May 2017 Issue 37
ENHANCING THE BUSINESS OF LOGISTICS
PACKAGING HEALTHCARE And transporting it right
Qatar’s deadline 2022 is approaching
Water scarcity The GCC’s strategy
At the World Aviation Safety Summit
Packing medicines SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: +971 4 3795678/2698011 Email: firstname.lastname@example.org Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven email@example.com Manager: Brian Cordeiro firstname.lastname@example.org Managing Editor: Munawar Shariff email@example.com Art Director: B Raveendran firstname.lastname@example.org Production Manager: Roy Varghese email@example.com
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Technology drives a lot of our lives today. As we move into the future, healthcare is simultaneously getting more sophisticated. Requiring a lot more specialised packaging as it is transported around the world. With the world population increasing rapidly, healthcare is not an industry that is going to be affected by usual economic conditions. As we see an improved pharma packaging solution evolve coupled with better temperature sensitive shipping offers, manufacturers will prefer this option especially for last mile delivery. Shipping companies are also gaining benefits of fully secured end-to-end payloads, besides also getting feedback and information from their clients to develop more effective last-mile solutions. Problems also creep up when multiple transportation modes are involved. Long transit times risk consignments due to fluctuations in temperature compromising product quality. Packaging has to take into consideration risks such as exposure to the elements, temperature fluctuations inside the container, how long clearance takes on the dock. (Page 26.) Take a look at the detailed cover article on packaging in pharmaceuticals and do let us know your thoughts. See you next month.
Distributed by Tawseel Distribution & Logistics – Dubai
Munawar Shariff Managing Editor firstname.lastname@example.org
Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.
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May 2017 Issue 37
ENHANCING THE BUSINESS OF LOGISTICS
40 Diversifying strategy for growth GWC recorded a substantial profit in the first quarter of 2017
42 Reducing demurrage and detention fees
26 06 News 16 Country report - Oman The 2022 deadline approaches Stability and consolidation were Qatar’s watchwords in 2016, as the government continued to make long-term investments in national infrastructure
22 Game changing moves Ignatius Scholtz, Head of Operations, INL, says technology will be leading the way when it comes to achieving a competitive advantage in the field of food logistics
26 Cover Cold chain packaging trends As drug products change, cold chain packaging is evolving to help address complexities
4 MAY 2017
30 Sulphur free packaging for perishables UFLEX’s new packaging solution eliminates allergy-causing sulphur pads for long term freshness of perishables
32 Sustainability through technology The increasing scarcity of water worldwide is making GCC nations rethink the way this natural resource is used and conserved
36 Streamlining oil production Kuwait Oil Company Deputy CEO Badria Ali Abdul Rahman offers insights into Kuwait’s strategy to boost heavy oil production
A summary of invitation-only Supply Chain and Logistics Leadership Forum organised by Top Management Resources Group
48 Success in the pharma supply chain Cold chain services in pharmaceuticals is a complex process, Albert Asool, CEO Agility, Dubai gives his insights
52 Aviation safety on the forefront The next generation air traffic management, with a heavy focus on safety, was examined by safety experts from all over the world at the fifth World Aviation Safety Summit
58 Maximising potential GSC spoke to Varun Vishwanath, Assistant Sales Manager, Genavco, about how the new racking system they have installed meets customer expectations and more
Growth in Ras Al Khaimah’s foreign trade in 2016
Jules Kappeler, CEO, Euler Hermes Middle East
Saudi Arabia’s diversification from the oil sector will take time Euler Hermes recently released its latest analysis on The Kingdom of Saudi Arabia, and stated that the government-initiated actions to address the economy’s heavy dependence on the hydrocarbon sector, which accounted for 44 per cent of GDP in 2016, will take time. This will be, in part, due to long-term projects facing challenges such as the transfer of public sector jobs to the private sector. According to them, Saudi Arabia’s weakness is its dependence on international oil prices along with a narrow economy focused on the hydrocarbon sector. The country’s strength is its solid banking system, with a large financial asset base and strong foreign exchange reserves. Jules Kappeler, CEO, Euler Hermes Middle East, commented, “The Vision 2030 roadmap and the National Transformation Plan 2020 are supposed to herald a turning point for the country. This diversification process relies on initiatives to develop weak sectors such as defence industries, retail, renewable energy and, the private sector. An improved environment is expected to result in stabilisation of GDP growth around +1.5 per cent in 2017.”
6 MAY 2017
According to a report published by the Studies and Commercial Cooperation Department at the Ras Al Khaimah Chamber, based on data from the Ras Al Khaimah Customs Department, foreign trade in the Emirate grew by 11.8 per cent in 2016, compared to 2015. Dr Ahmed Rashed Al Shemaili, Assistant DirectorGeneral of Commercial Service and Business Development Sector at Ras Al Khaimah Chamber said that foreign trade in the Emirate grew to reach a value of AED 10 billion compared to AED 9.04 billion in 2015. Exports had the lion’s share, and reached AED 3.78 billion, or 37.4 per cent of total foreign trade, followed by imports, which reached AED 3.53 billion or 34.9 per cent, while the re-export market reached AED 2.79 billion or 27.7 per cent of total foreign trade. The government of Ras Al Khaimah has also launched the Ras Al Khaimah Economic Zone (RAKEZ), a world-class
authority established to oversee, regulate and consolidate the services, facilities and zones of Ras Al Khaimah Free Trade Zone (RAK FTZ) and RAK Investment Authority (RAKIA). RAKEZ is now one of the largest economic zones in the region, covering about 33 million square metres of land, and housing over 13,000 companies, currently served by RAK FTZ and RAKIA. The two leading free zones started their collaboration last year by combining their boards and management teams, led by His Highness Sheikh Ahmed bin Saqr Al Qasimi as Chairman and Ramy Jallad as Group CEO. This was followed by the unification of the back-office functions of both entities, in order to streamline their activities and boost service delivery to clients. RAKEZ is fully committed to supporting the vision of Ras Al Khaimah of being a leading investment destination for investors from all over the world and significantly contributing to the economic growth of the emirate.
