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ITA Engages in Commercial Diplomacy to push U.S. Global Trade

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ITA Engages in Commercial Diplomacy to push U.S. Global Trade

The International Trade Administration, part of the Department of Commerce, engages in commercial diplomacy promoting U.S. exports, attracting inbound investment, protecting industry competitiveness, critical U.S. technologies, supply chains, etc. besides defending U.S. industries against unfair trade.  

Read also: US Trade Activity shows Resilience Amid Challenging Global Conditions

Arun Venkataraman, Assistant Secretary of Commerce for Global Markets and the Director General of the U.S. and foreign commercial service at the Department of Commerce, highlighted the U.S. export potential at the recent New York World Trade Week (NYWTW) held in New York, supported by a number of trade groups and other organizations, including the World Trade Centers Association (WTCA), the Port Authority of New York & New Jersey (PNYNJ), the New York District Export Council (NYDEC), etc. 

At the NYWTW, Venkataraman pointed out that New York was one of the top five biggest exporting states in the United States.  “The ITA has two offices in New York, but the ITA team has over 2,300 trade and business experts strategically located across 100 locations in the U.S. and in over 80 international markets,” he explained. 

Venkataraman maintained that increasing U.S. supply chains was “our top priority”.  Commerce’s trade mission, called Trade Winds, is the U.S. government’s largest annual trade mission and business development forum.  “This year, the Trade Winds is in Istanbul, Turkiye.” The ITA recently led a delegation of over 100 U.S. businesses representing sectors from technology and cyber security to renewable energy and agribusiness, interested to build or deepen partnerships in Turkiye and across Europe and Eurasia. 

Robin van Puyenbroeck, the WTCA’s executive director (business development), co-chair and a presenting sponsor, underscored the crucial importance of world trade. “It creates jobs and opportunities but we also face geopolitical challenges.  Indeed, world trade creates better international understanding and peace … our mantra is leveraging trade for peace,” he said. 

At the NYWTW kick-off event, a number of companies, mostly small-sized entities, were given awards for their “outstanding export achievements” despite some challenges.   New York-based Global Marketing Co. Ltd., was one such recipient. 

In an interview with this writer, Murtaza Fazal, Global Marketing’s chairman, explained the nature of his export business.  “We are an export management company … we represent U.S companies producing food products such as mayonnaise, barbecue sauce, etc.  We export their products, under our export management company, to some 65 countries in the Middle East, Asia, Africa, Europe … we have individual labels for each European country.  We maintain offices in Dubai and Singapore … our turnover last year was over $ 100 million,” he explained.

But Fazal also spoke of geopolitical tensions affecting international shipping, with the Red Sea disruptions causing diversion of shipments.  “…international shipping has indeed been impacted … shipments take longer to reach their destinations and prices keep rising,” he said. 

Of course, one could send consignments by air freight which is quicker but it also costs much more, making products more expensive for the importer in the final analysis.  Fazal’s company, which specializes in food exports, also participates in international food trade shows such as ANUGA in Cologne, Germany, and elsewhere. 

“In my view, the supply chain issue is a problem … and this can be even more difficult in the trucking sector,” he said, adding that competition was getting fiercer with Asian markets imposing tariffs on U.S. products. 

Before the NYWTW kick-off event, Assistant Secretary of Commerce Venkataraman had briefed journalists at the New York Foreign Press Center, stressing the importance of global trade in our lives.  “… making trade work for American businesses and families is the sole focus of the work that we do every day at the International Trade Administration.”

Juggling with figures, he said that the agency supported 93,000 U.S. businesses and helped facilitate $ 180 billion in U.S. exports, while inward investment supported nearly 600,000 American jobs.  “… New York is consistently among the top five exporting states, with over $ 97 billion in exports,’ he said. Part of the ITA’s core mission is to promote U.S. exports to foreign markets, which are home to over 95 percent of the world’s consumers. 

Unique supply chain center launched at the ITA

“Strong supply chains are vital to U.S. competitiveness and national security.” That was the reason why a unique first-of-its-kind supply chain center was launched at the ITA to create the tools, partnerships, and develop mitigation strategies necessary to increase supply chain resilience, foster economic prosperity, and increase national security.  “We’re moving beyond traditional trade agreements to make breakthroughs in commercial opportunities for U.S. companies and their counterparts abroad … we’ve launched new commercial and investment frameworks in fast-growing regions, including the Indo Pacific.”

He stressed inbound foreign direct investment played role in the U.S. economic success, contributing to substantial job creation in the software and IT services, business services, textiles, financial services, and consumer product sectors.  The 2024 Investment Summit from June 23 to 26 at the Gaylord National Resort and Convention Center in National Harbor, Maryland, is of “great importance” for the U.S. 

While referring to Japan as the number one foreign investor in the U.S. and the “deep partnership” with Japan, Venkataraman said that he had been “amazed” in the last three years to see how much that partnership had accelerated and deepened.  He said that the U.S. and Japan worked trilaterally with countries like the Philippines and Korea to promote a free and open Indo-Pacific region, with the much discussed Indo-Pacific Economic Framework (IPEF) being a critical part of it. 

A supply chain pillar exists in the IPEF since the early part of this year and, Venkataraman said, “we will soon be setting up the institutions to operationalize that supply chain pillar, which is really going to be critical to mitigating supply chain disruptions going forward and helping make our economies collectively more resilient to the threats that could occur from supply chain disruptions”. 

In June, the U.S. will host the first annual ministerial for the IPEF ministers in Singapore. 

Venkataraman also spoke about India as a critical partner for the U.S. When questioned by this writer on entering into a free trade agreement with India, he replied that “we’re doubling down on India and finding more ways to collaborate and grow that economic integration”. 

“Free trade agreements are a fantastic tool and can be very effective, but I think we should also remember the free trade agreements are only one tool in the toolkit.  And right now, when we look at the Indo-Pacific Economic Framework, that is addressing key elements that you don’t find in free trade agreements, addressing the urgencies of the day,” he said. 

American companies, he said, relied on Indian goods and services in many sectors, including in IT services, textiles, defense co-production, etc. 

“We are growing those partnerships across so many sectors with India … I genuinely believe that this is very much a heyday of this bilateral economic relationship.” 

Malaysia’s

New York State Senator Presents Proclamation on Malaysia’s 66th National Day 

Malaysia’s Location is of Strategic Importance for Global Trade and Shipping

A New York State Senator has issued a proclamation in honor of Malaysia’s consulate general in New York at a reception recently held at the Malaysian mission in the presence of the members of the consular corps, UN accredited diplomats and the Malaysian diaspora. 

