensing agreements, licensors need to perform local royalty compli-ance audits in order to assess and manage the activities of local partners.

In addition to these regulatory and business realities, the region also presents a number of geographic challenges, panicu1arly the threat of natural disasters. Historically, envi-ronmental catastrophes have affected local economies, mo-tivating local authorities to improve their disaster response infrastructure. A company’s risk management strategy should include an evaluation of its exposure to risky environmental events and an assessment of their potential impact.

Finally, Southeast Asia is culturally and geographically diverse, encompassing a multitude of terrains, languages, governments, histories, and traditions. Addressing these vari-ances from country to country requires a keen eye and deep cultural awareness. Therefore, it is imperative to understand the array of social, political, and economic issues that might influence the labor relations and business relationships that will likely be central to investing successfully in the region.

Southeast Asia’s export-driven growth and industrializa-tion was catalyzed by multinational companies in search of low-cost labor. Recently, companies began leveraging South-

east Asia’s pool of low-cost, skilled labor as a cheaper alterna-tive to their home country suppliers and manufacturers. The region’s fastest five share a serendipitous labor scenario: 1) large labor pools; 2) highly literate and skilled labor, owing to past investments by state actors and firstmover foreign inves-tors; and 3) relatively low-cost and untapped labor resources. Well take a look at each of them.

Southeast Asia, approximately half the land mass of the United States, boasts nearly two times the US population and nearly 9% of the world’s people. The combined population of Indonesia Malaysia, the Philippines, Thailand, and Vietnam is roughly equivalent to 40% of China’s population.

The region’s thriving labor pool reflects its robust popula-tion. Indonesia alone has a labor force that is on par with that of the United States or all of Europe; the combined labor force of the ‘fastest five’ eclipses the United States and all of Europe and totals about one-third of China’s sizeable workforce. Dur-ing the 2005-2009 period, the labor force for the fastest five grew from 237 million to 255 million, a growth rate of 7.4%. This growth in the labor force is more than twice that of Chi-na’s 3.2% growth in the same period.

Low-cost labor Long recognized as a low-cost production platform, Southeast Asia will continue to reap the benefits of its competitively priced labor pool, which is expected to en-dure as the region’s greatest asset.

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GUEST ARTICLE

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Labor costs in Southeast Asia are considerably lower than in North America and Western Europe; most importantly they are lower than in China. The hourly wage rate in China is USD 1.56, compared to only USD 0.81 in Vietnam and USD 0.51 in Indonesia, according to International Market Assessment. We also see significant labor cost disparities between Southeast Asia and Western countries, where a 12 times multiple in tal-ent costs is common.

Data from the International Monetary Fund (IMF) World Economic Outlook shows that average annual wages in the fastest five Southeast Asian countries is between USD 1,000 and USD 4,700.

Globally competitive labor costs enable multinationals to use Southeast Asia as a hub for global production and manufacturing and to access the Asian markets. As a result, for example, Thailand has positioned itself as an auto manu-facturing hub of the region, manufacturing all ranges of auto supplies and exporting finished goods worldwide.

As the region continues to grow more deeply integrated with the global economy, we expect its competitive manu-facturing capability and competitive labor costs will help meet a global demand for goods and labor.

Part of Southeast Asia’s large market potential emanates from its rapidly growing middle class. In Indonesia, for ex-ample, the middle class comprises approximately 40% of the population, or more than 90 million people. Within the next four to ten years, this block of consumers is expected to grow to more than 150 million?

Along with its climbing numbers, the middle class has ex-perienced a rapid income rise. Within the next decade some

58% of households in Indonesia are expected to have annual disposable income between USD 5,000 and USD 15,000; cur-rently, approximately one-third of Indonesian households have disposable incomes within this range.

