Building the Pyramids would be a challenge in this day and age, so how did the
ancient Egyptians cope? The following is an excerpt from Issa Baluch’s book
Transport Logistics: Past, Present and Predictions

The great pyramid likely required two million blocks of limestone and granite, weighing
from two to six tons each

Barber estimated that it would take a force of 900 men harnessed in double rank on four draft ropes to drag a 60-ton monolith….

Barber says that such a force would have no trouble dragging the stone, especially if they were drilled to pull together; he concludes that for this reason men and not animals are pictured hauling wrought stones: men could be drilled to march in absolute cadence to a song or time-keeping instrument. A ‘one-two-three surge’, says Barber, produces a momentary force represented by nearly the weight of the whole mass of men, or several times their ordinary pulling force.” -Peter Tompkins in his book Secrets of the Great Pyramid.

Central transport logistics challenge: quarrying, transporting, lifting, and placing two million blocks of granite, some of them weighing as much as 50 tons.

The Great Pyramid and its two siblings at Giza have attracted travellers of all
kinds in their 4,500-year history. Today, archaeologists, Egyptologists and engineers all over the world study its construction and attempt to understand the manner in which granite and limestone blocks weighing 50 tons were transported to the site and raised to such a great height. Whatever the answers to their technical questions, the evidence of a tremendous transport logistics operation remains. The Egyptians responsible for building the Great Pyramid coordinated the quarrying and movement of two million blocks of stone, the pyramid’s construction, and the hiring, feeding, clothing, and housing of a 30,000-man workforce (and perhaps their families as well). This was a project that most likely took 20 to 25 years to complete, meaning that it called for thorough planning at the outset and careful project management as it progressed. The Great Pyramid at Giza, then, provides our oldest conclusive example of a major transport logistics project. While the facts of its construction remain shrouded by the passage of a few thousand years, its complexity, size and technical accomplishment merit closer examination.

The Great Pyramid was built around the year 2600 BCE by Khufu, also known as Cheops, Pharaoh of the Fourth Dynasty (c. 2680-2565 BCE). Standing 146 metres high and covering 13 acres, it is two-thirds the size of the Hoover Dam. Two million blocks of limestone and granite, weighing from two to six tons each, were used to build it. Some of the granite beams quarried at Aswan and brought down the river on barges weighed more than 50 tons. Building the interior King’s Chamber required that granite blocks of 40 to 60 tons be raised to a height of 70 metres.

Many scholars have offered estimates as to how many men worked on Cheops’ pyramid. The Greek historian Herodotus, who travelled to Egypt in the 400s
BCE, is the first known person to have written about the pyramids. Herodotus writes that 100,000 men worked for three months at a time. Egyptologist Miroslav Verner calls this estimate “fantastic.” Ludwig Borchardt and Louis Croon, who assume that work went on throughout the year, estimate that 36,000 men worked at Giza, a number that fits within the 20,000-30,000-man range proposed by most Egyptologists.

What is clear is that the Egyptians patterned their work-force after their highly organised society. In addition to the massive human resources operation necessary for organising so many workers, pyramid builders also had to exercise strategic site selection. Giza was chosen as a pyramid site for a number of reasons, one of them being its proximity to the Nile, which would be convenient for transport. This is a classic case of the relationship between engineering and transport logistics. While the pyramid builders may have used marvelous engineering techniques to erect the 2.3 million blocks, the entire project depended on the efficient transport of these blocks from quarry to construction site.

The pyramid builders made good use of the Nile, bringing massive blocks on barges from quarries at Aswan and Tura. Planners took advantage of the annual floods, when the Nile was so full that it could carry the barges all the way to the foot of the plateau construction site. They also created artificial canals for the barges — because of the weight and size of the blocks, the logisticians’ goal was to get the barges as close to the construction site as possible. The next task was unloading the slabs. It is possible that an earthen embankment was built up as high as the barges’ decks so that the slabs could simply be slid off. Another possibility is that the barges were brought into a narrow canal where beams resting on the banks were put under the obelisk/ block to lift it. The ship would then be weighted down and slipped out from under the heavy rock.

