Global Supply Chain May 2018 Issue

May 2018 Issue 48

ENHANCING THE BUSINESS OF LOGISTICS

THE REFRIGERATED WAREHOUSE AND

COLD CHAIN A new look

Combilift’s new facility Worth 50 million Euros

Coming soon

The first hyperloop is in the UAE

Shipa Freight

Agility’s online forwarding platform

Driving profitability

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The changing face of the refrigerated warehouse and ensuing cold chain SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Manager: Brian Cordeiro brian@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

Printed by United Printing Press (UPP) – Abu Dhabi Distributed by Tawseel Distribution & Logistics – Dubai

Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused.

Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

Be it the increase in the use of temperature sensitive pharmaceuticals or the consumer’s need for the freshest, organic, locally sourced produce or even ready to eat foods. Hence the refrigerated warehouse is not what it used to be and the cold chain that connects to this warehouse is having to adapt very fast. This change in consumer preference has impacted the supply chain dramatically. This is altering the way many shippers do business. From setting up regional supply chain networks, accessing regional transportation routes and temperaturecontrolled logistics and warehouses, this change is vital and transformative.

The food industry is searching for a new consumer-centered retail model and the design of this new paradigm impacts the cold chain industry.

More on page 25.

Combilift, Ireland, opened its new manufacturing facility and global headquarters at the end of April.

This very successful forklift manufacturer has ambitious plans for the future of the company as well as the county it belongs to – Monaghan – in the Republic of Ireland.

Martin McVicar, Managing Director, has extensive plans for developing more state-of-the-art forklifts moving forward. He says the secret of their success is the fact that they customise each forklift based on the needs and requirements and the nature of business of each client. Listening to their customers has led Combilift to create sleek forklifts such as the pedestrian truck with a tiller arm that turns into any small corner or aisle in the warehouse. All their creations have also been patented to ensure the revenue streams remain abundant.

All of these and many more informative articles are in this issue. Let us know your thoughts.

Munawar Shariff Managing Editor munawar@signaturemediame.com

MAY 2018 3

May 2018 Issue 48

ENHANCING THE BUSINESS OF LOGISTICS

24 06 News 16 Country report Kingdom of Saudi Arabia Saudi Arabia develops natural gas industry To diversify its domestic energy mix, the Kingdom of Saudi Arabia is investing in developing its natural gas resources

24 Cover The refrigerated warehouse and cold chain The cold chain industry is changing fast all because of the changing consumer demand

32 Agility launches Shipa Freight Shipa Freight (online forwarding platform) allows users to get rate quotes, book, pay, track ocean and air shipments globally 4 MAY 2018

35

35 The bird consignment Etihad Cargo recently transported a large shipment of vulnerable Houbara bustards for release into their natural habitats

38 Global standards to generate future demand IATA urged aviation stakeholders to follow global standards and make greater use of operational data in order to safely accommodate an additional 3.8 billion air travelers by 2036

40 The warehouse experts SPAN Group has been in the region since 1989 and till date they continue to provide warehouse solutions for a large number of companies

44 Sustained success at Sohar Port Mark Geilenkirchen, CEO, Sohar Port

and Freezone, talks about current growth in business

48 Automation / robots take over the warehouse Alain Kaddoum, General Manager, Swisslog Middle East shares lots of insights into the current trends in the materials handling industry

55 First commercial hyperloop system in the UAE The hyperloop system is coming to the UAE very soon

58 Ireland’s Combilift opens €50 million facility Ireland’s forklift manufacturer, Combilift opened its new global headquarters and manufacturing facility worth more than AED 220 million

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World Free Zones Organisation debuts Izdihar prosperity index Under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the World Free Zones Organization’s (WFZO) 4th Annual International Conference & Exhibition (AICE) opened recently with the launch the Izdihar Prosperity Index and Free Zones Outlook Report in Dubai.

The 2018 AICE theme Free Zone 10X The Path to Prosperity, addresses the transformation of free zones as they shift their focus from the traditional pillars of employment, trade and investment to embrace social responsibility, entrepreneurship and incubation as drivers of prosperity. The two-day AICE convened representatives and experts from the world’s free zones, associated entities and multi-lateral organizations including World Trade Organization and International Labour Organization.

“The fourth edition of the AICE has attracted the brightest and most accomplished economists, policy-makers and experts, who are gathered in Dubai to discuss the future of free zones against

the backdrop of a rapidly-changing global economy powered by technology. With the launch of the Izdihar Prosperity Index and the Free Zones Outlook Report, the WFZO has established itself as a formidable source of knowledge and data to foster and support innovation and creativity in the free zones ecosystem,”said Dr Mohammed Alzarooni, Chairman, WFZO. Izdihar Index is a tool with appropriate metrics to measure the positive contribution of free zones to the global economy and is based on the ‘Free Zones of the Future Maturity’ model. The Index identifies three pillars with a total of nine indicators or parameters to measure a free zone’s success and to assess its impact on economies, societies and its contribution to a nation’s prosperity. The first pillar, Best in Class Practices, addresses the three criteria: Knowledge, Safety and Tech-Preparedness.

The second pillar, Innovation, addresses the three criteria: Entrepreneurship, SMEs Developer and Innovation. The third pillar, Sustainability, addresses the three criteria: Environmental Responsibility, Working Conditions and Social Responsibility.

Alstom to supply 17 additional Metropolis trains to Singapore Alstom has signed an agreement with Singapore Land Transport Authority (LTA) to supply six additional Metropolis trains (36 metro cars) and 11 additional Metropolis trains (33 metro cars) for the extensions of Singapore North East Line (NEL) and Circle Line (CCL) respectively. All 69 Metropolis cars will be manufactured in Alstom’s Barcelona site. The contract value is about 150 million Euros.

Alstom has successfully delivered over 100 Metropolis trains (450 metro cars) in operation to Singapore, serving the

6 MAY 2018

35.5km long Circle Line and 20km long North East Line. Additionally, Alstom provides maintenance training to its customers and supplies spare parts for these trains.

Metropolis is Alstom’s metro train solution. Twenty five cities in the world have ordered 5,500 Metropolis cars since 1998. It is available in both driverless mode and driver mode. Alstom has implemented some of the first driverless metros in the world, including Singapore North East Line.

Omar Hariri appointed new CEO of Saudia Cargo

Omar Hariri has been appointed as the new Chief Executive Officer of Saudi Airlines Cargo Co, Hariri has extensive management experience and various achievements in many of the leadership positions he has held over the past years in the fields of transportation, supply chain and logistics.

The new CEO will lead the company and strengthen its current position in accordance with the transformation strategy which took into account, the development of all services provided, the promotion of performance and production, in addition strengthen the aspects of security and safety in all stations and facilities to meet the international quality standards.

Saudia Cargo currently is going through important stages of its transformation 2020 program launched early 2017 in line with the Saudi 2030 vision, aiming to upgrade the various services and sectors and all of its working cadres.

Saudi Arabian Airlines (Saudia), the national airline of the Kingdom of Saudi Arabia, has selected SITA to support its strategic expansion plans by introducing modern, world-class IT infrastructure across 200 of the airline’s offices located in 100 cities and airports in 60 countries.

The solution will support the airline’s global IT infrastructure which connects all Saudia outstations with its headquarters and various data centers worldwide. Sita will introduce its unique ATI Cloud solution, which will allow Saudia to manage and distribute its business applications, information and business services on-demand, anywhere in the world.

The agreement also includes infrastructure, IT support and round-the-clock service through a dedicated service center.

Saudia’s incremental growth and global expansion has seen the airline open new offices in key cities and in turn, has developed new IT requirements to support the demand for the carrier’s continued growth in passenger numbers in the Kingdom and beyond.

Director General of Saudi Arabian Airlines, His Excellency Eng. Saleh bin Nasser AlJasser said,“Saudia has a critical role to play

Saudi Arabian Airlines expands network infrastructure

in the nation’s Vision 2030, and continues to grow both in the Kingdom and beyond.”

Hani El-Assaad, SITA President Middle East, India and Africa, said,“With the rapid

progress of hosted applications and cloudbased environments, it is the right time for Saudia to adopt cloud solutions across its network.”

Al Islami Foods partners with Mitsubishi Corp Al Islami Foods recently announced that Mitsubishi Corporation has acquired a minority stake in the UAE-based halal food manufacturer. The decision to partner with Mitsubishi Corporation followed a thorough study by the company into the strategic options for new product development that will help increase the frozen food market share in the GCC and wider global markets.

Furthermore, it is expected the collaboration will help Al Islami Foods to grow their footprint in the HORECA (Hotel, Restaurant and Catering) and food service segment within the UAE. The strategic investment will enable the local superbrand to capitalise on Mitsubishi’s well-established distribution in key international markets particularly in Asia.

Al Islami Foods enjoys the second largest market share in the frozen meat products in the UAE and has embarked on an ambitious plan to expand its operations. Prospects look bright for the brand, due to the company’s

proven market expertise and the booming global halal food industry which is projected to be worth more than US$ 1.7 trillion by 2020 with consistent double-digit growth year on year.

While the company has already established its footprint in the HORECA segment through effectively marketing high

quality poultry products, Al Islami Foods is poised to write a new chapter in its growth, by inviting brands such as Mitsubishi to invest with the promise of strong return on investment into one of the fastest growing sectors in the GCC- frozen halal food.

PwC acted as lead advisor to Al Islami Foods on the deal.

MAY 2018 7

AI, robotics, block chain transform aerospace industry The recently held Global Aerospace Summit showcased how technological advancements in artificial intelligence, robotics, block chain and connectivity are transforming the aerospace, aviation, space and defence industries. The importance of partnerships, collaborations and youth engagement were highlighted by a number of key participants including Mubadala, Etihad Aviation Group, Lockheed Martin, UAE Space Agency, Facebook, Hyperloop One and many others.

His Excellency Mohammed bin Ahmad Al Bawardi, Minister of State for Defence Affairs welcomed international guests to the UAE, where a knowledge based economy has formed a central national focus. He pointed out the fact that the UAE is the first country

Trans Gulf globally recognised for excellence in health and safety by BAM International Trans Gulf Electromechanical, part of Al Naboodah Group Enterprises (ANGE), was recently recognised as one of the safest subcontractors in the Middle East, and awarded the title of Overall Global Safety Contractor of the Year 2017

by BAM International. BAM International is a subsidiary

8 MAY 2018

to appoint a minister for artificial intelligence, and highlighted an ambitious goal of establishing a settlement on Mars by 2117.

Khaled Al Qubaisi, Chief Executive Officer, Aerospace, Renewables & ICT for Mubadala was interviewed by CNN’s John Defterios in which he talked about the Middle East region being one of the fastest growing aviation and aerospace markets in the world, driven largely by surging tourism, booming economies and the great geographic location.

He said that it is expected to see an annual growth of six per cent in air traffic for the next two decades, that’s 30 per cent above the global average.

Harj Dhaliwa, Managing Director Middle East & India, Hyperloop One spoke about his company offering a brand new mode of

of Royal BAM Group, one of Europe’s largest contracting companies.

The award is testament to Trans Gulf and ANGE’s commitment to Health and Safety. This forms part of the extensive sustainability work currently being undertaken.

Trans Gulf was recognised for its work as the MEP subcontractor on the Museum of the Future Project and selected as a winner from a pool of 70 companies audited

by BAM International.

The awarding panel highlighted Trans Gulf’s commitment to health and safety, and commended the company on its proactive measures of procuring safety equipment, worker wellness campaigns and initiatives, the Visible Felt Leadership programme under which senior management regularly inspect worksites, and the high quality of its employee villages.

transport. Combining space, aerospace and rail engineering technology into one. He said,“We will be giving time back. 300 to 500 kilometers can be done in half an hour. It will disrupt logistics, cargo, the way we plan and move and how we get to work. It will bring jobs, economic growth and opportunities. We have proven the technology works.”

“We’ve had a big launch with DP World looking at the logistics market. We are looking at a brand new logistics model in a similar way to air freight. The whole supply chain is being reviewed. DP Cargo Speed could revolutionize and disrupt the market.

We are working actively in KSA, with two years with RTA in the UAE. We are taking a phased approach to the GCC. We are working in India and have been for past nine months. There is need and demand and great support from government. They have a history of leapfrogging technology.

In telecoms they went from nothing to 4G and skipped wired telecoms. We have signed a binding agreement to develop the first Hyperloop system from Mumbai and to start on the ground in 2019. Our pods are pressurized vessels. They are effectively aircraft with no wings. At some stage we are looking to partner with aerospace manufacturers. We are discussing with Strata on carbon composite materials. The aviation industry will be a key area to support us moving forward. By 2025 we will have our first commercial operation.”