More importantly, this newly “rich” middle class is spend-ing their disposable income. Growth of the middle class and its income are generating increased demand for more tech-nologically advanced products and services. For example, Indonesia has become one of the largest markets for smart-phones and scooters, both of which are in high demand with the population’s affluent middle class. And though most people do not yet own them, car sales are increasing rapidly, up to approximately 750,000 vehicles in 2010. Even in Viet-nam, rising income, cheaper phones and IT devices are mak-ing telecommunication services more affordable. In Malaysia, sales of smart devices are expected to have grown by 35% in 2011. International Data Corporation (IDC) estimated that 26% of all the phones shipped last year were smartphones.

With these trends poised to continue across Southeast Asia, ever-greater spending power will support demand for services and higher value-added products. Some Asian coun-tries have been exceptionally successful in reducing poverty, enabling people to start consuming goods and services that transcend basic needs. Particularly notable have been achievements in Indonesia, Malaysia, Thailand, and Vietnam, where dramatic gains have been made recently.

PriceWaterhouseCoopers

Country Area Population Density GDP GDP p.c.km2 millions Inhabitants / km2 USD billions USD

Brunei 5’765 0.4 75 16.9 38’801

Cambodia 181’035 15.3 84 14.3 934

East Timor 14’874 1.1 75 4.2 1’066

Indonesia 1’904’569 244.5 128 894.9 3’660

Laos 236’800 6.4 27 9.3 1’454

Malaysia 329’847 29.0 88 305.8 10’579

Myanmar 676’000 63.7 94 54.1 849

Philippines 300’000 101.4 338 250.4 2’462

Singapore 724 5.4 7’412 267.9 49’936

Thailand 513’120 64.5 126 377.0 6’572

Vietnam 331’210 90.4 273 137.7 1’523

Total 4’493’944 622.0 138 2’332.4 3’538

China 9’596’961 1’350.7 144 14’625.0 10’695

USA 9’629’091 318.5 34 17’528.0 54’980Source: Wikipedia. Figures are based on 2012 data

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GROwING STRONG IN SOUTHEAST ASIAM+ R Asia traces its roots back to Southeast Asia, when, in 1985, the organization was founded with offices in Sin-gapore, Hong Kong and Taiwan, with headquarters initially located in Singapore. Almost 30 years on, M+ R Asia has a strong presence in Southeast Asia, covering all the important markets and still expanding!

In THAILAND, where M+R Forwarding (Thailand) Co Ltd had its business opening in November 1989, the company has enjoyed steady progression year after year and is now regarded as an established logistics service provider in the Thai market. During the early years the primary focus was on ocean freight exports to the European markets, but after 25 years in Thailand, the company is now well recognized as a reputable and strong provider for sea freight and air freight, offering services to all 5 continents.

In 2007 M+R Thailand gained IATA and CASS accredita-tion, allowing them to develop their airfreight product to be in line with the company vision for this mode of transport. Some highlights in air freight in recent years include operat-ing one of the first charter movements from Bangkok after the closure of the airport in December 2008 and in 2011 M+R was given a “Top Customers Award for outstanding support” by Lufthansa Cargo.

From the beginning, seafreight services were the main product of M+R Thailand. In the early years, the focus was mainly on the European trade lane. By the mid 90’s, with Thailand seeing more direct investment from Australia and New Zealand, the focus widened to include the Asia Pacific region. In a very short time, M+R became a very well-known player in that market – and this is still the case today. The next logical step in the overall development of M+R Thailand was the North American and the Latin American market. With the concept of a strong commercial presence, aggressive buying and impeccable operational service it quickly gained a signifi-cant market share.

Without doubt, the requirements of customers and partners, as well as service providers, have changed over the years. However, M+R Thailand is proud of being able to embrace these changes, since they are part of their tradition. The aim

Automotive assembly in Thailand

M+R IN SOUTHEAST ASIA

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ya branch in 1995. In the mid 1990s the Surabaya area was rapidly growing and many new industries were established. Traditionally, there is a lot of agricultural industry around Surabaya but also garment, footwear and furniture exports were growing fast during those days. Surabaya is the second largest city in Indonesia and is the second main seaport. Sura-baya has an international airport that recently expanded and also opened a much bigger terminal building with excellent facilities that reflect the development Surabaya underwent in the past decade.