New York State Senator John C. Liu presented the Proclamation to the Malaysian consulate general in New York on the occasion of Malaysia’s 66th National Day, with consul general Amir Farid Abu Hasan accepting it. 

The Proclamation cites, among other things, that “… Malaysia is one of the most diverse countries in the world, with different cultures assimilating from the very beginning of its history; many of these cultures have worked together to contribute to Malaysia’s uniquely diverse heritage, while vigorously maintaining their identities and customs”.  

The citation also cites the 66th National Day of Malaysia as a “special day, with glorious celebrations heralding another year of independence all over Malaysia, from Perlis to Kuala Lumpur to Sabah and Sarawak; for many Malaysians, National Day of Malaysia reflects on the unity, peace and prosperity of the country …” 

While accepting the Proclamation, consul general Amir recalled the historic moment when Malaya (as Malaysia was known then) stepped into the international arena as a free and independent nation, released from the British colonial yoke. He referred to the “proud moment in history” when Tunku Abdul Rahman (he was the country’s first prime minister and foreign minister after it gained its independence, continuing in that post when the federation of Malaysia was formed in 1963) raised the flag of independent Malaysia. 

“Malaysia has successfully evolved from an agricultural nation and moved towards further industrialization,” Amir said. 

The presence of ASEAN diplomats charged with promoting trade and investments at the event, emphasized the key role trade and economic ties play in strengthening the overall U.S.-ASEAN bilateral relations.   Malaysian Trade Commissioner in New York, Nyaee Ayup, whose office promotes trade with the U.S., said:  “I am happy about this Proclamation … it should also help profile Malaysia in trade and business circles.” 

With an increasingly receptive market for sophisticated products and services, including in technology, manufacturing, and healthcare, Malaysia remains the 19th largest trading partner of the United States, with two-way trade peaking at $ 72.9 billion in 2022. 

New York State Senator John C. Liu, in an interview with Global Trade Magazine, underscored Malaysia’s importance for New York and, indeed, for the United States.  “We look up to Malaysians and try to emulate them … they have strength and harmony in diversity,” he said. 

“We think of New York as the center of the universe, sometimes deservedly and sometimes undeservedly.  The Malaysian community reminds me about our own diversity … we can emulate them and learn from them,” Liu added unabashedly.

The composition of Malaysia’s population is characterized by a mixture of ethnic groups and their respective cultures, comprising Malay, Chinese, Indian and native groups.  The Malaysian social fabric rests on six pillars – sustainability, care, compassion, respect, innovation, prosperity and development – “which have guided the country’s destiny”, as one Malaysian community leader present at the Proclamation ceremony put it. 

Malaysia is one of the 10 member states of the Southeast Asia bloc known as the Association of Southeast Asian Nations (ASEAN) whose economic significance and strategic location have become key factors in the Indo-Pacific calculations of successive U.S. administrations.  

The other nine ASEAN member states are Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam. 

Indeed, the ASEAN group of nations is clustered along the crucial trade and shipping route, the Strait of Malacca, which many experts describe as the “lifeline” of East-West sea trade. 

The Strait of Malacca is a narrow stretch of water, 500 miles long between the Malay Peninsula to the northeast and the Indonesian island of Sumatra to the southwest, connecting the Indian Ocean and the Pacific Ocean. As the main shipping channel between the Indian and Pacific oceans, it is one of the most important shipping lanes in the world. It is named after the Malaysian state of Malacca.

According to the International Transport Administration of the U.S. Department of Commerce, Malaysia’s central location in the Asia Pacific region makes it an ideal gateway to Asia and ASEAN markets.   There are more than 40 seaports across Malaysia. Sixteen of these ports have container facilities. The largest container port in Westport, along the Straits of Malacca in Port Klang, an hour’s drive from Kuala Lumpur.  

Air cargo facilities are well developed in the five international airports. In Peninsular Malaysia, these are the Kuala Lumpur International Airport (KLIA), Penang International Airport, and Langkawi International Airport. Malaysia’s modern KLIA is the nation’s largest airport, located south of Kuala Lumpur. Cargo import and export procedures are fully automated at KLIA.  

The New York State Senate’s gesture in presenting the Proclamation to Malaysia is also being seen as an acknowledgement of the “crucial importance” of the ASEAN region in the Indo-Pacific region.  Other ASEAN diplomats, preferring to remain anonymous, remarked that their group saw “huge potential for trade, business and investment” in cooperation with the United States.  They were also keen to acquire U.S. technology which could further push their countries towards modernization and greater industrialization.   

 

asean

New York City Mayor’s Presence at ASEAN Flag-Raising Ceremony Goes Down Well with ASEAN Diplomats 

ASEAN emerges as a promising economic and trading partner 

While Washington is the nation’s political capital, New York City is unquestionably the world’s financial capital. The Big Apple also has the world’s largest cluster of foreign consulates and trade missions, not to mention an equally large presence of foreign permanent representations to the United Nations in New York City.

But many financial pundits fear that the rampant violence and crime in the city could adversely affect New York’s image as the global financial capital, also forcing investors and businesses, particularly the small businesses that form the economy’s backbone, to leave the city.  

The city’s mayor Eric Adams has been actively reaching out to the business community, and assuring them of a safe environment to do their business. 

Adams, who maintains contacts with foreign diplomatic and trade missions, has also been attending many diplomatic, business and cultural events, earning goodwill and strengthening the city’s ties with the international community.    

Adams recently attended a major event organized at the city’s historical Bowling Green site by the consulates of the member countries of the ASEAN (Association of Southeast Asian Nations) group to celebrate the 56th anniversary of the group’s founding in Bangkok. 

Bowling Green, located in the heart of the city’s financial district, is of historic significance: besides being a colonial center of activity in the 17th century, the site was previously used as council grounds for the Native American tribes, besides being a parade field and market where people would sell and buy livestock for their farms.

The ASEAN group has ten member states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. 

The guests included top officials representing various agencies of New York City, high-ranking diplomats a number of ASEAN member states and other countries, and also ASEAN businesspeople and nationals living in the United States. 

Because of Indonesia’s rotational presidency of the ASEAN group, it fell on Winanto Adi, Indonesia’s consul general in New York, to address on behalf of his ASEAN counterparts and highlight the special significance of the first ASEAN flag-raising ceremony in New York, as also the group’s growing political, cultural and economic strength. 

While felicitating the diplomats on ASEAN’s 56th anniversary, Adams emphasized he was honored to be the first mayor of New York City to jointly perform the ASEAN flag-raising ceremony.  He also praised the contributions by ASEAN citizens and businesses to the city’s socio-economic development.