Once the slabs were unloaded at Giza, there remained the task of transporting them up the hill to the pyramid. For this purpose, workers constructed a long causeway. The causeway leading up the hill from the Sphinx to the pyramid of Khafre (built c.2555-2532 BCE) can still be seen at Giza today. According to Herodotus, workers spent 10 years building the causeway to the Great Pyramid. According to Peter Tompkins, men, not oxen, probably pulled the stones, because men could be better trained to work together than could a team of livestock. Grease was then put under the sleds to reduce friction as they were pulled up the hard hauling tracks. Labourers might have used alluvial mud as a lubricant underneath the heavy blocks, or they might have slid the blocks over rolling logs. Harvard University archaeologist Mark Lehner learned from a pyramid construction experiment that 12 men could easily pull a 1.5-ton block over a slick surface. Therefore pulling a block weighing 50 tons would require the labour of 400 men.

The magnitude of the Great Pyramid’s transport logistics challenges should be very clear, especially to those who have visited Giza (or any other pyramid) and have seen its breathtaking size with their own eyes. Logisticians responded to these challenges by utilising resources like the annual flooding of the Nile, their strategic proximity to quarries, and a large labour force that seemed to be dedicated to the project for religious reasons as well as duty to State. When it came to hoisting these heavy blocks into place, logisticians relied on the most high-tech cranes possible at that time: pulleys, sandbag weights, levers and greased beams.

In addition to clothing, feeding, and housing a work-force of thousands, project managers had to mobilise experts in many fields and encourage cooperation among many different players. As noted earlier, it is interesting that in some cases, human labourers were preferred over animals because it was easier to train them to work together. While animals can provide only brute strength, human workers can provide brute strength as well as the mental determination necessary for such a project.

A 20-year project of this magnitude required not only the mental determination of labourers pushing stones up ramps, but also dedication by the entire workforce. Because few construction projects today last as long, it may be difficult to imagine the dedication required to complete the Great Pyramid. However, Egyptian pyramid builders were not working on a mere commercial endeavour—they were working for the purpose of honouring their gods. Perhaps this religious commitment bound the builders to the Great Pyramid throughout the project, from vision to reality.

Baluch is Chairman and CEO of Dubai-based Swift Group and Past President of the International Federation of Freight Forwarders’ Associations (FIATA)

Dubai Trade has announced the launch of its Centralised E-Payment Gateway
(CePG), enabling online payment transactions with Dubai World companies

 
From left: Mohammed Al Muallem, Senior Vice President and Managing Director, DP World’s UAE Region, Mahmood Al Bastaki, Director, Dubai Trade, and Ibrahim Al Janahi, Senior Vice President, Commercial Sales, JAFZA

Rapidly becoming a recognised player within Dubai’s trading sector, Dubai Trade remains adamant about their goal: “To ensure smooth trade flow covering the entire supply- chain system without any time-consuming interruptions,” says Mahmood Al Bastaki, Director of Dubai Trade.

By offering end-to-end online services to Dubai World’s companies, such as DP World, Economic Zones World, Dubai Multi Commodities Centre and Dubai Customs, Dubai Trade is coalescing the 50,000 companies that interact with Dubai’s ports, customs and free zones into a single community.

Recently signing agreements with Emirates Bank International and Commercial Bank of Dubai (CBD), Dubai Trade is expecting their Centralised E-Payment Gateway (CePG) to ease the transaction process as well. Customers can now deal with companies through their bank accounts, via Dubai Trade, streamlining the real-time transfer of funds.

“Dubai Trade’s e-payment gateway is a brilliant concept bringing customers and companies closer. I am confident that the e-payment gateway service will be beneficial for both sides as it will make transactions easy and qualitatively more efficient,” says Mohammed Al Muallem, Senior Vice President and Managing Director of DP World’s UAE Region.

By avoiding the need to be physically present at the counters, these services will considerably save time and effort for the customers and the companies. After all, who likes waiting in queues for two hours, simply for two minutes worth of payment and paperwork? With Dubai Trade, services will be available 24 hours a day, seven days a week from the comfort of your office, home or anywhere else around the world.

