1 Proposal for Establishment of Subsidiary Institute For The ASIA-PACIFIC SPACE COOPERATION ORGANIZATION (APSCO) Proposal for Establishment of Subsidiary

1

Proposal for

Establishment of Subsidiary Institute

For The ASIA-PACIFIC SPACE COOPERATION ORGANIZATION (APSCO)

Proposal for

Establishment of Subsidiary Institute

For The ASIA-PACIFIC SPACE COOPERATION ORGANIZATION (APSCO)

Prepared by Iranian Space Agency (ISA)Prepared by Iranian Space Agency (ISA)

Subject to: Agenda No. 6 ,5th Administrative Heads Meeting14 - 16 Jan. 2013 – Beiging, China

History of Inception

Asia Pacific Space Cooperation Agency (APSCO) was formally established (on 16 December 2008) based on a Convention which was signed on October 28,2005 in Beijing between eight countries: Bangladesh, China, Indonesia, Iran, Mongolia, Pakistan, Peru and Thailand. Financial requirements of organization have been arranged on the following day, composing of agreements and planning. Turkey joined APSCO by signing the convention on June 1 of 2006, becoming ninth member state to the convention.

Iranian Space Agency(ISA) Stablishment of Subsidiary Institute - 5th Administrative Heads Meeting of Apsco

3

To promote and strengthen the development of collaborative space programs among its Member States by establishing the basis for cooperation in peaceful applications of space science and technology;

To take effective actions to assist the Member States in such areas as space technological research and development, applications and training by elaborating and implementing space development policies;

To promote cooperation, joint development, and to share achievements among the Member States in space technology and its applications as well as in space science research by tapping the cooperative potential of the region.

To enhance cooperation among relevant enterprises and institutions of the Member States and to promote the industrialization of space technology and its applications.

To contribute to the peaceful uses of outer space in the international cooperative activities in space technology and its applications.

Objectives of APSCO

Article 4 of Convention stipulates APSCO’s Objective as follows:


4

Definitions

Non Profit, Not for Profit and Non-Commercial Organizations

By Definition: A nonprofit organization (US and UK), or not-for-profit organization (UK and others), often called an NPO or simply a nonprofit, also non-commercial organization (Russia and CIS) often called an NCO, is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends.

While not-for-profit organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans.


5

Definitions continued . . .

Membership Organizations

By Definition: A membership organization is a broad term for a group or body which has members. Typically any member of the public can join and a membership fee or "subscription" is payable, but arrangements vary widely. The legal form also varies widely, from very small which may or may not be formally established, to very large organizations This, like very many membership organizations, is established as a (non profit) though it has commercial subsidiaries.


6

Legal Status of APSCO

The Organization shall be an inter-governmental organization. It shall be a non-profit independent body with full international legal status.

According to Article – 3 of APSCO’s Convention the LEGAL STATUS of APSCO is described as follows:


7

APSCO’s Source of Revenues

4 All Member States shall make financial contributions for operation of the Organization.

Article – 18-1 FINANCIAL ARRANGEMENTS of Chapter 7-Finances

Article 9-4 MEMBERS of CHAPTER – 3 MEMBERSHIP

1 The funds for the Organization shall be provided through the contributions of the Member States, voluntary grants from the Host Government and other Member States, donations/subsidies received from other organizations, and services provided to others.


8

Challenges that APSCO Faces

Revenues, limited to Public Funding, such as voluntary grants, donations/ subsidies, member’s contributions.

Limited market restricted to the Member States, only

Projects offered to members will be proposed at “under market price”, and subject to membership privileges and special discounts, which might leave a little profit or none at all or even incur losses, causing eventual depletion of capital

Dynamics of “Global Economic Environment”, such as growing Global Inflation, Global Financial and Economic Crisis and its aftershocks, which may overshadow economies for years.


9

An Unwritten, but Plausible Financial Principle

Hypothetically, Sub-Objectives of an organization are organized in "Strategic Priority" order, in the Article of Organization (in this case the Convention).

But in reality, it is the Financial of organization which will sanctions Objective and Strategic Sub-Objectives of an organization stipulated in the document, or otherwise dictate them or muddle their order in its own favor, or even eliminate them, not formally, but in practice.