Malaysian consul general in New York, Amir Farid Abu Hasan, told the Global Trade that the businesses in Malaysia and the ASEAN region were keen to increase trade and investments with New York and the entire United States.

New York City, which routinely seeks to intensify trade and business ties with foreign countries, sees potential for developing business ties with the ASEAN member states whose combined population of some 667 million offers a large market besides being rich in minerals and raw materials, and providing access to one of the world’s most dynamic growth regions.  Also, some of the ASEAN countries are being looked at as alternative business partners by Americans keen to drastically reduce their trade dependence on China and identify manufacturing sites in neighboring countries such as Vietnam, Cambodia, Indonesia, Malaysia, etc. 

“It’s not wise to put all your eggs in one basket,” was the advice one New York based ASEAN businessman gave, obviously, making a veiled reference to China.

Adams highlighted the social-cultural openness of American society which absorbed foreign cultures and characteristics:  “And America is the only country on the globe where you are told, as you embrace this culture, you don’t have to abandon your culture. In fact, you are encouraged to bring both cultures together, to bring that energy, that unique product in New York City that is an accumulation of all of our different foods, our sounds, our spirits, our ways of religious philosophies and concepts.”

The mayor, sporting a baseball cap and attired in a white polo shirt, urged the ASEAN representatives in a light-hearted vein to tell their countrymen visiting New York City “to spend money, spend a lot of money in New York”. 

Why ASEAN Matters

ASEAN’s economic and strategic significance becomes obvious because of its location in the Indo-Pacific region, and its geographically dominant position at the crucial Strait of Malacca through which much of the world’s East-West trade flows.  

According to the US-ASEAN Business Council in Washington, the ASEAN collectively is projected to grow by over 5% per year to become the world’s fourth largest economy 2030.  It is also the United States’ fourth largest export market in the world, with exports of U.S.-made goods exceeding $122 to the ASEAN annually, with all 50 states exporting to ASEAN and 29 states exporting over $1 billion each year. This supports more than 625,000 American jobs while in 13 US states, ASEAN accounts for more than 20% of export-dependent jobs to the Indo-Pacific.  ASEAN collectively has a combined GDP of $3.2 trillion. 

ASEAN has emerged as the number one destination for U.S. investment in the Indo-Pacific, attracting more than $338 billion in U.S. foreign direct investment. With 915 million mobile connections, this region is the world’s fastest-growing internet market. The region’s digital economy is projected to exceed $300 billion by 2025; ASEAN is among the top five destinations for U.S. food and agricultural exports, amounting to $13.7 billion, including over $2 billion in soybeans and $1.6 billion in cotton. More than 34% of Asian Americans identify with an ASEAN ethnicity (over 7.6 million people).  

ASEAN has “transformed the region into an economic powerhouse”, as Edward Mermelstein, New York City Commissioner for International Affairs, observed in his speech. 

The author, Manik Mehta, is a New York-based journalist specializing in foreign affairs/diplomacy, global economics/trade, and emerging markets.

food

Foreign Food Suppliers Had Some “Very Tense” Moments During 2023 Port Disruptions in the U.S. 

Large International Turnout at New York’s Fancy Food Show 2023

Even as they tried to put last year’s U.S. port disruptions as a “bad dream”, foreign food suppliers, making a strong presence at the recent New York Fancy Food Show 2023, hoped that such disruptions would not recur in the future.

“Foreign food suppliers passed through some very tense moments as food shipments to the U.S., one of our biggest markets, lay uncleared for a long time at U.S. ports, particularly on the west coast,” said Servet Turgut, the export director of an Istanbul-based Turkish dry fruit exporting company at the show. 

The show is North America’s largest event for specialty foods and is organized by the Specialty Food Association (SFA).  Sales of specialty foods and beverages across all retail and foodservice channels neared $194 billion in 2022, up 9.3 percent over 2021, and are expected to reach $207 billion in 2023, according to SFA’s annual State of the Specialty Food Industry Report. The specialty market is composed of 63 food and beverage categories which combined account for nearly 22 percent of retail food and beverage sales

The show attracted 2,400 exhibitors from 50 countries and regions, with Italy, France, Spain, Greece, Turkey, Portugal, etc. represented by large exhibitor contingents. Asian countries such as Japan, South Korea, India, Indonesia, Malaysia, etc. were also well represented.  Morocco as this year’s “partner country” presented an array of products ranging from olive oil through dates to packaged tin foods. 

Foreign exhibitors, eager to take advantage of the bullish trend in specialty food sales, were making a strong pitch at the show, even finding innovative ways to beat the inflation and the high freight and storage costs.  One Malaysian company that seemed to generate considerable buyer interest at the show was Selangor-based Doluvo Bhd. Sdn., which used a clever marketing strategy to penetrate the U.S. market; it has been selling its “Pops Malaya” brand of shelf-stable ice lollies, using Amazon to sell its products.  The “Pops Malaya” brand has, meanwhile, become the fastest selling item for Amazon.  Doluvo, a 100% women-owned and managed company, attracted a steady stream of consumers and buyers.

In an interview at the show, Yasmin Karim, the company’s CEO/Founder, said that her company had established contacts with several distributors/brokers having business connections with retailers.  “We work closely with the Malaysian agricultural ministry’s office In Washington.  Our pops are made of a high fruit content, a characteristic appreciated by the consumers,” Karim said, adding her company would also participate in the ANUGA food show in Cologne, Germany, later this year. 

Doluvo ships the pops as liquid which can be stored at room temperature, instead of deep freezing them which would require refrigeration all the way to the retailers. The liquid pops are purchased by consumers who can then freeze them in their refrigerators and consume them as frozen pops.  Selling pops in liquid form is also advantageous because the ships take about two months to transport our containers from Port Klang in Malaysia to the U.S. east or west coast.  The costs for shipping them in frozen form would be prohibitive as a result of the constant refrigeration needed for the long shipment period.

Another big Malaysian brand name at the show was Julie’s Mfg. Sdn. Bhd. of Melaka. While Julie’s is a household name in Malaysia and many other countries, its cookies and other products adorn the shelves of, mainly, Asian supermarkets in the U.S.   The company now wants to break into the U.S. mainstream food market. 

“We do sell our products to a mainstream distributor who, however, packages it under his own brand name … however, we want to sell these products in the mainstream market under our own brand of Julie’s,” Martin Ang, the company’s director told Global Trade at the NYFFS.  Ang has regularly participated in the show in the past and has built up a broad business network in the U.S.  Julie’s products are exported to 90 countries around the globe, with exports accounting for some 60% of its total turnover of about US$ 100 million. 

