Beating Heart

Healthcare logisticians are eagerly awaiting Dubai Logistics City’s full opening
in two years’ time, but must keep their speedy transport options open in the
interim.

It’s all systems go at Dubai World Central, as its myriad components home in on a series of deadlines in the next few years. The first flight is targeted to arrive by the end of the year, the 200,000 sq metre office complex aims to be ready by April next year and the industry awaits the full opening of Dubai Logistics City (DLC) by 2010, with 150 plots currently reserved.

“This year and the next will be heavy construction years, so by 2010, we should have a very active community,” says Michael Proffitt, Chief Executive Officer for Dubai Logistics City. “We’re providing the platform, so the companies will be doing the actual interaction with the authorities. We want to make sure that the authorities are clear about what’s being developed in the timeframe, so they can work with us and have the processes in place ahead of the companies starting.”

Providing all certifications and approvals are in place, the first plane at Al Maktoum International should be touching down by the end of the year, although Proffitt concedes that might be tight. “The sooner we get it going, we’ll get a ramp up,” he says. “It’s really about taking pressure off Dubai International Airport – it’s a coordinated approach to transfer airlines to Al Maktoum International Airport.”

Emirates, which will open its new terminal at the existing airport this summer, has confirmed the whole of its operations will move to Jebel Ali at some stage in the future.

“As the new airport becomes fully developed, it will be the airport of choice for the region,” says Proffitt. “There will be the Metro links, but from a road point of view, it’s not finalised.” He says DLC is constructing three buildings for forwarders who don’t want their own buildings, which can be leased, with units measuring from 80 to
1,000 sq metres. “We want to cater for small, medium and global players,” he says. “It will most probably be used by companies looking to start-up and as they expand, they can take a plot.”

Given the high-value nature of the pharmaceutical market, DLC will be looking to handle goods in transit as well as serve the regional market. Saudi Arabia represents around 65 per cent of the AED 9.9 billion (US$2.7 billion) GCC pharmaceutical market.

“If you look at the evolution of the pharmaceutical market, there’s more emphasis on the temperature-control- led supply chain,” adds Proffitt. “It’s one of the sectors of interest because we’re looking for companies in the supply chain focused on the region and with air-freight volumes.”

Philip von Bismarck, National Contract Logistics Manager UAE, Kuehne + Nagel, says despite the local building sector facing shortages in building material and manpower, construction of its new DLC facility is on schedule and will go into operation this year.

It chose DLC as its new Middle East logistics hub due to its strategic location close to sea and airports, the good infrastructure and the “highly efficient” customs processes. “There is a growing demand for integrated logistics services in the region, with a strong focus on quality and cost-efficiency,” he says. “Consumption is growing tremendously and global manufacturers are penetrating the market more and more. In addition, storage, handling and import regulations for healthcare goods are also changing rapidly.”

These two trends call for a focus on end-to-end healthcare supply chain quality and reliability, as well as sound local knowledge to fully comply with regional regulations.

“Once operational, we will transfer some of our existing healthcare customers to the new facility,” he says. “The terminal will provide us with the capacity to accommodate new accounts, too; healthcare logistics is one of the key industry segments we will be catering to, alongside FMCG and hi-tech.

DLC will offer cool storage below 25 degrees Celsius and temperature-controlled distribution across the Arabian Peninsula. “Our warehouse management system supports all healthcare industry requirements, such as batch control and expiry date management,” he adds.

The company will also provide repacking and product labelling services and arrange for Saudi Arabian Standard Organisation (SASO) certificates and its new Cargo 2000-based airfreight products, as well as aviation logistics services.

Maher Kheder, Business Development Group Director, Pharma World Holdings, which plans to move into its new facility at JAFZA in February next year, says airfreight is vital in the shipment of important drugs, particularly injectables.

“Dubai World Central has huge potential and business wise, it’s all located in this area,” he says. “Commercially it’s going to be an important asset for the region.” But he says the timing of the opening is an issue and it will need full warehousing and logistics services. “If the airport opens by 2010, then that’s fine, but in the interim we will continue to use Dubai International Airport.”

EXPANDING

The region’s healthcare industry is growing rapidly as it seeks to keep pace with its rapidly expanding population. Investment could increase to AED 220 billion (US$60 billion) in the next 17 years, more than twice the amount that is spent today.

Alongside the UAE Ministry of Health – which has an annual budget of AED 1.6 billion
(US$439 million) to improve medical services – are the Health Authority Abu Dhabi, Dubai Department of Health & Medical Services, Emirates Medical Association and Dubai Health Authority (launched last March) and Dubai Healthcare City, as well as a number of private hospitals, clinics and pharmacists. The Abu Dhabi-based Al Yasat Holdings, part of the Al Mazroui group, plans to develop a healthcare city too on Shams Abu Dhabi, worth AED 3.5 billion (US$960 million) uniting wellness and clinical services.

Oman’s Majan Development Company (MDC) is planning to develop a healthcare city around 100 kilometres from Muscat with an estimated investment of OR300 to 400 million (US$774 million to US$1.03 billion). A one million sq metre development earmarked to be built near ‘Blue City’ will include medical colleges, hospitals, conference halls, hotels and shopping malls.