DMCC handles 53 million kilos of tea/year DMCC hosted the first day of its two day Global Dubai Tea Forum at The Address Dubai Marina, under the theme of“Brewing the Future of Trade”recently.

Representing all segments of the tea supply chain, more than 450 international delegates, a 39 per cent increase in attendance from the previous event, descended on Dubai for the event’s seventh edition, and to take part in expert analysis on the current state of the global tea industry, as well as debate the challenges set to define its future.

Front row (R-L) Mr Ahmed Bahrozyan the Chief Executive Officer of RTA and Mr Nigel Johnson the Senior Managing Director of FAMCO. Back row (R-L) H.E Mattar Al Tayer Director General and Chairman of the Board of Executive Directors of RTA, Mr Yousuf AlRaeesi the Director of Government Affairs and HSSE-Automotive of Al Futtaim Group Company, Akash Passey the Senior Vice President of Volvo Bus Corporation.

FAMCO and Volvo sign biggest deal with RTA Volvo Buses and FAMCO have received an order from the Dubai Roads and Transport Authority to supply 143 Volvo luxury intercity coaches over the next two years, in what is FAMCO’s largest deal with the RTA to date.

Volvo’s B11R is the first bus in the Middle East to meet the strict Euro 6 standards of fuel efficiency and emissions; aiding the successful signing of the deal which was evaluated against the RTA’s rigorous 10-year total cost of ownership requirements, including fuel and operational costs.

Commenting on the significant new signing, Akash Passey, Senior Vice President for Volvo Buses Region International said,“Being the first bus manufacturer to introduce Euro 6-standards to the Middle East has enabled us to deliver the most fuel efficient, cost effective and

environmentally conscious public transport solution, helping the RTA to continue to lead the way in safety and sustainability. These buses mark the beginning of a new breed of modern buses focused on delivering clean, safe and efficient public transport.”

All 143 Volvo coaches delivered to the RTA will be fitted with the Sunsundegui SC5 bodies. These buses will have future-ready ITS systems which provide the most modern levels of fleet tracking, allowing the RTA to deliver an enhanced level of service to its passengers. Each bus will have premium interiors, fitted with 55 luxury ISRI lightweight ergonomic seats, and all of the comfort and accessories required by a modern commuter like USB charging capabilities for all passengers, foot rests, cup-holders and plush wooden finish flooring.

“DMCC is a market-maker, facilitator of trade, and a hub for the flow of commodities around the world, and through Dubai. The DMCC Tea Centre is internationally recognised as a centre of excellence for the industry and has helped secure the position of the United Arab Emirates as a valuable export route for the majority of the tea producing nations,”said Ahmed Bin Sulayem, Executive Chairman, DMCC. “Our state-of-the-art Tea Centre handles 53 million kilos of tea annually, and we are confident our market share will remain consistent for the foreseeable future,”he added.

According to Euromonitor International, the Middle East and Africa region will account for 11 per cent of the total global retail value by 2022, growing at a five per cent rate over the same period of time. In the UAE alone, Euromonitor International estimates that the tea market will be worth US$ 70 million in 2018.

MAY 2018 9

Strata spreads its wings through new partnership with Pilatus Aircraft Ltd Strata Manufacturing PJSC (Strata), composite aero-structures manufacturing facility wholly owned by Mubadala Investment Company PJSC, has signed an agreement to manufacture Belly Fairings for the PC-24, a twin-engine business jet produced by Pilatus Aircraft Ltd of Switzerland.

The announcement was made at the Global Aerospace Summit being held in Abu Dhabi from the 30th April to 2nd May. The manufacturing of the PC-24 Belly Fairings is the first step of a long-term agreement between Pilatus and Strata targeting the production of the complete PC-24 composite shipset requirement in the UAE. Strata has partnerships with the world’s leading aircraft manufacturers. This latest agreement reinforces Strata’s credentials as a UAE success story with ambitions to be a global frontrunner in its field.

Advanced aircraft manufacturing is a key area of focus at the 2018 edition of the Global Aerospace Summit, where leading local and international experts are gathering to discuss the future of the industry.

Based at Nibras Al Ain Aerospace Park and employing more than 700 people of 30 different nationalities – with 51 per cent of its workforce being Emirati nationals and 41 per cent of employees being female - Strata has partnerships with Airbus, Boeing, and Leonardo Aero-structures Division, and is a supplier to FACC AG, SAAB, and S.A.B.C.A.

10 MAY 2018

The company is part of Mubadala’s Aerospace, Renewables and ICT platform, which aims to advance the development of a leading aerospace hub in the emirate.

Strata also awarded Boeing 777X Composite Aero-structures Contract Strata recently also announced a new contract award with Boeing, to manufacture composite empennage ribs for Boeing’s new 777X airplane.

The agreement, announced at the Global Aerospace Summit, is Strata’s first contracted

statement of work for the 777X program, enabling the company to expand its role as a direct composite aero structures supplier to Boeing Commercial Airplanes. Strata will manufacture 777X empennage ribs at its state-of-the-art facility in the Nibras Al Ain Aerospace Park, in the Emirate of Abu Dhabi. This is the fourth work package that Boeing has awarded to Strata since 2013.

Strata already manufactures empennage ribs for the 777 and vertical fin ribs for the 787 Dreamliner. In the future, Strata will be a supplier of the 787-vertical fin.

Dubai Auto Zone expands capacity

The UAE and the GCC form one of the world’s largest and most dynamic markets for automobiles with Dubai traditionally a centre for used vehicles providing a range of integrated support services for businesses operating in multiple locations.

The Dubai Auto Zone (DAZ) launched in 2000 by DP World UAE region has rapidly become a trading hub for the pre-owned vehicle trade.

It now has high occupation with an active customer base of over 440 companies operating there and 2,600 employees.

Given the occupancy rate, DP World, UAE Region is creating

another similar facility in the National Industries Park (NIP), close to Jebel Ali Port with plans for multi-level car storage.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, says, “The expansion of our infrastructure for the used vehicles industry has been driven by demand from customers. The investment in the multi-level storage facility at the National Industries Park will complement the Dubai Auto Zone, optimising the use of land to cope with high occupancy rates.

The five-storey facility at NIP will cover 82,000 sq metres for up to 12,000 vehicles at a time when completed. It will be equipped with essential services required by the automotive industry under one roof, including 4,000 sq metres of office space for processing transactions and a 1,300 sq metres of workshop area for repairing, modifying and adapting vehicles to customer specifications.

The UAE’s automotive sector is rebounding following recent headwinds.

According to BMI Research, 2018 will see a 4 per cent growth in new vehicle sales in the UAE and 7.3 per cent in the MENA region, led by commercial vehicle sales while the GCC markets will return to positive growth of 2.9 per cent.

Turkish Cargo has been awarded the 2017 Schiphol Aviation Award In 2017, Turkish Cargo was chosen as the second best air cargo brand in Europe by the Amsterdam Schiphol Airport (AMS) authority, one of the busiest airports in Europe and in the world in terms of passenger and cargo traffic Turkish Cargo has achieved significant success throughout the year in terms of its increase in fleet capacity, its redesigned operational processes, its innovative developments in products and services, its ability to produce and implement new digital solutions, and its secured, fast and reliable transportation chain This significant award, which is an important indicator of Turkish Cargo’s sustainable success in the air cargo sector, was presented by the Amsterdam Schiphol Airport Chief Operations Officer Birgit Otto and Chief Commercial Officer Andre van den Berg.

MAY 2018 11

FMS Tech has been approved as an official in-vehicle monitoring system (IVMS) supplier in Oman

TS&S Signs Maintenance Agreement with Dubai Aerospace Enterprise Turbine Services & Solutions (TS&S), engine maintenance, repair and overhaul (MRO) provider for gas turbines and driven equipment that is wholly owned by Mubadala Investment Company PJSC, today signed its first maintenance agreement with Dubai Aerospace Enterprise (DAE) Ltd, a globally recognised aerospace corporation and one of the largest aircraft leasing companies in the world.

Announced during the Global Aerospace Summit in Abu Dhabi, the contract will enable TS&S to service various engine types within DAE’s substantial portfolio, including the Trent 700, GEnx and the V2500 engine -one of which has already been repaired in the Abu Dhabi facility.

12 MAY 2018

TS&S decided to become an overhaul facility for the V2500 engine in 2010, following substantial negotiations with IAE. TS&S has since been rapidly increasing its capability and capacity with the engine.

The agreement represents a breakthrough for TS&S, as it marks the company’s first major deal covering multiple engine types with a market leading leasing company.

The engine repair and overhaul operations will continue to take place at TS&S’ state-ofthe-art facilities in Abu Dhabi, which has been recognized by major engine OEM’s as a quality approved overhaul base. TS&S works with OEMs and airlines around the world, including Rolls Royce, GE, Pratt & Whitney, Etihad Airways, Indigo, Sri Lankan and Onur Air.

Oman Society for Petroleum Services (OPAL) recently announced Fleet Management Systems & Technologies (FMS Tech) as one of its seven approved in-vehicle monitoring systems (IVMS) suppliers for Oil and Gas Transportation Safety Technology in its first round of approvals.

Oil & Gas Safety Standards and Regulations require multiple qualifications and approvals to be met before a company can supply to the Oil & Gas industry in Oman. This is due to several high-risk operations, that are potentially dangerous, if not managed and regulated properly.

OPAL has also created an advanced set of criteria for various Oil & Gas operating standards. One of these is solely focused on Health, Safety and Environment (HSE) and Road Safety principles of companies operating in Oman.

Historically, Oil & Gas transportations in Oman lacked an organized set of approved regulations.

OPAL’s new standards are now solving the fragmented standards and ensuring HSE and Road Safety standards are regulated on a national level.

FMS Tech, the major supplier of Oil & Gas Transportation Safety Technology in the Middle East, was recently shortlisted for two industry accolades offered by the annual Logistics Middle East Awards. Both category nominations were for Supply Chain performance optimization; one in the Energy industry, and the other in Fast Moving Consumer Goods (FMCG).

FMS Tech is now one of the seven OPAL-approved IVMS suppliers that was announced in its first round of approvals.

Tristar receives Happiness@Work Award Tristar received the “Best Workers Welfare Program” award at the Happiness@Work award ceremony organized

by Sustainable Mindz in Dubai. Tristar was selected for

“instituting positivity, happiness and a sense of belonging at the work place environment that inspires and engages employees.”

Tristar has a welfare programme in place to take care of their truck

drivers and ground staff through its Drivers’ Professional League (DPL) program to encourage safe driving practices; provision of staff accommodation; and initiatives to upgrade their skills

through English and computer education classes. The DPL program encourages drivers to be more proactive in HSE activities, it also recognizes and rewards safe drivers.

the release into the atmosphere of 89,600 tons of carbon dioxide – the equivalent of eliminating the emissions of 18,000 vehicles annually Tabreed is a partner of choice for organizations across the GCC in providing environmentally friendly district cooling solutions that support the region’s energy sustainability.

With 72 district cooling plants

located throughout the region, Tabreed currently delivers over 1 million refrigeration tons to key developments in the region including iconic infrastructure projects such as Abu Dhabi’s Al Maryah Island,Yas Island, Sheikh Zayed Grand Mosque, Dubai Metro, Dubai Parks and Resorts, and the Jabal Omar Development in the Holy City of Mecca, Kingdom of Saudi Arabia.

Tabreed’s Q1 2018 net profit AED 77.7 Million Abu Dhabi, United Arab Emirates: National Central Cooling Company PJSC (DFM: Tabreed), the leading regional district cooling utility company, released its 2018 first quarter consolidated financial results.

The company continues to deliver strong and consistent performance from its 72 district cooling plants across the GCC, which deliver almost 1.1 million refrigeration tons (RT) of cooling capacity to customers.

Operational highlights – three months ended 31 March 2018: Total Group connected capacity across the GCC of 1,093,818 RT. Acquisition of 50% of S&T Cool District Cooling Company LLC on Reem Island in Abu Dhabi to become its sole owner.

The plant has connected capacity of over 32,000 RT and is the

sixth plant in Tabreed’s portfolio providing district cooling to Aldar developments Successful completion of three-year pilot project to develop digital ‘smart controller’ technology to intelligently manage district cooling plants to improve operational performance by decreasing energy consumption in partnership with Masdar Institute of Science and Technology, a part of the Khalifa University of Science and Technology Environmental highlights – three months ended 31 March 2018: 179 million kilowatt hours was saved across the GCC – enough energy to power approximately 6,000 homes in the UAE every year These power savings prevented

MAY 2018 13

Al-Futtaim Logistics opens cold storage facility Al-Futtaim Logistics, a leading integrated logistics and supply chain solutions provider, has announced the expansion of its services with the opening of a state-of-the-art cold storage warehousing facility in Dubai.