“We are keen to establish a comprehensive customer-friendly electronic platform that offers direct and easy transaction facilities,” says Al Bastaki. “We see this as a vital element in strengthening Dubai’s aim to be the most efficient trading hub in the world.”

Dubai Trade’s services can be found at www.dubaitrade.ae.

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.

With plans to compete globally in the biotechnology market, and to have an AED One billion (US$272 million) capital value by 2010, Gulf Pharmaceutical Industries (Julphar) will be pumping out masses of drugs. Still, the Ras Al Khaimah-based manufacturer is choosing to take care of distribution all by itself

Abdul Razzaq Yousef, Chief Executive Officer, Gulf Pharmaceutical Industries (Julphar)

Big name pharmaceutical companies like Pfizer, Merck and Eli Lilly, likely have very few kind words for Abdul Razzaq Yousef. He is the Chief Executive Officer of Gulf Pharmaceutical Industries (Julphar), a drug manufacturer based in Ras Al Khaimah, and the market leader for generic medicines in the Middle East.

The company produces over 800 formulations and 184 brands in every major therapeutic category, including analgesics, anti-malarial drugs, anti-biotics, anti-amoebics, anthelmintics, antihistamines, vitamins and steroids.

“The big multinationals have a patent right over their products for 20 years, but still they want that right to continue,” says Yousef. “It becomes like a monopoly.”

And these companies can play dirty games in the name of profit, for example keeping newer generations of drugs off the market, as long as the preceding generation is still under patent and making money. “When the patent dies, then they’ll start introducing the new generation of the drug,” he explains.

But Gulf Pharmaceuticals is about to step into the multinational league, investing heavily in biotechnology, which involves producing medicine with live
cells, rather than chemical processes. The company recently spent millions of US dollars, for example, to purchase a particular strain of modified E. Coli bacteria which can generate human insulin. They are investing AED 260 million (US$71 million) in a plant which will produce 1,500 kilograms of human insulin crystals annually, as well as AED 100 million (US$27 million) in a biotechnology filling plant, producing 35 million each of vials, cartridges and ampoules. Both plants are scheduled for completion by the end of 2009.

“We have entered the biotechnology era,” says Yousef. “We are the pioneers of biotechnology in the Middle East. We are the first company among 216 pharmaceutical in the MENA region to adopt biotechnology.”

He says he is aware of the challenges of marketing genetically engineered medicine.

“With simple generic products, it is easy to prove to the doctor that your product is equivalent to another. But when you are producing biosimilar products, it is very difficult to prove that two products are identical.”

He knows he is going to have to earn the confidence of the doctors who could prescribe his drugs. “If your products are 10 or 15 per cent cheaper than the competition, a doctor will have no interest. And if you’re 50 per cent cheaper, the doctor does not trust you.”

The company is also constantly challenged by counterfeit drug producers
from countries such as Pakistan and Yemen, where Yousef says the law does very little to protect his products. He gives the example of the burn ointment
MEBO: “A company in Pakistan took our brochure, our leaflet, our promotional materials. They copied the marketing of the product 100 per cent, and they’ve registered the ointment in Pakistan as ‘Mebo’,” he says. “But it’s a totally different product – some gasoline, and some grease.”

Yousef says he’ll never know exactly how much money his company loses due to counterfeits.

One of Julphar’s plants

 
Gulf Pharmaceuticals has commissioned SSI Schaefer to build a
20-conveyor distribution centre

OUR WAY With AED 660 million (US$180 million) of sales in 2006, Gulf Pharmaceuticals ships approximately 1,000 containers a year, mostly by truck within the GCC and Middle East, but also by air as far as Europe, Ecuador, the United States and Malaysia.

“We prefer to transport by truck to the whole MENA region,” says Yousef. “There is no direct line from the UAE to North Africa. You have to go to Italy, and then reship the container. This takes far too long.”

In fact, Julphar recently spent AED50 million (US$14 million) on 50 Volvo trucks and 50 refrigerated 40 foot containers made by Saudi company Matlak to set up its own transportation company, Menacool.