10

Risks That APSCO Faces

Operations: Expose its operations to the risk of non performance and finally exhaust its credibility in global market;

Competitiveness in Global Market: It impacts directly on consistent development of an organization in general. Ignoring this principle, will drive the development of an highly technology intensive organization if not to complete halt, but certainly to an alternate pause / advancement state, postpone its progress and consequently deteriorate its competitiveness in global marketplace;

Existence of Organization: Missing two major points: "Operations" and "Competitiveness in Global Market" which was mentioned above, will put organization's very being in peril, ultimately.


11

SolutionAPSCO should seriously consider commercialization of its products and services

Expand its operations in member states as well as extending its market to other countries, as stated in Article 18-1

It can spend surplus revenues merely to achieve its objectives rather than distributing them as profit or dividends, while maintaining its Legal Status as a Non-Profit Organization and hold its Independence, as stipulated in Article – 3 of APSCO’s Convention.

While, Article 18-1 of APSCO Convention clearly suggests: “Services Provided to Others”, it does not draw up a framework to take action, accordingly.

This proposal has been developed to build such a framework, demonstrate the advantages of commercialization of APSCO’s Products and Service, and extend its market beyond its member states, in order to create surplus revenues, to make APSCO’s Objectives and Ideals attainable.


12

Background


13

Requirements and Programms for Development of APSCO Activities

To establish a solid ground to execute ratified programmes, particularly to establish an orderly, principled, financial efficiency to afford expenses and financial needs of projects in long term, particularly for "Optional Activities”, which are of great importance

It is imperative to observe two major points:

1. In addition to its basic activities under Article 7, the Organization shall recommend and organize suitable space science, technology and their applications programs for joint execution by its Member States, who choose to participate in such programs.

2. Such a program shall be carried out following the principle of return on investment. The Member States participating in such programmes shall obtain the return from an optional activity in proportion to their investment.

A. Article 8 of APSCO Convention under "Optional Activities" states that:


14

B. Establishment of Subsidiary is sanctioned under Article 10-2 of APSCO Convention

Article 10-2 of APSCO Convention under "ORGANS OF THE ORGANIZATION" states that :

The Organization may establish such subsidiary institutions, as it deems necessary for the performance and achievements of its objectives.


Continued …..


15

C. "Project Plan for APSCO's Activity Programm, 2011 – 2020" stipulates that proposed projects of member states will be implemented subsequent to approval of “Fourth Administrative Head Meeting” in the following fields *:

a) Space Technology Applications

b) Space Technology Development

c) Space Science.

d) Space Law

e) Space Policy

f) Space Training

* According to First Expert Group Meeting on “Development Plan Space Activities of APSCO” - December 2012 Beijing, China


Continued …..


16

The APSCO Market Expansion OutlookIn connection with “development objectives and programmes” of APSCO, in the framework of "Project Plan for APSCO Activities Programme 2011 – 2020" should be delivered with “competitive edge” to the international arena, which will certainly expand APSCO's market. The most significant themes in the realm of "Space Activities and Services" are as follows which worth attention:

1 Space Application Products and Services (Earth Observation, Telecommunication, Navigation & Positioning, e-education, e-health etc…)

2 Design and Manufacturing of Space System3 Space Test Facilities and Space Lab4 Educational / Training on Space Sciences and Technologies5 Ground Stations to Support Space Missions6 Space Research & Development7 New Space Technologies8 Assistance and Space Management

Note: At the present time, APSCO Members states have capabilities in some of above mentioned areas (1 through 8) that can share their experiences for fulfillment of these services.


17

Prospects of Income

Experts estimate that the space activities will soon account for USDbn 70 to 100 in annual turnover and this relates only to the space segment. The associated ground segment is estimated to generate similar turnover. Such a turnover reflects the size of a growing market, which APSCO can have a share, even minor, based on its capabilities. In time, this share will grow with growth of market, if APSCO remains competitive in the marketplace.