Semarang, where M+R opened a branch in 2008, is known for the exports of high quality wood and antique furniture. In the hinterland there are important cities like Jepara, Solo and Yogyakarta where furniture and handicrafts are made. Sema-rang, located on the northern coast line of Central Java is the gateway for these cities. In 2010, a further office was estab-lished in Solo, reaching out to manufacturers there as well as in and around Yogyakarta.

The most recent office opening was in Denpasar (Bali) in 2011. Bali is particularly known for the export of handicrafts but also for designer furniture and garments that are often produced in smaller quantities. Therefore consolidation ser-vices are very important. M+R Bali provides high quality and secure warehousing and can also do packing and crating to ensure goods arrive safely at their destination.

M+R SINGAPORE, established already in 1985, is the oldest office in Southeast Asia. Being one of the founding members of the Singapore Freight Forwarders Association (as it was known then), M+R has built up a solid reputation both in

has always been to add value to their customers’ products and be seen as an equal partner in finding solutions for the whole supply chain. In addition to forwarding services, M+R also provides warehousing, warehouse management, pick-and-pack and country-wide distribution services, which are all playing an increasingly prominent role in the portfolio of services provided.

As part of the on-going efforts to be environmentally friendly, the M+R Spedag Group undertook carbon footprint reduction initiatives in conjunction with one of their VIP cus-tomers, resulting in M+R Thailand adding an NGB truck to their fleet and in turn reducing greenhouse gas emissions. This was part of a greater project to reduce the CO2 footprint in the whole supply chain managed by M+R.

INDONESIA first saw the establishment of a joint venture named PT Spedagutama Spedition in 1989. When in 2004 new legislation allowed majority foreign ownership M+R Spedag opened a new legal entity which is currently known as PT M+R Forwarding Indonesia. Initially starting with an of-fice in Jakarta, the capital city of Indonesia, M+R Indonesia steadily grew and has opened a further 5 branches since.

In January 1994, the company opened a branch in Band-ung, a major center for textile manufacturing. Although ex-ports of garments have much declined since 1994, Bandung is still the center of textile exports and M+R Indonesia is very active in this area. The next opening was that of the Suraba-

A seamstress, working in a garment factory in Indonesia

Singapore has a central hub function in Southeast Asia

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terms of services and reliability in the market. The very roots of the more recent expansion in Malaysia, Vietnam and Myan-mar stem from M+R’s Out Port Service Center (OPSC), which was established in 2007 in Singapore to co-ordinate and de-velop a structured approach to business originating from ar-eas outside the established network of our own M+R offices.

Singapore remains a tough market of 5 million people and through innovative solutions and in the very spirit of Sin-gapore itself the company has striven to maximize its posi-tion from the hub of Singapore. The opening of the S.E.A Proj-ect and Events Logistics hub in 2008 proved to be a success in this niche market, especially where oil and gas business is concerned.

With the head office being located in downtown Singa-pore, M+R Singapore further expanded its operations with the opening of a dedicated air freight branch office at Changi Airport Cargo Terminal in January 2008 after receiving IATA accreditation in mid-2007, and went on to rapidly receive Sin-gapore’s Police Force accreditation under the RCAR system (Regulated Cargo Agent Regime). Besides offering all the tra-ditional forwarding services, M+R Singapore also oversees all project-related activities on behalf of M+R Spedag Group in S.E. Asia through the Projects Hub and are also active in the events logistics business – on every level a growing business in Singapore.

Expanding to MALAYSIA, the group opened its first office in Johor Bahru in 2012, followed by another in Kuala Lumpur in 2013. Both offices are fully operational with Johor Bahru

predominantly focused on sea freight and project logistics, and Kuala Lumpur having the lead for air freight and service through the northern ports.