“The inside temperature of dry containers in the summer here reaches 80 to 90 degrees Celsius,” says Yousef. “We discovered that some of our products reached the customer in deteriorated quality, because trucks were turning off their generators when they were stopped at the borders. We decided we needed to form our own transportation company to guarantee to our customers that all our products are reaching them at a constant temperature and condition.”

Yousef says Julphar’s set up of Menacool was in no way a cost-cutting measure. “The cost of transportation is two to three per cent of the medicine,” he says. “If it starts to cost four per cent, that doesn’t matter.”

He knows Menacool is going to have to expand in the future, as Gulf Pharmaceuticals is ramping up its production, with four new plants planned within the next few years, giving them a total of 14 production facilities.

“Now we are transporting about 1,000 containers a year,” he says. “This will increase to up to 3,000 containers by 2010.”

Yousef says Julphar is also exploring the idea of setting up a division of Menacool to transport drugs from distribution centres to pharmacies. “We are studying this system in the UAE and I think we are going to implement this system in Saudi Arabia, UAE and Oman in the near future,” he says, mentioning that the company will need a chain of smaller vans and cars in constant motion.

But he says his team has not yet decided whether or not to outsource the service. “We are studying this also,” says Yousef.

If it goes forward with distributing to pharmacies, the company is going to need a lot of trucks, as Julphar plans to expand its own pharmaceutical network of 110 in the UAE to 2,000 in the region within the next few years. Yousef says this project, Planet Pharmacy, will help Julphar compete with multinational giants like Boots who are setting up their own chains in the Middle East. “We have to have a relationship with the distributors, and we have to have a relationship with the pharmacists,” he says.

“Why don’t we start our own big chain in the MENA region?” Yousef says this chain will sell both Gulf Pharmaceuticals’ and competitors’ products. “We will
make sure customers have everything available under one roof.” But will Gulf Pharmaceuticals ever distribute via the Internet?

“I do not encourage that,” says Yousef. “I do not think it is a healthy way, because you cannot guarantee the quality of the drug you are buying. It’s a lot of question marks.”

INNOVATING Inside the Julphar premises, Gulf Pharmaceuticals is also investing heavily in its logistics infrastructure. The company has recently commissioned Dubai- based SSI Schaefer to build a 20-conveyor distribution centre to process customer orders. Three infeed lines supply pallets to one of 20 pallet positions for each conveyor line, each designated to a particular destination, for example Saudi Arabia. When the truck headed to Saudi Arabia arrives at the loading gate, another transfer car loads the ordered pallets on an outgoing conveyor. The outgoing conveyor then moves the pallets to a forklift, that stores it in the truck. The entire process is sensor-monitored by Sick.

“With the design of the Schaefer system, we can ship 20 40-foot containers a day,” says Hasan Jibreel, Director Projects Dept., Gulf Pharmaceutical Industries. That’s between 2,000 and 3,000 pallets a day, he says, “if we work 10 hours a day.”

“I don’t think any pharmaceutical company in the region has such a sophisticated system,” adds Yousef.

WAREHOUSING Gulf Pharmaceuticals built 10,000 sq metres of cold storage last year, which includes 2,000 sq metres of -20 degrees Celsius space and 2,000 sq metres of four to eight degrees Celsius.

It also has a warehouse for raw materials, which can handle up to 8,000 pallets, and a warehouse for packaging, which can take 50,000 pallets. “We use a lot of bottles, which take up space,” explains Jibreel.

The finished goods warehouse can handle up to 15,000 pallets, but is not yet automated.

“This can be a possibility in the future,” says Jibreel. And judging from Julphar’s eagerness to invest, it probably will be.

LOG.Middle East sits down with Alexander Borg, Training Consultant for Dubai Industrial City, to talk warehousing health and safety

Having been in the logistics industry for more than 20 years, Alexander Borg has experienced warehousing safety from the ground up.

Starting out as an assistant store keeper and working his way up through various managerial positions, he now lends his expertise to companies throughout Europe, North Africa, Middle East and Southeast Asia, offering solutions in warehousing safety.

“When you talk about health and safety, a lot of people are concerned,” says Borg. “If you look at warehousing, you will find generally shelving, forklifters, cleaners, a lot of people are involved. There must be a clear policy coming from the top down, with implementation from the ground up,” he says.