Ang said that Julie’s peanut butter cookies were a fast-selling item in U.S. market; other bestselling items included Le-Mond lemon-flavored biscuits, chocolate/tiramisu biscuits, etc. Ang, who also participates in the Las Vegas food show, finds the New York show attracts more buyers.  Like many other exhibitors at the show, Ang also wished the show would have longer hours, like they have in Europe, from 9:00 am to 6:00 pm, instead of from 10:00 am to 4:00 pm.  “They can also extend it by one day to a four-day event and make it worth our investment coming here,” Ang said. 

Buyers were minutely scrutinizing the olive oil products at the individual booths at the large Turkish pavilion. The business of some Turkish exhibitors had been adversely affected by the supply chain disruptions and cargo congestion at U.S. ports.  However, they were happy that their shipments were now being cleared faster than last year at U.S. ports. 

Davut Er, the chairman of the Aegean Olive and Olive Oil Exporters’ Association, the olive oil exporters’ interest group headquartered in Izmir, Turkey, who also owns an olive-oil company Eroglu, said he was “cautiously optimistic” about the supply chain situation, adding that  Turkey’s exports in 2022 had been “twice as high” as in 2021. He said that Turkish olive oil exports this year were expected to grow twice as much as in 2022; he was expecting the volume to increase to 100,000 tons in 2023, up from nearly 50,000 tons last year.

But Er lamented that container prices were nearly three times higher from Turkey to the U.S.  “We have encountered delays and disruptions (in deliveries),” he said.  The Turkish government had also stopped giving subsidies to Turkish exporters because of the massive earthquake allocations which had resulted in budget cuts. He said that Turkey’s major competitor was Egypt for table olives.  “However, for olive oil, our competitors are Spain, Greece, Italy, etc.”  He said that the show had “satisfied our expectations”. 

Bedri Girit, the chairman of the 7,000-member strong AEGEAN Aqua and Animal Products Exporters’ Association, said that Turkey exported in 2022 seafood products worth $ 1.5 billion, poultry $ 1.5 billion, dairy products valued at $ 0.5 billion and other food products worth $ 1.640 billion, totaling some $ 4.3 billion. 

Girit said that inflation was a global problem and had dampened the demand for upper-end products. 

Asked to compare the Fancy Food Show with other international trade shows, Girit said that the Dubai food show was more attractive for Turkish companies because Turkish food products were widely marketed in the Middle East whereas the New York Fancy Food Show is a channel to tap the U.S. market. 

“Because of the rising health-consciousness of the average American, there is a trend towards consumption of low-sodium items such as nuts, olive oil, salmon fish, etc.  Turkey can ship salmon by air cargo which saves time for the buyers.”

Steven Weisensee, the transportation sales manager of Continental Logistics of Cranberry, New Jersey, who had a booth at the show, said that his freight brokerage company handled between 7,000 and 8,000 TEU containers in 2022. The containers come, mainly, from Europe but also from Asia.  “The crisis caused by past disruptions has eased lately,” he noted, pointing out that ports such as Savannah and Georgia were expanding berths and other infrastructure assets. He said that Savannah port was efficiently organized both for truck and rail transportation.  (End)

Side bar – Bill Lynch, SFA President, Calls Show a “Record Breaker” 

In an exclusive interview, Bill Lynch, the President of the Specialty Food Association, which organizes the New York Fancy Food Show, was pleased with the run of the show which he described as a “record breaker” after the gloom that descended during the pandemic. Lynch, who spoke of double-digit growth in the number of exhibitors at this year’s show compared to the pre-pandemic figures, noted that consumer tastes are changing, with people looking for healthy food items. 

“They are looking for alternative foods which are nutritious … global flavors are in and new products keep coming in from different countries,” he said.

When asked to comment about supply chain disruptions, he said that during the pandemic there were supply problems such as access to glass for packaging, port congestion, inflation, scarcity of labor during the pandemic, etc., all of which contributed to delays and shortages. 

Consumers have more access to products and they are paying attention to processing and scrutinizing the environment footprints. 

Morocco was the “partner country” this year with its pavilion presenting a colorful look and its exhibitors showcasing a large array of food and agricultural items. “The ‘partner country’ presentation has been successful and will be continued,” he added. 

Lynch pointed out that 337 million pounds of food were annually exported to the U.S.  He said that educating buyers and consumers in the U.S. about their food products would help the exporting countries penetrate the U.S. market. 

The SFA has been working closely with a number of countries and has sent missions to countries such as Italy to help the suppliers showcase their products at the Fancy Food Show in New York. 

As demand for display space grows, Lynch revealed that the SFA was looking at expanding or utilizing “to the fullest” any unutilized space.  

 

malaysian

New Malaysian Ambassador Resorts to Trade and Economic Diplomacy to Strengthen Bilateral Ties with the U.S. 

Malaysia’s new ambassador in Washington DC, Mohamed Nazri bin Abdul Aziz, underscored the importance of forging closer trade and economic cooperation with the U.S., adding that he would also reach out to U.S. trade and industry associations and the corporate sector  to highlight business and investment opportunities in Malaysia. 

“Promoting trade and economic cooperation will be the focus of my work in the United States where Malaysia has over the years built up a network of contacts with a number of institutions and, generally, within the business community,” Nazri said in an interview with The Global Trade Magazine on the sideline of a recent event held at Malaysia’s permanent mission to the UN in New York where he addressed the Malaysian diaspora.  Amir Farid Abu Hasan, the Malaysian consul general in New York, moderated the meeting between the ambassador and the Malaysian diaspora. 

“Our aim is to further increase trade with the United States … I have been engaging with the USABC (the United States-ASEAN Business Council, an advocacy group whose objective is to foster economic growth and trade ties between the U.S. and the ASEAN member countries)…. all the big U.S. corporations that are members in the USABC, have been investing in Malaysia,” the envoy said. Before arriving in Washington DC, Nazri had coordinated closely with USABC officials in Malaysia and also participated in the Council’s seminars.  

Nazri, who was Malaysia’s Minister of Tourism and Culture from May 2013 to May 2018, added that he also exchanged views with Malaysian businesspeople in the U.S. “Malaysian businesspeople provide useful insights …” he maintained. 

The envoy pointed out that the United States is Malaysia’s third largest trading partner after Singapore and China.  According to the latest trade figures released by the U.S. Census Bureau, Malaysia’s exports to the U.S. in 2022 amounted to $ 54.75 billion while its imports from the U.S last year were about $ 18.11 billion; Malaysia posted a trade surplus of $ 36.65 billion in bilateral trade. 

