PHARMACEUTICALS\\\


Issue 1 2012


35


Pharmaceutical logistics industry comes of age in the Middle East


While Jebel Ali is one of the world’s leading freight, logistics and warehousing regions, it has been relatively slow to develop specialised facilities for the pharma industry. Tranzone Logistics is the first and only specialised company in Jebel Ali Free Zone to provide storage and handling services uniquely for the health industry. Up until around 2007/08,


most product was moved into the region direct to local distributors by airfreight, which could be quite expensive – but the global pharma industry did not have full confidence that local warehousing would be to its very exacting standards. That though is changing. The Middle East


is building


up a modern, specialised pharmaceutical logistics infrastructure – indeed, its standards frequently exceed those of Europe and North America, says general manager of Tranzone Logistics, Juergen Hirsch. The Middle East-based pharmaceutical logistics specialist – a subsidiary of Saudi-based Banaja Holdings - recently opened a new facility in Jebel Ali and at the same time announced a new contract with Glaxo Smith Kline, a major player in the health care industry. At time of writing, the company will be responsible


Tranzone’s Jebel Ali warehouse is the first of a new wave of pharma facilities in the Middle East


process quality. GSK is expected to contribute


around 25% of Tranzone’s revenue in 2012. It also enhances the latter’s image and reputation in the market. While not the largest logistics service provider in terms of operations, they are “fiercely proud of their professionalism, quality standards and flexibility.” While pharmaceutical


for warehousing various GSK products for distribution to the Gulf and Near East region. Parent company Banaja


Holdings’ history in pharmaceutical in the region goes back a long way, however, and the company distributes for many of the major pharma manufacturers. It operates six pharma facilities in Saudi Arabia and a sister company also provides similar services in Egypt. In the past, a lot of pharmaceuticals were handled by general freight forwarders but lately there has been a lot more focus on dedicated facilities able to provide the correct temperature and


humidity monitoring, a


high standard of cleanliness and precise control of consignments, explains Juergen Hirsch: “That can be far better achieved in a


specialised warehouse than in a general one. If pharmaceutical only accounts for, say, 10% of what you handle, there will always be pressure to move personnel around the warehouse to work in other areas – whereas our people are very well trained and equipped.” Dedicated facilities of the type


provided by Tranzone in Jebel Ali can also offer high standards of product safety, with back-up generators to make the warehouse completely self-sufficient and cleanliness controls can be provided to a much higher level. The Jebel Ali facility uses


mainly bar-code technology to track consignments, with some use of radio frequency scanners. The process could be further automated, but labour costs in


the UAE are very reasonable. The warehouse is designed to maintain products in various temperature bands and is monitored automatically and continuously. In a statement, Tranzone said:


“High priorities in GSK’s awarding of the contract to Tranzone were the top-of-the-range facilities available and back-up strategies to protect products at all times in all circumstances, the high quality management system and absolute confidence in their professionalism and ethics. These last two are vital when they have a direct impact on health and life itself.” Tranzone had comfortably


met GSK and the UAE’s Ministry of Health’s very exacting quality standards , with the emphasis also on physical security such as access control and fire prevention and


manufacturers are willing to continue using forwarders’ general warehousing, provided it is to a high enough standard, dedicated facilities are gaining the edge, both in terms of winning business and because they can command slightly higher fees, Hirsch considers. “Manufacturers appreciate working with specialists and they are willing to pay a slight extra margin – so it is a good selling point.” The local Ministry of


Health does stipulate that any pharmaceuticals in general warehousing must be separated at least by a masonry wall from other products, so it is frequently just as convenient to provide them in a totally separate facility. The ministry also stipulates that different manufacturers’ products are also separated from each other within the pharma section, though a wire mesh is sufficient. For the moment, Tranzone is


focusing on the UAE. The next development will probably be a


second facility outside the Jebel Ali freezone and perhaps another in East Africa, but ultimately such decisions are up to the customers. Distribution


from local


warehouses in the Middle East brings many advantages. Bulk movements from Europe or North America can be carried out on a less urgent basis, and hence much more cheaply. At the same time, lead times from local supplies can be much shorter – overnight in many cases. As might be surmised, the


Middle East has not traditionally been a major pharmaceutical manufacturing region itself and around 85-90% of medication is still imported, mostly from the US and Europe, says Hirsch. However, the major multinational firms are setting up small local projects, oſten with local manufacturers he points out, and governments are also encouraging development of the industry through tax breaks and other incentives. There may also be potential


for larger-scale manufacture of ‘generic’ medicines – products that have come off patent and can be produced in large volumes by other manufacturers. All of these could help develop an export trade out of the region, though Hirsch expects that


it will be


mainly regional in nature, perhaps stretching as far as the Indian subcontinent and, possibly, China.


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