A proactive approach to sales and on-the-ground local knowledge allows the efficient navigation of Malaysia, be it from cold-chain clients to FMCG or JIT components trucked cross border between peninsular Malaysia and Singapore on a daily basis. In addition to covering the area of peninsular Malaysia, M+R Malaysia offers a complete range of logistical services on the island of Penang and in East Malaysia (Sabah, Sarawak and Labuan), through our carefully selected repre-sentative partners.

In VIETNAM, network coverage was provided for over 17 years using selected agents, until in 2012 M+R decided to play a more pivotal role in the country, opening M+R For-warding Pte Ltd in Ho Chi Minh. In conjunction with local operational representatives, M+R Vietnam is in a position to offer a complete range of logistics services covering the northern, central and southern areas of the country. With di-rect control over procurement for sea and air freight as well as space allotments with selected airlines and shipping lines, the company has gone from strength to strength.

With huge investments in electronics manufacturing in the north and the visible shift from China to Vietnam in the garment and footwear industries, M+R is very well positioned on the ground.

Martin Housby, Bangkok

Many high tech firms have moved their production to Southeast Asia

Fish Sauce manufacturing - a traditional industry in Vietnam

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M+R IN SOUTHEAST ASIA

SOUTHEAST ASIA ORGANIZATIONThe M+ R Asia Organization consists of three geographical subdivisions: Southeast Asia, the Indian Subcontinent and East Asia. While some support functions are catered for the entire region by various competence centers based at different locations in Asia, each of the three subdivisions to report individually to the global management of the M+ R Spedag Group.

M+R Forwarding (Thailand) Co. Ltd.Bangkok

Founded 1989 / 30 EmployeesRegional Headoffice for Southeast Asia

M+R Forwarding Pte LtdSingapore, Singapore Changi Airport

Founded 1985 / 18 EmployeesHeadoffice for Singapore, Malaysia & Vietnam

PT M+R Forwarding IndonesiaJakarta, Bandung, Denpasar, Semarang, Surabaya, Solo

Founded 1985 / 55 Employees

M+R Forwarding Malaysia Sdn BhdJohor Bahru, Subang (Kuala Lumpur)

Founded 2011 / 12 EmployeesReporting to M+R Singapore

M+R Forwarding Pte LtdHo Chi Minh City

Founded 2013 / 7 EmployeesReporting to M+R Singapore

Network Partners Southeast Asia(coordinated by Regional OPSC, M+R Singapore)

MyanmarCambodia / LaosPhilippines

M+R Logistics, India

- 13 offices / 340 employees

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M+R Forwarding, East Asia

- Hong Kong (100 employees)

- China (15 offices / 310 employees)

- Taiwan (20 employees)

M+R Forwarding, Southeast Asia

- Thailand (30 employees)

- Singapore (2 offices / 18 employees)

- Indonesia (6 offices / 55 employees)

- Malaysia (2 offices / 12 employees)

- Vietnam (7 employees)

The territory of THAILAND occupies a consider-able proportion of the land area of Southeast Asia, stretching from the last foothills of the Himalayas to the Malaysian Peninsula. In the 1980’s, a real economic boom started that brought the country one of the high-est growth rates in the world until 1995. The traditionally most important branch of the economy, agriculture, was rapidly replaced by the manu-facturing sector.

The chief sectors of the economy are food processing, the textile industry, electronics, the automotive industry, the petrochemical industry and the production of iron and steel. The most important agricultural products are rice (it is the largest rice exporter in the world), sugar, manioc, maize, natural rubber, cotton and tobacco. With a quota of 6% of the GDP, tourism is the chief source of revenue.

INDONESIA is the largest insular state in the world (17,508 islands), and with some 240 million inhabitants it is the world’s fourth most populous country. It also is the economic heart of Southeast Asia, generating a GDP of US$ 900 billion and be-longing to the G-20 group.