During the Jan-March first quarter of 2023, Malaysia’s exports amounted to $ 11.99 billion while imports touched $ 4.32 billion, resulting in a trade surplus of $ 7.66 billion in Malaysia’s favour. 

Malaysia’s major exports to the U.S. consist of electrical and electronic products, rubber products, optical and scientific equipment, wood products, etc., while imports from the U.S. consist of electrical and electronic products, chemicals and chemical products, machinery equipment and parts, optical and scientific equipment, etc. According to the U.S. Department of Commerce, the U.S. can potentially increase its exports of agricultural products, equipment and machinery, aerospace and defense products, healthcare, information and communication technology, renewable energy, etc.  This could benefit Malaysia because U.S. exporting companies can also consider setting up operations in Malaysia, using it as a hub for production and distribution in the ASEAN region. 

But Malaysia is not alone in vying for greater trade and investments from the United States – Indonesia, Vietnam, and the Philippines have been aggressively courting American companies and, as their recent maneuvering shows, they have intensified their courtship through exchanges of high-level visits in both directions. 

Because of its strategic location, the importance of the bloc of Southeast Asian nations called ASEAN has grown in context of the South China Sea which is witnessing a growing U.S.-China rivalry. Washington has received several high-ranking visitors from the ASEAN region – the most recent being Philippine President Ferdinand Marcos Jr – while U.S. politicians have also visited various ASEAN capitals. 

When asked to comment on Malaysia’s position in regard to the growing competition between the U.S. and China in the South China Sea, Nazri said that Malaysia maintained strict neutrality in the rivalry and “desired friendship with all countries”.  The Philippines, Vietnam and other ASEAN member countries are “not disinclined to U.S. overtures to enter into strategic cooperation”, as some experts cautiously formulate the response of some ASEAN countries.  Indeed, the Philippines is entering into defense cooperation with the United States, an old ally of the Philippines during the rule of former President Ferdinand Marcos Sr. 

“The Philippines has been a strategic partner of the U.S. while Malaysia’s focus is on trade and investments with the U.S.  We are trying to attract U.S. industry with our well-developed infrastructure, skilled manpower, lower costs and good connectivity,” Nazri said. 

Malaysian passport holders have, meanwhile, been urging the Malaysian government to get the facility of visa-free entry into the U.S.  That subject was raised by past Malaysian governments with successive U.S. administrations.  “While we will not lose sight of that goal, Malaysians should, meanwhile, get the appropriate visa and follow U.S. visa regulations for visiting the U.S.,” Nazri responded. 

Malaysia is also interested in promoting cultural, academic and people-to-people exchanges and activities.  Nazri revealed that a Malaysian tourism official will be posted at the Malaysian Embassy in Washington to promote tourism from the U.S. to Malaysia. After the closure of the Malaysian Tourism Office in New York a few years back and discontinuation of flights by Malaysian Airlines to the east coast, tourism promotion efforts seemed to have weakened.  At present, Malaysia’s Tourism Ministry has only one representation office in Los Angeles which promotes tourism from the U.S.  “We are confident that a tourism representative at the embassy (in Washington) will strengthen the overall tourism-promotion effort,” the envoy said.

IWD

New York’s Diplomatic Community Celebrates IWD, Reinforces Commitment to Women’s Causes

Diplomatic and consular representations in New York reinforced their commitment to promoting women’s causes and held celebrations to mark the International Women’s Day.  Though the IWD is, officially, on March 8, some institutions and consular representations celebrated it a day or two earlier while others did it a day or two later. 

Indeed, the Indian consulate general provided its architecturally iconic premises for hosting an event to mark the IWD together with the Society of Foreign Consuls in New York, bringing together consuls, diplomats and prominent female personalities from 15 nations.  Indeed, the Indian consulate general’s historic building – it is part of the so-called Upper East Side Historic District under the Landmarks Preservation Commission of New York, and was built in 1903 for Carrie Astor (later known as Mrs. Orme Wilson) as a private residence flaunting a Beaux Arts street façade constructed with Indiana limestone and crowned with a mansard roof – provided a perfect setting for the international gathering, with each consular representation projecting the culture, traditional music and dancing, and a spread of culinary delights of their countries. 

Moderated by Karina Tuspekova from the Kazakhstan consulate general, the evening’s proceedings opened with an Indian dancer rendering a classical Indian dance performance which seemed to impress the guests who broke into a thunderous applause.  This was followed by traditional songs and dances by performers from Bulgaria, Chile, Serbia and other countries. 

Addressing the high-profiled guests in the hall of the Indian consulate building, Edward Mermelstein, New York City’ Commissioner for International Relations, underscored the city’s commitment to women’s causes and the need to create gender equality and stop discrimination against women. 

In his welcome speech, an elated Randhir Jaiswal, the Indian consul general, hailed New York’s multicultural and diverse ethnic fabric.  He thanked New York City Mayor Eric Adams for his endeavors to bring about a rich cultural diversity in the city.  Jaiswal also spoke about the goal of food security worldwide.  India, on its part, is promoting millet grain exports and, as some guests were saying, the grain would be a “welcome addition” to the nutritional needs of American consumers who maintained an open mind to new cuisines.  “Millet can contribute to the global efforts to achieve food security,” Jaiswal told Global Trade. 

Ambassador Marita Landaveri, Peru’s consul general and the president of the Society of Foreign Consuls in New York, presented neatly-framed certificates, expressing appreciation for the contributions of individual countries present at the IDB event.  She highlighted the significance of the IWD and underlined the need to achieve gender parity. 

Besides the host India, other countries represented at the event included Algeria, Angola, Argentina, Australia, Brazil, Bulgaria, Chile, El Salvador, Guyana, Kazakhstan Nigeria, Peru, Serbia and Turkey.  The participating consular representations had set up national food stands in another hall of the building, presenting a kaleidoscopic view of international food delicacies. 

Other foreign missions and representations also celebrated the IWD.  The Taipei Economic and Cultural Office in New York, as Taiwan’s representations in the U.S. are known in the absence of formal diplomatic recognition, marked the IWD by hosting a colorful fashion show by Claudia Wang, a young female Taiwanese fashion designer, depicting the latest haute couture creations.  The event, jointly organized by Taiwan’s representation with the permanent missions of Palau, and Saint Lucia, was called “Taiwan Night: Celebrating Women in Tech”.   

“New York is a dream place for all fashion designers.  I have also participated in London in spring 2022.  My goal is to set up an office in New York,” Wang said in an interview on the sidelines of the fashion show which was part of Taiwan’s “Gender Equality Week” coinciding with the just-concluded 67th session of the UN Commission on the Status of Women. 