According to Borg, the first thing that should be in place is a standard of operations. It should be revised every two to three years depending on the changes in the company, including growth or turnover of staff.

“Even a cleaner should know how to use f iref ighting equipment.” So what about the training? Borg suggests companies implement an induction course for employees, where procedures can be introduced, as well as providing a tour of the premises.

“From my experience, when I visit the warehouses in different countries, I ask them, ‘How many of you have attended an induction course?’ The answer will
be maybe 50 per cent of them.”

“Companies must give an induction process to the people using the equipment,” says Borg. Whether f ire extinguishers are hanging out of reach of employees, emergency exits do not exist, or risk is just not recognised until it’s too late, Borg says, with some adequate direction and execution, hazards can be prevented.

“The bottom line is this: the policy needs to come from the top-down, while the implementation should come from the ground-up.” Alexander Borg will be providing three courses throughout June in Dubai Industrial City, teaching proper health and safety measures in warehousing.

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.”

The Aqaba Special Economic Zone Authority’s slogan ‘Turn sand into gold’
appears to be coming true, thanks to Aqaba’s strategic location and top-class
infrastructure

When the Aqaba Special Economic Zone Authority (ASEZA) launched Aqaba Special Economic Zone (ASEZ) in 2001, it set out to earn Jordanian Dinars (JOD) 4.2 billion (US$6 billion) from investors by 2020. By 2006, however, it had already raked in JOD 5 billion (US$7 billion), thanks to an aggressive marketing campaign and interest from around the region, particularly Kuwait, UAE, Qatar and Bahrain.

The project’s new goal is to reach an additional JOD 2.1 billion (US$3 billion) by 2010. With land borders shared by the Kingdom of Saudi Arabia and Israel, and territorial waters reaching Egypt, ASEZA’s 375 sq kilometres are highly strategic. ASEZ also sits on Jordan’s only coastline, a mere 27 kilometres.

Aqaba Development Corporation, which owns Aqaba’s seaport, airport and main parcels of land, is working hard to not only promote Aqaba’s tourism and manufacturing industries, but also its logistics infrastructure.

ADC is expanding the container port and industrial port. The general cargo operations in the main port are being relocated to the industrial port, so the area can be redeveloped towards tourism use. In 2006, 405,660 TEUs of general cargo passed through the port, a four per cent increase on the previous year.

BENEFITS

• Five per cent income tax on net profit
• Exemption from taxes on land, property, social services and the distribution of profits and shares
• Exemption from customs duties on all imports, except for cars
• No restrictions on foreign properties
• No foreign currency restrictions
• Ability to hire up to 70 per cent foreign labour

King Hussein International Airport (KHIA), which operates under an ‘Open Skies’ policy, boasts a brand-new state-of-the-art cargo terminal which has more than enough capacity, as it is still trying to lure regular international flights to Aqaba.

Sitting across the road from KHIA is Aqaba Industrial Estate (AIIE), a 60 hectare free zone development ideal for everything from logistics and warehousing to paper-based packing and printing to metal and engineering industries.

The Southern Industrial Zone, which touches the border of Saudi Arabia, is also being expanded for future development for heavy agrochemical industries.

An 8,000 kilometre highway stretches across Jordan, connecting Aqaba to bordering countries and Europe via Syria and Turkey. The Hijaz Railway also connects Aqaba to several Jordanian cities, with planned further expansions.

Within the zone, registered enterprises are subject only to a flat five per cent tax on net profits and enjoy duty-free imports, including capital equipment and raw materials. Foreign investors are allowed 100 per cent ownership and are entitled to employ up to 70 per cent foreign labour.

Investors on board include Mercedes, which is developing a 10 sq kilometre truck maintenance and mechanical centre, and Agility, which manages Aqaba’s logistics village, a 10,000 sq metre container freight station only minutes from the main port.

Kuwait Free Trade Zone (KFTZ) has everything an investor needs, except space

Kuwait is pursuing the benefits of privatisation

Long before Kuwait discovered and exported oil it had a free market economy based on trade and pearl diving activities. Today, the Gulf country is actively pursuing the benef its of privatisation, seeking to diversify away from oil, while remaining an active trade partner to its neighbours.

