Logistics Middle East - Feb 2010 by ITP Business Publishing

An ITP Business Publication Licensed by Dubai Media City

VERTICAL REALITIES How a niche focus can benefit logistics service providers in the region

MATERIAL WORLD NEWS AND ANALYSIS FOR SUPPLY CHAIN MANAGEMENT PROFESSIONALS

FEBRUARY 2010 ISSUE 65

Walid Daniel discloses the secrets behind the SPAN Group’s continual success

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CONTENTS

CONTENTS Issue 65 February 2010 For the latest news and stories go to

22 02 Editor’s Letter

14 ArabianSupplyChain.com

33 Ask The Expert

Can the material handling sector expect a much-awaited rebound in the Middle East?

Highlights of the month from the official website of Logistics Middle East magazine.

04 Readers Letters

16 Material Handling Report

Ulrich Koegler, partner at Booz and Company, highlights the benefits of specialising in niche markets for Middle East logistics companies.

Readers of Logistics Middle East provide their views on the industry’s hottest topics.

A comprehensive report on the material handling sector in the Middle East, with a general overview from Loc8’s managing director Stewart Arbuckle, together with results from Logistics Middle East’s 2010 market survey, and interviews with ten of the region’s most prominent players.

07 News Update • Logistics industry ready to celebrate with the Supply Chain and Transport Awards • Aramex finalises joint venture in Oman • First Bahrain starts Majaal operations • Abu Dhabi set for global logistics forum • Kuehne + Nagel increases UAE workforce • ACME opens Dubai pallet mole warehouse • Godrej reports 70% growth in Middle East • Dubai Trade honours e-service excellence • TNT introduces 30 trailers to local fleet

34 Facts And Figures Transportation statistics from a variety of regional and international sources.

38 Events Calendar A listing of seminars, conferences and trade shows for the Middle East logistics industry.

22 Interview: SPAN Group

40 Face To Face Interview

As one of the first companies to enter the Middle East material handling sector back in the late 1980s, Walid Daniel explains how SPAN Group has maintained its leadership position for over two decades in the industry.

The opening of its large-scale warehouse facility in Jebel Ali Free Zone South has marked the latest chapter in the success story of JBC Express Freight, explains managing director P.K. Ayyappan.

16 07

40 www.arabiansupplychain.com | FEBRUARY 2010

EDITOR’S LETTER

Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP BUSINESS PUBLISHING CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Diarmuid OMalley EDITORIAL Senior Group Editor Robeel Haq Tel: +971 4 435 6284 email: robeel.haq@itp.com Contributors Nadia Khan, Ed Attwood, Sarah Cowell ADVERTISING Publishing Director Diarmuid OMalley Tel: +971 4 435 6163 email: diarmuid.omalley@itp.com Sales Manager Jayant Dey Tel: +971 4 435 6106 email: jayant.dey@itp.com STUDIO Group Art Editor Daniel Prescott Art Editor Simon Cobon

Searching for leaders of the material world

ollowing the overwhelming response to our power list in the previous issue of Logistics Middle East, it’s now time to shift our attention to the local material handling sector. Despite a certain degree of turbulence in the last year, the market has started to experience its first green shoots of recovery around the world and that certainly holds true in this region. Our exclusive interview with Walid Daniel, managing director of SPAN Group, provides a fascinating insight into one of the first companies to operate in the sector – and one of the most successful too. We also catchup with executives from ten other leaders from the Middle East, including FAMCO, Logsquare, ACME Group, CHEP Middle East, BITO and Godrej & Boyce, with each interview looking at the common themes of growth, survival and innovation. Although these profiles will provide an interesting backdrop to the supply side of business, our market report would not be complete without touching on demand. For the first time in the magazine’s history,

we have conducted a readership survey, with approximately 250 material handling purchasers from across the Middle East taking part. Your opinions on the region’s market could be changed by looking at the results of this questionnaire, which are published on pages 18-20 (sponsored by the SPAN Group). Finally, what the material handling sector has traditionally lacked in this part of the world is manufacturing activities. However, this could be set to change, with news that Gulf Automobile Industry Corporation (GAIC), the Middle East’s first manufacturer of a forklift truck, has experienced such a positive response to its ‘Camel’ brand that it plans to move from a 14,000 square metre factory in Abu Dhabi to a 3 million square metre facility in Saudi Arabia. Its great news to start the year and we’re looking forward to other positive signs in the coming months. If you have any comments to make on this month’s issue, please email Robeel Haq, senior group editor of Logistics Middle East magazine (robeel.haq@itp.com)

To subscribe please visit www.itp.com/subscriptions 2 FEBRUARY 2010 | www.arabiansupplychain.com

PHOTOGRAPHY Director of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers G-nie Arambulo, Efraim Evidor, Thanos Lazopoulos Staff Photographers Isidora Bojovic, George Dipin, Lyubov Galushko, Jovana Obradovic, Ruel Pableo, Rajesh Raghav PRODUCTION & DISTRIBUTION Group Production Manager Kyle Smith Production Coordinator Louise Schreiber Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami CIRCULATION Head of Circulation & Database Gaurav Gulati MARKETING Head of Marketing Daniel Fewtrell ITP DIGITAL Director Peter Conmy ITP GROUP Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 435 6000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. Printed by Horizon Printing Press Controlled distribution by Blue Truck Subscribe online at www.itp.com /subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

*BPA Worldwide Audited Average Qualified Circulation 6,044 (Jan - June 2009)

READERS LETTERS

Future considerations for power list

Fadi Ghandour was the right choice

Dear Editor, Further to the publication of your Logistics Middle East Power List 2010, I would like to congratulate each of these exceptional leaders, who comprise the ‘who’s who’ of the industry. It was quite a comprehensive list, t,, although Saudi Arabia seems undernde der err represented, with the exc exception xceptio cep eptio ptio i of Syed Mustafaa from Al Majdouie and yed d Musta Al Ma nd d Brian McHale from Wared Logistics. ogistic gisti gis st Hopefully more and opefully peef ll iin the he future, future, r aass m d more industry experts avail off tth the h immense mmense mense ens ns opportunities pp rtunities in the p he Kingdom, K Kin ingd i we will begin to see s e more m representation in n the power nominate po p ower o we list. li t If I were allowed ll d to t nomin omin ominat mina in one CEO for would be orr next neext year, year year, a my pick p k wo Aamer Alireza, the man behind the first private container terminal in KSA, The Red Sea Gateway Terminal, and CEO of the Saudi Trade & Export Development Company (Tusdeer). Nadeem Qureshi

Dear Editor, An interesting list and I’ll have to agree with Fadi Ghandour being selected for the top position. I think he’s been an inspiration for others and proved what heights can be scaled with efficient leadership. It’s also nice that so much ‘local talent’ has made it onto the list, alongside their global counterparts. Ashok Mehta

Characteristics of a leader Dear Editor, Success is that old adage of ABC – ability, breaks and courage. That’s what Elias Monem from Agility is all about, so I’m particularly thrilled to read about his inclusion in your Logistics Middle East Power List. He has the courage and the daring nature to truly make a difference and that’s resulted in him taking Agility Logistics an extra mile every day. Asif Abdul Rauf

Personal opinion on rankings Pride of Saudi Arabian logistics Dear Editor, The power list published in the last issue of Logistics Middle East was very informative. On behalf of the Project Professionals Group (PPG), I would like to take this opportunity to congratulate everyone on the list, with a specific mention to Syed Mustafa for being the highest ranked person from Saudi Arabia. Kevin Stephens, general manager, PPG

Dear Editor, This is the first time I have seen such a list for the Middle East logistics industry, so congratulations. The rankings are good, although personally I would have placed Hamdi Osman from FedEx in either third or fourth position. Also, I’m assuming that Issa Baluch is not included because he’s sold Swift Freight to Barloworld. Shame really, I felt his presence was missing on the list. Iftikhar Chaudhry

Positive feedback from SNS conference Dear Editor, I would like to congratulate Mario Ghosn from Supply Network Solutions (SNS) and his entire team for hosting such a top conference in Lebanon. It was great to look at the photos from this event in the last issue of Logistics Middle East magazine. I was actually present and found the conference very worthwhile. The speakers were relevant and the information was up-to-date. In particular, Walid Daniel from SPAN Group provided a great presentation. I am very positive that this conference will open further opportunities for SNS in the future and CILT looks forward to being part of the follow-up event in 2010. Alex Borg, regional director, CILT

Please address your letters to: Logistics tics Middle East, PO Box 500024, Dubai, UAE or email: robeel.haq@itp.com robeel.haq@i q@ittp.com com (Please provide your full name and address, stating clearly if you do not wish them to appear in print. All letters will be edited for clarity of shortened to fit the allotted space).