GAC Dubai goes live with e-commerce operations for highend fashion line GAC Dubai has celebrated its first month of live outbound operations for start-up online luxury couture retailer, The Modist. The launch of themodist.com website followed a short preparation period to build up stock and develop the dedicated Warehouse Management System (WMS). GAC Dubai reported that its dedicated contract logistics team assigned to the account was met with a flurry of local and international orders when the website went live, all of which were picked, packed, and dispatched within hours. Local customers in the UAE received their orders on the same day, and international orders were delivered the next day, a pattern that has continued since. Orders for Dubai are delivered within just four hours, those to London arrive within 24 hours, and New York within 48 hours. Lisa Bridgett, Chief Operating Officer for The Modist, said: “GAC Dubai was selected as the very best partner for the inbound and outbound operations of our luxury proposition. Their strength in warehousing and commitment to the evolution of e-commerce in the region has been second to none.”GAC Dubai Contract Logistics currently operates storage and handling operations for retail customers from both offshore locations at Jebel Ali Free Zone and onshore at Dubai Industrial Park. Source: Transport Intelligence
DP World wins multiple categories at Golden Peacock Awards 2017 DP World has won three categories at the prestigious Golden Peacock Awards 2017, the annual business event organised by the Indian Institute of Directors (IOD). Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive Officer, DP World, was voted by business executives for the Leadership Award, with DP World’s Nhava Sheva International Container Terminal (NSICT) winning a distinguished award in the Innovative Product category.
Meanwhile, World Security, part of the DP World Group based in Dubai, won an award in the Business Excellence category. Bin Sulayem was cited for his visionary leadership of DP World and the industry, and his major contribution to the expansion of Dubai’s infrastructure, including ports and free zones, which has supported the economic development of the United Arab Emirates. The awards were presented by Sheikh Ahmed Bin
Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman and CEO of the Emirates Group, and Sheikh Nahyan bin Mubarak Al Nahyan, UAE Minister of Culture and Knowledge at an event held in Dubai recently. The Golden Peacock Awards were launched by the Institute of Directors in India in 1991, and are widely regarded as a benchmark of corporate excellence worldwide.
MAY 2017 7
From left to right: Boris Ogursky, Heike Birlenbach, Waseem Shaikh
Lufthansa Group invests on innovation, digitalisation, and personalisation Lufthansa Group is on an investment drive in the areas of product customisation and digitalisation. Between now and 2020, the Lufthansa Group will be investing a total of 500 million euros in innovations, including the development and improvement of personalised digital offers across the group. On her visit to Dubai for the first time as the newly-appointed Senior Vice President
Sales Lufthansa Hub Airlines and Chief Commercial Officer (CCO) Hub Frankfurt, Heike Birlenbach said,“Lufthansa is gearing up to raise the bar in customers’ travel experience. As part of our investment drive, we initiated the roll out of our modern aircraft, and we continue to churn out ideas for innovative services.” On Lufthansa long-haul flights, a powerful Wi-Fi hotspot and the on-board wireless
network offer the best conditions for surfing the Internet and using mobile data services via the GSM mobile service. The free and exclusive Lufthansa FlyNet portal provides users with news, comprehensive information about the journey, as well as access to the Lufthansa flight information and to Lufthansa destinations, to live TV channels, shopping and more.
Lufthansa Cargo and United Airlines sign JV
From left to right: Heike Birlenbach, Karsten Zang, Waseem Shaikh
8 MAY 2017
In another move, Lufthansa Cargo and United Airlines (UAL) have signed a joint venture agreement for cargo cooperation on routes between the US and Europe. The pair will cooperate on capacity availability and align booking and handling processes. The joint venture will provide 600 direct connections per week between the US and Europe. Customers will be able to access the combined network through either UAL or Lufthansa’s booking channels. The contract signing initiates the implementation phase of the joint venture project, during which the carriers will align their cargo IT systems and business processes with the goal to implement the new network’s first working day later this year. Source: Transport Intelligence
Geodis establishes partnership with LVMH group subsidiary Kenzo
Henkel reports strong performance in fiscal year 2016
Geodis has established a fiveyear partnership with Kenzo, the luxury clothing company owned by the LVMH group. Geodis has been operating Kenzo’s global logistics from France since the beginning of March. With a dedicated team of 70, Geodis is responsible for the reception, storage, and preparation of the fashion brand’s clothes, leather goods, shoes, and accessories. Geodis’ logistics campus to the south of Paris, a site with storage and preparation facilities specifically adapted to folded and hanging garments, was selected to centralise these operations. Geodis is also supporting Kenzo in the development of its e-commerce sales channel by preparing and fulfilling orders. In addition, Kenzo is sourcing specific services from Geodis, such as the management of raw materials, quality control, and regulatory compliance.
Henkel reported a strong organic sales growth of 5.6 per cent in the Middle East and Africa region.“In a challenging market, we achieved new record levels for sales and earnings, and met our financial targets for the fiscal year,” said Henkel CEO Hans Van Bylen, adding,“For the first time we reached an adjusted operating profit of more than three billion euros.”
Sales in the fiscal year 2016 reached a new record level, and grew by 3.5 percent. Organic sales, which exclude the impact of foreign exchange and acquisitions/divestments, showed a solid increase of 3.1 per cent. All business units reported solid organic sales growth. Organic sales in the Africa/Middle East region grew by 5.6 per cent,
despite the political and social unrest in some countries. Nominal sales increased by 3.7 per cent. The Adhesive Technologies business showed a positive sales performance in the Africa/Middle East region, along with the beauty care, laundry and home care business. Henkel expects to generate organic sales growth of two to four per cent in the fiscal year 2017.
Source: Transport Intelligence
MAY 2017 9
DHL supply chain to use collaborative robots DHL Supply Chain will begin a pilot test using a collaborative, autonomous robotics solution within the life sciences sector at a facility in Tennessee in the next two months. The robots, called LocusBots from Locus Robotics, will be tested as a picker companion for piece picking order fulfilment in the warehouse. LocusBots work collaboratively and safely alongside warehouse staff, helping to quickly locate and transport pick items, so pickers don’t have to push carts or carry bins. “We believe it’s critical to identify and implement these types of advanced
technology solutions in the warehouse so we can seamlessly improve our customers’ supply chains,” says Adrian Kumar, Vice President of Solutions Design, DHL Supply Chain North America, adding,“DHL Supply Chain’s initial implementation of this pilot programme within the life sciences sector will inform the potential for broader deployment across different parts of our business. This is a natural evolution of our robotics programme.”