Located at Jebel Ali South Free Zone, the multi-temperature facility has space for more than 1,600 pallets with full temperature control ranging from +18°C to -22°C. The facility incorporates worldclass warehouse management technology

including capturing all the attributes of the products combined with double-deep storage which optimises space and enables high throughput. The new facility has been designed for piece and pallet picking for speed-to-market orders.

Customers utilizing the cold storage facility can also take advantage of Al-Futtaim Logistics’ value-added services such as barcoding, labelling, date coding which are compliant with local and regional GCC

Dubai Government recognises Transguard’s quality Leading UAE-based business services provider, Transguard Group, was honoured on Tuesday, 24 April, at the renowned Dubai Quality Awards, where the company was recognised for delivering business excellence across the organisation.

Transguard excelled across all categories in an extensive judging process, which had criteria including business results, leadership skills for shaping the future of the business and ensuring the organisations

14 MAY 2018

ongoing success, as well as adopting and implementing a diverse range of employee initiatives to ensure learning and development.

(L-R) Dr Abdulla Al Hashimi, CEO Transguard Group and His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai Transguard Group

regulations and are in line with international standards of food safety storage.

The facility also offers a dedicated onsite office for local authorities thereby enabling fast-track inspections to ensure the products stored meet stringent standards.

Al-Futtaim Logistics has expanded its primary services into the Kingdom of Saudi Arabia and Oman and is set to extend the new warehouse facilities to its regional F&B customers.

DP World reports 7.3 per cent growth in first quarter

Continental claims award for road safety at UAE’s Global Infrastructure Congress Continental, the leading German tyre manufacturer, has received a prestigious Acknowledgement Award at the Global Infrastructure Congress (GIC) in Dubai for its recent road safety initiative, urging UAE motorists to maintain high alertness levels to promoter safe driving on the roads.

Hosted earlier this month under the patronage of H.E. Dr. Abdullah Belhaif Al Nuaimi, Minister of Infrastructure Development, UAE, the award was presented to Continental for its regional road safety initiative that revealed how UAE motorists turn to different types of caffeinated drinks to help them maintain concentration and prevent road injuries.

Schneider Electric’s Innovation Hub on Wheels showcased smart utilities in the UAE.

FedEx - UAE’s Great Place to Work FedEx Express announced that, for the eighth consecutive year, it is officially ranked amongst the ‘Best Workplaces in the UAE’ for 2017-2018, by Great Place to Work®.

“It’s an honor to be recognized by the Great Place to Work® Institute, and a confirmation that by investing in our team members, we build a positive and successful workplace environment and culture. FedEx is committed to putting our people first. We want to see our colleagues achieve their full potential, and we provide

them with the means to do so – through education support, mentoring, and more. Their accomplishments are our success,” said Jack Muhs, regional president of FedEx Express Middle East, Indian Subcontinent and Africa.

The FedEx“People-ServiceProfit”philosophy is based on the belief that by taking care of our people, they will provide an outstanding level of service to customers, which leads to profit, that in turn can be invested back into the business and its people.

FedEx believes that team member development and

growth are central to making this philosophy a reality. They work closely with their managers on individual development plans and are provided with tools to facilitate their growth. Through the FedEx Virtual Academy, everyone working for FedEx Express can access a variety of training materials and courses to further their own skills. Additionally, FedEx Express team members can apply for the company’s Tuition Assistance program, which provides financial support to enable any team member to pursue further education.

DP World Limited handled 17.6 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first quarter of 2018, with gross container volumes growing by 7.3 per cent year-onyear on a reported basis, and 8.4 per cent on a like-for-like basis, well ahead of Drewry Maritime’s industry estimate of 4.6 per cent global throughput growth for 1Q2018.

The first quarter witnessed a continuation of the recovery in global trade and all three regions delivered growth, especially our terminals in Europe, Middle East & Africa and Australia. UAE continues to deliver stable growth and handled 3.8 million TEU, growing 2.9% year-on-year in 1Q2018.

At a consolidated level, our terminals handled 9.2 million TEU during the first quarter of 2018, a 6.6% improvement in performance on a reported basis and up 6.8% year-on-year on a like-for-like basis.

MAY 2018 15

COUNTRY REPORT - KINGDOM OF SAUDI ARABIA

16 MAY 2018

P

etro-dollars earned from oil exports comprise the majority of Saudi Arabia’s revenues, yet gas is seen as key to diversifying the economy. The medium-term National Transformation Programme (NTP) calls for a 48 per cent increase in dry gas production by 2020 – from 12bn standard cu feet per day (scfd) in 2016 to 17.8bn scfd. The country is also seeking to make optimal use of the associated gas alongside oil recovery, as well as develop non-associated gas fields.

According to its analysis of the role natural gas will play in the Saudi Vision 2030 development plan, Jadwa Investment has calculated that gas output will have to rise by as much as 6.6 per cent on average each year in the decade to 2030 to meet the demands of a growing population and industrial development.

Saudi Arabia develops

natural gas

industry To diversify its domestic energy mix, the Kingdom of Saudi Arabia is investing in developing its natural gas resources. If the Kingdom is to make the most of the cost opportunity granted to it by oil, it must reduce the amount of oil used to generate power for factories and petrochemicals plants. Oxford Business Group has this report

Gas expansion Jadwa Investment’s paper on Natural Gas and Vision 2030, published in October 2016, notes that the target in the NTP is in keeping with the last decade’s expansion of gas production, which it said grew by 47 per cent between 2005 and 2015 when it reached 11.6bn scfd. The report notes that over that period, the country’s power, water and petrochemicals plants have consistently used all the gas produced in the Kingdom.

Domestic demand peaks in the summer months when electricity is used to power air conditioning, and it is at this time of year that the country’s power producers directly burn crude to meet any shortfalls.

Economists have long since warned that burning this valuable commodity rather than refining or exporting it is a costly action.

With production costs of US$5 per barrel, the country was losing approximately US$31 with each barrel of oil burned in the lowprice environment of the first half of 2016, when the average sales price of Saudi crude was just US$36 per barrel. Jadwa estimates that by 2030 lost earnings could reach US$71 for every barrel of oil used to generate electricity domestically.

More than two-thirds of sales gas produced in Saudi Arabia comes from the Ghawar field in the Eastern Province, which is tapped for both associated and nonassociated gas. The Kingdom has invested

MAY 2018 17

COUNTRY REPORT - KINGDOM OF SAUDI ARABIA

Group of big fuel tanks Ras Tanura Oil Terminal, Saudi Arabia

was launched in 2002 to promote best in exploration and development of nonpractices in the economic consumption associated gas because production from of electricity, and was followed by the these fields is unaffected by fluctuations in establishment of the Saudi oil production, such as Energy Efficiency Centre. the reductions Saudi Electricity use However, reducing wasteful Arabia made in 2017 as use patterns was a difficult task, part of the supply-cut expanded by 85 as individual and industrial pact between members per cent in Saudi consumers alike have benefitted of the Organisation of from highly subsidised the Petroleum Exporting Arabia between electricity.

Countries and other oil In 2016 the government producers, including 2005 and 2015. began to reduce subsidies as Russia. By 2015 associated The National part of its fiscal consolidation gas accounted for oneprogramme, but also to third of the country’s sales Energy Efficiency encourage more moderate use gas, down from 42 per Programme was of electricity. At the start of 2016 cent in 2005, thanks to the price of natural gas and its the development of nonlaunched in derivative – the primary source associated fields.

2002 to promote of feedstock for petrochemicals – cost US$0.75 per million Consumption best practices British thermal units (Btu).

Electricity use expanded in the economic After subsidies were reduced, by 85 per cent in Saudi customers were expected to Arabia between 2005 and consumption of pay US$1.75 per million Btu 2015. The National Energy electricity for propane and US$1.25 per Efficiency Programme

18 MAY 2018

million Btu for gas. Even at these prices, gas in Saudi Arabia is 50 per cent cheaper than in the US and 400 per cent below prices in Asia.

Saudi peak electricity demand is expected to reach 120 GW by 2030, according to Jadwa, and the company calculates that this means the Kingdom will need 135 GW of installed capacity by that time – nearly double the capacity it had in 2015. The report points out that for gas to power a high proportion of this generation capacity, significant investment will be required for exploration and production activity in the country’s gas fields. If gas is used for 70 per cent of generation, for example, the nation must produce 32bn scfd, significantly more than the 17.8bn scfd target for 2020 outlined in the NTP.

New developments Most of the gas due to come on-stream between 2017 and 2020 is conventional nonassociated gas. Saudi Aramco, the country’s state-owned oil company, is developing three new gas complexes at Wasit, Fadhili and Midyan which will have a combined non-

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associated gas processing capacity of more than 5bn scfd, according to the company. The Wasit Gas Plant (WGP) near Jubail is supplied by two new fields at Arabiyah and Hasbah, which began production in 2016. Hasbah has seven single-well platforms and Arabiyah has six wells, with each field capable of feeding the WGP with up to 1.3bn scfd of non-associated gas.

The WGP was the first Saudi Aramco facility designed to process non-associated gas. The plant processes 2.5bn scfd of non-associated gas and supplies 1.7bn scfd of sales gas or methane to the master gas system, while also producing 4800 tonnes per day of molten sulphur.

Furthermore, the WGP also processes 250,000 bpd of gas to make feedstock – including ethane, propane, butane and natural gasoline – for the petrochemicals industry.

Heat waste of the WGP is turned into steam at its on-site co-generation plant that is capable of generating 750 MW of power, 600 MW of which is distributed to other Saudi Aramco facilities through its own supply network. Approximately 40 per cent of the materials used to construct Wasit were sourced in Saudi Arabia, and more than 1800 Saudis, including technicians, engineers and managers, were employed as contractors on the project.

Fadhili Project The Fadhili complex is being developed 85 km north-west of Jubail at a cost of SR50bn (US$13.3bn). The facility at Fadhili will process 2.5bn scfd of nonassociated gas including 2bn scfd from the Hasbah offshore field and 500m scfd from the onshore Khursaniyah field.

Fadhili is expected to produce 1.5bn scfd of sales gas and 4000 tonnes of sulphur.

It will supply 470m scfd of gas to a co-generation plant that will provide Fadhili with steam and power while also feeding 1100 MW into the domestic electricity grid.“Saudi Aramco’s multibillion-dollar investment in Fadhili will considerably increase the share of gas in the Kingdom’s energy mix and fits in with our long-term strategy to

20 MAY 2018

Saudi National Museum, Riyadh, Saudi Arabia

COUNTRY REPORT - KINGDOM OF SAUDI ARABIA

lower emissions,”said Amin Nasser, CEO of Saudi Aramco, when he announced the Fadhili project in June 2016.“Gas will be of vital importance to the Kingdom’s ongoing industrial diversification and economic development, while enabling better energy efficiency in the utility sector.”

In July 2016 Saudi Aramco awarded 10 contracts for the project, including an offshore facility award for Mumbaibased conglomerate Larsen & Tubro, a downstream contract for Saudi KAD, and a combined heat and power generation contract to Saudi Electricity Company and France’s Engie. Then in December 2016 South Korea’s Doosan Heavy Industries and Construction announced it had been jointly awarded

While the weather conditions of the region certainly presented difficulties during construction, it also gave way to opportunity.

Plans for a 400-MW wind farm are in the works, a first for the Kingdom’s renewable energy strategy a contract with Engie worth US$900m for the co-generation facility at Fadhili.

Upon completion, the power plant will be jointly owned by Saudi Aramco Power Holding Company and Saudi Electricity Company, each with a 30 per cent stake, and Engie with 40 per cent.

Doosan Heavy Industries will be in charge of the engineering, procurement and construction of the co-generation plant, which is due to be completed in November 2019.

The Fadhili complex is expected to create 4500 jobs for Saudis,

OPEC’s viewpoint To what extent has OPEC’s decision to adjust production achieved its intended target?

Mohammad Sanusi Barkindo, SecretaryGeneral, Organisation of the Petroleum Exporting Countries (OPEC): Thus far, the results are encouraging.

From January 1, 2017 OPEC and a group of 11 leading non-OPEC oil producers began the implementation of production adjustments totalling 1.8m barrels per day (bpd). We have seen a steady rise in conformity. In January 2017, conformity levels were 86 per cent, while in February this improved even further, rising to 94 per cent. In March and April conformity reached 98 per cent and 102 per cent, respectively. Inventory levels are decreasing, investor sentiment has improved and industry investment is starting to pick up. This high level of conformity is bearing fruit, especially when you consider how far the oil market has evolved since the market rebalancing process began. These are all signs of a renewed sense of positive momentum and stability in the global oil market.

What can be done to improve coordination on production between OPEC and nonOPEC members?