Wang said that she combined her passion for art and design with virtual technology and sustainable fashion practices. 

The young designer, who has been in the fashion business for three years and studied at the Technology Institute in Taipei, explained her motive for coming to New York: “New York offers all kinds of opportunities for all newcomers”. 

The American fashion arena which was once the exclusive domain of French and Italian designers, today presents a geographically versatile picture, with many Asian designers having carved out a niche for themselves.  Designers such as Anna Sui, Vivienne Tam, Vera Wang and others broke into a market at a time when Calvin Klein, Bill Blass, Ralph Lauren, Michael Kors, Donna Karan, etc. ruled the roost. Each of the Asian designers introduced a new element of aesthetics to the fashion world.  

A new vanguard of Asian designers, many of whom have opted for U.S. citizenship, includes Zang Toi, Phillip Lim, Richard Chai, Peter Som, Bibhu Mohapatra, Derek Lam, etc. 

While Taiwan is not a member of the United Nations, it maintains that it observes UN-related goals and principles, including the world body’s Social Development Goals (SDGs).  Organizing an event to mark the IWD was in alignment with the UN program. 

“Although Taiwan has established a strong reputation as a hi-tech hub, it also has a well-developed fashion environment with many aspiring designers keen to make a mark on the international fashion landscape,” said James K.J. Lee, the Director General of the Taipei Economic and Cultural Office in New York. 

Constance H. Wang, the director general heading the Department of NGO International Affairs at Taiwan’s Ministry of Foreign Affairs, while emphasizing the IWD’s significance observed that women were increasingly involved not only in the hi-tech sector but also in fashion business , adding that “the IWD is a good occasion to profile Taiwan’s fashion industry”. 

Manik Mehta, a New York based journalist, writes extensively on foreign affairs/diplomacy, U.S. bilateral relations, global markets, business/trade, shipping/logistics, aviation, etc..

 

World’s Textile Industry Attempts a Spirited Post-Pandemic Comeback at Frankfurt Trade Fair

World’s Textile Industry Attempts a Spirited Post-Pandemic Comeback at Frankfurt Trade Fair

After suffering a massive slowdown during the two years of the devastating Covid pandemic, when global supply chains were also disrupted, the world’s textile industry attempted a spirited comeback at the recent four-day international Heimtextil 2023 of Frankfurt. 

Heimtextil, the world’s largest trade fair for home textiles, attracted a large turnout of international exhibitors and visitors, albeit the numbers were lower than the pre-pandemic levels.   The Heimtextil show was, in fact, the first full-fledged event in three years although a “mini” Heimtextil edition, combined with the technical textile show TechTextil was held in June 2022.  

The event, showcasing a wide range of products – from raw materials, technology, upholstery and decorative fabrics, outdoor fabrics, artificial leather and wallpaper, technology and recycling with its emphasis on sustainability, etc. – made a “powerful return”, and provided “all the signs for success as a barometer for the trade fair business year”, as Detlef Braun, the executive board member of Messe Frankfurt, put it. 

Sustainability was the key word at the show. To save the planet’s increasingly shrinking resources, greater emphasis will be put on recycling.  Innovative material developments from natural raw materials such as mushrooms, plant fibers or recycled waste products provide impulses for the future of home textiles; a special “Future Materials Library” at the show provided pointers in the future direction, flanked by special guided tours and high-profile lectures.  Caroline Till, a textile technology specialist and co-founder of the London-based Franklin Till studio, explained that sustainability and, with it, the circular economy had become imperatives for the industry.  

Turkish companies, reeling from business losses under the Ukraine crisis – both Russia and the Ukraine were their major markets before the outbreak of the war – and the absence of Chinese buyers because of the Covid, made a strong attempt to woo international customers at the show. 

The 315 exhibitor strong Turkish contingent, up from 304 in 2020, displayed a wide range of products – from curtains and curtain fabrics through blankets, rugs and bed covers to upholstery, furnishings and decorative materials – and while the first day appeared slow for some of the exhibitors resulting from the low numbers of visitors, they were satisfied with the overall result. 

Omur Isiki, a representative of the Istanbul based Turkish Home-Textile Association, popularly known by its acronym TETSIAD, maintained that Turkish companies were aware of the growing importance of recycling. “Some companies are trying to acquire recycling technology.  Recycling, as a corollary of sustainability, will play an important role in the global textile industry,” he said. Turkey is Europe’s largest home-textile exporter, supplying to 118 countries. 

Haluk Hocaoglu, the sales director of Flokser Textil San. of Arnavutkoy/Istanbul, which supplies artificial leather used for upholstery, interiors of vehicles, garments, bags, etc., said in an interview with Global Trade that he was, initially, unsure of the response his company would get at the show because of the Covid and the Ukrainian crisis.  Hocaoglu and his team had come with “realistic expectations”, anticipating very few Russian and Ukrainian buyers, but “then our expectations were exceeded when we received some very promising business enquiries from buyers from other countries.  In short, we can’t complain!”  

Flokser had has an annual turnover of US$ 75 million, with exports amounting to $ 15 million. 

Another Turkish exhibitor, Ipeker Tekstil of Bursa, which showcased its weaving, dyeing and printing services as well as its products such as fashion fabrics and bedding, presented its “unique fiber” cupro. “Our product is recycled but it is strictly vegan in character … our fiber is known as cupro (it is also known as vegan-silk cupro). Cupro is used for women’s and children’s clothing but also for men’s shirts,” Recep Eller, a company representative said.  Ipeker received “good business enquiries” from potential buyers from the U.S., Canada, Mexico and Europe.  “Indeed, we received an order right at the show from a Portuguese buyer,” he said.

Pakistan’s textile industry, the mainstay of the country’s exports, put up a brave front at the show despite the pessimism that had descended on the industry following political and economic turmoil, and the devastating floods that destroyed a large part of Pakistan’s infrastructure and cotton crop. 

Aftab Gauhar, the director of Gohar Textiles, a leading textile mill in Faisalabad, Pakistan, said in an interview that many producers had sustained heavy losses in production because of the floods. Pakistan’s cotton production is about 9 million bales, of which 2.5 million bales were lost as a result of the floods. The country traditionally requires about 15 million bales of cotton; the difference between its production and actual requirement is met through imports from Brazil, the United States, etc. 