Emrill wins AED 166 million in new business contracts within six months
Source: Jim Butschli www.logisticsforthelifesciences.com
DHL launches daily flight from Bahrain to Jeddah Closer to home, DHL Express has launched a new daily flight connecting Bahrain Hub with Jeddah, one of its gateways in Saudi Arabia’s western region. The new route will see DHL Express fly seven times a week between Bahrain International Airport and Jeddah’s King Abdulaziz International Airport, with each Boeing 757 flight carrying up to 22
10 MAY 2017
tonnes of cargo. Doing so makes DHL the first international express provider to offer direct movement and clearance of non-document goods through its DHL Express Worldwide service between Bahrain and Jeddah, reducing transit times by anywhere from 24 to 48 hours for customers shipping to Saudi Arabia’s Western Provinces.
Emrill Services has announced a series of contract wins over the past six months worth over AED 166 million. According to a recent study prepared by TechSci Research, the UAE’s FM market is expected to grow at a compound annual growth rate (CAGR) of nine per cent until 2021. The report points to the fact the FM sector is forecast to expand on the back of increased construction development in the country. The recent contract wins include market leaders within the aviation, master communities, healthcare, retail, and residential sectors, and include Dubai Healthcare City, Dubai Festival City, Outlet Village, The Greens and Views (Swimming Pools), Dubai Hills Show Villas, Meydan South Villas, DC Aviation, and Unilever, to name a few. Emrill was awarded these contracts based on its collaborative and customer-focused approach, along with its market leading technologies and award winning expertise in facilities management supporting its service delivery.
Siemens expands open cycle power plant in Kuwait with steam turbine Siemens has received an order to deliver an industrial steam turbine package to expand the Az Zour South 3 open cycle gas turbine power plant to a combined cycle power plant. The plant is located in Kuwait, and is operated by the Ministry of Electricity and Water (MEW) - Siemens’ customer is the Chinese EPC contractor SEPCOIII. The expansion will increase the total installed capacity of the plant by 263 megawatts (MW) without using any additional gas. The combined cycle
power plant is expected to go into operation in mid-2019. SEPCOIII has already used Siemens’ steam turbine technology for three solar thermal power plants in Morocco. The Noor II project also operates with a combination of the SST-800 and SST500. Siemens components are already installed in the first and second stages of the Az Zour South power plant. The company supplied a total of eight SGT52000E gas turbines and two SST5-4000 steam turbines for this project.
Empower Awards new contracts in the first quarter of 2017 Emirates Central Cooling Systems Corporation (Empower) has announced that it has awarded contracts valued at AED 62 million in the first quarter of the year. The main reason behind the increase in the number, as well as the value of contracts, is the customers’ growing trust in the district cooling service, in terms of its efficiency compared to conventional cooling services. The company recently announced that the number of its customers has increased to reach 65,000 at the end of 2016. Empower underscored that the number of its customers and contracts has only seen an increase in 2017. Said H E Ahmad Bin Shafar, CEO of Empower,“Empower is committed to boost UAE’s efforts to become the country with lowest carbon footprint in the world by 2050. As district cooling requires specialist knowledge, Empower is well equipped to provide best-inclass services with our advanced knowledge and a team of highly qualified professionals.” Empower currently operates more than 1.250 Million RT, providing environmentally responsible district cooling services to large-scale real estate developments such as Jumeirah Group, Business Bay, Jumeirah Beach Residence, Dubai International Financial Centre, Palm Jumeirah, Jumeirah Lake Towers, Ibn Battuta Mall, Discovery Gardens, Dubai Healthcare City, Dubai World trade Centre Residences, Dubai Design District, among others.
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Bahri set to register 32 VLCCs and five midsize carriers under Saudi flag by end of 2017 Bahri has announced that the Public Transport Authority (PTA) has completed the registration of Amjad, a Very Large Crude Carrier (VLCC) owned and operated by Bahri, under the flag of Saudi Arabia. The announcement comes as part of Bahri’s plans to register all of its 37 VLCCs by the end of 2017, and falls in line with the remarkable shift and growth the transportation sector in the Kingdom has witnessed in the recent past. This also marks another achievement for PTA as an initiative completed as part of its national transformation programme. Last February, Amjad, the 37th VLCC to join Bahri’s fleet, arrived in the Kingdom, docking at Port of Ras Tanura near Dammam, in the Eastern Province, where it was officially registered under
12 MAY 2017
the Saudi flag by officials from the Ministry of Transport and PTA in Saudi Arabia. The registration took place on the back of a number of successful meetings between maritime specialists from PTA and Bahri’s technical team. The Saudi Arabian flag is raised on cargo and passenger vessels after they are successfully registered with the PTA. They are then inspected and checked regularly in accordance with the standards laid down by international classification authorities accredited by the Kingdom. Moreover, the vessels can be licensed for sailing after meeting certain technical specifications as per shipyards’ requirements – for shipping vessels, and the allowed number of passengers – for passenger ships.
RAK Marine Training Institute announce inaugural vessels up to 12 metres driver course The RAK Marine Training Institute, which was recently founded to meet the growing demand for specialist marine training in Ras Al Khaimah and the Northern Emirates, recently conducted its inaugural vessels up to 12 metre driver course. The course is fully accredited by the United Arab Emirates Federal Transport Authority (FTA), and will soon become mandatory for boat owners of this category within the UAE. The first delivery of the course took place last month at Al Hamra Marina, Ras Al Khaimah, and further courses will be held each week during the summer. Those completing the course will qualify for a UAE licence for driving vessels up to 12 metres, and there is also the opportunity for students to qualify for RYA Powerboat 2, which is the equivalent of a Vessels up to 12 metre Driver license, and recognised internationally.