Barkindo: We are making every effort to achieve our common goal of lasting stability in the global oil market. The decisions taken at a recent meeting of OPEC and non-OPEC states in May 2017 have provided a renewed sense of forward momentum to this collaborative process, and are a testament to the determination of the 24 participating countries to achieve healthy oil market growth. This is the only way forward for our industry.

How will unconventional production affect OPEC member states moving forward?

Barkindo: The future energy environment will certainly have an adequate number of challenges, but it will also offer many opportunities. In the coming years the world will need more energy to fuel a rapidly growing global economy, which is expected to more than double by 2040. It must also meet the increasing needs Port of the world’s Oman massively of Salalah,

expanding population, which is forecast to reach a staggering 9bn people by 2040.

To meet this demand, all forms of energy will be required, including renewables such as wind and solar, which are expected to continue increasing. In terms of nonOPEC supply, we have seen a decline in recent times due to the low oil price environment.

However, there has been an uptick of late, mainly due to the resurgence in US tight oil production. In the long term we expect non-OPEC supply to continue to rise steadily, reaching a high of 61.4m bpd in 2027, before dropping to 58.9m bpd in 2040. This all boils down to the fact that OPEC will be needed to fulfil most of the additional long-term oil demand. For crude oil this means an estimated 8.9m bpd between 2015 and 2040, and 12.6m bpd for liquids.

How will the global oil trade evolve in the future?

Barkindo: Trends in long-term global oil trade point to an increase in crude imports being delivered to the Asia-Pacific region from the Middle East. Our “World Oil Outlook” estimates that imports to the Asia-Pacific region will grow by 9m bpd between 2015 and 2040. Of that, we forecast that 6.5m bpd will come from exports originating in the Middle East.

By contrast, product demand and crude runs are expected to decline in developed nations, along with their crude oil imports. This can be seen with imports to the US, Canada, Europe, Japan and Australasia, which are forecast to drop by 3m bpd during the same timeframe.

There could be a gradual increase in flows from Russia and the Caspian region via the Eastern Siberia-Pacific Ocean oil pipeline; however, we expect the Middle East to Asia-Pacific link to dominate trade growth.

As far as Africa is concerned, we foresee export volumes decreasing in the long term, due to increasing domestic demand and rising domestic refining capacity, along with additional declines in ageing production areas.

Other contributing factors relate to decreasing African exports to the US and Europe, caused by the recovery in US tight oil production growth and progressive declines in European refinery runs, respectively.

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COUNTRY REPORT - KINGDOM OF SAUDI ARABIA

and a dedicated training centre is to be established in collaboration with government agencies to ensure citizens receive skills training and work experience as part of the project. Education and employment drives are important to spur diversification in the energy sector, and lead the country away from a reliance on oil and the jobs that it supplies. Local oil players recognise the need for this, and the exciting opportunities new energy sources and solutions will bring. “Diversification is key to job creation, not only because it increases the number of jobs, but also because it creates possibilities for more high-tech jobs that young Saudis would be interested in taking,” Salaheddine Dardeer, CEO of oil refinery Luberef, told OBG.

22 MAY 2018

Midyan While output from the Midyan field in the north-west of Saudi Arabia near Tabuk may be more modest at 75m scfd and 4500 bpd of condensates, it is an example of innovative, cleaner power generation. Midyan is fed by seven non-associated wells producing sweet gas, i.e., low in sulphur. It supplies Al Muwaylih power plant near Duba, which will generate 520 MW per day using Midyan’s gas, and a further 50 MW per day through Saudi Electricity Company’s solar thermal power plant.

During construction from 2013 to 2016 the teams who worked on building Midyan often had to contend with winds of up to 70 km per hour, which made it impossible to work with cranes. While the weather conditions of the

region certainly presented difficulties during construction, it also gave way to opportunity.

Plans for a 400-MW wind farm are in the works, a first for the Kingdom’s renewable energy strategy. The farm was initially conceived to be at Midyan, but in mid-2017 the location was moved to Dumat Al Jandal.

New energy sources In Turaif To maximise its use of natural gas resources, Saudi Aramco is also developing an unconventional, or tight gas, facility in Turaif in the north-west of the country. It aims to generate 50m scfd that will be used to power the Saudi Arabian Mining Company’s (Ma’aden) phosphate mine at Waad Al Shamal industrial city. According to Jadwa Investment, this project may be comparatively

COUNTRY REPORT - KINGDOM OF SAUDI ARABIA

The chemical industrial zone advantage

Skyline view at Riyadh Kingdom Tower, Riyadh, Saudi Arabia

modest in scope to others in the sector, but it has greater long-term significance, as it marks Saudi Aramco’s first step in unlocking the Kingdom’s reserves of unconventional gas.

An experiment in wind energy also took place in Turaif, with the completion of the Kingdom’s first individual turbine there in February 2017. Wind Turbine No. 1 provides power to the bulk plant and thus reduces the amount of electricity Saudi Aramco has to buy from the Saudi Electricity Company. The wind turbine project was developed by specialists from Saudi Aramco’s Power Systems team, with GE selected to design, supply and construct the turbine.

What advantages have the development of industrial zones provided to manufacturers?

Mohammed Al Badr, Managing Director, Saudi Chemical: The main advantage of having a factory established in an industrial zone, such as Sudair, Al-Kharj and Jeddah, is having to deal with one counterpart for logistics and operations, rather than different government entities. However, industrial zones in major cities are currently congested and have limited land available, while those located in remote areas require a lot of work. In addition, companies cannot develop permanent bases in such areas, as the Ministry of Municipal and Rural Affairs has the right to reallocate the land originally devoted to warehouses to residential use at any time. The establishment of a stronger logistics authority and permanent land allocation to factories with appropriate cargo and ports logistics would allow for longer term industrial planning and growth.

The country is currently developing logistics hubs across different regions with free zone incentives and Customs and handling facilities.

This will help promote economic growth and regional diversification.

In what manufacturing areas do you see potential for public-private partnerships (PPPs)?

Al Badr: The potential is usually greater in industries such as defence where the government is the only client and contracts have to be long term to incentivise investors.

At the moment, however, there is no unified regulatory framework for PPPs, which restricts their wider use. Pharmaceuticals are another sector in which PPPs could play a greater role in the future. One form of partnership the Ministry of Health is looking at relates to the outsourcing of medical or pharmaceutical supply to the private sector, rather than buying and storing large numbers of items at the ministry’s facilities. This links local pharmacies to primary or secondary care hospitals so that patients can collect prescriptions from any

pharmacy using their national ID numbers. The pharmacy then collects the money directly from the government, which saves around SR4bn (US$1.1bn) in logistics costs and eliminates the sale of counterfeits.

How is the government seeking to increase the local output of pharmaceutical products?

Al Badr: The government is increasingly giving preference to local production and procurement. In the pharmaceutical industry one way of doing this is to facilitate product registration by the Saudi Food and Drug Authority. It used to take two years to register a drug locally, compared to six months in Europe.

With the new rules now being implemented, a drug that has already been registered in advanced economies will automatically also be available in the Kingdom. This improved ease of doing business will incentivise manufacturers to localise production. As a result of the government’s strategy to increase local content, we have also signed agreements with a number of international companies to localise the production of pharmaceuticals in Saudi Arabia.

What role can research and development (R&D) play in expanding product manufacturing?

Al Badr: Deepening local manufacturing of generic drugs constitutes the low hanging fruit, but partnerships with international companies and the transfer of specialised technology can yield greater results in the long term. The priority is for products that tackle diabetes and other lifestyle-related diseases.

Despite high demand, we do not produce such products locally. However, there are universities and pharmaceutical colleges – including King Abdulaziz City for Science and Technology – which are starting to collaborate with international companies in this field. R&D is a long-term investment with a minimum nine-year return prospect. Having international companies manufacturing specialised, patented products in local factories would contribute to the quality of manufacturing and provide positive branding for Saudi Arabian pharmaceuticals. www.oxfordbusinessgroup.com

MAY 2018 23

24 MAY 2018

COVER

The refrigerated warehouse and

cold chain The cold chain industry is changing fast. Between the increased development and usage of temperature sensitive biologic pharmaceuticals and consumer preferences for convenient, fresh foods, the cold chain must adapt quickly. www.datexcorp.com recently compiled this comprehensive report on the trends most prominent for the refrigerated warehouse and the cold chain

O

ne main factor is dominating the cold chain these days: the power of consumers.

Today’s consumer values convenience, wholesome food and just-in-time delivery. Consumer tastes have changed and continue to evolve towards a preference for locally sourced, ethnically diverse, healthier fresh food products in a wide variety of options.

Moving away from highly processed foods with a long shelf life to temperaturesensitive perishable food products requires an adjustment in the food supply chain.

Because consumers value convenience and fast delivery, there are added complications.

From U.S. ports to distribution centers, 3PLs and privately owned refrigerated warehouses, designing a cold chain that meets consumer needs can seem daunting.

The future looks bright consumers drive growth The sheer number of consumers has increased across the world in recent years and continues to expand. Consumers value

convenience, quality, service and real time information. Whether they order from Alexa, Amazon or the corner supermarket for home delivery, consumers want it fresh and fast. Industry experts anticipate that there will be 55 million smart devices in consumer homes by 2020. Think of all the orders that can be created by pairing the Internet of Things (IoT) with consumer desires for popular brands, a desire for convenient automatic replenishment and innovative “hot” new food products!

Today’s consumers, especially Millennials, expect variety. Variety=more and more SKUs as food manufacturers add new packaging types, flavors, sizes and other options. Because of the desire for fresh food products in increasing variety and need for convenience, food producers and manufacturers are altering what they are producing, where it is being produced and how it is distributed and transported to the door of consumers.

More fresh and chilled products are being ordered in smaller quantities from a wider range of product choices. This

MAY 2018 25

COVER

It’s likely to be a bumpy ride. No longer will is causing a proliferation of new product refrigerated warehouses be able to exclusively development, product and packaging enjoy the simplicity of pallet in-pallet out changes and updates. operations. The cold chain needs to change Consumers crave information about and must become as flexible and transparent the products they purchase and use their as possible and that will take technology, Smartphones, tablets and other devices to find forward-thinking business executives and and share information and their opinions on investments in innovation. social media. This real time feedback loop can Currently global pharma industry is have a measurable impact on demand. Trending valued at $1.2 trillion. Between 2015 products can increase spikes in demand. and 2021, this is projected to rise by 41 Out-of-stock popular goods result in per cent. Pharmaceutical products that backorders and disappointed consumers require refrigerated storage who vent their frustration on are anticipated to increase by social media, causing some Moving away 70 per cent within that time potential damage to brands. period. This is largely due to the It all happens so fast… from highly transition to biologically-based When it comes to food, processed pharmaceuticals in new product 2017 was one of the most development. In addition, important years in history. foods with continual growth in vaccines and The food and grocery insulin products is also fueling industry is changing at a long growth in the temperaturebreakneck speed, due to shelf life to sensitive product sector. consumer buying habits Pharmaceutical manufacturers and expectations. The food temperatureare anticipated to increase industry is changing faster sensitive production of temperaturethan the supply chain can controlled vaccines and biologic accommodate it. In less than perishable drugs for such conditions as two years, 17 CEOs of major food products rheumatoid arthritis and Type 2 food companies left their diabetes, among other conditions. positions and were replaced requires an The increased volume of by more “fresh-thinking adjustment vaccine and biologic medication executives”. The food industry production combined with new is searching for a new in the food transportation regulations is consumer-centric retail model supply chain driving accelerated growth in and the design of this new the airfreight transportation paradigm impacts the cold of pharmaceuticals. Of the top selling chain industry. pharmaceuticals thus far in 2018, nearly half Consumer buying preferences have are temperature sensitive pharmaceutical changed markedly. Today’s consumer products, mainly biologics. prefers freshly prepared, locally sourced Biologic drugs as well as the food products. This is altering the way many manufacturing process involved with shippers do business. Setting up regional production, make these pharmaceutical supply chain networks, accessing regional products temperature-sensitive in nearly transportation routes and temperatureall instances. Lack of proper temperaturecontrolled logistics and warehouses is vital controlled storage degrades the pharma and transformative.

Consumers’ hunger for convenience helped product, making it less effective.

Another trend increasing the need for create the meal-kit industry, a new menu pharmaceutical product refrigeration is the item for today’s busy consumer. Now even evolution of a variety of precision medicine Walmart has entered the cutthroat industry, competing with industry giant Amazon in the innovations that range from cellular therapies to biomarker testing, regenerative medicines grocery wars. Add to this the proliferation of restaurant delivery mobile apps and the party that use stem cells.

Some of the therapies involve extracting is just starting to heat up. tissue or blood from patients which must What does all of this mean for cold storage then be transported to a facility for some warehouses? Better buckle up Buttercup.

type of genetic or other manipulation then returned to the patient. Each step in this type of therapeutic process is potentially a cold chain task, requiring stringent constraint on monitoring the condition of the shipment.