The staple food, rice, is cultivated mainly on Java, where due to the fa-vorable climate three harvests a year are possible. Cereals, soy, spices, groundnuts, rubber, tea and coffee are also grown. A few of the export products are gold, copper, nickel ore, coal, wood products, agricultural products (palm oil, rice, ground nuts, cocoa, coffee), textiles, minerals and liquid natural gas. Tourism is an important source of revenue for the country. About four million tourists visit Bali every year, mostly from Australia, USA and Europe.

The city state of SINGAPORE lies on the southern tip of the Malayan Peninsula and is only 137 kilometers north of the equator. With a size of just 700 square kilometers it is one of the smallest countries – and yet Singapore is one of the top business centers in the world.

Singapore’s state-of-the-art harbor is one of the world’s largest ports and container tran-shipment hubs, handling 29,649,000 TEUs per annum, of which a large portion are con-tainers that originated from, or are destined for other countries in Southeast Asia. Various products are merely customized and processed in Singapore, e.g. foodstuffs, oil, rubber, steel and machines. Today, Singapore is an economy primarily focused on services. Sin-gapore is not only a top financial centre, but is endeavoring to become a biotechnical centre in Asia. In the newly created Biopolis Science Park are now located private and state

institutes, biotechnical and pharmaceutical companies.

THE COUNTRIES OF SOUTHEAST ASIA

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VIETNAM lies within the fastest economic growth region in the world. Only a few flying hours away from the

country are some of the world’s largest markets with more than three billion people combined.

The country has good flight connections to all the Asian economic cen-ters, and along the 3,440 km coast lie seven international ocean harbors; the road networks are better than in comparable countries. Studies pre-dict that Vietnam will grow into being the 17th largest economy in the near future. 90 million Vietnamese, who count as well educated and very

hard-working, live in the 320,000 km2 state and ensure a sound economic growth rate. The country not only has large reserves of natural resources, in

particular ‘rare earth’, but in recent years it has become the second biggest cof-fee exporter in the world.

MYANMAR is a resource-rich country with some 60 million in-habitants in an area the size of France and Great Britain combined together, located at the interface between China, India and Southeast Asia. In view of the ongoing eco-nomic opening of the country, taking place since 2011, there is great interest in Myan-mar. Investors speak of unprecedented opportunities, and many companies of new markets or production sites with low wages are rushing there.

The first foreign industries, primarily in the textile sector, have already relocated their production facilities to Yangon, the country’s economic centre. Big energy and technol-ogy groups are entering the market, and tourism has been booming for some time now. Myanmar also has major deposits of jade, rubies and teak, as well as reserves of natural gas. Some of the Great Powers are already investing billions of dollars in building harbors and overland routes. Myanmar has the potential to become the most important transit country in Asia.

MALAYSIA, with its capital city Kuala Lumpur, consists of two parts separated by the South China Sea: the Malayan peninsular to the west and

parts of the island of Borneo to the east. (23 million inhab-itants)

The country has developed successfully from a supplier of raw materials to an industrial location, and has become

the third largest economy in Southeast Asia after Indone-sia and Thailand. It is now an important trading nation with its main focus on electronic goods, as a producer of microchip and solar cells, with worldwide exports that also include raw materials such as oil and palm oil, rubber, tropical timber, tin, etc.

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SWITZERLAND - CHINA RELATIONS

It took a number of years for the new free trade agreement between China and Switzerland to come into being. Follow-ing initial exploratory contacts in November 2007, joint work-shops in 2009 and a joint feasibility study in 2010, negotia-tions were officially launched in January 2011. The agreement was then negotiated during nine rounds of negotiations and various intersessional meetings from April 2011 to May 2013. The landmark free trade agreement between Switzerland and China came into effect on Tuesday, July 1st 2014. The comprehensive agreement addresses customs procedures between the two countries, as well as issues of intellectual property and dispute resolution. For the vast majority of bilat-eral trade between the two countries, the Free Trade Agree-ment will dismantle tariffs fully or partially, sometimes subject to transition periods.