UAE Ambassadors tour Barakah Nuclear Energy Plant The Emirates Nuclear Energy Corporation (ENEC) and Nawah Energy Company (Nawah) welcomed 117 of the UAE’s overseas diplomats to the Barakah Nuclear Energy Plant during a tour of the project, which included a briefing on the UAE’s Peaceful Nuclear Energy Programme and the latest construction and commissioning milestones. The UAE Ambassadors and Heads of Missions Abroad were hosted by ENEC CEO, Mohamed Al Hammadi, Acting CEO
of Nawah Energy Company, Mohammed Sahoo Al Suwaidi, Barakah One Company CEO, Nasser Al Nasseri, ENEC’s Deputy CEO Ahmed Al Rumaithi, and other senior management. During their visit, the delegation was briefed on the latest developments of the UAE Peaceful Nuclear Energy Programme, including construction progress, the next stages of testing and commissioning, and plans for operational readiness. The Barakah
plant is considered the world’s largest new build nuclear energy construction site, with four reactors being constructed simultaneously. The visit was part of the 11th Forum of UAE Ambassadors and Heads of Missions Abroad, and aimed to introduce the representatives to the most significant achievements of the UAE in vital sectors and fields, such as energy, including the Barakah Nuclear Energy Plant Project.
Solutions for a healthy world Tranzone operates a state-of-the-art 3PL warehouse in Jebel Ali Free Zone. We have partnerships with the leading pharmaceutical, medical device and animal health companies around the world.
Healthcare Logistic Services: Air Freight Sea Freight Land Transportation Value Added Services Warehousing & Distribution Return logistics Documentation Tranzone FZCO (Member of Banaja Holdings)
Jebel Ali Free Zone (South) Plot No: S20129 P.O Box : 262955, Dubai, United Arab Emirates, Tel : +971 4 811 0000
Web: www.tranzone.ae MAY 2017 13
Dubai Customs signs cooperation agreement with BUiD Ahmed Mahboob Musabih, Director of Dubai Customs, asserted out that the innovation policies and programmes adopted at Dubai Customs are based on the national innovation strategy and the strategic development plans. The fruits include 97 per cent client happiness, 89 per cent supplier happiness, and 90 per cent partner happiness. During his participation in an event organised by Dubai Customs, under the theme ‘Unleash Innovation’, Musabih reaffirmed the Department’s commitment of providing a positive workplace conducive to innovation. The event also saw the signing of an agreement between Dubai Customs and the British University in Dubai (BUiD) on research and knowledge sharing. Musabih pointed out the agreement will open broader horizons to scientific
14 MAY 2017
Jafza to strengthen cooperation with the British business community
research that will serve the Department’s vision of becoming the leading customs administration in the world, supporting legitimate trade. About 60 employees were also rewarded with certificates for attending and passing the Certified Chief Innovation Officer (CCINO) training course, which Dubai Customs organised recently in cooperation with the Global Innovation Institute (GII).
Jebel Ali Free Zone (Jafza) hosted the UK Business Forum for British companies operating in the free zone to strengthen partnerships and explore opportunities in the Middle East and African region. The forum was held in the presence of Paul Fox, British Consul General in Dubai and Northern Emirates; Mohammed Al Muallem, CEO of Jafza and Senior Vice President and Managing Director of DP World UAE Region and senior officials from renowned companies including Jaguar Land Rover Middle East, Barloworld Logistics, Liberty Building Solutions, Momin Oil Industry FZCO, and Quest Middle East. DP World’s investments in the UK through London Gateway and Southampton have established a new era of partnership between the UAE and the UK, adding value to the economy and British companies by enabling efficient global trade. The number of British companies in Jafza has increased by seven per cent year-on-year in the past five years to over 400.
UAE Minister of Climate Change and Environment endorses launch of Majid Al Futtaim’s net positive strategy Majid Al Futtaim launched its Net Positive strategy in the presence of Dr Thani Ahmad Al Zeyoudi, Minister of Climate Change and Environment. The strategy aims to significantly reduce the company’s water consumption and carbon emissions to the extent that it puts more back into the environment than it takes out, resulting in a positive corporate footprint by 2040. As part of its Net Positive strategy, Majid Al Futtaim will measure current carbon and water
impact and implement measures to reduce it through projects focused on decreasing carbon emissions and water consumption at all its assets across the region. These projects will range from small scale energy efficiency measures and on-site renewable energy installations to on-site rainwater harvesting and grey water recycling. In the long term, Majid Al Futtaim will create positive impact by providing more accessible and better quality water to local communities where it has extracted
water for business purposes. The Net Positive movement was developed through the work of the Net Positive Group, a collaboration formed by Forum for the Future, The Climate Group, and World Wildlife Fund (WWF). The group started a movement to encourage businesses to transform their sustainability ambitions from doing less harm to becoming Net Positive, and is led by multinationals such as Kingfisher, BT, Coca-Cola, and Lego.
Avanza Solutions signs MOU with Smart Dubai Office Under the patronage of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Avanza Solutions has signed an MOU with Smart Dubai Office to implement a citywide blockchain-based payments platform. The MOU, signed by Dr Aisha Butti bin Bishr, Director General, Smart Dubai, and Waqas Mirza, Managing Director and Chief Marketing Officer, Avanza Solutions, is in line with His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum’s vision to transform Dubai into the first Government in the world to execute all applicable transactions on the blockchain by 2020. As part of the Dubai Future Accelerators programme, Avanza Solutions’ blockchain platform Cipher was selected by Smart Dubai Office to deliver a pilot project to provide an instant reconciliation and settlement platform to Smart Dubai Office for DubaiPay
payment platform. The pilot project was delivered in collaboration with Dubai Smart Government and Emirates NBD. Smart Dubai Office now plans to roll out Cipher across all its existing 38 partner government entities, partner financial institutions, and departments to set up the
first blockchain based building block within its financial plumbing. Avanza Solution’s Cipher platform will enable each of these entities to process instant payment payments and reconciliations across the Cipher network, to create a streamlined process for more efficient and effective service.