“In some cases, prices of locally-produced cotton are higher than imported cotton,” he observed. Gohar Textiles, which had an annual turnover of about $ 135 million in 2022, up from $ 120 million in 2021 and $ 95 million in 2020, received a “good response in Frankfurt, completely exceeding our expectations”, Gauhar said. However, he felt that the four-day trade fair should start on Monday, instead of Tuesday, which will make visitors come on Thursday, the last day.  “If the fair starts on Tuesday, then visitors tend to stay away on Friday, the last day.  This makes considerable difference to exhibitors who can get maximum benefit from their participation.”

An elated Olaf Schmidt, the vice president of Messe Frankfurt, the show organizer, said in an interview that after two difficult years, “we’re back in business”.  “It is the first show in 2023 at our trade-fair ground. The numbers have been promising for us … we have had 2400 exhibitors while the number of trade visitors exceeded 44,000 from 130 countries. The international attendance touched 82% of visitors at the show, reinforcing Heimtextil’s status as a really global platform. The show has been good and cleared any doubts in the global textile industry. We are confident that the next show in 2024 will be even better and head towards the level of 2900 exhibitors of 2020,” Schmidt said.

According to Messe Frankfurt, China presented the largest contingent of 429 exhibitors, followed by India (382), Turkey (321) and Pakistan (269).  

Asked about the growing realization among foreign companies to move out of China to other production sites such as Vietnam, Bangladesh, etc., Schmidt said that Vietnam was strong in shoe production but was now also growing in the garment sector. “Vietnam is gaining importance .… global changes are affecting supply chains but China will still remain the largest textile producer in the future,” he predicted. 

Malaysia Sees Trade as Vehicle to Forge Closer Bilateral Ties with US

Malaysia Sees Trade as Vehicle to Forge Closer Bilateral Ties with US

Two newly arrived Malaysian diplomats in New York underscore the importance of forging closer ties with the US, and underscore the importance of trade in promoting bilateral ties. 

Amir Farid Abu Hasan, the new Malaysian consul general in New York, who was transferred from the Malaysian High Commission in Dhaka, Bangladesh, says that trade and business would lead to greater cooperation between the two countries. 

Amir, who says that “New York is a different terrain altogether”, sees the crucial role the business-oriented Malaysian diaspora in the US can play in fostering closer bilateral ties. .  

“We work closely with the Malaysian diaspora … there are about 21,000 Malaysians residing in the 17 state jurisdiction served by our consulate general and about 45,000 in the United States.  The diaspora performs an important role in promoting Malaysia’s interests through people-to-people contacts, business and professional relations, etc.  Since many Malaysians in the U.S. are engaged in business and trade, they help forge close business and trade relations with the US which is an important trading partner for us,” the envoy said in an interview with Global Trade Magazine

The diaspora’s significance was also evident during the visit of the then Malaysian Prime Minister Ismail Sabri bin Yaakob to New York in Septemer, when a dinner was hosted for the large diaspora in the U.S. with many guests coming from across the United States. 

Besides providing consular services to Malaysian nationals in the country, the consulate general promotes Malaysia’s economic interests, and coordinates with the offices of dedicated agencies in New York like the Malaysian External Trade Corp. (MATRADE) and the Malaysian Investment Development Authority (MIDA). “We cooperate with each other in various ways, including at the federal, state and city council levels,” the consul general said. 

The U.S. which has, traditionally, been one of the top three trading partners of Malaysia, is viewed as a key market for the export-oriented economies of Malaysia and other Southeast Asian countries.  “With uncertainties characterizing the Chinese market, which has been very lucrative for most Southeast Asian countries, the current thinking is not to put all your eggs in the China basket … the mantra is diversification,” explains Thomas Lee, a Chinese-Malaysian businessman who participates in US trade fairs for his company based in Sabah in the Borneo region. 

Indeed, at the networking luncheon he hosted for his counterparts from other Asian countries on Dec. 6 at Malaysia’s permanent UN mission in New York, Amir reinforced Malaysia’s “keen interest” to intensify trading and business ties with the United States. Edward Mermelstein, the commissioner in the New York Mayor’s Office for International Affairs, and his deputy Dilip Chauhan, were among the invited guests. 

Amir’s resolve to improve US-Malaysian bilateral trade and economic ties is also shared by the newly appointed Malaysian trade commissioner, Nyaee Ayup, at the MATRADE office in New York. 

The new trade commissioner worked at MATRADE’s head office in Kuala Lumpur before she was assigned to New York.  Prior to that, she had served as Malaysia’s trade commissioner in the Philippines from 2014-2018.  Nyaee has intimate knowledge of major industries that drive Malaysia’s exports, including electrical and electronics, information technology, green technology, etc. 

A product of the National University of Malaysia, where she studied statistics, Nyaee has come at a time when the U.S. economy is facing a slowdown accompanied by high inflation, prompting many economists and pundits to believe that America may be headed towards a recession.

Nyaee acknowledged in an interview in her office that the US slowdown could pose a challenge “as it may possibly affect our overall exports to the US which is our third largest trading partner”.

But, as she put it, “you can also find opportunity in a critical situation”. Malaysia’s forte lies in having a strong base in such crucial industries as the electrical and electronic industry. The semiconductors product category is an area where Malaysia can use its existing presence in the US to further strengthen its market position, particularly since many American companies are seeking to diversify their supply chains. “This could open up new opportunities for Malaysia in the US market.” 

Another industry in which Malaysia can flex its muscles is healthcare, with international buyers from around the world, including the US, showing interest in Malaysia’s medical devices, as is evident at the annual MEDICA trade fair, the world’s leading event for medical devices held in Dusseldorf, Germany, which attracts large Malaysian exhibitor contingents. 

The Covid pandemic has led to an unprecedented demand not only for PPE products but also for scientific and medical devices.  “The Covid has also aroused interest in many parts of the world, including the US, for medical devices produced In Malaysia,” Nyaee said, adding that the healthcare sector is inherent with strong business potential for healthcare products.  

Nyaee said that trade fairs and exhibitions provided an excellent platform to showcase products; Malaysian companies, she said, were already participating in a number of industry-related trade fairs. 

According to trade figures provided by MATRADE, Malaysia’s 2021 exports to the US amounted to US$ 34.31 billion, up from US$ 26.03 billion in 2020; imports from the US in 2021 amounted to $ 18.02 billion up from $ 16.60 billion in 2020. Malaysia’s exports during the first ten months (Jan-Oct) of 2022 amounted to $ 31.39 billion, up from $ 27.79 billion during the year earlier period, while imports in the Jan.-Oct. 2022 period amounted to $ 19.37 billion over $ 14.81 billion in the previous year’s corresponding period. 