Use of temperature monitoring electronics, insulated containers, refrigerants and other logistics practices are needed to ensure safety in human use.

The nature of many pharmaceutical and life science products makes it necessary to transport, handle and store them within an established temperature range. In some instances, new technology products are required when dealing with specific products, such as data loggers to monitor the storage temperatures of vaccines.

Expansion of Value-Added Services 3PL cold storage operators are optimizing the utilization of their assets. Because refrigerated warehouses are especially expensive to build and operate, extending services beyond merely handling and storing products makes perfect economic sense.

Providing an array of value-added services also serves to help build a partnership between the 3PL and its customers.

According to the International Association of Refrigerated Warehouse’s 2016 Productivity and Benchmarking Survey, 56 per cent of the revenue recognized by the cold chain industry comes from non-storage activities. Today’s multitemperature warehouse customer is more likely to outsource work such as logistics management, repacking, labeling, packaging and other activities to save money and reduce the burden on their operations. Third party warehouses are also providing light processing to reduce the burden on food producers and manufacturers.

By shifting the cost of the warehouse investment from the customer to the 3PL, it can be spread across multiple customers.

Value-added services provide additional incentive for customers to select the refrigerated warehouse operator and help reduce their overall expenses. In selecting a public cold storage warehouse, 3PL customers also benefit from the economies of scale, have a lower point of entry to the temperature-controlled supply chain and have access to already developed delivery networks and do not need to invest heavily in systems, technology and logistics expertise.

MAY 2018 27

COVER

In addition to providing new revenue stream, 3PL cold storage operators have found that being able to provide a wide array of value-added services gives them a competitive edge in today’s crowded market.

For some 3PLs, however, the complexity of billing for value-added services for many different customers, inventory types, activities and metrics means that they are missing out on revenue. This typically occurs for 3PL cold storage operators that are not using WMS software with 3PL billing capabilities, using legacy systems or using systems not specifically developed to meet the needs of third party logistics providers. Just as with other issues in warehouse operations and inventory management, having the necessary tools can make a major impact on profitability.

Labour shortage Across the supply chain industry, businesses are reporting that they are suffering from a shortage of qualified candidates to fill essential positions. Whether it is a warehouse worker, truck driver, IT or operations professional, the lack of labor diminishes the capabilities of the business. According to industry experts, because many shippers have been outsourcing warehouse and transportation to 3PLs, they may not be aware of the extent of the labor shortage and the challenges this poses to the supply chain. This presents new opportunities for third party logistics operators, however.

Many cold storage warehouse operators now report offering more value-added services to compensate for the lack of labor or need to reduce costs.

As labor pools tighten, many supply chain operations are looking towards technology for help in filling the gap. Because of the new focus on technology, workers need increased training. Whether dealing with providing new services or last mile delivery, cold chain workers need to become more skilled to meet these higher expectations.

Increased Adoption of Innovative Technologies Including Robotics and Automation Warehouse automation, originally popular in Europe where labor and land are more expensive, is now reaching more widespread adoption in North American cold storage warehouses. Several factors are combining to increase the adoption of new technologies:

28 MAY 2018

Shortage of refrigerated warehouse workers Worker safety, comfort and employment longevity issues from exposure to intense cold temperatures Availability and cost of new technologies that can streamline efficiency and replace manual work Need for increased speed and accuracy of operations Desire to optimize storage within the available facility footprint Need to decrease waste and product damages Ability to reduce overall costs, especially energy expenses and cold loss Private and public refrigerated warehouses have been replacing existing systems used in routine packaging and palletizing with automated systems. Many multi-temperature warehouse operators have shown an interest in adopting AS/RS warehousing.

Environmental and sustainability concerns

Whether it originated from consumer sentiment or the need to simply cut costs, cold storage warehouse operators have become increasingly aware of energy and water consumption. Many 3PL and private warehouse operators have adopted enterprise-wide sustainability initiatives, including: Building features designed for longevity and sustainability Utilizing alternative refrigeration options such as NH3, low charge and fluorocarbonbased systems Reducing dependence upon HCFC refrigerants Implementing reclamation, recycling and re-use programs Implementing energy management plans to reduce energy use and cost Accelerated Inventory Turns Ensuring that supply chains are able to be flexible, stable and capable of moving the According to cold chain industry experts, long-term storage now accounts for a fraction appropriate amount of goods to the correct locations at the right time is essential in of total warehouse income in many facilities. meeting consumer expectations and reducing To improve inventory turn velocity, shippers waste and damages are often relying on Multi-temperature warehouses a Just-in-Time (JIT) The food and are investing in ways to reduce strategy. This utilizes consumption such as cross docking to ship grocery industry energy upgrading lighting, replacing products in and out on traditional fan motors with the same day to avoid is changing electronically-commutated versions warehouse storage fees, at breakneck and installing smart controls. preserve the quality and Cold storage warehouses often value of temperaturespeed, due find that large inefficient coolers sensitive goods and to to consumer and freezers may be consuming save time in processing 30-50 per cent more energy than inventory. buying optimized equipment. Changing Cold storage habits and switch-initiation lighting to devices warehouse operators that rely on motion sensors and that rely on industry expectations. automatic dimmers can make a leading supply chain The food significant impact on expenses. solutions have a By anticipating demand, supply competitive advantage. industry is chain operations can be better Having real time, changing faster positioned geographically to serve accurate information end consumer. Because the that can be transmitted than the supply the products handled and stored in digitally is critical to refrigerated warehouses are subject speedy warehouse chain can to spoilage, damage and diminished operations and fast accommodate it quality and value, getting the goods inventory turns. This is to consumers quickly is essential. because moving goods Being able to tailor production and quickly requires that cold chain companies distribution to meet demand can reduce share detailed information accurately across product waste and quality reduction that the supply chain as well as bills of lading and can lead to food safety issues. other vital information.

COVER

Food safety issues According to estimates from the Centers for Disease Control and Prevention (CDC), foodborne illnesses cause approximately 1 in 6 Americans (48 million people) to get sick. Of these, 3,000 people die and 128,000 are hospitalized from foodborne diseases.

Issues regarding food safety have increased in number and at times, in complexity. Factors impacting the increased numbers of product recalls include but are not limited to: Undeclared allergens in food products Incidence of foodborne pathogens Misbranding and mislabeling Inadequate or lack of pasteurization documentation Counterfeit food products To protect consumers, there is an enhanced need for worker safety training as well as for air quality testing, swab tests for listeria and a greater focus on efficiency to safeguard the quality of food products. Another major issue in food safety involves the cold chain itself. Perishable goods are subject to biological decay processes. Delivering perishable goods that are safe and of acceptable quality requires that the products are maintained within the appropriate specific temperature range during transportation and storage. Cold chain industry studies show that this remains challenging. Problems with precooling, transportation ground operations, commercial handling practices and other issues have been noted as weaknesses in the cold chain and need to be addressed to prevent product degradation and food safety issues.

Growth in Online Grocery Sales Anticipated to Increase Demand for Cold Storage Warehouse Space The acceleration of consumer demand and increase in e-commerce grocery sales is expected to fuel demand for more refrigerated warehouse space.

According to real estate experts at CBRE, the increase in online grocery

30 MAY 2018

Today’s consumer prefers freshly prepared, locally sourced food products.

This is altering the way many shippers do business

sales is set to disrupt food product storage and home delivery.

As consumers gain more confidence from positive experience shopping online, grocery retailers are exploring new options to increase online grocery sales. Designed to reduce concerns regarding spoilage and diminished product quality, the new models include refrigerated lockers at terminal stations, instant delivery service with a one to two-hour delivery window; “to go�options to enable consumers to order online and retrieve at the retailer during a specific time window.

To reduce costs and time of delivery to consumers, often refrigerated warehouses are situated near densely populated areas. The high cost of cold storage warehouse construction and ongoing operation, escalating land prices and capacity constraint have an impact on new construction and often encourage vertical development and use of automation. Because heat infiltration is greatest through the floor and roof, taller buildings tend to have better energy efficiency than lower or wider buildings of equivalent volume.

Having common order profiles, even for multiple companies can encourage automation integration, highly useful for fast-paced e-commerce fulfillment operations.

COVER

Conclusion What is going on in the cold chain this year?

Consumers are driving change and growth in the cold chain industry.

This means SKU proliferation, faster inventory turns and an increased need for real time data transparency and fast shipments. More individual orders, processed and delivered faster is now the norm.

Development and adoption of innovative new temperaturesensitive biologic pharmaceuticals is increasing the need for refrigerated transportation, transparency and cold storage warehousing as well as for new technologies to monitor and safeguard products.

The labor shortage continues and the investment in new technologies to compensate advances. Third party refrigerated warehouses have increased the range of value added services that they provide to shippers.

Cold storage warehouse operators have become increasingly aware of and invested in reducing energy consumption and adopting sustainable operations.

The continued incidence of foodborne illness is a major issue in the cold chain industry. Problems with insufficient worker training, precooling, transportation ground operations and commercial handling practices remain weaknesses.

The projected increase in online grocery sales is fueling demand for more cold storage warehouse space. An FMI/ Nielsen report indicates a projected pattern of growth from $19 billion to $100 billion by 2024. Current U.S. cold storage warehouse occupancy rates already top 85 per cent.

Location of refrigerated warehouses tends to be near population centers, agricultural areas and at or adjacent to centers of consolidation. This is to reduce transit time to consumers and take advantage of ways to reduce cost.

The cold storage warehouse industry remains dominated by the top 10 operators which own 80 per cent of the market.

MAY 2018 31

ONLINE FREIGHT PORTAL

Shipa Freight (online forwarding platform) allows users to get rate quotes, book, pay, track ocean and air shipments globally.

It’s simple, easy to use and accessible through the desktop, laptop, tablet and mobile app

Agility launches Shipa Freight 32 MAY 2018

A

gility recently announced Shipa Freight, the first fully integrated online freight service that allows users to get rate quotes and book, pay and track ocean and air shipments around the world.

Shipa Freight provides instant, no-obligation rate quotes from the countries that account for 95 per cent of global trade and allows users to manage their international shipments with a simple, easy-to-use tool accessible by desktop, laptop, tablet and mobile app.

“Shipa Freight is a simple, technologydriven answer for small and medium-size businesses trying to take the complexity out of their international shipping,”said Agility CEO

ONLINE FREIGHT PORTAL

“Shipa Freight is a simple, technology-driven answer for small and mediumsize businesses trying to take the complexity out of their international shipping,” said Agility CEO Tarek Sultan

Tarek Sultan.“It gives them the transparency, flexibility, competitive pricing and customer service that the industry offers only to multinationals and high-volume customers.”

Shipa Freight is backed by Agility’s global network of more than 22,000 experienced employees in 500 branches and over 100 countries. It gives customers the support of a trusted global network and allows small and medium-size companies to access the world’s growing markets. Agility customer support is available 24/7 to help them book and manage their shipments, or to get rates for routes not quoted online.

“Shipa Freight’s digital platform allows users to complete a shipment completely

online,”said Toby Edwards, CEO of Shipa Freight.“This includes shipment booking, a range of payment options, and online tracking, which have not been widely available for small and medium-size businesses until now.”

In a recent Agility survey of 800 SMEs, small and medium-size companies said they needed the complexity taken out of compliance, customs requirements and cross-border bureaucracy if they were to do more international trade.

Shipa Freight helps customers overcome these issues by providing a compliance database with information on documents required on all trade lanes, helping them navigate the legal and regulatory requirements that are obstacles for many small businesses.

“Shipa Freight is unique among online freight services,”Sultan said.“It offers both air and ocean, including Full Container Load (FCL) and Less than Container Load (LCL) options. It provides users with the ability to manage their freight from start to finish via quote-book-pay-track features and 24/7 customer service. And it makes use of Agility’s existing global network and scale, which means it’s got built-in flexibility, expertise, and deep understanding of how to move freight around the world.”

Shipa Freight is one of several technologyled innovations that Agility is using to make logistics more efficient and drive down costs for customers.

MAY 2018 33

AIR CARGO

The bird consignment Etihad Cargo and the International Fund for Houbara Conservation (IFHC), one of the world’s leading conservation programmes, recently transported a large shipment of vulnerable Houbara bustards for release into their natural habitats

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n the past three years, the partnership between the two organisations - Etihad Cargo and the International Fund for Houbara Conservation (IFHC) - has led to the successful relocation and integration into the wild of more than 3,000 Houbara across the world. This particular shipment done recently transported 100 Houbara for release into their natural habitat.

The venture, which is part of the Sheikh Khalifa Houbara Reintroduction Programme, began in 2014, when the two organisations signed a partnership agreement. In 2017, more than 2,000 birds were transported safely to countries in Asia and North Africa, which have more

MAY 2018 35

AIR CARGO

hospitable environments, thereby increasing the birds’ long-term survival.