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NEWS UPDATE

Logistics awards to celebrate Middle East achievements Supply Chain and Transport Awards (SCATA) will return to Dubai for a fourth consecutive year in 2010

eading players from the Middle East logistics industry will compete for trade honours at the fourth annual Supply Chain and Transport Awards (SCATA). The prestigious ceremony, which is organised by ITP Business Publishing, will be hosted at one of Dubai’s glamorous five-star hotels in June 2010. “Supported by continued investment in the Middle East’s transportation infrastructure, the region is producing some of the most impressive warehousing and transportation companies in the world,” commented Walid Akawi, chief executive officer of ITP Business Publishing. “Against this exciting backdrop, the Supply Chain and Transport Awards make a welcome return in 2010 to recognise the individuals and companies that stand out from this exalted crowd. The nominees will once again include a combination of regional and international players that have gone above and beyond in terms of their industry contribution,” he added. LEADERBOARD: SUPPLY CHAIN AND TRANSPORT AWARDS Which companies have been awarded the most trophies since the SCATAs were started in 2007? Gulf Agency Company (five awards) DP World (four awards) Jebel Ali Free Zone (three awards) Dubai Cargo Village (three awards) Aramex (two awards) DHL Express (two awards) Emirates SkyCargo (two awards) Maersk Line (two awards)

SCATA 2010 will include 16 categories in total, covering the logistics, sea freight and air cargo sectors in the Middle East. These include the Express Logistics Provider of the Year and 3PL Service Provider of the Year awards, which honour companies that have consistently delivered world-class services and facilities across the region over the past year. In addition, the FMCG Logistics Manager of the Year category will be awarded to the senior executive that has made a significant difference in managing their company’s in-house supply chain operations. “Since its inception in 2007, the Supply Chain and Transport Awards have emerged as a leading event for the Middle East logistics industry. Given the market challenges that our industry is facing on a global level at the moment, this is a perfect opportunity to remember those companies and individuals that continue to achieve excellence on a daily basis,” commented Issa Baluch, founder of Swift Global Logistics, who returns to the judging panel for the fourth consecutive year. Also coming back to the Supply Chain and Transport Awards in 2010 are Captain Mansoor Ghafoor (CEO of STALCO Group and president of National Association of Freight and Logistics), Ali Al Jallaf (vice president of Dubai Airports cargo unit), Salma Hareb (CEO of Economic Zones World), Dr Kanak Madrecha (senior manager of Dubai World and founding member of the Supply Chain and Logistics Group), Cedwyn Fernandes (MBA programme coordinator at Middlesex University Dubai) and Sebastian Thomas (head of supply chain at ZAFCO). The panel also welcomes the addition of Alex Borg, regional director of the Chartered Institute of Logistics and Transport (CILT). “The judging panel has never been stronger and we’re looking forward to receiving this year’s nominations,” added Baluch. “Award ceremonies in general are important in defining the benchmark for excellence and separating the outstanding achiever from the rest of the group. They also provide recognition to the best performers in the field, while inspiring others to emulate their success. This is exactly what we’re hoping to achieve with the SCATAs.” To receive further information, submit your nomination or book your tickets, please visit www.arabiansupplychain.com/scata www.arabiansupplychain.com | FEBRUARY 2010

NEWS UPDATE

NEWS IN BRIEF

Danzas has expanded its CSR (corporate social responsibility) programme with a recent pledge to support the production of donation envelopes for the Emirates Airline Foundation. The logistics company, which has worked with Emirates Airline for over a decade, will assist with the charitable project for the next 12 months. “As part of DHL, we have a responsibility to support local communities and use our core expertise to benefit society,” stated Enver Moretti, CEO of DHL Global Forwarding in the EMA region. AW Rostamani Logistics will host an opening ceremony for its latest warehouse in Jebel Ali Free Zone next month. The event, which takes place on 18th February 2010, is being hosted by Abdul Wahid Al Rostamani, chairman of AW Rostamani Group, together with Japanese partners Mitsui & Co and Mitsui-Soko Company. “This new facility has marked the next chapter in our growth and we look forward to welcoming partners and Jafza officials to this ceremony,” said Hajime Ogawa, managing director, AW Rostamani Logistics. Kuehne + Nagel has increased its management team in the United Arab Emirates, with the appointment of Dirkjan Mechielsen as national seafreight manager and Mark Bondonno as national airfreight manager. Mechielsen has joined the Dubai office from Kuehne + Nagel’s Istanbul branch, while Bondonno previously worked at DHL Danzas. “These appointments, along with our recent move into a purpose-built facility, have proved the company’s commitment to the Middle East,” said Christopher Smith, national manager of Kuehne + Nagel in the UAE.

8 FEBRUARY 2010 | www.arabiansupplychain.com

Aramex finalises Oman joint venture

Aramex founder and chief executive officer Fadi Ghandour has partnered with Z-Corp for the company’s latest expansion in Oman

Aramex has formed a joint venture with the Oman-based business conglomerate Z-Corp (Zubair Corporation) to provide clients in the Sultanate with logistics services such as storage and distribution, freight forwarding and customs brokerage. The new company will cater to a wide range of industries, including telecommunications, fast moving consumer goods (FMCG), military, retail and information technology. 3PL

“This agreement marks an important step towards expanding the depth and range of our services in Oman, while expanding our supply chain solutions network across the Middle East and North Africa (MENA) region,” said Fadi Ghandour, founder and chief executive officer of Aramex. As part of the agreement, Aramex and Z-Corp plan to build a state-of-the-art logistics centre in Oman, with the first phase scheduled for completion

in early 2011. The new facility, which has been designed to comply with global guidelines, will be situated in the Nasseem Gardens area of Barka on a plot of land that measures nearly 160,000 square metres. “We are both determined that our logistics facility in Oman will be environmentally sustainable, in line with the commitments that both parties have made to our communities, in addition to the environment,” added Ghandour.

First Bahrain commences Majaal operations First Bahrain hosted an opening ceremony last month for its ‘Majaal’ logistics development in Bahrain Investment Wharf. The project, which has been valued at US$45 million, is now being marketed to potential tenants from the Middle East’s small to medium enterprise (SME) market. “The achievement of this milestone comes at a significant time for the Kingdom, with His Majesty the King celebrating the first 10 years of his rule and the recent inauguration of both Khalifa Bin Salman Port and Salman Industrial City,” said Amin Al Arrayed, general manager of First Bahrain and board member of Majaal. “For our company, the on-time and on-budget completion of 3PL

construction represents a major and tangible accomplishment by the team and puts us in a good position to execute on projects in the year ahead.” Approximately 130,000 square feet of storage space has been

delivered with phase one of the project, which is being offered to customers in units ranging from 250m2 to 1000m2 in size, each with the provision of 24-hour security service and information technology.

Amin Al Arrayed (centre) cuts the ribbon for Majaal’s first phase of development

NEWS UDPATE

Abu Dhabi set for global trade forum Abu Dhabi will host the ‘Global Logistics Forum’ next month in support of the emirate’s Economic Vision 2030. The conference, which takes place on 14th and 15th March 2010, has been organised by Abu Dhabi University as part of a EVENTS

long-term partnership with the Berlin Institute of Technology (TU-Berlin) Chair of Logistics, an internationally renowned university in Germany. “Despite the downturn, this region is still experiencing a strong demand for logistics services, which has outpaced

Abu Dhabi University officials sign an agreement with Berlin Institute of Technology

the global market. The ongoing infrastructure projects in the United Arab Emirates requires an understanding of the various strengths, weaknesses, risks and opportunities from a local and global point of view,” explained His Excellency Ali Saeed Bin Harmal Al Dhaheri, chairman of Abu Dhabi University. “The Global Logistics Forum will also address subjects related to Abu Dhabi’s Master Plan and Economic Vision 2030. We will bring global supply chain leaders and heads of various international logistics organisations to tackle the needs of the local supply chain and logistics industry in the global economic crisis,” he added. The event is supported by the Chartered Institute of Logistics and Transport (CILT), with Logistics Middle East magazine as media partner.

NEWS IN BRIEF

TNT Express has expanded its delivery fleet in the Middle East to increase the availability of its express delivery solutions. The company, which secured a string of regional contracts from clients such as Volvo, Dubal and HewlettPackard in the past year, recently introduced 30 new trailers onto its Middle Eastern Road Network. “Given the economic situation, many of our customers are opting for road networks as opposed to air freight, which means the introduction of added capacity is fundamental,” commented Mark Woodcock, sales and commercial director of TNT Express UAE.

INTERNATIONAL PROFESSIONAL QUALIFICATIONS IN LOGISTICS AND TRANSPORT The Chartered Institute of Logistics and Transport International is a uniquely established global professional body. CILT is the lead-

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lished in 1919 and receiving its Royal Charter in 1926, the Institute has an exciting history behind it, but it is always adapting to stay consistent with current logistics and transport issues. The Institute’s Patron is Queen Elizabeth II. CILT (UAE) is the Regional Ofﬁce for the UAE & GCC Region and an Approved Centre of CILT International. We take pride in bringing the internationally recognized professional qualiﬁcations in Logistics and Transport and facilitate them at your doorsteps.