FREE TRADE AGREEMENTSwitzerland and China have maintained strong relations for many years. In 1950, Switzerland was one of the first countries in the western world to give diplomatic recognition to the People’s Republic of China. A first bilateral agreement was signed between the countries in 1987. In July 2013, Switzerland and China signed a Free Trade Agreement which came into effect on 1 July 2014.

Under the agreement, China will eliminate tariffs on 84.2 percent of Swiss imports, either immediately or gradually over the next five to ten years. In total, tariffs are reduced on 96.5 percent of Swiss products. Consumers in China can ex-pect more affordable Swiss goods, including cheese, luxury watches, chemicals and fine machinery. Likewise, Switzer-land will phase out tariffs on 99.7 percent of Chinese imports, mainly textiles, agricultural products and industrial goods.

There are many advantages to this agreement for both Swiss multinationals and SMEs, especially since China and Switzerland are complementary economies. Analysts are predicting that China will overtake Germany as Switzerland’s largest export market by 2035. China is currently the largest importer of Swiss industrial goods in Asia, and is the alpine nation’s third most important trading partner.

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In 2013, Switzerland exported goods to the value of CHF 8.7 billion to China, which makes up 4.1% of all Swiss exports. Swiss Imports from China came to CHF 11.4 billion or 6.1% of all Swiss imports. The main products exported by Switzerland include machines and instruments, watches, chemical and pharmaceutical products. Swiss imports from China include machinery, textiles, clothing, watch-making and chemical products.

Another bilateral agreement on labor and employment cooperation between the two nations also came into force earlier this year on June 9th 2014. The Swiss Government said the two agreements together will significantly promote eco-nomic growth and development.

For goods to be imported under the new agreement, proof of origin is required either by the standard movement certificate EUR.1 (with additional indication of the HS tar-iff number at 6-digit level and of the applied origin criteria) or by the declaration of origin on the invoice or shipping note (‘self-declaration’). The declaration of origin allowing provision for proof of origin without any additional forms is reserved for authorized exporters. The direct shipping rule al-lows the splitting up of consignments in third countries un-der customs control, without the products losing their coun-try of origin status.

Yvo Richner, Shanghai

Movie recommendation

THE HANGOVER, PART II (2011)

Admitted, the movie does not offer much depth, but is purely aimed at entertaining the viewer through its own, special kind of humor. But since the movie is playing almost entirely in Bangkok, we felt that it is the perfect recommendation for this special issue of our Panorama Magazine dedicated to Southeast Asia!

Switzerland imports from China China imports from SwitzerlandCommodity % Commodity %

1. Electrical Appliances 23.2 1. Machinery 19.2

2. Machinery 18.1 2. Pharmaceutical Products 18.9

3. Garments 12.7 3. Watches 16.5

4. Watches (Parts) 6.6 4. Optical Instruments & Apparatus 9.5

5. Chemical Products 5.4 5. Electrical Appliances 8.6

6. Furniture & Lighting Equipment 3.5 6. Precious Metals & Jewellery 8.4

7. Toys 2.8 7. Chemical Products 7.3

8. Shoes 2.7 8. Plastic Products 2.0

9. Plastic Products 2.5 9. Metal Products 1.4

10. Optical Instruments & Apparatus 2.4 10. Automotive Parts 0.9

11. Leather Products 2.2 11. Tools 0.6

12. Metal Products 1.8 12. Leather Products 0.6

Source: Swiss Federal Custsom Administration (FCA) / Percentage shows percent of total trade volume by value

SOCIAL PROJECTS

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Children in India and in Thailand playing with OWFP‘s indestructable soccer ball

SLUM SOCCERSport is increasingly seen as tool for bringing social change, peace and development. Numerous organizations, some global, others local, embrace sports as a method to reach the young, as a tool to reach personal and com-munity goals. Most of these activities are geared towards underprivileged children and teenagers.

