Pushing Pills

A booming healthcare industry is going to need efficient distribution.
And Pharma World Holdings is set to target this niche

Maher Kheder, Business Development Group Director, Pharma World Holdings

You’ve heard of designer drugs, but how about a designer 3PL specialising in drugs? Pharma World Holdings is setting up a logistics facility in Jebel Ali Free Zone, specialising in pharmaceutical distribution.

“It’s a complete 3PL, and is actually the first in the region focused on pharmaceuticals and health care,” says Maher Kheder, Business Development Group Director, Pharma World Holdings, a subsidiary of Saudi-based Banaja International, which maintains a partnership with GlaxoSmithKline for its manufacturing plant in Jeddah.

The AED 29 million (US$8 million), 10,000 sq metre facility set to open in February 2009, will feature temperature- controlled warehousing, cool chain storage, cross-docking and inventory management, according to Kheder.

Pharma World also plans to offer several other value-added services on the financial and marketing side. “We will be taking the invoices from the distributors so the manufacturers deal with only one company,” says Kheder.
“We will also be doing quarterly and monthly market reviews on the position of the products, their delivery and distribution. Packaging would be the next phase,” he adds.

Kheder says Pharma World is investing heavily in IT, and is currently looking at providers such as Swisslog and Exceed for warehouse management software.

The company is also planning to share data with customers via a portal website. “Customers can track their shipment, check their stock,” says Kheder. “They can also review their sales and even look at the warehouse through a video camera to see the position of their actual physical stock.”

While he admits offering a fullyautomated distribution centre is impractical – “There could be a lot of damages and also delays,” – Kheder says the facility will be semi-automated, relying on human beings only for duties such as driving the diagonal turret trucks, receiving, dispatching and cleaning.

“With over 10,000 pallets, we will have only eight people in the warehouse,” he declares, explaining that they will use RFID for everything, “from receiving to dispatching. All the bin locations, pallets and boxes will be barcoded,” he says.

The facility will also be fully certified under Good Manufacturing Practice (GMP) and Distribution Resource Planning (DRP), according to Kheder.

Pharma World’s Dubai facility will be a duplicate of its distribution centre in Jeddah

“Distribution is distribution, but handling and hygiene are important factors when it comes to pharmaceuticals,” he says. “Pharmaceutical distribution requires certain kinds of packaging. Temperature and humidity control play major roles in providing the right storage and transportation environment for drugs. You also need to follow the regulations of the Ministry of Health.”

“The Pharma World facility will be almost a carbon copy of Banaja’s existing distribution facility in Jeddah, as well as one that is being built in Riyadh,” says Kheder. In fact, he says his company has plenty of expertise in pharmaceuticals, thanks to the Saudi Arabian demand for drugs.

“The pharmaceutical industry in Saudi is the largest in the Middle East, because of the country’s purchasing power and economics, the large number of hospitals, as well as government support. In addition, you have a good health care system, and a lot of patients coming from abroad into Saudi Arabia for health care.”

But he also says that the demand for pharmaceutical 3PL services exist in  smaller markets like the UAE, too. “Most of the countries in the GCC and Middle East are small countries with limited resources, and also limited purchasing. Pharmaceutical manufacturers are large manufacturers. The whole Middle East does not represent even one per cent of their total turnover. So there are minimum batches,” he says.

“When these manufacturers consolidate shipments and deal with one logistics company to take all the logistics issues and worry, it leads to a lot of savings.”

“Manufacturers like to focus their business on manufacturing and quality control and marketing. They need someone,” he adds.

And Kheder says the drugs passing through his facility will come from around the world. “At least 80 per cent of our customers will be coming from overseas, the biggest pharmaceutical companies in Europe and North America.”

He is in the process of luring these customers. “We don’t have anyone on board,” he admits. “But we have discussions of commitment and letters of intent from big pharmaceutical manufacturers in Europe and the US. We are also under discussion with Indian pharmaceuticals.”