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www.arabiansupplychain.com | FEBRUARY 2010

NEWS UPDATE

NEWS IN BRIEF

8 FEBRUARY 2010 | www.arabiansupplychain.com

Aramex finalises Oman joint venture

Aramex founder and chief executive officer Fadi Ghandour has partnered with Z-Corp for the company’s latest expansion in Oman

Amin Al Arrayed (centre) cuts the ribbon for Majaal’s first phase of development

NEWS UDPATE

Abu Dhabi University officials sign an agreement with Berlin Institute of Technology

NEWS IN BRIEF

INTERNATIONAL CERTIFICATE INTERNATIONAL CERTIFICATE IN IN LOGISTICS ANDAND TRANSPORT LOGISTICS TRANSPORT

ing professional body associated with logistics and transport. With

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www.arabiansupplychain.com | FEBRUARY 2010

NEWS UPDATE

NEWS IN BRIEF

‘Pallet mole’ centre opened in the UAE Jaleel Traders, one of the largest food product distributors in the UAE, has commissioned the country’s first Pallet Mole high-density storage system at its new cold store at Aweer Fruit and Vegetable Market. The Pallet Mole system has been designed and installed by the ACME Group to raise Middle East standards in floor space utilisation and operator productivity, allowing Jaleel Traders to pick and load a 40’ container within 30 minutes. The system combines the density of drive-in racking with the benefits of flow racking and automation, according to Navin Narayan, director of Dubaibased ACME Group. “The Pallet Mole system was developed by our South African partners Storage Management Systems and provides a cost effective solution for customers that operate high density multiMATERIAL HANDLING

Hundreds of people were treated to live demonstrations of FAMCO’s complete product range during the company’s latest roadshow in Dubai last month, which followed the success of previous events in Abu Dhabi and Ras Al Khaimah. “We decided to hold this event at the Al-Futtaim Logistics warehouse in Jebel Ali Free Zone and received a very favourable response,” said David Dronfield, divisional manager of FAMCO’s storage and handling solutions division. “We had displays for brands such as Linde, Dexion, Volvo, Ingersoll Rand, Yanmar, Hart, Nassau, Stertil and Bott.” GAIC (Gulf Automobile Industry Corporation), the Middle East’s first manufacturer of a forklift truck, has announced a major expansion to meet growing market demand. The company, which produces the Camel forklift, is moving from its 14,000m2 factory in Abu Dhabi to a three million square metre facility in Saudi Arabia. “With a US$13.5 million sales forecast for 2010, the move to a larger manufacturing plant was necessary,” commented Dr Nasser Hamad Al Hajeri, GAIC chairman, who plans to hire 800 additional staff for the factory.

ACME Group installed the pallet mole system at Jaleel Traders’ warehouse in Dubai

SKU logistics facilities, such as cold stores and food distribution hubs,” he commented. “Unlike other storage system layouts, which require multiple access aisles, the Pallet Mole

Godrej reports 70% growth in the Middle East Godrej & Boyce has reported that Middle East sales for its storage solutions increased by more than 70% across the region over the first nine months of last MATERIAL HANDLING

year, compared to the same period in 2008. The Indian company, which has a regional office in Sharjah Airport International Free Zone, benefited from a number

Jordan’s Naouri Group has formed a partnership with the UK-based freight specialist Braid Logistics. Representatives from both parties recently signed an agreement for the Naouri Group to promote and distribute Braid Logistics’ FlexiTank product - a polyethylene container for fluids, non-hazardous chemicals and oils. “The FlexiTank can help to reduce the cost, volume and weight occupied by traditional containers and vessels by 50%,” commented Ibrahim Naouri, chairman of the Naouri Group of Companies. Krishna Raj from Godrej & Boyce is backing a regional expansion for the company

10 FEBRUARY 2010 | www.arabiansupplychain.com

system only requires aisles for pallet entry and retrieval, making them space efficient. The layout can be designed to go up to 60 pallets deep,” he added.

of product launches in 2009, including a 1.5 tonne counterbalance stacker with AC driver and a digital picking solution for warehouses and shopfloors. “During the global recession, we consolidated our position in the Middle East with various product launches, which helped to exponentially increase the company’s client base,” stated Krishna Raj, regional manager of Godrej & Boyce in the Middle East, North Africa and CIS. “Moving forward, we plan to expand on both a regional and international basis and will remain contemporary and relevant with the launch of new products and businesses. The entire Godrej & Boyce team in the Middle East is optimistic about the future and confident about achieving sustainable and long-term growth in the region,” he added.

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NEWS UPDATE

Salma Hareb (EZW) and Mahmood Al Bastaki (Dubai Trade) on stage with winners from the E-Service Excellence Awards

ZW) Salma Hareb (E speech ote provided a keyn

Salim Ahmed Khan (Dubai World) with Jubil Thankachan and Ravi Kurhade from Maersk Line

Sebastian Th Jayant Dey (Lo omas (ZAFCO) with gistics Middle East)

Dubai Trade honours e-service achievements

anzas, Globelink West Star Shipping and Unique Sea Cargo were amongst the winners of the second annual E-Service Excellence Awards (ESEA), which were hosted at the Raffles Hotel in Dubai last month. The prestigious ceremony was organised by Dubai Trade, the online services provider of Dubai World, to honour the performance of companies that have implemented the ROSOOM integrated e-payment platform. “With more than 150 people in attendance, Dubai Trade is encouraged by the response to this year’s E-Service Excellence Awards,” stated Mahmood Al Bastaki, director of Dubai Trade. “We believe that the transformation to electronic services can bring about major positive changes in conducting trade activities. It is with 12 FEBRUARY 2010 | www.arabiansupplychain.com

this perspective that Dubai Trade is designing and upgrading its integrated services.” The team from Danzas walked away with the highest honour of the night, while Unique Sea Cargo Services was named as platinum performer, Globelink West Star Shipping as gold performer, Al Areesh Cargo Clearing & General Transport as silver performer and Silk Road Shipping as bronze performer. “Through ESEA, Dubai Trade is keeping its pledge to promote e-services and facilitate easier trade flow,” stated Salma Hareb, CEO of Economic Zones World, who provided a keynote speech at the ceremony. “These winners have proved the remarkable way that performance can be enhanced through the adoption of electronic transaction methods.”

NEWS UPDATE Salma Hareb (EZW) and Mahmood Al Bastaki (Dubai Trade) present an award to Eric Pilling (Danzas)

Dirk Van Den Bosch (DP World), Steven Lai (Rais Hassan Saadi), Mansoor Ghafoor (NAFL) and Robeel Haq (Logistics Middle East)

, Aijaz Emirates Lineâ&#x20AC;&#x2122;s Biswajit Mukherjeen Lai (Rais Ahmed, Shahul Hameed, with Steve kumar (DSAA) Hassan Saadi) and Nayana Nand

de) staki (Dubai Tra Mahmood Al Ba

V.S. Santosh Kumar from Landmark Group and Eddie Diaz from Al Ghurair Foods

B.S. Krishna Moorthy, Swapan Choudhury, V.S. Santosh Kumar, Bhuvana Acharva and Anthony Crasto from Landmark Group

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MATERIAL HANDLING MIDDLE EAST REPORT 2010

Reader Comment:

“The recession has made us better managers of purchasing. Some purchases are long-term investments, hence they have gone ahead as planned, others have been shelved as these are conveniences rather than needs”

Would you consider automated storage in the future?

58.7%

Yes, these will become commonplace in warehouses

41.3%

Do you believe there is value in large-scale material handling exhibitions in the Middle East, such as the Materials Handling Show?

9ES THESE ARE VERY USEFUL IN MAKING PURCHASING DECISIONS !LTHOUGH THESE EVENTS ARE NOT ESSENTIAL THEY DO SERVE A PURPOSE FOR CUSTOMERS .O THEY SERVE LITTLE PURPOSE

How would you describe after-sales service from Middle East suppliers?

Perhaps, although they are not suitable at the moment

Never, I prefer manual solutions for warehouses

How do the prices for material handling solutions in the Middle East compare to other markets around the world?

3.6% Costs are cheaper in this region 66.8% There is little difference in the prices 29.6% Purchasing is more expensive in the Middle East 20 FEBRUARY 2010 | www.arabiansupplychain.com

3% Excellent and world-class

71.9% Satisfactory although room for improvement

25.1% Poor and insufficient Approximately 250 material handling purchasers from across the Middle East took part in this survey, including representatives from Arabian Trading Supplies, CEVA Logistics, Modern Freight Company (MFC), DHL, Global Shipping & Logistics (GSL), ZADCO, Maximus Air Cargo, Tamer Group, Al-Futtaim Logistics, Al Majdouie Group, RSA Logistics, Integrated Freight & Logistics, Emirates SkyCargo and Al Madina Logistics.

Delivering a new product to the U.A.E market

SPAN-Group, the leading provider of storage solutions has partnered with Jungheinrich, one of the world's largest supplier of industrial trucks to complete its broad range of solutions. Jungheinrich products are made in Germany and include over 600 different vehicles: pallet trucks, forklifts, stackers, reach trucks, order pickers... that cater for all warehouse operations. For product inquiry, please contact SPAN-Group: Dubai - United Arab Emirates: Tel: (+971) 4 289 5111 - Fax: (+971) 4 289 5110 Doha - Qatar: Tel: (+974) 443 1166 - Fax: (+974) 432 8642 Beirut - Lebanon: Tel: (+961) 1 888 288 - Fax: (+961) 1 902 690 Email: inquiry@span-group.com - website: www.span-group.com

MATERIAL HANDLING MIDDLE EAST REPORT 2010

MATERIAL

WORLD As one of the first companies to enter the Middle East material handling sector back in the late 1980s, Walid Daniel explains how SPAN Group has maintained its leadership position in the industry.