In such a strategically located country like Kuwait, the economic free zone concept has only enhanced established trade and commerce. Opening in 1999, Kuwait Free Trade Zone (KFTZ) remains the country’s sole free zone. Located within the Shuwaikh port, KFTZ encompasses approximately 900,000 sq feet, and comprises 40 warehouses owned by domestic and foreign investors in commercial, industrial, and service sectors. Shuwaikh Port itself is the main commercial port in Kuwait, and is located to the immediate northeast of Kuwait City.

As it is positioned near the Kuwait International Airport, Kuwait City and the Iranian border, KFTZ possesses an ample supply of energy, water and adequate transportation systems by sea, land or air. Additionally, with statutes allowing 100 per cent foreign ownership, no corporate tax, state-of-the-art communication systems, and relaxed policies on exchange of capital and profits outside the KFTZ, Kuwait understands what it takes to attract the investors.

“Kuwait is in the spotlight of many logistics players. However, it would take operators with considerable resources, integrated regional network and established infrastructure to tap into the market,” says Ronald Lichtenecker, Managing Director, GAC Kuwait.

Recently, KFTZ engaged in an expansive renovation and modernisation effort. With the privatisation of cargo and container handling, and computerisation of the tariff, financial and administrative systems, KFTZ’s Shuwaikh Port has become a more modern facility. The only problem is – no vacancy. Currently there is no space available in the KFTZ and the administration of customs has rendered operation there untenable. At this time, investors would probably be best advised to look elsewhere.

BERTH CONTROL 

Shuwaikh Port is considered the main commercial port in Kuwait. It has 21 berths of which 14 are 10 metres deep, four are 8.5 metres deep and three are 6.7 metres deep. The total length of the berths is 4,055 metres.

Located centrally, Iran’s Chabahar town with its many ports and free zone has become the main area for development in the east of the country

Chabahar remains Iran’s only oceanic port

On the south east coast of Iran lies the town of Chabahar. As the entry point to the mainland via the Gulf of Oman, Chabahar is best known for its access to abundant fisheries, and remains Iran’s only oceanic port. Renowned for its climate, Chabahar is situated in the warmest part of Iran in winter, and the coolest part in the summer.

Established in 1992, the Chabahar Free Zone (CFZ) covers a total area of 145 sq kilometres and focuses on five major activities; transit of merchandised goods, investment attraction and related services, tourism, construction and urban development and education. Situated on international shipping routes in the Gulf of Oman and the Indian Ocean, it links the Central Asian Republics with international waters, providing for the mass transit of goods.

“This port is ready to cooperate in facilitating many of the requirements of merchants such as depot, fuel containers for oil related products and logistic commerce,” says Mohammad Taher Bagherizadeh, Managing Director of Chabahar Free Trade–Industrial Zone Organisation. The ports in Chabahar Bay, Shahid Beheshti and Shahid Kalantari, harbour large ocean-going cargo vessels, and facilitate loading and unloading of up to six million tons per year. The proximity to Konarak Airport, as well as established road transportation routes linking to Central Asia and Afghanistan, make the CFZ’s location even more ideal.

For this reason, Chabahar is the focal point of Iran for development in the east of the country through expansion and enhancement of transit routes among countries situated in the northern part of the Indian Ocean and Central Asia.

“This zone and its specif ic potentials such as the Shahid Beheshti and Shahid Kalantari docks with a total load capacity of six million tons can actualise the
long waited for dream of many northern lateral states of the Caspian Sea of being connected to international waters,” says Bagherizadeh.

Currently, CFZ’s imported goods are mostly distributed throughout the country by trucks. The Iranian government has plans to link CFZ to Iran’s main rail network, connecting it to central Asia and Afghanistan. The move is intended to make CFZ more competitive in the region and will allow for expedited distribution of cargo, domestic and abroad.

Picturesque Ras Al Khaimah might not be such a sophisticated address like neighbours Dubai and Abu Dhabi. But with all costs being a fraction of what they are anywhere else, Ras Al Khaimah is attracting investment fast.

