Page6-1OverallAssessmentTheresultofthispreliminaryassessmentsuggeststhatthetwoproposedinitiativesinNingbo,namelyZALandIPSC,presentdecentopportunitiestothePortofBarcelonaanddeservefurtherevaluation.Thehighgrowthpotentialofthemarket,drivenbythelikelyChina’sentrytoWTO,growthofinternationaltrade,supportfromgovernmenttodevelopthelogisticsindustry,andanticipatedbetterreputationandimageenhancedbyHutchison’sinvestmentinNingboport,presentpromisingopportunitiesforPortofBarcelonatoestablishthepresenceinNingbo.InviewofthelimitedpresenceofforeignenterprisescurrentlyinNingboandtherelativelylowservicestandardsofferedbytheexistingplayers,anearlyestablishmentofoperationmayenablePortofBarcelonatobettercapturethemarketpotentialandbuildupfirstmoveradvantage.However,beinganearlyplayerinamarketwouldcertainlyinvolverisks.Assuggestedbysection3.3,Thecurrentunderdevelopedlegalsysteminthelogisticssectorpresentsuncertaintyastowhatthefutureruleofthegamemightbeandwhethertheywouldbefavorabletoforeigninvestors.TheserviceexpectationofthepotentialcustomersaroundNingboisquitelowandthemarketmaynotbereadyforvalue-addedservices.TheoversupplyofcontainerfreightstationspacemightlimittheprofitpotentialoftheIPSCinvestmentinthenearfuture.AlltheserisksmayhampertheprofitabilityoftheproposedinvestmentofPortofBarcelonaandshouldnotbeneglected.Weattempttoproposeanapproachthatwouldminimizetheshort-termrisksandenhancethelongtermbenefitsoftheinvestment.6.1.StrategicDirection
Page6-2ZAL/IPSCSynergyItisourassessmentthatbothZALandIPSCarecomplimentarytoeachotherandshouldbeconsideredasanintegratedentity.ToZAL,IPSCbringsaboutvalue-addedlogisticsservicestoitsclients,enhancingthecompetitivenessofthezoneascomparedwithotherzo
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