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MATERIAL HANDLING MIDDLE EAST REPORT 2010

SPAN Group has experienced a considerable amount of success in the past 20 years, with over 250 employees now operating from offices throughout the Middle East region

ith such a large number of material handling providers in the Middle East these days, it’s hard to remember a time when the market was served by only a handful of dedicated companies. However, for Walid Daniel, managing director of SPAN Group, those early days are fresh in his memory, providing a pleasant reminder of how his business has not only survived the numerous peaks and troughs of the past 20 years, but developed into a regional powerhouse along the way. SPAN started its operations with humble beginnings in 1989 as a Dubai-based company that provided system shelving and pallet racking to customers in the United Arab Emirates. “Back then, the main activity was focused around the industrial areas of Aweer, Mussafah, Rashidiyah, Al Quoz and Sharjah. There were very few warehouses as we know them today and very few companies were using racking systems,” Daniel reminisces. “Although our start was modest, we had a primary objective from the beginning and that was to utilise our knowledge to benefit clients and provide them with solutions that made sense.” Looking back at the late 1980s, around five companies were active in the local storage solutions market, of which only a couple are still around today, the most prominent being the SPAN Group. “Competitors have come and gone, which shows that companies require a

lot of attention and effort to survive and adapt to changes,” Daniel smiles. “To be honest, it has been an interesting and challenging uphill journey. We have managed to develop our company by constantly improving and bringing storage solutions that made sense to customers, while maintaining quality and personalised services.” The growth of the SPAN Group has been staggered over the years, starting with the import of racking solutions from Europe and North America, followed by the launch of a design and customer service unit that helps businesses to incorporate the most suitable warehouse layouts. In the early nineties, this portfolio was expanded to include light material handling equipment, dock levellers, packing equipment, carton sealing, strapping and stretch wrapping machines, while warehouse management systems and barcoding were also incorporated into a new IT division in the mid-nineties. To support the diversity of these activities, SPAN Group also established a centre of excellent for warehouse design and operations, managed by a dedicated engineering and research division. “This was a focal point in our growth strategy, as we managed with the help of a professional engineering unit to work on large project designs for the most prestigious warehouses and distribution centres in the region,” states Daniel. “This led to an increase in business volumes and gave us the knowledge base and opportunity to design

and contract manufacture our own branded racking products, with added features and advantages specific to our local market. We further expanded by acquiring distribution rights for the full range of Jungheinrich trucks, in addition to the launch of our warehouse automation division, which provides solutions such as ASRS, sorters, conveyors, garment on hangers, carousels and shuttle systems.” At present, SPAN Group has around 250 employees and covers most countries in the GCC and wider Middle East region, with a head office in Dubai and supporting facilities in Qatar and Lebanon. Smaller offices are also

COMPANY PROFILE Company: SPAN Group Established: 1989 Employees: 250 Customers: Over 2000 clients from various industries have been served Office locations: Dubai (head office), Saudi Arabia, Qatar, Lebanon, Abu Dhabi and forthcoming facility in Jordan Description: Integrated provider of warehouse design, engineering, shelving, racking, IT supply chain systems, material handling equipment and warehouse automation for the logistics and distribution industries Awards: Material Handling Provider of the Year (SCATA 2009)

www.arabiansupplychain.com | FEBRUARY 2010

MATERIAL HANDLING MIDDLE EAST REPORT 2010

Walid Daniel (right) decided to focus on smaller markets such as Oman, Jordan and Lebanon during the recession

If anything, the global recession has fuelled operational in Abu Dhabi and Saudi Arabia, with plans to expand into Jordan and even even more changes in the market, although further afield, following the launch of a recent SPAN Group has utilised its vast experience to implement a development strategy that joint venture in India. focuses on the positives. “Every “Growth and expansion come change in the market comes with with a lot of planning effort and opportunities. It is true that sacrifices,” states Daniel. “We y change business volumes were somewhat learned a lot along the way to “Every becoming a leading company in in the market affected in our main market in the GCC and we were faced early this field. To make a story very comes with like all other companies, with short, and not talk about the opportunities” pportunities” on, the prospect of scaling down and text book challenges that every letting some staff go. company faces, the transition However, we have to a successful business is revenue and the main challenge to bringing worked very hard on this revenue lays in how a vendor treats its developing our people customers. In essence, the main challenge is and they have become to make your customers and vendors feel the our biggest asset,” he admits. “So, we retrue partnership spirit.” The importance of such partnerships has organised our geography been reinforced in recent years, with a growing and our attention to number of competitors being established smaller markets, such in the Middle East, together with an influx as Oman, Jordan, on international players also entering the Lebanon, Syria, while local market. However, such developments also focusing on have left Daniel unfazed, especially since he’s entering India and grown used to witnessing the rise and fall of Africa. I am more numerous rivals. “At any given point in time than happy to now there is competition. This is good because see the positive it keeps us alert, but most importantly, it results of this reprovides an opportunity for customers to o r g a n i s a t i o n . interact with multiple vendors and compare Moving forward, prices, knowledge, expertise and service we have plenty of other surprises in levels,” he states. “Over the years, I have experienced some store for the market companies entering the market and some and the entire team companies exiting the market. Each entry is optimistic about and exit comes with its own challenges and our continued success in 2010.” lessons to be learned.” 24 FEBRUARY 2010 | www.arabiansupplychain.com

MATERIAL HANDLING MIDDLE EAST REPORT 2010

market alone is over ten million new ISPM#15 approved pallets this year. Thatâ&#x20AC;&#x2122;s in addition to other industries.

How do you convince companies to invest in material handling solutions during the global downturn?

INMA PALLETS - SATTAM AL BUKHARI, BUKHARI MANAGER OF OPERATIONS AND TECHNOLOGY What material handling solutions does your company provide in the Middle East? Inma Pallets Company provides all types of wooden material handling products, mainly wooden pallets in different sizes, in addition to cable reels wood bobbins, frames, boxes and containers.

Well, Inma Pallets Company been in the business for more than 20 years and was the first manufacturer producing wooden pallets in large volumes. During the global downturn, we managed the business through our existing customers in Saudi Arabia. As stated, the Kingdom appears to be better positioned to weather the downturn and Inma Pallets has also benefited from being a member of the Khalid Ali Alturki & Sons group of companies, a major industrial conglomerate operating in Saudi Arabia for over thirty years.

Is there a lot of competition in the market? Surely competition is there, however competitors with large production capacity are limited. I would say there is room for all players to sell their products.

In your opinion, what type of products will be particularly popular in 2010? Wood handling materials will remain the most popular, as the other products like plastic are not yet feasible enough for the market.

How strong is demand for material handling solutions in the Middle East?

Which companies are using your products?

In the wooden pallets business, the main market is the petrochemical industry, which is still growing considerably in the MENA region. Demand in the Saudi Arabian

Major clients include Saudi Aramco, Al Waha Petrochemicals Company, Gulf Packaging Industries, Qatar Chemical Company, and Gulf Warehousing & Distribution Centre.

What are your predictions for the Middle East material handling market in 2010?

LOGSQUARE - JACQUES ADEM, EXECUTIVE DIRECTOR

How strong is demand for material handling solutions in the Middle East?

solutions, including Saud Bahwan Group, Aramex, Jotun and Al Khalij Sugar.

What material handling solutions does your company provide in the Middle East? LogSquare offers a spectrum of innovative solutions with a focus on automated handling and storage applications. We have a complete range of integrated solutions and services, including conveyors and sortation systems, automated storage and retrieval systems, advanced picking modules, systems and controls, garment on Hanger applications (GOH) and vertical movers, in addition to the conventional storage range. We take pride in our capabilities to handle complex applic ations which require tailoring and customisation. www.arabiansupplychain.com w ww www. ww w.ar arab rab aabbians abians ians ian nssuup nsup upp pp pp FFEBRUARY EEB BRU RUUAARY RUA RY 2010 2010 20 010 10 | www 26 FEB 26

The Middle East was a fertile ground for the material handling industry, especially in the last three years and we believe that it will remain a good market, despite the correction for reasons pertaining to demography, development and investment in infrastructure.

How do you convince companies to invest in material handling during the downturn? Our range of solutions and approach is geared at optimisation and enhanced efficiency. The global downturn pushed all companies to review their processes and optimise.

Is there a lot of competition in the market? The Middle East is an open market and the majority of the players are focusing on the classical range. Our main challenge is promoting awareness and acceptance for our range of solutions.

Which companies are using your products? Despite our young age, several companies use our

Higher growth, higher quality expectations, and a quicker response time to the demand.

In your opinion, what type of products will be particularly popular in 2010? In 2010 I expect to see a growing demand for intra logistics automated transportation systems, such as conveyors. That said, the most popular products will be conventional pallet racking solutions.

What are your predictions for the Middle East material handling market in 2010? This will be a challenging year for the material handling industry, project cycles and planning approaches will embrace a return to the valuable basics.

MATERIAL HANDLING MIDDLE EAST REPORT 2010

INTERMETAL - ATANAS KHAJERIAN, SALES MANAGER OF RACKING DIVISION What range of material handling solutions does your company provide to customers in the Middle East? Interack, manufactured by Intermetal, supplies customised industrial storage systems. With a well-resourced design and sales team, we work closely with our clients to supply the most efficient and cost effective racking solutions. The Interack product range includes selective pallet racking, drive–in racking, multi–tier racking systems, galvanized floor gratings and drive–in satellite systems.

SICK SENSOR INTELLIGENCE - JULIAN SPERRINGTOY, MIDDLE EAST BUSINESS DIRECTOR What range of material handling solutions does your company provide to customers in the Middle East? We provide a diverse portfolio of solutions for airports, shipping ports, warehouses, courier and express logistics operations, plus thousands of applications for manufacturing companies. We have solutions for any company that moves an item from one place to another - whether in a manufacturing line, aircraft or delivery truck.

How strong is local demand for material handling solutions? Although great strides have been taken in the past 10 years or so, I believe the Middle East still lags behind Europe, North America and parts of the Far East in its materials handling investment, and this impacts demand. This situation is changing slowly, and leads to increasing demand year on year.

How do you convince companies to invest in material handling solutions during the global downturn? By working with our clients to identify problematic areas of their operations that are costing them money, or are lacking efficiency, or could be improved to save costs. This gives us an idea on a return on investment, without this, there is no imperative to act. We never approach our clients with ‘something to sell’, we work with them to understand how we can improve their operations.