18

* According to Attachment 6 (Executive Summary of Cost & Benefit Analysis for APRS Project) of MOM - Second Ad-Hoc Committee Meeting on APRS Feasibility Study (7-25 June 2010)

APSCO Projects

Estimated Average

Cost (Million

USD)

Estimated Total Sales (Million

USD)[APSCO MS and

Other Countries]

Estimated Benefit

(Million USD)

Income: in terms of % of

Investment

Remote Sensing Satellite [Two Satellites with 5 Years lifetime ,(2+8) meter Resolution]*

≈219 - 260 ≈477 ≈217 – 258 ≈183% - 217%

Development and Demonstration Applications of Compatible GNSS terminals for Emergency Management and Disaster Rescue

0.874 TBD TBD TBD

Prospects of Income Continued …


19

Grounds to Establish Subsidiary Institute

More opportunities will be available to APSCO in global market, if only the organization extends its markets beyond its member states. Earned revenues will be spent merely on APSCO’s Objectives and Programmes. Operations will progress smoothly without disruption, development projects will advance in orderly and consistent basis, to promote APSCO’s “Global Image” and create “Competitive Edge”.

Such an advantage can be developed by creating a “Structured Subsidiary Institute” under APSCO, based on solid business terms, which is main theme and objective of this presentation.

It will also, shield APSCO against sudden changes in “Global Economic Environment” allowing the organization to reposition itself, against global inflation, price and wage hikes, and “Global Economic Dynamics” such as business or boom and bust cycles.


20

ObjectiveTo build a self sustained financial structure and create competitiveness in members states’ and global market through commercialization of APSCO’s products and services sell them based on International Marketing and Sales principles in the framework of a "Structured Subsidiary Institute ".

Subsidiary Institute Structure and FunctionsThe Subsidiary Institute will manage APSCO’s business affairs. Typically the office has three main functions:

1. Marketing and Sales;2. Support & Services;3. Technical Assistance & Engineering.


21

Marketing and Sales function is responsible for developing markets and satisfying customer needs at a profit. Responsibilities include:

A. Market research/analysis;B. Market entry strategies;C. Pricing policy;D. Risk ManagementE. Promotion;F. Sales;G. Preparation of quotation and proposals; andH. Participate in tenders.I. Receipt and verification of orders.J. Drawing up Contracts

Subsidiary Institute Structure and Functions Continued ….


22

Support & Services function is to coordinate and facilitate delivery process once a sale has been concluded. It ensures that details of the order are transmitted to production and / or service departments, that arrangements are made for order processing, documentation and recording the transaction. Provide information on suppliers, and logistics and link them to the production department and the client. Responsibilities include, but not limited to:

A. Order ProcessingB. Transportation Management and Freight Insurance;C. Distribution and Delivery;D. Freight Documentation;E. Trade Finance and Insurance;



23

Technical Assistance and Engineering function is responsible to provide cost-effective services on analysis & engineering, manufacturing, technical management and consulting on space-related programs for senior industries, member states’ governments, research centers and other customers. Main responsibilities include, but not limited to:

A. Space project design, management and engineering;B. Space system engineering and integration;C. Space mission operation services;D. Technical support services and supervision;E. Maintenance and operations;F. Test and evaluation of space systems & subsystems;G. Earth station and control centers services;H. Consultancy services on engineering and management;I. Training & education on space science and technologies;J. Space technology transfer;K. Management and implementation of R&D projects;L. Standard and documentation services;



24

Conclusion


Therefore, it is essential to commercialize APSCO’s products and services in order to be marketable. Revenues earned from operations can be spent on Objectives, Ideals and development of organization to enhance its capabilities and efficiency for improvement of its services to member states, as well as others.

With respect to Legal and Financial Structure of APSCO, and restricted monetary input, APSCO’s Objectives and Ideals seem, if not inaccessible, but hard to fulfill. It exposes the organization to non performance of operations and programmes, inconsistency and lagging its development and falling behind competition in the marketplace.

Such prospect is only attainable if a “Structured Subsidiary Institute” under APSCO is established to manage APSCO’s commercial affairs based on framework of business principles, which has been drawn up in the body of proposal and visualized in following pages.

25

The "Subsidiary" title is only a suggestion and is optional.

Note

However, it is revisable to:

a) "Market Development Centre"; b) "Space Commerce Office", or

c) etc. …


26Iranian Space Agency(ISA) Stablishment of Subsidiary Institute - 5th Administrative Heads Meeting of Apsco




30

Thank you for your

Time and Attention


Documents

1 Proposal for Establishment of Subsidiary Institute For The ASIA-PACIFIC SPACE COOPERATION ORGANIZATION (APSCO) Proposal for Establishment of Subsidiary