The Houbara are bred in centres in Abu Dhabi managed by IFHC and then released into their natural habitat in countries across the world. IFHC has developed protocols based on ground breaking ecology on the breeding and release of the Houbara, and every release site is studied to ensure the birds have the optimal chance of survival.

Justin Carr, Vice President of Etihad Cargo, said, “Our motto is ‘From Abu Dhabi to the world’ and it is literally the case with our partnership with IFHC. It is an honour to be able to safely transport the Houbara to countries where they can thrive, and play a small part in Abu Dhabi’s project of restoring this iconic species in the wild.”

Commenting on the partnership, Mohammed Saleh Al Baidani, Director-General of IFHC, said, “The range of the Houbara stretches from Morocco to Mongolia, so it is critical that we are able to move the birds from Abu Dhabi to countries across the species’ range safely and securely.”

Abu Dhabi’s Houbara programme was initiated over 40 years ago by the late Sheikh Zayed bin

36 MAY 2018

“The range of the Houbara stretches from Morocco to Mongolia, so it is critical that we are able to move the birds from Abu Dhabi to countries across the species’ range safely and securely.”

-Mohammed Saleh Al Baidani, DirectorGeneral of IFHC

Sultan Al Nahyan, the Founding Father of the UAE, to restore sustainable wild populations of the species to the areas of the world where they were under threat of extinction. In that time, it has developed into the world’s leading Houbara conservation programme. Etihad Cargo receives the Houbara at the Live Animals facility at Abu Dhabi International Airport. The climate in the aircraft hold is adjusted to the ideal level to ensure the birds’ comfort during the flight. As is standard when transporting live animals, the Houbara are the last to be loaded onto the aircraft and the first to be offloaded.

In 2016, Etihad Airways signed the Buckingham Palace Declaration, as a demonstration of support for the prevention of trade in illegal wildlife.

The UAE is signatory to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and the airline provides the necessary support to help ensure that wildlife controlled under CITES is not carried unless the necessary paperwork is in order. While the transport of Houbara is usually prohibited under CITES, permission is granted on this occasion in support of an official conservation programme.

From left to right: Mohammad Al Bulooki, Executive Vice President Commercial, Etihad Airways; Peter Baumgartner, Chief Executive Officer, Etihad Airways; Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group; Abdul Khaliq Saeed, Chief Executive Officer, Etihad Airways Engineering; Khaled Al Mehairbi, Senior Vice President Abu Dhabi Airport, and General Manager of Etihad Airport Ground Services; Abdulla Shadid, Managing Director, Cargo and Logistics, Etihad Airways.

Year of Zayed Etihad Aviation Group’s initiatives for the Year of Zayed are based on the four themes, which are wisdom, respect, sustainability, and human development. The company’s initiatives are: 1) Humanitarian freighter 2) Zayed A380 & Abu Dhabi Experience 3) Abu Dhabi Birdathon 4) Zayed Campus and Young Aviators Tony Douglas, Group Chief Executive Officer of Etihad Aviation Group, said, “More than half a century ago, Sheikh Zayed envisioned Abu Dhabi having a world class aviation industry and infrastructure that is on par with the major cities of the world.”

Under the theme of respect, Etihad Airways will launch a specially branded freighter aircraft which will conduct humanitarian flights for charitable organisations throughout 2018. The first humanitarian freighter mission will take off in May. Etihad Airways will partner with Emirates Red Crescent, Khalifa Foundation, and His Highness Sheikh

Sultan Bin Khalifa Al Nahyan Humanitarian and Scientific Foundation to conduct these philanthropic missions across the globe.

To celebrate this vision and wisdom amongst the global audience, guests travelling on a specific A380 Etihad Airways aircraft will enjoy a host of content and services inspired by the late Sheikh Zayed, including themed inflight entertainment, kids packs and a photo gallery of his life.

Another exciting initiative will be the launch of an Abu Dhabi cultural experience. During the course of 2018, Etihad Airways will fly-in 1,000 guests from around the world to experience the capital’s vibrant culture scene, including visits to the Founder’s Memorial, Sheikh Zayed Grand Mosque, Wahat al Karama, and Louvre Abu Dhabi.

Combining the themes of flying and sustainability, Etihad Airways and the Environment Agency - Abu Dhabi (EAD) will host the Abu Dhabi Birdathon, a community event featuring the flamingos.

Several tagged flamingos, each one

nominated to an Abu Dhabi partner entity, will be tracked online as they fly off during the breeding season at the end of the year.

This initiative aims to drive awareness of environmental conservation, which the late Sheikh Zayed bin Sultan Al Nahyan was passionate about.

The final component of Etihad’s Year of Zayed campaign, focusing on human development, has two elements.

Etihad will dedicate its training facility buildings to Sheikh Zayed. The Etihad Training Academy building adjacent to the Corporate Headquarters will be renamed Zayed Campus – Abu Dhabi, and the Etihad Aviation Training facility in Al Ain will become Zayed Campus - Al Ain. In addition, Etihad will launch the Young Aviators programme for school children in the UAE. This initiative, which aims to inspire children, will involve guided tours of the Etihad headquarters and Training Academy in Abu Dhabi, including sessions in the full flight simulators.

MAY 2018 37

CARGO SAFETY

Global standards to generate

future demand The International Air Transport Association (IATA) urged aviation stakeholders to follow global standards and make greater use of operational data in order to safely accommodate an additional 3.8 billion air travelers by 2036

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peaking at the Safety and Flight Operations Conference, IATA’s Director General and CEO Alexandre de Juniac said,“Over the next 20 years, we expect to see a near doubling of passengers from the approximately four billion who traveled in 2017. Managing this growth, while making aviation even safer than it already is, will be a massive undertaking.”

De Juniac noted that 2017 was a very strong year for safety. There were no fatal accidents involving jet passenger aircraft and the fatal accident rate was 0.14 per million flights - the equivalent of one fatal accident for every 6.7 million flights - according, to IATA’s just released 2017 Safety Report.

38 MAY 2018

“If we look at it another way - using fatality risk - on average, a person would have to travel by air every day for 6,033 years before experiencing an accident in which at least one passenger was killed.

Yet we still have accidents, so we know there is room for improvement. Each fatality is a tragedy. And that rededicates everyone in the aviation industry to our common goal of having every flight takeoff and land safely,”said de Juniac.

Global standards Global standards and best practices are vital to sustaining safety improvements.

This is demonstrated by the performance of airlines on the IATA Operational Safety

CARGO SAFETY

Audit (IOSA) registry.“Now in its fifteenth year, IOSA is the recognized global standard for operational safety. Over the last five years, the accident rate for airlines on the IOSA registry has been nearly three times better than for non-IOSA airlines,”said de Juniac.

To ensure that IOSA delivers even greater value in the future, it is undergoing a digital transformation. Introducing automated advanced business analytics to the IOSA process will enable better management of resources, the ability to measure the effectiveness of standards, and an enhanced level of quality assurance. Digital transformation also will enable more seamless interaction on industry safety initiatives, standards and operational practices, as well as benchmarking.

Greater use of operational data “As the number of accidents declines, future safety advances primarily will lie in achieving a better understanding of what happens in the more than 100,000 flights operating safely every day, through analysis of flight information and other data resources. IATA’s Global Aviation Data Management initiative is a crucial part of this effort. The GADM program now includes information from over 470 different organisations. Over 90 per cent of IATA members are contributing to at least one of the GADM databases,” said de Juniac.

In a related initiative, IATA and the Civil Aviation Authority of Singapore (CAAS) recently signed a Memorandum of

Collaboration to establish a Safety Predictive Analytics Research Center in Singapore (SPARC). SPARC will leverage operational safety information from GADM to assess potential hazards and identify safety risks.

End users across the aviation community can then work collaboratively at the system level to address and implement appropriate safety measures to mitigate the risks, or even to prevent the occurrences of safety hazards.

De Juniac also said that IATA is developing a global database of turbulence reports to provide airlines with an enhanced situational awareness tool.“When our innovative turbulence data repository is operational early next year we expect to see a significant decrease in turbulence-related injuries.”

MAY 2018 39

MATERIALS HANDLING

SPAN Group has been in the region since 1989 and till date they continue to provide warehouse solutions for a large number of companies.

Munawar Shariff speaks to Walid Daniel, MD, about e-commerce, material maintenance, trends to watch for and changing demand

experts The warehouse

As the e-commerce market expands in the country and region, what requirements are you responding to for warehouses to be better equipped?

In the past few months, we have experienced a surge in inquiries related to e-commerce. The inquiries have mainly tackled the design of fulfillment facilities, order picking automation as well as order consolidation and sorting.

What warehouse e-commerce best practices do you work according to?

I don’t think that one can particularly define a specific set of e-commerce best practices. E-commerce best practices vary from one project to another, and depend on the volumes and throughput required for each operation as well as on the types of product and order

40 MAY 2018

mix each facility has.

If you were to look at the apparel, fashion, and related accessories industry; these operations and clients have a certain set of design criteria in common while most other businesses would have a different set of facility design criteria.

High order volumes require deeper levels of automation and semi automation which means storage using miniloads or shuttle systems, inbound and outbound conveyors, leading to an order consolidation area, which in turn leads to a series of packing stations. All these components have to be synchronised and balanced in terms of the throughput and processing speed of each module. On the other hand, lower volume facilities may spare the expense of the automated storage solutions and reduce the

MATERIALS HANDLING

MAY 2018 41

MATERIALS HANDLING

total linear metres of conveyors needed by installing simple straight conveyor sections with accumulation capabilities, and heavily relying on implementing efficient picking solutions such as Voice picking, S4 PTL (Pick/ Put-To-Light) or smart trolleys. This latter combination yields an excellent process at a lower price than an automated process.

So, it really depends on the type of business we are dealing with and its operational requirements.

Would you be able to tell us an estimated average age of materials handling equipment in use in warehouses in the

42 MAY 2018

country and region? How does the age of the equipment affect the company’s ability to meet the changing needs of the market today and in the near future?

The estimated average age of an electric forklift is 10 years, considering that the equipment is running on an annual average of 2,000 hours per annum.

However, we do have some trucks in the market that have been running for more than 12 or even 14 years.

Actually, the lifetime of a truck depends on several factors, such as: the annual operating hours, the type/model of the truck, the quality of the truck, how well

it is being maintained and taken care of, the environment in which the truck is operating, etc. If we look at a forklift operating in a cold store environment or a meat/fish processing factory, the machine will surely have a shorter lifetime when compared to a truck working in an ambient temperature storage facility.

As a truck gets older, the frequency and severity of breakdowns increase, thus affecting the operation; and with today’s growing e-commerce business, a very short breakdown in an equipment might affect the delivery time of products, thus the company’s reputation and consumer satisfaction.

MATERIALS HANDLING

the warehouse, using traditional material handling equipment controlled by navigation guided solutions.

What is the one equipment or solution that can greatly improve the efficiency of a warehouse?

In terms of material handling equipment, the usage of Lithium-Ion technology has a significant impact on the efficiency of an equipment in terms of operation.

Li-Ion batteries have no gas emission and are maintenance free. They offer fast and opportunity charging during breaks and downtimes for a 24/7 availability of trucks and flexibility in the warehouse.

Li-Ion batteries have a significant higher lifetime than a lead acid battery, and are approximately 30 per cent more energy saving.

Trends toocus: f mation: keebopticsin and auto robotics

How does a logistics warehouse manage equipment maintenance and or breakdown repair? Do you undertake that work or is there another market for that purpose?

Logistics warehouses usually manage the equipment maintenance and or breakdown repair by a certain level of service agreements with the OEM or its representative. At Span, we offer several types of level agreements: Preventive Maintenance – With On-Call Preventive Maintenance – Without On-Call Full Service – Includes Spare Parts Customised Preventive Maintenance – To meet the client’s requirement

With technology advancements being the norm for all handling equipment in the warehouse, how has demand changed?

Handling equipment are being affected by the introduction of automation, software, navigation and sensors. Today, we are seeing the early versions of driverless forklifts guided by on board navigation and controlled by smarter generations of WMS systems.