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COUNTRY REPORT - QATAR
The deadline approaches
16 MAY 2017
Stability and consolidation were Qatarâ€™s watchwords in 2016, as the government continued to make longterm investments in national infrastructure at a time of restricted economic growth in the region
COUNTRY REPORT - QATAR
n its October 2016 “World Economic Outlook” report, the IMF forecast that Qatar’s GDP growth for the year would come in at 2.6 per cent, down from 3.7 per cent in 2015, as high state spending continued in a wider context of lower energy prices. Looking ahead, however, the government’s strong policy direction and leadership look set to pay dividends, with the IMF anticipating real GDP expansion of 3.4 per cent in 2017, the highest rate in the GCC. Significant public spending will continue in 2017, as the government seeks to ensure a number of major infrastructure projects are completed on time.
The 2017 budget, announced in December by the Ministry of Finance, allocates QR93.2bn (US$25.6bn) for major projects, maintaining spending in key areas such as health, education and transport. According to the minister of finance, Ali Shareef Al Emadi, this would include QR46.1bn (US$12.7bn) on new projects to be signed in the coming year, split between infrastructure and transportation programmes worth QR25bn (US$6.9bn), projects related to FIFA World Cup 2022 facilities valued at QR8.5bn (US$2.3bn), health and education schemes of QR5.8bn (US$1.6bn), as well as QR6.8bn (US$1.9bn) of projects in other sectors.
“An increase in the pace of construction activities on various projects will lead to higher allocation for major projects during the coming three fiscal years,”Al Emadi told local media in mid-December. Total government spending is budgeted to reach QR198.4bn (US$55.5bn) for 2017. This investment strategy is supporting an increasingly diversified economy, with nonoil growth figures reaching 7.8 per cent in 2015 and 5.8 per cent in the first half of 2016, well above the country’s overall GDP growth recorded for the year. Maintaining spending, however, will result in a budget deficit of QR28.3bn (US$7.8bn), down 39.1 per cent on the budgeted deficit for 2016. Given Qatar’s recent history of high oil revenues, this would be the country’s second budget deficit in 15 years.
Greater worker protection Ongoing state initiatives include easing regulations for Qatar’s largely migrant workforce, something that has become a point of contention in recent years. In mid-December, the government announced
Doha Corniche, Qatar
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18 MAY 2017
COUNTRY REPORT - QATAR
Aerial view of Doha and the Pearl City, Qatar
Elsewhere in banking, following the US that it had lifted the controversial kafala Federal Reserve’s December announcement (sponsorship) labour legislation. that it was raising its federal funds rate’s Under the kafala system, migrant target range to 0.5-0.75 per cent, the labourers were allowed to leave Qatar only Central Bank of Qatar (QCB) increased with permission from their employers, and interest rates by 0.25 per cent. This means workers who left a job at the end of the that the overnight lending rate was raised contract were required to wait at least two from 4.5 per cent to 4.75 per cent and the years before returning to the country for deposit rate went from 0.75 per cent to 1 employment by another company. per cent, as of the middle of December. Kafala has now been replaced by a new The Fed’s rate hike and QCB following suit system, which the minister of labour, Essa were both expected. In a recent report, Fitch bin Saad Al Naimi, called “a modernised, Group research agency BMI had forecast that contract-based system that safeguards Qatar’s 2017 growth meant it would be in a workers’ rights and increases job security.” position to withstand the effects As a result, foreign of the hike. workers in the country no longer need sponsorship Looking ahead, to change jobs or leave Qatar gets serious however, the the country. Employers about solar who confiscate passports, With a target of producing government’s blocking the rights of 20 per cent of its electricity strong policy employees from leaving using solar energy by 2030, a the country, will be fined series of public and private direction and QR25,000 (US$6800), up investments are driving new leadership from QR10,000 (US$2700) developments in Qatar’s solar under the previous system. energy sector. look set to The new law also provides a grievance Production begins at pay dividends, committee for cases in major solar plant with the IMF which sponsors refuse to At the end of March, Qatar grant exit visas. anticipating real Solar Technologies (QSTec) – a joint venture (JV) between GDP expansion Qatar Solar (a subsidiary Strong year for of Qatar Foundation), Islamic banking of 3.4 per cent Germany’s SolarWorld AG Qatar’s financial services in 2017, the and Qatar Development sector performed strongly in Bank – announced that 2016, with Islamic banking highest rate in the first polysilicon had in particular recording high the GCC been produced at its new growth. Sharia-compliant production plant in Ras banking grew by 7.2 per Laffan Industrial City, 80 km north of Doha. cent in the first half of 2016 while the Polysilicon is a high-purity form of silicon conventional side of the sector increased and a key component in a range of solar by 6.5 per cent, with ratings agency Fitch photovoltaic (PV) technologies. attributing the growth figures to higher The factory, which is currently in the final retail and real estate financing. stages of being commissioned, will have an Among the industry’s strongest annual production capacity of 8,000 tonnes performers was local sharia-compliant and is expected to start exporting later this year. investment bank Qinvest, which in Speaking to OBG, Khalid Klefeekh Al November announced a revenue increase Hajri, chairman and CEO of QSTec, said of 18 per cent year-on-year in the first nine that the plant’s polysilicon would initially months of 2016. be for export to meet global demand for However, Fitch expects full-year figures high-purity, Tier 1 polysilicon. for 2016 to show Islamic banking growth Al Hajri went on to say that he sees the slowing in the second half of 2016, citing facility’s initial production capacity as just reduced hydrocarbons reserves and high the first phase and expects it to move up to government spending.
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COUNTRY REPORT - QATAR
Power plant in Qatar, Middle East
as much as 500,000 tonnes per annum over time. The plant has also been designed with sustainability in mind, possessing 1.1 MW of solar generation capacity and waste treatment facilities to recycle excess gases and water. “I am very positive about the growth potential of solar energy and research in Qatar and across the MENA region. We have the perfect climatic conditions, and the government has shown the will to diversify its energy mix ,”Al Hajri told OBG.