Malaysia’s major exports to the US consist of electrical and electronic products, rubber products, optical and scientific equipment, wood products, etc., while imports from the US consist of electrical and electronic products, chemicals and chemical products, machinery equipment and parts, optical and scientific equipment, etc.

Author’s Bio

Manik Mehta, a New York based journalist, writes extensively on foreign affairs/diplomacy, United Nations, U.S. bilateral relations, global markets, business/trade, shipping/logistics, etc.

 

Air cargo, air freight carrier Lufthansa has become the biggest air-cargo carrier in North America and a major player in the global logistics of international trade.

Lufthansa Cargo CEO Discusses Air Freight Industry

Lufthansa Cargo which asserted its position as the biggest cargo carrier on the North Atlantic route, has also been looking at other regions, particularly Asia which is the fastest growing market for cargo traffic. While the air cargo carrier’s total tonnage in 2014 declined slightly to a total of 1.67 million tons of freight and mail from 1.71 million tons in 2013, its operating result jumped to 100 million euro in 2014 up from 79 million euro in 2013.

Peter Gerber, Lufthansa Cargo’s chairman and CEO since May 1, 2014, discussed in a recent interview with Manik Mehta at the air cargo carrier’s headquarters in Frankfurt, Germany, an entire range of issues affecting the cargo logistics industry, including markets, strategy, general outlook, acquisition of new planes, competition, joint venture cooperation, the new freight center at Frankfurt, and Lufthansa Cargo 2020 program. Gerber presented the company’s annual report for 2014 at an international media conference in Frankfurt.

 

Manik Mehta: How was the year 2014 for your air cargo business? According to Lufthansa Cargo’s earlier forecast, the company was going to assert its biggest market share in the USA. Has this forecast proved to be correct?

Peter Gerber: The year 2014 had its challenges but Lufthansa Cargo achieved an operating profit of 100 million euro last year, a significant increase over the previous year’s 79 million euro. The result, if I may say so, stood out from the competition and was achieved in a challenging market environment.

Although global demand for air freight increased slightly in 2014, traffic at Lufthansa Cargo had initially declined and did not fully meet expectations starting at the beginning of the year. However, we witnessed a surge in shipments around Christmas resulting in an overall improved business for the entire year.

In regard to the North American market, we have emerged as the largest cargo carrier in that region. One way to win and retain customers is to offer them specialized services. We have customized our products especially for the North American market. The (North American) market is still strong … although there has been a lot of talk about a downturn in the sales of oil pipes and equipment for the oil and gas industry, we have not, yet, seen this downturn. Indeed, traffic has remained stable on North Atlantic routes where we are the largest cargo carrier. America accounted for some 44 percent of its traffic, compared with 44 percent also with the Asia/Pacific region.

The major trade lanes with significant growth rates, especially export to Asia Pacific will be the European Union-Asia Pacific and the European Union-North America. Growth is expected to be strongest on the Asia-Pacific routes which will need more freight capacity. However, North America freighter capacity demand will be stagnant at a high level.

 

Given that some airlines have already started to downsize their freight business or are giving it away to third parties, how do you see the future of the air cargo business?

Looking at the future, I do believe that air freight is, and will continue to be, a growth market. I am confident that air freight will always be the only viable transport option for certain goods. Air- and sea-freight businesses are very different from each other. For some goods, air freight is the only sensible means of transport. There is demand for high-value, time-sensitive products. Big brand names such as Zara, Pfizer, Bosch, Roche, etc., for example, also use air transportation for their high-value products.

Major exporting regions like Germany are an excellent long-term basis for the air freight sector.

 

Why Germany? And why Frankfurt?

Germany’s economy is heavily dependent on exports. And air freight plays an important role in Germany’s overseas export, accounting for some 30 percent of total value with just 2 percent of total tonnage. It is, as I said earlier, the only sensible means for transportation of certain products. Frankfurt is the epicenter of Europe’s industrial sector. Geographically, it’s much better positioned than London or Paris. Frankfurt is the main European hub for our customers, the major international freight forwarders. They have their main consolidation centers here. It’s an ideal location for us to continue investing. Lufthansa Cargo wants to act on the opportunities provided by its location and expand on its market position in Europe.

 

You have been adding the latest B777F aircraft to your fleet. You are creating additional capacity with the new aircraft?

Lufthansa Cargo has a fleet of 21 aircraft. We have 16 MD11F and five B777F freighter aircraft. The fifth fuel-efficient B777F aircraft joined our fleet in early spring 2015. The triple seven is rated the best aircraft in its class, with low fuel consumption, outstanding range and superb reliability. Our fleet is being constantly modernized so that we can offer quality service to our customers. Some old planes will be retired at some point in the future.

 

You formed a joint venture with Japan’s All-Nippon Airways last year. How is it coming along?

Lufthansa Cargo and ANA have been jointly offering since 2014 cargo flights from Japan to Europe. Flights in the opposite direction (Europe to Japan) should start in summer this year. Both the partners can market capacities of the partner to each other’s customers. The joint venture is a big plus for our customers.

 

However, you are also forming alliances with other air cargo carriers. Besides ANA, you are planning to form partnership with another airline by end 2015. What other carriers are you holding talks with?

Yes, we are negotiating with other carriers … We have had talks with other airlines but I will not be able to disclose names at this point.

 

Could you give me an update on your new freight center LCCneo at Frankfurt? What’s happening on that front?

We are keen to expeditiously push the new cargo center project. However, because of the overall situation in the group and the pilot strike [editor’s note: pilots of the parent Lufthansa concern were on a strike when this interview took place in Frankfurt], getting approval from the supervisory board of the company is not going to be simple. Nevertheless, I am hopeful about construction work starting end 2015.

The LCCneo freight center will be a major step towards modernization. [editor’s note: the existing facility is some 30 years old. According to the carrier’s estimate, the costs for the new freight center will be around 700 million Euro.]

Tell us about your Lufthansa Cargo 2020 program which is supposed to be your response to the future strategic challenges.

Yes, the Lufthansa Cargo 2020 program is our response to the strategic challenges of the future. We have identified nine ambitious projects to make ourselves fit and competitive in the future. We are currently implementing a modern IT system for freight handling. The roll out is scheduled for completion by this fall. The eCargo project involving the digitalization of all the company’s main processes, is also picking up pace. With this, we can further improve our quality and speed. Then there is the new construction of the air-freight terminal at Frankfurt. An “Air-Cargo Community Frankfurt” was established with other partners at Frankfurt airport to promote industry wide issues and enhance Frankfurt’s attractiveness as an air-freight hub. We have also resorted to other measures like deploying modern 777F freighters, cooperation with other airlines, etc.