M+R India recently supported “Slum Soccer” (slumsoccer.org), a non-governmental public charitable trust organization, whose ultimate aim is to reach out to the Indian homeless using football as a tool for social improvement and empow-erment. Slum soccer received a donation of 21’720 footballs from “One World Futbol Project” (OWFP), the organization that produces nearly indestructible balls that have been proven to survive the harshest environments, balls that never need a pump and never go flat.

When the shipment of soccer balls arrived in India, the Chennai-based head office of M+R India provided on a non-profit basis the services for customs clearance and delivery of the balls. The clearance itself was no mean feat. Under the Indian Customs Act and Rules, there is no specific exemption of duties for donations of soccer balls. But M+R India sug-gested to Slum Soccer to bring the issue up with the Sports Authority of India, who in turn requested the Commissioner of Customs to grant a Customs Duty Exemption Certificate (CDEC) for this shipment.

Suresh V. Chandran, Chennai

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One World Futbol

In 2006, One World Futbol inventor Tim Jahnigen was watching news footage about traumatized refugee youths in Darfur playing soccer on dirt using a ball they had made by tying trash together with twine. In that instant, Tim saw that these kids had such strong, indestruc-tible spirits and felt they deserved better. He realized there was a global need for a nearly indestructible ball that could withstand the harsh conditions often faced by youths living in refugee camps, disaster areas and other disadvantaged communities.

With a concept and material in mind, Tim set out to design a ball that played like a soccer ball, but would never need a pump and never go flat – even when punctured multiple times. His idea remained in the concept stage until a conversation with his friend, world-renowned

entertainer Sting. Once Sting heard Tim’s vision for the ball, he provided the initial funding to do the research and development for a prototype of the One World Futbol.

The One World Futbol is a nearly indestructible ball that never needs a pump and never goes flat – even when punctured multiple times. Whether used on streets, at the beach, at home or on the roughest landscapes in the world, the One World Futbol will last for years. It can survive the harshest of environments. It was designed with a lower bounce for recreational play on harder surfaces such as streets, rocky landscapes, schoolyards, dirt lots – but is great on grass and turf too. A single One World Futbol can outlast hundreds of regular balls, eliminating the waste of discarded, punctured soccer balls and the hassle of buying pumps and needles. The ball is the same size and weight as a standard soccer ball, but it can also be used for netball, volleyball, and many other games. The ball comes in two sizes – an adult size 5 and a youth size 4.

The One World Futbol Project sells the One World Futbol directly to institutions, companies and non-profit organizations, as well as to individual consumers through a “Buy One, Give One” model. For every ball bought by individuals at retail, the company donates a second ball to organizations working with children and youths in disadvantaged communities around the world. The One World Futbol Project distributes balls through a growing network of organizations serving youths in harsh environments around the world, including refugee camps, conflict zones, disaster areas, inner cities and other disadvantaged communities

Since the launch of the One World Futbol Project in July 2010, more than 800,000 One World Futbols have been distributed to 165+ coun-tries worldwide.

For more information see www.oneworldfutbol.com

PROJECT LOGISTICS

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STRONG POTENTIALSeveral years ago, M+ R China did set up a special department dedicated to handling and developing Project Logis-tics, especially the handling of “Out of Gauge” (oversized) and “Heavy Lift” cargo. Special focus is given to the trade with East Africa, where, in cooperation with Spedag Interfreight, the entire logistics chain from factory in China to a Job Site at destination is covered seamless.

In recent years, M+R Forwarding China has built up a profes-sional, dedicated project team within China and the Asian region. In China, the project team has grown to number ten experienced colleagues focusing on clients in very different industries, with hands-on service. Starting with big import projects for paper-making machines to exports of whole ce-ment plants, the department is dealing today with a great diversity of customers in China. “We have clients for whom we imported huge machines and equipment into China maybe eight years ago. In the meantime these companies have built up production facilities in China which are dedicated to the export markets”, says Andreas Thoerner, one of the specialists from the Project Team in China.