Is there a lot of competition in the regional market? There is a lot of competition in all markets. However, due to the broad product range of SICK (35,000 distinct products and solutions), we can make ourselves standout from the rest of the crowd - no other company in our market can offer such a diverse range of products.

How strong is local demand for material handling solutions? Although the worldwide financial crisis has affected many businesses, the Middle East is still a growing market and the demand for material handling solutions is still strong. Intermetal is committed to working closely with our customers to ensure that we provide the right solutions that meet their specific requirements. Being a local manufacturer will enable us to meet the demands of our customers promptly.

How do you convince companies to invest in material handling solutions during the global downturn? The situation has forced many to re-think their expectations and control their costs. Substantial savings come through the better use of space, as land and warehouse building costs have recently soared. Interack allows customers to maximise the use of space and reduce costs. The investment pays for itself in a relatively short time.

Is there a lot of competition in the regional market? There are a number of storage system suppliers in this region. The competition is high, but this forces manufactures such as ourselves to come up with innovative solutions to benefit the customer. Intermetal’s advantage is that we provide solutions that meet exact requirements. We design, manufacture, supply, install and offer complete after sales support and maintenance.

What are your predictions for the Middle East material handling market in 2010? Intermetal has witnessed an upswing in orders and inquiries for Interack in the third quarter of 2009, signalling a return to confidence in the economy. We see a better 2010 compared to 2009 and we have positioned ourselves to take advantage of this with the start up of a new factory in Dubai.

In your opinion, what type of products will be particularly popular in the Middle East over the coming year? Any product or solution that can increase productivity, raise efficiency levels, improve the bottom line and has a definite, demonstrable and short return on investment will always be popular. When SICK approaches the market with our solutions, we make sure that we can tick all of these boxes for the user.

What are your market predictions for the Middle East in 2010? I don’t think we are out of the woods just yet as far as the economic slowdown goes. However, the region’s materials handling companies are well placed to emerge from the downturn in a much stronger position. Additionally, I believe the development of world-class warehousing facilities around the region could start to threaten Dubai’s traditional dominance as the regional logistics hub.

www.arabiansupplychain.com | FEBRUARY 2010

MATERIAL HANDLING MIDDLE EAST REPORT 2010

ACME GROUP - NAVIN NARAYAN, DIRECTOR What material handling solutions does your company provide in the Middle East? ACME Group is an intralogistics system integrator that provides a wide range of solutions, such as pallet racking, drive-in, high density racking, boltless shelving, order fulfilment solutions and sorters, forklifts, reach trucks as well as conveying systems. We also provide consultancy in facility design and warehouse management systems.

How strong is demand for material handling solutions in the Middle East? The Middle East has traditionally been at the cross-roads connecting the developed and emerging economies and hence, always had a great demand for material handling solutions. However, it is only in recent times that we see organisations implementing new generation technologies to optimise their supply chain management systems.

How do you convince companies to invest in material handling during a downturn? In developed economies, organisations will

generate the bulk of their profits by holding a very tight leash on the supply chain. Getting lean and efficient is of paramount importance in the current economic scenario. At ACME, we focus on highlighting the return on investments that our solutions can bring.

Is there a lot of competition in the market? Yes, I would say that the regional market is quite saturated. Margins are wafer thin and a fair share of the competition focuses on product sales and a quick project turnaround, instead of providing a long-term solution that takes into account the needs of customers.

What makes your products different to others in the market? Our differentiation is not in the products alone. It is a combination of the products we carry and the service we provide. We focus on developing long-term strategic partnerships with our clientele and hence we are a part of their endeavours to keep abreast with innovations in products and processes.

Which companies are using your products? Traditionally we have provided solutions to retail chains, food and beverage distributors,

How strong is demand in the Middle East? In these recession days, some of the projects are deferred indefinitely. Nonetheless, there are industries such as logistics and fast moving consumer goods (FMCG) sectors, where demand is still healthy.

UNITED MOTORS & HEAVY EQUIPMENT COMPANY - G. VENKAT, DIVISIONAL MANAGER OF HEAVY EQUIPMENT AND MATERIAL HANDLING What material handling solutions does your company provide in the Middle East? We are the authorised dealer for Yale Material Handling equipment in the United Arab Emirates. Yale, being a pioneer in the field of material handling, has a wide range of products, right from hand pallet trucks to VNA (Very Narrow Aisle) trucks that cater to 17 metre heights in a warehouse. In the counterbalance sector, Yale has varieties in battery, gas and diesel ranges. 28 FEBRUARY 2010 | www.arabiansupplychain.com

pharmaceutical distributors, manufacturers and public sector companies.

What are your predictions for the Middle East material handling market in 2010? There will be more investment in automated, intelligent and high density warehouse solutions that help in improving the bottom line.

In your opinion, what type of products will be particularly popular in 2010? Even during recession time, Yale has launched ten new models, such as the new series of NextGEN Yale Trucks, which are built to increase the overall efficiency of operations.

How do you convince companies to invest in material handling during the downturn?

What are your predictions for the Middle East material handling market in 2010?

This is the best time for investment and consolidation. We provide the total solution and advise our customers to implement in phases. Once the market picks up, the customer is ready for the take off.

I believe that opportunities continue to prevail for warehousing products, especially in the consumer industries.

Do you face much competition? There is a stiff competition from European, Japanese and American manufacturers. Even the Chinese manufacturers have their stake in the Middle East.

What makes your products different? Yale scores over them in all aspects, including cost of ownership, productivity and also in overall ergonomics.

Which clients are using your products? Our customers are mainly logistics companies, food chain companies, retail companies and those in production units.

MATERIAL HANDLING MIDDLE EAST REPORT 2010

BITO STORAGE SYSTEMS - CHRISTIAN GEBLER, MIDDLE EAST GENERAL MANAGER What range of material handling solutions does your company provide in the Middle East? BITO has a focus on two core businesses. The first is shelving and racking, which includes complex storage solutions such as carton and pallet live storage, drivein/push-back pallet racking, multitier installations and automated bin/tray storage installation. The second focus is bins and containers, like storage bins with pick opening, stacking containers, and small parts containers.

How strong is local demand for material handling solutions?

EfÞcient

solutions!

Shelving & Racking · Bins · Accessories

Storage and order picking has become an economic factor in almost every industry. It’s our responsibility to show the potential and return on invest of efficient products and solutions.

How do you convince companies to invest in material handling solutions during the global downturn? Companies in this region have seen enormous growth rates in recent years and they know that the region has enormous potential for a long lasting period to come. Firms are suffering with cheap or even nonexistent storage solutions already.

Is there a lot of competition in the regional market? BITO started its subsidiary in the UAE only a few months ago with a small team. We have competition which is established by brand and action in this region. Nevertheless we are partnering with our competitors too. In special solutions like pallet and carton live storage, boltless shelving and especially in bins we can help each other to give outstanding solutions to our customers.

What makes your products different to others in the market? First of all, we manufacture in Germany where we have been based for the last 160 years, with 50 years of experience specifically in storage solutions. The second difference is that we are not only a manufacturer but also a professional partner for all project-related tasks, ranging from layout planning, realisation and project management to assembly and after-sales-service, whether that relates to complex and demanding storage facilities with different systems or automated installations for bin or tray storage. We will set new standards too in the second half of 2010 with an outstanding service to end users.

Which companies are using your products in the region? Despite being a newcomer in the region, we have entered final talks with numerous logistic companies and medium-sized firms. We have already done some fantastic projects with Airbus, Emirates Flight Catering and Al Buheira LACNOR Dairies.

What are your market predictions for the Middle East in 2010? In many areas I believe the market will still feel the impact of the downturn, but the potential will remain. The amount of potential will depend on the efforts of each and every player. It’s important that the industry as a whole takes a united approach for this challenge.

Ask the manufacturer to meet your needs – from bins to high-rise installations + concept-to-completion consultancy BITO STORAGE SYSTEMS MIDDLE EAST (FZE) P.O.Box 8838 Sharjah Airport Int. Free Zone Sharjah, UAE innovative

STORAGE SOLUTIONS

www.bito.ae

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MATERIAL HANDLING MIDDLE EAST REPORT 2010

CHEP MIDDLE EAST - KEVIN SMYTH, MIDDLE EAST DIRECTOR What material handling solutions does your company provide in the Middle East? CHEP Middle East offers pallet pooling and supply chain consulting services, along with advice on pallet specifications and pallet handling procedures.

How strong is local demand for material handling solutions? There is a pent up, often unappreciated demand for more cost-effective materials handling solutions in the Middle East.

What makes your products different to others suppliers in the market? Our pallet pooling concept is a service rather than a product, whereby companies will share the cost of the pallet on a daily hire basis as it is shipped along the supply chain. It differs from other 3PL services in that it requires buy-in from all companies in the

FAMCO - DAVID DRONFIELD, DIVISIONAL MANAGER OF STORAGE AND HANDLING SOLUTIONS DIVISION What material handling solutions does your company provide in the Middle East? FAMCO provides solutions that cover the entire functionality of a warehouse or distribution centre. This includes the full range of Linde forklift trucks from Germany, as well as docking solutions for the loading and unloading of transportation vehicles. These systems are designed in conjunction with the forklift trucks to ensure efficient operation. FAMCO can also design conveying solutions for pallet and package handling, and we can implement turnkey garment on hanger solutions.

FMCG supply chain to work cost effectively and efficiently. This requires co-operation and a win-win mindset from all participants.

How do you convince companies to invest in material handling solutions during the global downturn? It is always difficult to appreciate the hidden costs of materials handling procedures when they are not managed with costs dispersed throughout the organisation.