The cost of living in Ras Al Khaimah is lower than Abu Dhabi and Dubai

Everyone knows billions, maybe trillions, of dollars are floating around Dubai and Abu Dhabi, but most would be surprised to learn that Ras Al Khaimah Investment Authority (RAKIA) has brought in over AED 7.3 billion (US$Two billion) in investment since 2005.

The government body responsible for Ras Al Khaimah’s socioeconomic growth is aiming to further develop the emirate’s industrial sector, already strong from
major players like RAK Ceramics and RAK Cement.

RAKIA’s first development – Al Hamra, a 2.4 sq kilometre free zone and three sq kilometre industrial zone – is completely leased out.

RAKIA is now developing the 21 sq kilometre Al Ghail Industrial Zone, made up of 3.7 kilometres of free zone and 17.3 kilometres of industrial zone. Since its launch in January, 2007, investors have already snatched up half of the free zone and a third of the industrial zone.

Notable players include American glassware company Guardian, French tableware maker Arc International, India’s Pioneer Cement and Ashok Leyland, and RAK Global logistics.

Executive Director Serge Guillaume says he’s not surprised Al Ghail is filling up.

“The first reason that comes to mind is the cost. It is definitely cheaper to lease land with RAKIA,” he says. “The cost of living in Ras Al Khaimah is also lower than other emirates.”

Land with RAKIA sells for AED 70 US$19 per sq metre, and leases for between AED 12 and AED 15 (approximately US$4) per sq metre, and office rents are Going cheap Picturesque Ras Al Khaimah might not be such a sophisticated address like neighbours Dubai and Abu Dhabi. But with all costs being a fraction of what they are anywhere else, Ras Al Khaimah is attracting investment fast. Kathryn Semcow has the details SPECIAL about AED Nine (US$2.5) per sq metre. The electricity rate is only 18 fils (five cents US) per KWH.

“Another reason to come here is the location,” adds Guillaume, explaining that
Al Ghail is equidistant to three ports: the shallow Jazeera Port and Ras Al Khaimah port, as well as Saqr Port, which is 12.2 metres deep, with 12 berths, four container terminals, three cranes and eight bulk material handling depots.

“We are 40 kilometres to Saqr Port,” he says. “That’s not very far.”

Al Ghail is also 60 kilometres to Sharjah, 55 kilometres to Fujairah and 43 kilometres to Ras Al Khaimah International Airport.

“It actually takes less time to go from here to Dubai International Airport than to go to the airport from most of the parts of Dubai,” says Guillaume. “Despite the distance in kilometres to travel to Ras Al Khaimah from Dubai, the trip is not much in terms of time.”

RAKIA’s free zones offer 100 per cent foreign ownership and are customs-bonded, but its industrial zones require 51 per cent local sponsorship. RAKIA, says Guillaume, will sponsor selected companies in exchange for an annual fee.

“We are screening very seriously, not only for legal purposes, but also in order to select companies that fit the long term strategy of the emirate and its development.”

Ras Al Khaimah is striving for “balanced development”, he says. “We are
developing the industrial sector, but it fits into a larger view, which includes
education and research. It also takes into account the very important tourism sector, since we are by far the nicest emirate, with our mountains, lower temperatures and beautiful beaches.”

COMPETITION

 Ras Al Khaimah Free Trade Zone

Ras Al Khaimah Investment Authority (RAKIA) is up against Ras Al Khaimah Free Trade Zone (RAK FTZ) for attracting business. While RAKIA secured 21 sq kilometres in Al Ghail Industrial Park, the government has given RAK FTZ six sq kilometres of its own.

RAK FTZ has 4,500 companies registered in its projects, which include:

Business Park Located in the central business district of the city, close to the RAK Exhibition Centre, the Business Park gives investors an opportunity to start a business with furnished and ready-to-use offices, shared offices and shared desks.

Industrial Park Located approximately six kilometres from Saqr Port, the Industrial Park’s 300 hectares are developed for construction of heavy industries and warehousing.

Technology Park Covering an area of 100 hectares not far from Ras Al Khaimah International Airport, the Technology Park is devoted to light industries and automated manufacturing, as well as capital intensive quality lifestyle projects.