The development from importing large machines to export-ing complete green-field plants shows the ongoing change in the Chinese market. For the project team, the main ex-port markets are Africa and the Asia-Pacific region as well as North America. “Especially the great potential out of China for the African market is being closely followed by our depart-ment”, says Ken Zhu, the China-Africa project leader at M+R Forwarding China, who frequently travels to Africa to meet with clients and their project managers. “We are seeing huge investments in infrastructure, energy supply and, of course, mining from our Chinese clients in Africa”, he explains further.

M+R Forwarding China has been providing project lo-gistics services to Africa since 2008. Many of these projects

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are for the road construction sector, and not surprisingly, the company has a strong reputation among clients in this indus-try. In late 2012, M+R Forwarding China was invited to quote for a road construction project to South Sudan, which includ-ed the entire range of services from customs export formali-ties in China all the way up to door delivery at the jobsite in Juba, the capital city of South Sudan. M+R secured the proj-ect, and has over the past 1.5 years handled over 1,000 tons of engineering equipment shipped as break-bulk, plus an-other 50 boxes of containerized cargo. Delivery in Africa was handled through M+R’s sister company Spedag Interfreight. “Co-operation and dedication to highest service standards are the key to success; there is great potential for us. Together with Spedag Interfreight, we are a very strong contender for project logistics from China to the East African region.

Recently, M+R Forwarding China was chosen by a client to handle the transport of tanks for a brewery extension from China to Singapore. “The tanks measured of over 20 meters in length and had a diameter of 6.8 meters. Transport-ing items of such size by road would be a major challenge anywhere in the world”, says Andreas Thoerner, who was in charge of this project. “In Singapore we had to find a route from the discharging terminal up to the brewery that would not lead over bridges or pass by other obstacles that could possibly affect our transport. We finally decided on barge transport from Jurong port in Singapore up to a small jetty close to the brewery. Otherwise transporting cargo nearly 7m high just wouldn’t have been feasible”, he explains. Once the cargo arrived at the jetty, the tanks had to be offloaded by means of a 200-ton floating crane and placed onto hydrau-lic multi-axle trailers. “The jetty was very narrow and would only allow for one trailer to maneuver at a time”. Moving “Out of Gauge” cargo required a permit as well as a police escort, and was only allowed at night time. It took two nights to de-liver all the tanks to their final destination. The last stretch to the brewery site was a further challenge for the team: right at the end of the route there were several along the road that had to be removed in order to make room for the trailers to pass through.

Loading surveys are standard for project shipments. The surveys are either done through M+R personnel, or through the assistance of third party surveyor companies. “Normally one of us is present during the loading and/or discharging operations. Seeing the cargo in person rather than just work-ing with cargo specifications often helps to estimate particu-lar challenges that need to be considered when working out the routing or ways to handle the cargo. It also enables us to give feedback to our clients, information that might help them in adjusting or improving the packaging or even the cargo design, making the handling of the cargo smoother and safer”, says Andreas Thoerner. “Moreover it enables us to

Book recommendation

HOW FOOTBALL EXPLAINS THE WORLD: An Unlikely Theory of Globalization Franklin Foer (2004 / 2006)

The book, also published under the title ‘How Soccer Explains the World’, is an analysis of the interchange between soccer and the new global economy.

The author takes readers on a journey from stadium to stadium around the globe in an attempt to shed new insights on today’s world events, both from political and economic standpoints. Soc-cer is here the globalized medium that seems to lend itself to ex-plaining the effects globalization has on society as a whole.

Globalization never seems as vivid as when seen through the eyes of a soccer fan. In his book, the author looks at the passions and rivalries embedded in soccer, coming up with some surprising theories about our ever-shrinking world.

give our clients first hand survey reports, and if problems oc-cur, we can react faster and solve these problems on the spot”.

“For our team, challenges like the ones posed by the transport for the brewery in Singapore make all the differ-ence”, says Rene Marte, in charge of project clients residing outside of China. “Every day brings a different request and a new challenge, so life never gets boring!”

Andreas Thoerner, Shanghai

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