Is there a lot of competition in the market? It is not a case of competition, which is good, but rather a lack of industry standards and co-operation that hinders the introduction of new ideas.

Which companies are using your products in the Middle East? CHEP is currently doing business with over 600 clients in the region, with many of these companies being the region’s biggest FMCG brands, such as Abudawood, International

How strong is demand in the local market? The Middle East has developed its capabilities to become a major international logistics hub in the past decade. The arrival and dispatch of each and every product demands various items of materials handling equipment, specified for maximum efficiency and lowest unit cost of handling. Of course, the flow of world trade has slowed and the movement through and into the Middle East has also witnessed reduced transit and domestic volumes. As a result, the purchase of materials handling equipment is now heavily focused on productivity.

How do you convince companies to invest in material handling during the downturn? Customers are even more focused on cost reduction at the moment. This does not necessarily mean the “cheapest” machine, but a solution that is derived from full cost benefit analysis and lifetime cycle costs. It means machines that deliver higher levels of performance at greater speeds with reduced energy requirements and lower operating and maintenance costs.

Is there a lot of competition in the market? There is an increasing number of competitors offering cheap prices, but the amount of suppliers offering the best solutions is limited, and FAMCO remains a major provider of quality in the market.

30 FEBRUARY 2010 | www.arabiansupplychain.com

Refreshments Company (Pepsi), National Food Industries, Procter & Gamble (P&G), Hyper Panda and SIPCO, just to name a few.

What are your future market predictions? The market will continue to change with the adoption of more efficient storage and product handling methods.Growing awareness of environmental and health and safety issues is also likely to start having an impact.

In your opinion, what type of products will be particularly popular in 2010? The market is shifting from bulk storage to handling solutions that move products faster and over greater distances. Cross docking operations will increase as operators strive to reduce inventory, which requires equipment dedicated to the rapid movement of palletised goods between docking operations within a distribution operation.

What are your future market predictions? Operators want to maximise the effectiveness of existing facilities and operations, based on fulfilling the customer orders as quickly, efficiently and economically as possible.

MATERIAL HANDLING MIDDLE EAST REPORT 2010

GODREJ & BOYCE - KRISHNA RAJ, REGIONAL MANAGER OF STORAGE SOLUTIONS GROUP What range of material handling solutions does your company provide in the Middle East? Godrej & Boyce provides a wide range of storage equipments, such as racking and shelving, digital pick solutions, counter balance forklifts, warehouse trucks and a variety of attachments.

How strong is local demand for material handling solutions? Being a logistic hub, I would state that demand is very good and has actually been rising for our company through increased awareness, as shown by our year-on-year growth.

How do you convince companies to invest in material handling solutions during the global downturn? As a company, Godrej & Boyce has been operating for more than 110 years and braved many economic cycles. Our solutions are reliable and offer value for money. With our setup in the United Arab Emirates, we can provide tailor-made products and services direct to the client.

Is there a lot of competition in the regional market? Yes, competition is quite high in the storage side. However, only a few companies have a complete set-up, the rest are traders with limited know-how. Competition is moderate in material handling equipments.

What makes your products different to others in the market? Godrej & Boyce is well-diversified, with a global presence and worldclass design and manufacturing capabilities, which helps to provide customers with customised products at a reasonable cost and schedule. Itâ&#x20AC;&#x2122;s in our genes to focus on providing technically sound products and solutions and we never compromise on design safety. As a natural outcome, our products are quite rugged and last a long time, which is always appreciated by customers. Finally, our direct presence as a principal with two offices in Middle East helps to create a better understanding of customer requirements and we can translate this into specific solutions.

Which companies are using your products in the region? Our products are being used by companies in various different industries, including oil fields, manufacturing, government, defence, jewellery, construction, aviation, logistics, trading, contracting, engineering, relief missions, reconstruction projects, food processing and cold stores.

In your opinion, what type of products will be particularly popular in the Middle East over the coming year? With growing awareness of global warming, demand will be strong for battery/electric operated equipment and solutions that use clean fuel. Also cost effective and highly productive products will be popular.

What are your market predictions for the Middle East in 2010? Stability should be returning and we expect demand to continue. Many companies which had postponed their requirements last year have started buying, plus demand has been steady in markets like Saudi Arabia, Qatar, Oman and Bahrain.

sesh@godrej.com

www.arabiansupplychain.com | FEBRUARY 2010

ASK THE EXPERT

VERTICAL REALITIES QUESTION: What are the benefits for logistics companies that specialise in niche markets? THE HISTORY OF NICHE LOGISTICS IN MIDDLE EASTERN COUNTRIES

WHY THIS ESTABLISHED BUSINESS MODEL LOOKS NEW TO THE REGION

MIDDLE EAST MARKETS THAT WILL EXPERIENCE THE MOST GROWTH

Although vertical specialisation has received a lot of attention in the logistics industry over the past couple of years, it cannot actually be considered a new trend. On the contrary, this is a well-known approach to logistics services in mature markets such as Europe and North America. Due to their sheer size, we find a multitude of logistics service providers (LSPs) in these markets with a broad range of specialisations on individual industry verticals, such as A. Talke in Europe for petrochemical logistics, or the large-scale players that cover a broad set of vertical specialisations under the common global brand, such as DHL or UPS.

Based on agent laws and a strong preference to keep logistics in-house in the Middle East, LSPs could not find enough customers to develop a vertical specialisation. Also, the logistics market is highly fragmented with many small LSPs. In consequence, none of the small players were able to build sufficient size and economies of scale to achieve the respective advantageous cost/price position. In response, they were forced to serve a broad portfolio of vertical industries to achieve an acceptable size of the business. We estimate that the pharmaceuticals and hospital logistics market in all six GCC countries will amount to only US$250 million. Assuming three or four LSPs serve each of the national markets will provide an indication about the small share that each player can achieve.

There is a broad portfolio of industry verticals that are highly attractive for LSPs, such as FMCG, pharmaceuticals, apparel, cosmetics and automotives, just to name a few. Yet, vertical specialisation only becomes viable if the respective verticals are large enough to develop the required economies of scale. As the logistics demand grows in the respective verticals, we expect that more industry verticals will become attractive for logistics players to provide specialised services. In the short to medium term, the following specialised services will be most attractive for LPSs: petrochemical logistics (due to the significant growth of the industry in the next few years), project logistics (based on significant investments in infrastructure, production facilities and real estate projects), distribution of FMCG and other durable consumer goods (provided that customers continues to outsource logistics services) and critical parts logistics (although this market is already well covered by the global and regional express service providers).

THE ADVANTAGES OF VERTICAL SPECIALISATION IN LOGISTICS A focus on the needs of a specific vertical industry allows the LSPs to develop the required skills, know how and capabilities to serve the respective industry (e.g. petrochemical industry, pharmaceutical industry, etc.) in a better and more adaptive way. In addition, this focus often allows the LSPs to develop economies of scale along the dimensions cost position and customer lockin. Illustratively, a LSP with a specialisation on pharmaceuticals who already serves key brands of the industry has to stop at each chemistry in his service area. Hence, to add an additional brand does not require the LSP to do additional stops in his service area and in consequence the distribution costs are marginal. In consequence, the LSP which has the largest amount of pharmaceutical brands will have the lowest unit cost of distribution and should be able to lock-in his customers – the pharmaceutical producers – based on lowest prices. Overall, industry specialisation generates value for the LSP as he can attract the highest volumes and the customer achieves lower logistics costs. 32 February 2010 | www.arabiansupplychain.com

KEY TRENDS FOR THE FUTURE We expect the trend towards vertical specialisation will continue and more service offerings will become available. This will be fuelled by the continuous growth of Middle Eastern/North African economies, population and wealth. As the logistics market in specific industry verticals grows, it will become more feasible for LSPs to serve these verticals with specialised services. In addition, the majority of logistics services in the Middle East (approximately 80%) are still done in-house. Hence, there is a significant potential to outsource logistics to LSPs and we actually observe an increasing trend of customers – especially agents of global brands/manufacturers – to do so. Finally, in their search for new growth markets, global leaders such as UPS, DHL and Kuehne & Nagel will increase their engagement in the region. These players have longstanding expertise in vertical specialisation and clearly understand the competitive advantages that can be obtained.