PV demand The projected increase in polysilicon output over time is likely to be matched by growing demand for PV technology. According to the latest“Global Power Industry Outlook”from research consultancy Frost & Sullivan, solar photovoltaic will be the energy sector’s highest growth area this year, with investment forecast to increase by 11.5 per cent to €141.6bn. The MENA region is itself a strong market for PV products, where increased awareness of the need to diversify the energy mix prompted investments in solar projects to grow from US$160m in 2010 to US$3.5bn in 2015.
Broader vision Qatar will be looking to maintain this momentum in renewable power generation as it continues to pursue its long-term strategy plan, Qatar National Vision 2030,
20 MAY 2017
which aims to fill an expected growth in power demand while simultaneously increasing the sustainability of the country’s energy mix. Between 2006 and 2016, power and water consumption recorded average growth rates of 10.4 per cent and 7.7 per cent a year, respectively, according to data released by Qatar Electricity and Water Company (Kahramaa), the country’s main utilities regulator. Furthermore, research conducted last year by the Arab Petroleum Investments Corporation shows that Qatar will need to attract US$9bn in its power sector between 2016 and 2020 to keep pace with electricity demands.
Power supply One upcoming project that is set to fulfil part of this need is a 200-MW solar power plant being developed by Siraj Power – a JV between Kahramaa and Qatar Petroleum, which has provided US$500m in start-up capital for the project. Construction of the facility is scheduled to start in June, with plans already in place to expand the project’s capacity to 500 MW in the future. Continuing to attract investments of this scale should not pose too difficult an obstacle, as Qatar’s location is ideal for future solar
projects. According to the Climate Technology Centre and Network, the annual solar energy potential of each square kilometre of Qatari soil is equivalent to 1.5m barrels of oil.
Multiple applications Qatar has also been encouraging the use of solar technology in the urban environment. Several large-scale developments are deploying rooftop solar installations as part of their energy infrastructure, including Mshereib Downtown Doha, a sustainable downtown regeneration project; Lusail City, a planned city on the coast north of Doha; and Energy City, an integrated energy hub being built between Lusail City and the capital. Five of the FIFA 2022 World Cup stadiums are also slated to use pioneering solarpowered cooling technology. Speaking to media in July last year, Khalid Al Subai, acting executive director of the Qatar Environment and Energy Research Institute, underlined the potential for rooftop solar solutions in Qatar, with electricity demand closely tracking solar intensity during the hottest months of the year. “Thus, rooftop solar becomes very cost effective in lowering peak electricity demand, which is very important to Qatar’s utilities,” he said. -www.oxfordbusinessgroup.com
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Game changing moves Technology will be leading the way when it comes to achieving a competitive advantage in the field of food logistics. GSC speaks to Ignatius Scholtz, Head of Operations, INL, to find out how they are staying a step ahead
22 MAY 2017
o matter what the industry, a company cannot survive without technology. To keep up with the competition, especially in the logistics industry, one needs to anticipate the most significant technology trends, and then develop innovative ways to use these to create a competitive advantage. â€œOne can see that, through automation, even in the larger warehouses, the work now requires little human intervention. Traceability has become increasingly important, and through advanced capabilities, this drives efficiencies throughout the order process, from picking to returns. Identifying a risk that can be traced back its source, swiftly isolating the problem, and preventing contaminated
products from reaching consumers is easier. Itâ€™s significance is dependent of the type of reader, and the features the devices have to offer,â€?says Ignatius Scholtz, Head of Operations, INL. Automation is changing paradigms in traditional warehouse operations, and across the global supply chain. Companies are continuously seeking ways to maximise throughput, while enhancing order accuracies through the use of automated materials handling (AMH) equipment, highspeed conveyor systems, and automated crane applications. The concept of using drones inside a warehouse was recently introduced, and although this is still in the early stages, it can soon become an attractive option for upgrading and implementation.
MAY 2017 23
“INL’s automated storage solution ensures the food products are kept at their best quality throughout the process, with an optimal tracking and tracing module providing all the information related to the stored goods. INL solutions fully comply with the storage requirements of food products, taking into account all aspects of the end products and speed to market, on the basis of that information,”he says. INL has experienced positive growth since they began operations in 2012, and have
24 MAY 2017
increased their service offering over time. “Through close involvement from our clients, really listening to their expectations, and adapting to accommodate the continuous changing industry, INL is able to offer far more adaptable solutions. We do not only focus on one market in particular, and offer
40,000 pallet positions of automation, with adaptable temperatures ranging from frozen (-18 to -30) and chill (0 to + five), to ambient (+10 to +14),”explains Scholtz. The UAE is regarded as a major hub in the food logistics market, and this is expected to further increase through Expo 2020, as global
transportation and logistics players are looking to the GCC for future growth opportunities. “Over the past decade, the UAE government has succeeded in creating a world-class infrastructure in transportation (seaport, airports, and roads), communications, and tourism, and this has played an important role in encouraging companies to locate and operate in the country. Free zones in the UAE have succeeded in attracting capital, allowing for full foreign ownership of projects, and have generally highly modernised infrastructures
and facilities, which are well connected to other free zones and transportation hubs,”he elaborates. Moving forward, logistics companies will be required to operate on an even larger scale, with a distinct global outlook through further expansion, and this could lead to an increase of mergers and acquisitions, along with increased standardisation supply chain fulfilment, he feels. At INL, says Scholtz, challenges are always welcome.“This will test the resilience of
your operations and business, regardless of the situation. This year will see more cold storage facilities becoming operational in the region, thereby increasing the availability and options to new and existing businesses in the frozen food industry. INL will be investing in the expansion of its fleet to accommodate the growing need for cross border deliveries to GCC DCs, as well is local distribution. Plans are currently underway and in the early stages of design, location, and service offering for our second facility,”he concludes.
MAY 2017 25
Cold chain packaging trends The pharmaceutical supply chain presents
unsustainable materials, and regulatory
many challenges in and of itself, such
compliance in an increasingly global
as the threat of counterfeits, specialised
marketplace, to name a few. As drug
biopharmaceuticals with strict temperature
products change, cold chain packaging
and handling requirements, costly and
is evolving to help address some of
26 MAY 2017
What are the growth areas or trends youâ€™re seeing from pharma/biopharma that are impacting packaging?