We are not talking about AGVs (Automated Guided Vehicles) that have traditionally been around to move pallets horizontally over a fixed path from point A to B. We are talking about free movement, almost anywhere, in the vertical and the lateral dimensions of

Ro tion of to lementa The imp ontinues n matio c ok for lo s ie and auto n a as comp petitive. expand ain com m re to on can ti ways a d autom n a ts o b ie Ro ffic ncy overall e ionally improve adit g, rming tr s pickin by perfo u s s ch a k nd s a ta g l n a manu ng, stori inspecti , g in rt o s . handling dictive and pre l Big data powerfu s: It is a hts ig s in analytic g n uncoveri r l fo a l it o ig to td data tha In . e id from the v ro hains p forecast supply c , helping to n io it and risk add aviours h e b r a e g consum becomin s is also improve to analytic d e s tool u in valuable pply cha ies in su c n ie c ing id effi v ro p ns by the operatio ation on nt inform tenance of a rt o p im ain y and m efficienc and systems. t n equipme s (IoT) / of thing Internet f IoT and o The use : rs o s n se chains is in supply entially sensors w expon d to gro t te s c o e p m x e the it one of tions a v o making n in dopted widely a years. past five e th over

MAY 2018 43

SOHAR PORT OPERATIONS UPDATE

Sustained success at

Sohar Port D espite volatility in the global maritime sector, Sohar maintained steady growth over the course of 2017 and successfully handled an average of over one million tonnes of cargo every week in the same year. The port’s container traffic increased by 36 per cent as compared to 2016 and dry bulk output saw a rise of 25 per cent. Sohar Port has received 3,075 vessel calls in 2017, which marked a significant increase of 17 per cent, despite the fact that the global trend leaned more towards consolidation and larger ships.

44 MAY 2018

“We expect this number to increase further this year, due to the new bunkering facilities that we will be introducing in 2018 alongside the new Sohar Port South expansion and the completion of the new Food and Agro Cluster,”says Mark Geilenkirchen, Chief Executive Officer, Sohar Port and Freezone.

Oman is also experiencing solid growth in the food logistics sector and e-commerce.

Rapid development of transportation infrastructure and demand for modern warehouses equipped with IT, are the key drivers behind influencing the growth of the industry.“We aim to prepare ourselves

Mark Geilenkirchen, Chief Executive Officer, Sohar Port and Freezone, gives Munawar Shariff an update on the current growth in business for Sohar Port and what challenges it faces in the year ahead in making a better profit than ever before

SOHAR PORT OPERATIONS UPDATE

to adapt to these changes and establish ourselves as a leader in the region,”continues Geilenkirchen.

“Additionally, our upcoming Sohar Port South expansion is fundamental to Oman’s national focus on growing the logistics and industry sectors as part of its ongoing economic diversification efforts,”he says.

This expansion will aid the steady growth in aggregate cargo volumes and investments at the port by delivering additional cargo capacity and attracting more business to Sohar.

Food logistics “One of our primary goals is to capture a larger portion of the food cargo trade in the region, and the new state-of-the-art Agro Cluster is an important component of the Oman government’s long-term food security strategy,” says Geilenkirchen.

The dedicated terminal features remotecontrolled quay cranes, 450 reefer plugs and

is equipped for an initial throughput of 1.6 million tonnes/year.

The sugar refinery is privately owned by the Oman Sugar Refinery Company; a governmental strategic food reserve facility regulated by the Public Authority for Stores and Food Reserve. The sugar refinery will boast a production capacity of one-million tonnes per annum. The grain milling plant is owned and operated by Sohar Flour Mills and will have a capacity of 500 tonnes per day.

This combination of food storage resources such as packaging materials from a plastics facility for PET due to open by 2020, alongside available steel and aluminium feedstock, and world-class logistics, makes Sohar an attractive option for investors looking for the perfect Middle East hub for food production. The new Food Cluster is set to play a major part in Oman’s plans to expand its food-processing sector.

The port’s container traffic increased by 36 per cent as compared to 2016 and dry bulk output saw a rise of 25 per cent. Sohar Port has received 3,075 vessel calls in 2017, which marked a significant increase of 17 per cent

MAY 2018 45

SOHAR PORT OPERATIONS UPDATE

Expansion plans “The Sohar Port South expansion, which is at its final stages, is one of our major projects in 2018. We are reclaiming around 200 hectares from the sea (adding to the port’s existing 2,000 hectare capacity) starting with approximately 50 hectares in the initial phase and adding more land area in later phases,” says Geilenkirchen. The second phase will be focused on hosting new industries that require deep water berths. “Trescorp, a Singapore-based oil and petroleum products trading firm, is one of the first investors to benefit from our new deep water project,” he says. Other investors are also being lined up to take advantage of the additional 150 hectares being offered as part of the Sohar Port South expansion.

Due to its close proximity to the bustling petrochemicals cluster, including the Liquid Berth and Tank Terminal, this expansion will be assigned almost exclusively for oil and gas-based investment.

46 MAY 2018

One of our primary goals is to capture a larger portion of the food cargo trade in the region, and the new state-of-theart Agro Cluster is an important component of the Oman government’s long-term food security strategy

Overseeing the Sohar Port South expansion is Sohar International Development Company (SIDC), which is a 50-50 joint venture between the Omani government and the Port of Rotterdam.

Metals and minerals cluster “Gulf Mining, one of the industries within the port, are constructing five ferrochrome smelters to boost metals output. Investment in the smelter will provide an essential boost to the growth of our metals cluster and will complement and support the iron and aluminium industries at Sohar,” says Geilenkirchen.

The metals cluster is one of the fastest growing divisions at the Port and have a high economic yield. Research indicates iron industries and their by-products experience significant growth as long as they continue to strive to meet demand.

Another major project was the production of antimony, a mineral which is primarily used as a fire-retardant.

SOHAR PORT OPERATIONS UPDATE

“Additionally, we have signed a US$ 60 million deal with a UK-led consortium which will see Sohar house the largest rare earth metal plant of its kind outside of China,”he says.

“We are characterising 2018 as the year of ‘Smarter Thinking’. The main feature of this concept is one that encourages the sharing of innovative ideas to modernise and simplify operations, and at the same time become more efficient,”says Geilenkirchen.

For example, the steam produced by the oil refinery at Sohar is a by-product of their operations but has significant energy potential.“To tap and utilise that energy, we are planning to build a pipeline to carry steam to other industries. The heat from the steam can be used as an energy source to produce subsequent products, and will therefore reduce energy loads and costs. To reduce operating costs, we’re also conducting a study to convert our port vehicles to run on hydrogen; another underutilised by-product from the industry.

Additionally, we are installing PV solar cells around our head office, which will reduce

the amount electricity drawn from the power grid,”Geilenkirchen says.

One of the most significant projects was the signing with India’s Pittie Group, which is one of the biggest cotton yarn manufacturers in the world, for a US$ 300 million cotton yarn project. The project, when completed, will produce 100,000 tonnes of cotton yarn per year and generate over 1,500 sustainable jobs in the Freezone.

With the establishment of Oman’s first bitumen refinery, the new plant will significantly reduce the reliance on imports of bitumen and asphalt for road paving and industrial applications. Due to the growing local and global market for asphalt and bitumen, the project will create new business opportunities and employment in the Sultanate, with 34 direct jobs for citizens generated in the first phase of operations.

In total around 26 companies are already reaping the benefits of unrivalled access to land, low-cost energy, and skilled workforce in the regio.

China’s belt and road initiative The Middle East plays a critical role in the Chinese ‘One Belt One Road’ initiative. The development of modern land and maritime silk routes will stretch from Shanghai all the way to Hamburg.“Due to the prime location of Sohar outside the Strait of Hormuz, we are ideally located as an important connecting hub on these maritime routes, and can direct cargo through the Suez Canal or around the Cape, depending on the vessel size and its final destination,”says Geilenkirchen.

“In 2016, we signed a sister port agreement with the Port of Shenzen in the People’s Republic of China. The agreement covers the development of mutually beneficial trade and shipping businesses and helps increase trade relations between China and Oman.

Our relationship with the Port of Shenzen is proving highly effective in areas such as port planning and construction, management and operations, environmental protection, information technology, personnel training and port security,”concludes Geilenkirchen.

MAY 2018 47

MATERIALS HANDLING

Automation/robots take over the warehouse Alain Kaddoum, General Manager, Swisslog Middle East speaks to Munawar Shariff and shares lots of insights into the current trends in the materials handling industry. Automation, he says, is not as expensive as is the general assumption in the market

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s per current market conditions, a lot of businesses are experiencing changing consumer habits, increased operating expenses and other challenges. Though many businesses understand that automation is the answer, not many invest in it.

Reports show that a lot of companies are still afraid of using latest technologies in their business operations as they assume they are too expensive. “I’d say this is one of the biggest challenge in this market. Businesses that are not going to implement any changes to the way they operate risk being left behind and the cost of inaction in this case can easily exceed the price of a modernisation project,� says Alain Kaddoum, General Manager, Swisslog Middle East.

Today, warehouses can be better equipped in numerous ways: agile and future-oriented software is the critical key for companies to adapt to market changes today and in the future and keep their warehouse operations optimised at all times. Businesses require a software solution that enables companies to

48 MAY 2018

SOHAR PORT OPERATIONS UPDATE

MAY 2018 49

MATERIALS HANDLING

optimise not only warehouse performance, but also their entire value chain. Many businesses seek an effective automated storage and retrieval system. Limited space, an awkward warehouse building, increasing inventory or turnover in unusual shapes or sizes can all make it difficult to find the right solution. Not only that, automated storage solutions need to be scalable while maximising space and performance. Staying flexible enough to respond to changing market requirements is also essential, as when new products launch, demand increases and regulations change. Picking and palletising is another critical requirement for warehouses and these functions make up to 60 per cent of warehouse operational costs.

The demand today is for effective and flexible solutions and respond to changing business conditions, by adjusting capacity.

50 MAY 2018

Trends

The future for intralogistics isn’t in a single technology like robotics, or sensors, or even Big Data, but rather how these elements can be tied together.

Flexible robotics and data-driven solutions is the direction we see

The supply chain is being impacted by a number of trends resulting both from the broader changes in society and advances in technology. Some of these are: Robotics that enhance inbound and outbound logistics for shippers Omnichannel logistics that facilitate smarter deliveries and address changing consumer habits The entrance of digital technologies (blockchain, drones, 3D printing, autonomous mobile robots, IoT connectivity, Big Data and VR amongst others) Customer-centric production and personalisation “These are just a few examples. The future for intralogistics isn’t in a single technology like robotics, or sensors, or even Big Data, but rather how these elements can be tied

MATERIALS HANDLING

together. Flexible robotics and data-driven solutions is the direction we see, with the end goals being cost-competitiveness for operations and a higher level of responsiveness and product availability for end customers,” continues Kaddoum.

E-commerce is another major trend to watch out for. Kaddoum says it is only going to grow larger in the coming years.“Traditional techniques of warehouse management are slowly becoming obsolete, and omnichannel orders mean your organisation needs to be ready with the right product on-hand, at the right time and ship it almost simultaneously with the customer’s ‘checkout’,”says Kaddoum.

Keeping that in mind, some of the warehouse e-commerce best practices that Swisslog supports with their automated solutions are: Target Two-Day Shipping – Most major online retailers now offer their consumers the

option of two-day delivery, if not same day shipping or pickup. Our solutions cater to this quick pace of business Combine Traditional and E-Commerce Warehouse Locations – E-commerce

warehouses do not necessarily require a different location or warehouse. Many companies today house traditional retail, B2B and e-commerce warehousing operations under one roof. However, different sections of the facility may be used for specific e-commerce or traditional fulfilment purposes. The automated solution should be intelligent enough to work around this.

Batch picking – The demand created by e-commerce requires quick and efficient picking of many different orders. Businesses recognise that best practices in picking mean fulfilling orders faster.

Flexibility – A smart warehouse is one that

is flexible. Operations should be adjustable and scalable depending on market conditions and demand. All plans and strategies need to adapt to real-time data regarding demand fluctuations, forecasts and changes in how consumers are ordering.

Trends that are impacting local retailers supply chains are: Artificial Intelligence and Robotics –

While automated picking and packing have been around for a while now, the next wave of change is being brought about by artificial intelligence or AI. A warehouse that deploys robots reduces costs significantly while boosting efficiency.

Focus on Supply Chain Visibility and Orchestration – Increasingly businesses in

the Middle East are focussing on the better visibility of supply chains. This is only natural,

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MATERIALS HANDLING

given that the Middle East is a retail-strong economy. Greater visibility will mean an improved ability to orchestrate the supply chain for efficiency, service and lower costs.

Smart Last Mile Fulfilment – Last mile fulfilment is always a big expense for companies. Therefore, there is a clear need to look for efficient and economic solutions. It is becoming increasingly popular in the Middle East to use telematics and route planning software to achieve smart last-mile fulfilment.

3D Printing – 3D printing is becoming increasingly popular in the Middle East.

Customers with 3D printing capabilities only have to download patterns and create their own parts on site. The aerospace industry is an example of one such sector that has adopted this technique. If this trend continues, it is not an exaggeration to say that distribution centres may become printer farms in the future rather than the warehouses of today.

Blockchain and Smart Contracts –

Blockchain and smart contracts are very popular in the financial services industry.