This month’s column was written by Ulrich Koegler, partner with Booz & Company

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INDUSTRY STATISTICS

FACTS & FIGURES Air Cargo Regional & International Statistics

Knowledge of cargo statistics is essential to supporting your supply chain operations. Every month, Logistics Middle East provides its readers with three pages of the latest information from a variety of trusted sources, including Emirates SkyCargo, Airports Council International (ACI) and Saudi Ports Authority. EMIRATES SKYCARGO FUEL PRICE INDEX

DUBAI INTERNATIONAL AIRPORT: CARGO STATISTICS

420

200000

08 January

408 150000

400

20 November

04 December

380

100000

380 22 January

27 November

18 December

373

364

377 50000

FUEL PRICE INDEX The fuel index is based on the average price of aviation fuel in five key spot markets (Rotterdam, Singapore, New York, US Gulf and US West Coast). Oct 09

Sept 09

Aug 09

July 09

June 09

May 09

April 09

Mar 09

Feb 09

Nov 08

Jan 09

INDEX 100 = 53.5 US cents per US gallon

Dec 08

360

22 Jan 10

15 Jan 10

08 Jan 10

01 Jan 10

25 Dec 09

18 Dec 09

11 Dec 09

04 Dec 09

27 Nov 09

20 Nov 09

13 Nov 09

340

MONTHLY AIR CARGO REPORT: EUROPE REGION* AIRPORT/COUNTRY

OCTOBER 2009/2008 Cargo (tonnes)

MONTHLY AIR CARGO REPORT: AFRICA REGION*

YEAR-TO-DATE 2009/2008

% CHG

Cargo (tonnes)

CARGO STATISTICS This graph represents the cargo volumes handled at Dubai International Airport over twelve months. Cargo is measured as loaded and unloaded freight and mail in tonnes (Source: Airports Council International)

% CHG

AIRPORT/COUNTRY

OCTOBER 2009/2008

YEAR-TO-DATE 2009/2008

Cargo (tonnes)

% CHG

Cargo (tonnes)

% CHG

Amsterdam (Netherlands)

125,106

-9.7

1,060,341

-21.6

Accra (Ghana)

3386

-32.9

38,317

-12.5

Brussels (Belgium)

38,749

-16.4

371,169

-30.1

Addis Ababa (Ethiopia)

4025

n/a

32,451

n/a

Cologne (Germany)

51,150

-1.5

453,189

-7.0

Algiers (Algeria)

1401

-12.4

17,911

-5.7

Frankfurt (Germany)

181,687

-0.1

1,514,510

-15.2

Antananarivo (Madagascar)

1047

-45.2

9521

-32.3

Istanbul (Turkey)

38,760

25.5

302,288

-0.4

Cairo (Egypt)

23,012

7.5

2,33,279

1.2

Leipzig (Germany)

50,679

17.0

408,690

16.6

Casablanca (Morocco)

4232

2.5

45,560

-5.9

Liege (Belgium)

47,715

8.1

373,937

-14.4

Dar Es Salaam (Tanzania)

1583

-8.1

15,616

-20.0

London Heathrow (UK)

126,646

-0.4

1,090,535

-12.8

Durban (S. Africa)

895

n/a

2273

55.6

Luxembourg (Luxembourg)

57,909

-17.4

504,412

-24.2

Harare (Zimbabwe)

1910

-0.1

16,419

-12.0

Paris (France)

162,500

-7.4

1,482,180

-13.5

Johannesburg (S. Africa)

25274

-2.4

203,066

-23.5

Vienna (Austria)

20,494

6.8

156,559

-7.7

Libreville (Gabon)

1639

-15.4

16,783

-10.3

Warsaw (Poland)

4615

-3.1

40,591

-11.6

Nairobi (Kenya)

24,031

-6.1

220,601

-12.6

24,332

-6.0

229,721

-11.5

Tunis (Tunisia)

1967

26.0

15,449

-11.4

Zurich (Switzerland)

*Monthly cargo statistics for international airports, with data provided by Airports Council International (ACI). Cargo is defined as loaded and unloaded freight and mail (in tonnes).

34 FEBRUARY 2010 | www.arabiansupplychain.com

INDUSTRY STATISTICS

MONTHLY AIR CARGO REPORT: MIDDLE EAST REGION* AIRPORT/COUNTRY

OCTOBER 2009/2008

YEAR-TO-DATE 2009/2008

MONTHLY AIR CARGO REPORT: ASIA PACIFIC REGION* AIRPORT/COUNTRY

Cargo (tonnes)

% CHG

Cargo (tonnes)

% CHG

Abu Dhabi (UAE)

36,448

24.8

312,390

4.6

Ahmedabad (India)

Amman (Jordan)

6631

-1.7

67,306

-8.7

Bahrain (Bahrain)

27,896

-3.8

281,993

Beirut (Lebanon)

6440

8.9

59,530

Dubai (UAE)

185,868

17.7

1,552,748

Jeddah (Saudi Arabia)

11,445

-21.0

Kuwait (Kuwait)

17,668

21.5

Muscat (Oman)

6,418

Riyadh (Saudi Arabia) Sharjah (UAE)

YEAR-TO-DATE 2009/2008

% CHG

Cargo (tonnes)

% CHG

1995

-14.9

17,877

-15.8

Bangalore (India)

14,770

9.7

132,327

-6.7

-8.1

Bangkok (Thailand)

100,617

1.6

837,259

-18.8

7.0

Chengdu (China)

34,447

18.7

303,652

-4.3

2.2

Colombo (Sri Lanka)

11,700

2.2

110,095

-16.6

173,630

-4.6

Fukuoka (Japan)

21,756

-5.0

200,721

-11.6

166,012

10.2

Hong Kong (China)

327,154

1.4

2,703,717

-13.2

37.7

51,864

5.9

Jakarta (Indonesia)

40,931

7.8

347,192

-13.3

20,008

23.1

168,687

-11.2

Kuala Lumpur (Malaysia)

59,076

11.4

491,429

-14.5

37,544

18.4

340,930

14.2

Manila (Philippines)

40,033

30.9

285,133

-5.5

Mumbai (India)

50,890

10.3

464,806

-2.2

Osaka (Japan)

60,687

-17.3

486,868

-33.9

YEAR-TO-DATE 2009/2008

Seoul (Korea)

12,754

-13.0

121,194

15.0

% CHG

Cargo (tonnes)

% CHG

Shanghai (China)

261,470

11.0

2,007,573

-9.4 -15.6

MONTHLY AIR CARGO REPORT: NORTH & SOUTH AMERICA AIRPORT/COUNTRY

OCTOBER 2009/2008 Cargo (tonnes)

Anchorage (USA)

191,535

-3.1

1,533,180

-23.6

Singapore (Singapore)

156,738

2.0

1,353,703

Buenos Aires (Argentina)

17,494

-10.2

124,234

-28.1

Taipei (Taiwan)

140,974

15.6

1,068,740

-18.0

Tokyo (Japan)

186,583

3.5

1,489,916

-17.3

Chicago (USA)

118,827

0.4

921,477

-20.0

Los Angeles (USA)

144,314

4.2

1,212,472

-12.9

Memphis (USA)

343,160

5.0

3,036,742

-1.2

Mexico City (Mexico)

31,863

-0.2

261,022

-19.4

*Monthly cargo statistics for international airports, with data provided by global trade association Airports Council International (ACI). Cargo is defined as loaded and unloaded freight and mail (in tonnes).

For up-to-date figures, visit:

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INDUSTRY STATISTICS

FACTS & FIGURES Sea Freight Regional & International Statistics Our sea freight data includes information on bunker fuel prices at major port facilities in the Middle East, North and South Europe, North and South America, and Asia. More specific cargo statistics are also provided from the Saudi Ports Authority, covering the major ports in the Kingdom.

FUJAIRAH BUNKER FUEL PRICE INDEX 500

12 Jan

480

12 Aug

447.5

12 Nov

464.5

BUNKER FUEL PRICE INDEX

505

672

662

n/a

555

685

n/a

Fujairah (UAE)

480

492.5

661

n/a

Houston (USA)

452.5

463.5

n/a

650

Istanbul (Turkey)

487

502

675

n/a

New Orleans (USA)

461

471

n/a

655

Piraeus (Greece)

480

495

645

n/a

Port Klang (Malaysia)

481

487

648

n/a

Rio de Janeiro (Brazil)

484

502.5

701

n/a

Rotterdam (Netherlands)

455

475

625.5

597

479.5

489

632

619

Singapore (Singapore)

*Information on the bunker fuel price at port facilities in the Middle East, North and South Europe, North and South America, and Asia, featuring data from 12th January 2010. The prices are quoted in US$ per metric tonne and split into four categories: 380 centistoke (IFO380), 180 centistoke (IFO180), Marine Gas Oil (MGO) and Marine Diesel Oil (MDO).

TOTAL THROUGHOUT FOR SAUDI PORTS IN TONNES 15 million

350

275

12 Mar

244

200

Summary of cargo throughput for major Saudi Arabian ports - Saudi Ports Authority CARGO TYPE

Loaded

Discharged

Loaded

471,952

18,284,215

6,299,722

Bulk cargo (liquid)*

523,431

4,776,501

4,907,042

5,323,058

General cargo

431,616

88,029

4,769,746

770,290

2,029,438

1,556,837

23,453,792

15,778,905

Ro-Ro and vehicles

129,352

18,994

1,381,869

181,165

Livestock

51,369

n/a

173,690

n/a

4,946,277

6,912,313

52,970,354

76,353,140

TOTAL

6 million

TOTAL PORT THROUGHPUT

CONTAINERS (TEU)

Nov 09

Oct 09

Sep 09

Aug 09

July 09

Jun 09

May 09

Apr 09

Mar 09

Feb 09

Jan 09

3 million

YEAR-TO-DATE

1,781,071

Containers (in tonnes)

9 million

NOVEMBER 2009 Discharged

Bulk cargo (solid)

12 million

12 Jan 10

495

Cape Town (South Africa)

12 Dec 09

Busan (South Korea)

435

12 Nov 09

n/a

12 Oct 09

n/a

12 Sept 09

n/a

12 Aug 09

n/a

12 Sept

407.5

12 July 09

Buenos Aires (Argentina)

12 Jun

425

12 Jun 09

MDO

12 May 09

MGO

12 Apr 09

IFO180

12 Mar 09

IFO380

12 Feb 09

PORT / COUNTRY

11,858,590

129,323,494

2009

2008

November

Year-to-Date

MONTH

Year-to-Date

Discharged

177,507

2,036,466

201,992

2,176,062

Loaded

198,491

2,000,470

203,750

2,081,856

TOTAL

375,998

4,036,936

405,742

4,257,918

Source: Saudi Ports Authority (SPA). The statistics cover all major Saudi Arabian ports (dead weight in tonnes). *Bulk cargo (liquid) excluding crude oil.