There is an increasing number of specialised biopharmaceuticals being brought to market that require temperature-sensitive packaging. At the same time, the demand for these products is also growing and expanding to emerging markets. Worldwide, revenues from biologics, which accounted for 12 per cent of all drug sales in 2005, are expected to grow to 23 per cent by 2017, according to Evaluate Pharma 2013. Moreover, specialty drug spending in the US is expected to quadruple from US$ 87.1 billion in 2012 to US$ 401.7 billion in 2020. More global clinical trials are requiring stricter temperature regulations, further driving the need for innovative cold chain packaging.
these complexities. Susan Li, UPS, discusses pharma and biopharma trends impacting packaging, serialisation and the supply chain, challenges, and packaging innovations MAY 2017 27
As cold chain packaging and shipping trends evolve, pharmaceutical manufacturers will continue to move toward more secure, temperature-sensitive shipping solutions, particularly during new last-mile transportation. Shippers are taking advantage of more complete protection of payloads end-to-end, as well as leveraging data from their carriers, such as ambient temperature environment, package orientations, etc, to develop more effective last-mile solutions. For small packages — but particularly for freight — that means more controlled-room temperature (CRT) solutions requiring enhanced ambient environments. What are some of the recent advances in packaging, and where do complexities/ challenges persist?
New phase change material (PCM) is improving pack-out efficiencies with higher latent heat. However, cost is still an issue to further advance the application of such technology. Furthermore, the use of thermal blankets in freight shipments is offering cost-effective protection for previously unprotected products. Even when it comes to sales representatives’ product samples, there previously was less protection than there is today. Providing the right temperature controls from car to cooler to glove compartment have evolved, as more focus on product protection expand beyond distribution of samples into lastmile deliveries. Also, complexities that persist include intermodal transportation, which impacts pharmaceutical packaging. Extended time in transit on inland transportation movements exposes the packaging to temperature fluctuations, increasing risk. Ocean transportation increases risks through container placement on the vessel, sunlight exposure, container insulation, and dwell time on the dock, all introducing additional packaging stressors. How are pharma/biopharma packaging needs changing?
Pharmaceutical companies are under increased pressure to understand carrier ambient environments in order to
28 MAY 2017
develop, or justify their transportation method and risk mitigation plan. Pharma companies are also finding a greater need to optimise the product carton and shipping carton, to minimise unused space, and select more precise packaging configurations. You’ll see more efforts placed on sustainable materials, and demand will grow for carriers to offer more temperature controls within its network to minimise pack-out complexities, costs, and requirements. An increased number of pharmaceutical companies are also innovating and collaborating with reputable 3PLs to create better efficiencies, de-bulk shipments, and reduce dimensional weight costs. What type of packaging is most in demand among clients?
Styrofoam and water-based PCM are still in high demand, while polyurethane demand is declining, since it is not recyclable, and heavier than Styrofoam. The healthcare industry is challenged to do more with less, and the question of where to invest and what to outsource is a lofty, necessary analysis for any effective business strategy. Firms that focus on core competencies and free up capital reserved for logistical assets have the opportunity to leverage collaborative solutions needed to face supply chain challenges, such as cost management, regulatory compliance, product security, mitigating product damage and spoilage, and gaining better inventory visibility.
How is serialisation impacting supply chain security?
According to the 2015 UPS Pain in the (Supply) Chain survey, which uncovers healthcare executives’ pain points, opportunities, and strategies in their supply chain, what’s most interesting is the optimism logistics decision-makers have with product security — with 75 per cent of respondents reporting success in this area. This represents a 20 per cent increase over 2014. Credited are investments such as barcoding, serialisation, and better cooperation with law enforcement agencies. With the enactment of the Drug Supply Chain Security Act, healthcare companies are getting in lockstep with establishing an interoperable track-and-trace system, where manufacturers would serialise their product, ie, a unique numerical identifier. As serialisation progresses, new advancements such as mobile technologies by consumers will likely continue to be game-changers. In years to come, expect healthcare companies to make even bigger strides in serialisation and product security.
About Susan Li
Susan Li joined UPS in 2011 as a Marketing Manager in UPS Healthcare Strategy group. Today, as Manager, UPS Temperature True, her main responsibility is temperature sensitive packaging logistics. Li has extensive marketing and product development experience in the healthcare industry. She was a Senior Marketing Manager, and a member of the core strategy team at ThermoSafe Brands, Tegrant Corporation. She developed a thorough understanding of global cold chain management in the pharmaceutical and biotechnology industries, having held positions with Abbott Laboratories, Cole-Parmer, Zimmer, and AstraZeneca. -Written by Kristen Brooks, originally published in Contract Pharma www.contractpharma.com
PACKAGING FOR PERISHABLES
Sulphur free packaging for perishables Yzza Ibrahim of www.freshplaza.com tells us about UFLEXâ€™s new packaging solution which eliminates allergy-causing sulphur pads for long term freshness of perishables while saving costs 30 MAY 2017
n 2016, the focal point for UFLEX was the use of Flexfresh films. An Indian company that specialises in flexible packaging solutions, UFLEX has been working with several large retail chains in the North American and European markets. Flexfresh liner bags for blueberries is one of their recent achievements in the fresh produce packaging segment. Flexfresh films is a type of packaging material that is biodegradable, and has a positive effect on the environmental footprint of the supply chain. The use of
PACKAGING FOR PERISHABLES
Flexfresh films also significantly reduces the amount of moisture loss, which also reduces the amount of overall weight loss during transportation. Notable amongst these categories are blueberries and flowers, supplied for a major UK Retailer, and flowers for a major retailer in the USA. Ulfex and Perfotec have achieved a shelf life of seven weeks for blueberries from Chile, and one of the major milestones in this trial has been the removal of the sulphur pads, which are known to cause allergic reactions in some consumers. Flowers have been shipped out of Kenya and Ecuador to the UK and USA respectively, with a shelf life of 30 days for various varieties. “The use of sulphur pads for the protection of fresh produce was aimed at suppressing the formation of the Botrytis fungus,” says Siva Shankaran, vice-president
of Flexfresh UFLEX,“However, the pads often caused irritation for end consumers that are allergic to sulphur. Therefore, we eliminated the use of these sulphur pads by applying higher amounts of carbon dioxide in products like grapes and blueberries. We’ve been working with major retail chains to field-test this new packaging solution.” UFLEX has expanded its sales and technical teams for Flexfresh in Europe, North America, and South America. New distributors are being appointed in major markets in Europe, both Americas, and Asia, to offer local sales and associated support. The company has also invested in additional capacity to expand its product range for a wide range of flowers. With this investment, UFLEX intends to offer liner bags of all sizes for export cartons that are currently being used in both America and Africa. “More and more countries are shifting their logistics from air transport to sea transport. This year, companies in Ecuador will start shipping flowers by sea to markets as distant as Russia or Australia. These companies are going to be using our solutions in their export,”explains Shankaran.