While it is still a relatively new concept in warehousing and logistics, the current trend indicates that this will be a way of life in the future. Blockchain enables“smart contracts“,

52 MAY 2018

which is the ideal solution for quality issues, late payments, delivery disputes etc. that are daily issues for logistics companies.

Solutions for local clients For Mai Dubai, Swisslog is working on delivering a fully automated storage solution for two warehouses: one for raw materials and one for finished goods, standing 14m and 25m tall. Both warehouses are operated by pallet-stacking robots. Alongside the two facilities themselves, Swisslog has also delivered a 1km-long monorail system – the largest such system in the Middle East – that connects to and from the production area.

The monorail uses 44 autonomous carts designed by Swisslog specifically for Mai Dubai. Each cart will carry two pallets. Overall, the project will more than double the current production capacity of Mai Dubai and will significantly increase its efficiency through the implementation of a fully automated storage and transport systems. Automation will also allow the racking systems to be packed closely together, allowing for greater storage density than with a manual warehouse. The project is scheduled to be delivered in the near future.

The order value of the project amounts to UD$21 million.

Another brand that has been automated

by Swisslog is Almarai in Saudi Arabia. The goal was to have processes run more quickly, increase transit quantities and reduce costs. To achieve this goal, Swisslog provided Almarai with several warehouses for palletised finished goods and a fully automated picking and goods distribution centre. Swisslog is also managing five sub-projects which implement the internal logistics systems within the various factories; step by step so that the company can continue to operate at the same time. The multi-million euro project included supply and installation of the following components: storage and retrieval machines, conveyors, refrigerated trucks (Automatic Reefer Loading System, ARLS), systems for automatic loading of HGVs, automatic picking modules supplied by KUKA, electric monorail suspension systems and SAP’s warehouse management system to control the material flows and data intelligently and efficiently.

Robots “Robotic warehousing is no longer something out of science fiction,”says Kaddoum.“It is happening right now, and there are many advantages to this. The most obvious advantage is productivity goes up. Robots can work

MATERIALS HANDLING

much longer hours and do not require as much rest. If deployed in shifts, robots can work 24/7, so your warehouse won’t ever need to close. They can also lift much heavier loads than human beings can. As a natural consequence of this, it means you won’t need as many pieces of heavy equipment no more forklifts, for example, and the number of accidents in the warehouse will drop dramatically. Most of these robots have been designed with safety in mind and are programmed with a number of different safety routines to protect themselves, the products, and the people who work with them. On the same note, warehouses using robots require far less oxygen, which significantly reduces fire hazards. Space saving is another advantage of using robots. As robots are much smaller in size than forklifts, it means that the aisles between the shelves can be made narrower and this will improve the amount of space used to store things. With the space saving, more storage can either be added or rented out.�

A data-driven warehouse is one that effectively utilises operational software specifically designed for effective warehouse management. The advantages of this are

many. Firstly, data can be used intelligently to analyse and optimise your warehouse, resulting in many critical insights. It also enables agility. With the help of data analysis, it is possible to future proof operations and stay flexible with IT solutions. Last but not least, intralogistics processes can be orchestrated to your needs, and you can keep your peak performance when needed.

Ecommerce and the retail supply chain E-commerce has fundamentally changed the nature of the retail supply chain. Fast and accurate delivery of orders is critical to ensure customer satisfaction and make a profit.

Some developments in robotics and automation technology in this sector are many.

Online shoppers require greater personalization. Therefore, warehouse managers must now consider automated solutions for split case picking, multiline item sorting and fast turnaround times. Further software should include functionalities such as returns handling, promotions and other value-add services.

The massive surge in e-commerce has prompted businesses to look for smarter and efficient ways to fulfil orders. Robots are the answer. In this sector, robots are now being used to assist with loading, unloading, sorting, picking, transportation, storage, delivery and audits. Robots helping with these tasks come in all shapes and sizes. They also use different forms of navigation tools such as rail, wire-guided, labels, magnet tape, laser, vision, geo-guidance and others. As time passes, robots will continue to become more intelligent and take over even more tasks than they currently do.

Use of robots has a number of advantages, all of which result in increased warehouse productivity.

MAY 2018 53

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ENHANCING THE BUSINESS OF LOGISTICS

THE REFRIGERATED WAREHOUSE AND ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

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COLD CHAIN A new look

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On top of the game

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Sustainable aviation fuel

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Goals set for 2025

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4/6/18 8:53

Combilift’s new facility Worth 50 million Euros

Turkish Cargo Future ready

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Coming soon

The first hyperloop is in the UAE

Dubai Trade 10 years of ESEA

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First commercial hyperloop system

TRANSPORT TECHNOLOGY

The hyperloop system is coming to the UAE very soon. An agreement recently signed by Aldar Properties PJSC and Hyperloop Transportation Technologies allows the latter to begin construction of the hyperloop system

Signing - Talal Al Dhiyebi, CEO, Aldar; Bibop Gresta, Chairman, HyperloopTT2

H

yperloop Transportation Technologies (HyperloopTT) revealed recently the signing of an agreement with Aldar Properties PJSC, the leading real estate developer in Abu Dhabi, which will allow HyperloopTT to start construction of a Hyperloop system as well as HyperloopTT’s XO Square Innovation Center, and a Hyperloop Visitor Centre.

The construction site is located in Aldar’s Seih Al Sdeirah landbank in Abu Dhabi and in close proximity to the residential development Alghadeer. It is conveniently located on the border of the Emirates of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport.

MAY 2018 55

TRANSPORT TECHNOLOGY

HyperloopTT plans construction of the line in several phases starting within the 10 kilometre allocation, with further development aimed at creating a commercial Hyperloop network across the Emirates and beyond.

Earlier last month HyperloopTT began construction of the first full-scale passenger and freight prototype system in Toulouse, France, and expects delivery of the first passenger capsule later this year. The capsule

Earlier last month HyperloopTT began construction of the first full-scale passenger and freight prototype system in Toulouse, France, and expects delivery of the first passenger capsule later this year 56 MAY 2018

TRANSPORT TECHNOLOGY

will be assembled and optimised in Toulouse, France, prior to use in the Emirates.

“This agreement creates the basis for the first commercial Hyperloop system in the world here in the Emirates, with the goal of eventually connecting Abu Dhabi to Al Ain, Dubai, and Riyadh, Saudi Arabia,”said Bibop Gresta, Chairman of HyperloopTT.“With regulatory support, we hope the first section will be operational in time for Expo 2020.”

“We are delighted to be working with HyperloopTT as they look to bring one of the world’s most revolutionary transportation technologies to Abu Dhabi,”said Talal Al Dhiyebi, Chief Executive Officer, Aldar Properties.“Alghadeer sits at such a strategic point within the UAE – close to major growth areas of both Abu Dhabi and Dubai, that it makes sense to pair it with rapid transport opportunities. We believe that Hyperloop technology can have a major positive impact on the lives of all of those living within our communities, and we look forward to this possibility becoming a reality.”

“A forward-thinking nation like the UAE is ideal for building the most revolutionary, most efficient, and fastest transportation system in the world,”said Dirk Ahlborn, CEO of HyperloopTT.“With this historic agreement in Abu Dhabi, we take a big step towards the world’s first commercial system.”

MAY 2018 57

FORKLIFT

With guests invited from all around the world, Ireland’s forklift manufacturer, Combilift opened its new global headquarters and manufacturing facility worth more than AED 220 million. Munawar Shariff was present at the opening and has this report

Ireland’s Combilift opens

€50 million facility

F

orklift manufacturer and material handling solutions provider Combilift has officially opened its new global headquarters and manufacturing facility in Monaghan, Ireland. Celebrating its 20th anniversary this year, the company also announced that it will be significantly expanding its workforce with the creation of 200 new jobs in the next three years.

The opening ceremony was attended

by Irish Prime Minister An Taoiseach Leo Varadkar TD. He said,“Combilift is an incredible home-grown Monaghan success story. When the company was founded 20 years ago, it had three employees, a brilliant

58 MAY 2018

concept, and the ambition to make it a reality. Combilift is playing a significant role in Monaghan’s success, and I would like to congratulate Robert Moffett and Martin McVicar and everyone at Combilift on their achievements to date and wish them every success for the future.”

Built at a cost of €50 million, the investment in the new 46,500 sq. m.

(500,000 sq. ft) facility will allow Combilift to realise its ambitious growth plans. Martin McVicar, Managing Director said,“We have employed an additional 230 people since we announced our plans for this factory in 2015 and the combination of this state of the art production plant and the growing skilled

workforce will allow us to double production within the next five years.”

Combilift currently exports 98 per cent of its products to 85 countries through its 250-strong international dealer network.

The current workforce stands at 550 people and the new employment opportunities will be for skilled technicians, design engineers, logistics and supply chain specialists and those with mechanical and electrical mechatronics skills.

Mass customisation Martin McVicar attributes the company’s impressive growth and its status as an acknowledged world leader in the material

FORKLIFT

handling sector to mass customisation.

“Combilift has set the benchmark for the mass production of customised innovative products. Mass customisation is the new frontier for both the customer and the manufacturer as customers are increasingly expecting products to be tailored to their requirements. We listen to and take feedback on board from our customers and dealers to identify solutions that best match their individual specific needs.”

Combilift invests seven per cent of its annual turnover in research and development to enhance its customisation capability and to maximise ROI for its customers.“The flexibility in our new facility means that we

MAY 2018 59

FORKLIFT

unique patented multi-positional tiller arm technology.“There is a growing demand for pedestrian trucks, driven by safety concerns where customers and/or employees are in the vicinity of operating forklifts,”said McVicar.

“It is our intention to significantly expand this range, as can be seen with the launch of the new high lift capacity Combilift Powered Pallet Truck (Combi-HC-PPT).”

New factory

can continue to accommodate any request for a customised material handling solution.

We also see ourselves as much more than a forklift manufacturer and are transforming the transport and logistics sector with our innovative, space-spacing products and our services.”

Combilift offers a free logistic and warehouse design service which enables customers to see the benefit that its products will bring to their business.“Our engineers proactively design, plan and produce material flow analysis and 3D animations - 150 to 200 per day for our worldwide customers - which clearly illustrate the capacity potential as well as the optimum flow of materials on their site.”said McVicar.

Growth of Combilift Established by Martin McVicar, Managing Director and Robert in Moffett, Technical Director, in 1998, Combilift is a privately held and fully capitalised company. It developed the world’s first multidirectional all-wheel drive IC engine powered forklift in 1998.

In the first year of operation it produced 18 units,17 of which were exported. The

60 MAY 2018

company has more than doubled in the last 5 years and now has 40,000 units in operation in over 85 countries.

Combilift’s product portfolio has expanded way beyond its first multidirectional model according to McVicar,“Combilift has always focused on a number of niche market segments and has a proven track record of launching one or two new products annually.

In the first 10 years we focussed on the long load material handling sector with the multidirectional range which revolutionised the handling of long materials, allowing customers to handle long products in less space more safely.”

Between 2008 and 2018 Combilift diversified its product ranged by developing a number of innovative space saving warehouse and heavy load handling products; the Aisle Master articulated truck and the Straddle Carrier (Combi-SC) respectively.

Pedestrian products were introduced into the range in the last five years, enabling Combilift to gain a foothold in this growing market. The Combi-WR, Combi-WR4 and the Combi-CS all incorporate Combilift’s

The new 46,500 sq. m purpose–built factory is set on a 100-acre site with room for future expansion when required. With 11 acres of roof space, it is one of the largest manufacturing operations under one single roof in the Republic of Ireland.

Incorporating the latest manufacturing processes with a focus on sustainability, the new factory will enable Combilift to double its output in a single shift across all production lines. Four 90 metre moving assembly lines produce a finished truck every 15 minutes. There are 60 welding bays, two plasma cutting machines, three paint lines which use sustainable water-based paints and three automatic shot blasters to cater for different sized products. 12,000 pallet locations ensure ample storage space for parts and components. The facility also includes a 50-seat cinema training room, 5,000 m² of office space and a dedicated R&D Development and Testing Centre.

Twenty three per cent of roof space is covered in skylights, enabling staff to work in natural daylight without the assistance of artificial lighting. Other lighting is provided through 1100 LED light with individual PIR sensors. Solar panels supply 185 kW of energy with a one MW Biomass plant fuelled by recycled wood (pallets etc.) to heat the spraying booths and assembly area. 110,000 litres of rain water are harvested for jet washing and bathroom facilities.

More than 50 truckloads of finished products are dispatched from the factory each week, and spare parts are shipped across the world to the dealer network.

Certified to international quality and safety management standards, the new headquarters and manufacturing facility has been awarded ISO 9001 international quality management system, ISO 14001 Environment Management and OHSAS 18001 Occupational Health and Safety Assessment Series.