36 FEBRUARY 2010 | www.arabiansupplychain.com

01 1 02 2 03 04 05 EVENTS CALENDAR 06 07 0809 10 11 12 13 14 15 16 17 18 19 20 21 2 23 2 23 24 2 25 2627282930 2627 2 EVENTS

TRADE EVENTS

A listing of trade shows, conferences and seminars relating to the Middle East logistics industry

21st – 22nd February 2010 ACHIEVING LOGISTICS EXCELLENCE

8th – 10th March 2010 WORLD OF PERISHABLES 2010

9th – 11th March 2010 COMMERCIAL VEHICLES MIDDLE EAST

Kavaaq has invited decision makers from the Middle East logistics industry to attend its ‘Achieving Logistics and Supply Chain Excellence’ seminar in Dubai, which has been organised as a platform to discuss the global recession and its continued impact on regional operations. Guest speakers include Fredrik Lindblad from Aramex, Alex Borg from the Chartered Institute of Logistics and Transport (CILT), Justyna Janik from Damco and Arun Kumar from Global Shipping & Logistics (GSL). VENUE: Metropolitan Palace Hotel, Dubai EMAIL: faizan@kavaq.com WEBSITE: www.kavaq.com

The growing popularity of fresh produce in the Middle East, fuelled by consistent growth in the regional population, has created a variety of logistical challenges. Covering the entire supply chain - from farming procedures to transportation and delivery to retail operations - the World of Perishables (WOP) exhibition will return to Dubai Airport Expo between 8th-10th March 2010 for trade professionals that specialise in activities such as importing, exporting, warehousing and distribution. VENUE: Airport Expo, Dubai EMAIL: dubai@planetfair.com WEBSITE: www.wop-dubai.com

With increasing volumes of cargo being transported by road in the Middle East, next month’s Commercial Vehicles Middle East exhibition has been marketed as the only specialist show in the region to cover all varieties of commercial vehicles, parts and services. The three-day event, which is aimed at transport, fleet and logistics managers, will be complimented by trade seminars, technical workshops and a large display area, where visitors can view the latest models available in the local market. VENUE: Dubai Convention and Exhibition Centre EMAIL: tommy@smg-online.com WEBSITE: www.commvehicles.com

14th – 15th March 2010 GLOBAL LOGISTICS FORUM

18th – 19th April 2010 SHIPTEK 2010

25th – 28th April 2010 FREIGHT LOGISTICS ARABIA

The first Global Logistics Forum is part of a strategic partnership between Abu Dhabi University and the TU Berlin Chair of Logistics, representing the first step in developing a long-term, high quality programme of courses, conferences and knowledge transfer in the field of supply chain logistics. The forum aims to provide a unique forum for local and international policy makers, supply chain managers and logistics executives to understand the latest issues in the Middle East. VENUE: Fairmont Bab Al Bahr, Abu Dhabi EMAIL: james.graham@aimevents.net WEBSITE: www.globallogisticsforum.com

Following the success of ShipTek 2009 in Singapore, the maritime sector will be setting its sails for the five-star Crowne Plaza Hotel in Dubai for the event’s latest edition. Taking place on 18th and 19th April 2010, ShipTek will offer a platform for delegates from the shipping, marine and offshore industry to exchange information, explore trade opportunities, showcase the latest technical innovations and take stock of the most prominent issues at the heart of future strategies. VENUE: Crowne Plaza Hotel, Dubai EMAIL: contact@shiptek2010.com WEBSITE: www.shiptek2010.com

With significant growth being forecast for the warehousing and transportation sector in Saudi Arabia, the Kingdom has announced plans to host its second annual Freight Logistics Arabia conference and exhibition. The four-day event is taking place at the Jeddah Centre for Forums and Events on 25th-28th April 2010, with organisers already reporting a positive response from a variety of exhibitors in the global airfreight, maritime, warehousing, freight forwarding and technology sectors. VENUE: Jeddah Centre for Forums and Events EMAIL: international@acexpos.com WEBSITE: www.acexpos.com/exhibitions

10th 0th t – 12th October 2010 TRANSOMAN TRAN A

23rd – 24th November 2010 TRANS MIDDLE EAST

TransOman, Trans a the Sultanate’s leading trade event vent n for transportation, shipping and logistic s logistics companies, will provide a three-day forum u ffor local industry professionals to discuss the latest issues that are effecting domestic market’s development. In the dom d addition, delegates will be provided with the opportunity to network with their colleagues, exchange valuable information and predict the newest opportunities that are expected to arise in the local sector. VENUE: Oman International Exhibition Centre EMAIL: ebrahim@oite.com WEBSITE: www.oite.com/transoman

The historical maritime city of Alexandria in Egypt has been selected as host city for this year’s Trans Middle East exhibition and conference. The annual trade event is expected to attract around 70 exhibitors from around the world, while a supporting conference has a target audience of 500 senior executives from Europe, the Middle East and Africa (EMEA), who will discuss the latest trends in logistics, shipping and container port operations. VENUE: Hilton Alexandria, Egypt EMAIL: wani@transportevents.com WEBSITE: www.transportevents.com

12th May 2010 GLOBAL LOGISTICS & SCM SUMMIT

200+

deleg a fore tes are SCLG cast for ’s an summ nual it

The Supply Chain and Logistics Group (SCLG) ost has announced plans to host its third Global Logistics and Supply Chain Management Summit in Mayy 2010. The Dubai-based trade association is hoping to break its record from last year’s summit, which attracted more than 200 delegates from various Middle Eastern countries, in addition to Singapore, India and the UK. VENUE: Dubai, United Arab Emirates EMAIL: admin@sclgme.org WEBSITE: www.sclgme.org

www.arabiansupplychain.com a BRUARYY 2010 | www.arabian 38 FEBRUARY

FACE TO FACE INTERVIEW

STEADY PROGRESS The opening of its latest warehouse facility in Jebel Ali Free Zone South has marked the latest chapter in the success story of JBC Express Freight, explains managing director P.K. Ayyappan. In which year did JBC Express Freight commence its Middle East operations? We started our operations on 12th July 1993 with a branch office in Muscat. The company was formed to provide a cost effective and reliable service to customers in the Middle East, starting with a consolidation and FTL (full truck load) cargo service to Abu Dhabi and Oman, together with cargo clearance. With such massive developments in the industry since this time, how has your company expanded its service portfolio? JBC Express Freight is now providing its consolidation and FTL services to clients in the United Arab Emirates, Oman, Qatar and other GCC countries. In addition, we have diversified into a number of additional solutions, including a daily cargo collection and distribution service across the UAE, express package deliveries to major UAE and Oman destinations, and scheduled deliveries to remote areas in the region. Has your warehouse infrastructure also been developed over the past 17 years? Yes, we opened our Dubai head office in 1998, followed by a Jebel Ali Free Zone branch in 1999 and Abu Dhabi office in 2005. Most recently, we have also ventured into the 3PL business with the launch of logistics centre in Jebel Ali Free Zone South, which was inaugurated in December 2009. What has been your approach to ensure the success of these developments? From the inception, each stage of our development has been gradual, carefully evaluated and firm footed. This remains our main objective even today and one of the reasons why JBC Express Freight has been able to develop a customer base of over 1500 companies, a workforce of approximately 200 trained professionals and a fleet of 100 commercial vehicles in the region. 40 February 2010 | www.arabiansupplychain.com

What are the specifications of your new warehouse in Jebel Ali Free Zone South? The facility measures 100,000 square feet and includes a built-up area of 30,000 square feet, comprising of covered warehouse, open yard and office facilities. It has been valued at US$2.5 million and features the latest in material handling solutions and supply chain technology. Basically, with the opening of this warehouse, we wanted to provide a storage and distribution service to international customers by utilising our existing freight forwarding system more effectively. Once we combine our established transportation solutions with this facility, we can provide benefits such as reduced lead times and reduced inventory costs. What type of reaction have you received from the market since the inauguration? Our clients have been very positive about this new facility and supportive about our growth. We expect to reach full storage capacity within the next six months. Did you have some concerns about expanding in a global recession? To be honest, JBC Express Freight has not been drastically or directly affected from the global recession. However, similar to others in the logistics industry, some ripples have been faced from the situation. Since our sales have been maintained over the past year, the major concentration at this moment is collecting the receivables in time to provide fuel to our running machine. What are your companyâ&#x20AC;&#x2122;s target markets? With exception to dangerous and hazardous cargo classified as HAZMAT, we transport all types of cargo. This includes fast moving consumer goods (FMCG), auto parts and machinery, heavy equipments, oilfield and gas pipes, steel structures and specialist cargo for the ship building industry.

Are you planning to continue this growth momentum with further developments? Yes, we are planning to establish a presence throughout the GCC region and consolidate our operations in Oman, Abu Dhabi, Doha and Saudi Arabia, thereby establishing a solid distribution network. In addition, we are looking to increase our foothold in the market for multi-modal shipments, which will enable JBC Express Freight to bolster its appeal to a wider base of customers. Itâ&#x20AC;&#x2122;s been a rough year for the Middle East logistics industry. In general, what are your predictions for the market in 2010? I actually believe that 2010 will be the same as 2009. In other words, it will be a difficult time for maintaining liquidity. There will be a slump in the market during the initial quarters, although we can expect the latter quarters to be relatively good, effectively covering up the slump experienced. For most companies, this time should be used for concentrating on business operations, fine-tuning the investments done and preparing for all possibilities in the future.

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