“We work on a 360-degree packaging development process,” he continues, “The critical parts of this process include understanding the crucial requirements of the product to be packed. Under what conditions does the product perform best? What are the types of ambience or environments through which the packaged cargo shall pass? What is the expected shelf life, what actually impedes that the shelf life, and how can we solve that problem? Our engineers are constantly looking for ways to counter weight reduction and how to retain freshness.” UFLEX was founded in 1985, and has evolved into a world-spanning market leader in the field of packaging. The company has facilities in Poland, the US, India, Mexico, Egypt, and the UAE. In 2017, as far as the fresh produce packaging is concerned, UFLEX is going to continue working on high clarity film for retail, which, according to Shankaran, could go commercial this year.“Our engineers have been working for over a year on the right formulation blend for this solution. It will change the way retail packs are sold today. This will also bring in substantial savings to the entire value chain, as the film would be compostable. This, in turn, will give the entire supply chain major benefits towards enhanced sustainability and carbon footprint reduction,” he concludes.
MAY 2017 31
through technology The increasing scarcity of water worldwide is making GCC nation rethink the way this natural resource is used and conserved. Fortunately, technology offers some solutions, Frost & Sullivan’s experts provide deeper insights
32 MAY 2017
A paradigm shift in Middle East’s water industry As concerns of water scarcity intensify across the globe, the Middle East is being prudent in dealing with this hypercritical resource. Nations in the Gulf consume an average 816 cubic metres of water, per person, per year, which is 65 per cent more than the world average. At the same time, the region is widely recognised for being the vanguard of new technology adoption, deploying thermal desalination, reverse osmosis (RO) membrane desalination, and eco-friendly, solar-powered desalination plants for generating potable and process water. Technological innovation, improved efficiencies, and supportive policies will shape the region’s water odds. Governments and policymakers have already begun measures to promote efficient water usage. “The Middle East has shifted gears swiftly to address the water demand-supply gap, and change its path of economic growth to incorporate sustainability,”noted Frost & Sullivan Programme Manager, Energy and Environment, Kshitij Nilkanth, adding, “Like other parts of the globe, the Gulf Cooperation Council (GCC) is looking to desalination and wastewater reuse and
recycling to bridge the supply-demand gap. The GCC must have a balanced focus towards reducing water consumption and increasing recycled water usage, as well as incorporating advanced water and wastewater treatment technologies.” While several measures will be taken on demand-side management, it is key technologies and processes that will drive the supply side. For example, Dubai Integrated Energy Strategy (DIES) 2030 aims to reduce water consumption by 40 per cent by 2030, and water reuse and efficient irrigation are part of the eight strategic pillars of Dubai’s Demand Side Management programme. GCC countries will also aim to lower loss from non-revenue water (NRW) in order to strengthen water security. For instance, NRW rates in Europe range between three and five per cent of the water produced, while those in the Middle East range between 13 and 35 per cent. Renewing infrastructure and increasing accountability will help address this issue. “The strong political will of governments in the GCC to tide over the water scarcity issue and promote economic growth will continue to expand growth opportunities for water and wastewater technology and
MAY 2017 33
solutions providers,” noted Nilkanth,“for instance, water has traditionally been heavily subsidised in Arab countries. However, this is changing with new and revised water tariffs and slabs announced by Abu Dhabi, which is likely to begin a trend of sustainable consumption in the region.” Such hikes in tariffs can spur research and development, and commercialisation of smart metres and smart water grids. Rise in electricity tariffs would mean that desalination water plants will be under pressure to reduce energy consumption by resorting to energy-saving devices, or
34 MAY 2017
shifting to energy-efficient pumps. Overall, the Middle East water solutions market is set for strong growth.
Homes and buildings industry: Integration of new technology drives double-digit growth The global homes and buildings industry is undergoing an intense evolution and accelerated growth. Transformational technologies such as Internet of Things (IoT), Big Data, data analytics, and the cloud are propelling double-digit growth and market expansion in connected
homes and light-emitting diode (LED) lighting sectors. This is augmenting growth in the building automation market, and playing an important role in the delivery of products and solutions in traditional sectors, such as heating ventilation, air conditioning, and fire and safety technology. Global Homes and Buildings Industry Outlook, 2017, part of Frost & Sullivan’s Homes and Buildings Growth Partnership Service (GPS) programme, finds that the industry is expected to reach US$ 1,150.75 billion in 2017. The research provides a
detailed analysis of growth opportunities, technologies, and transformation trends impacting the industry, and profiles innovative and emerging companies to watch in 2017. “The integration of new technologies such as virtual voice assistants and IoT-enabled products will boost growth, spawn new revenue models, and drive partnerships between connected home participants, device suppliers, utilities, and technology giants such as Google, Amazon, and Apple,”said Energy and Environment Senior Research Analyst Anirudh Bhaskaran.
Other developments driving accelerated growth include: The residential LED lighting market will witness a year-on-year growth rate of 16.7 per cent in 2017, largely assisted by the rapid adoption of LED lamps in India, China, South Korea, and other Southeast Asian countries. IoT-enabled LED lighting will fasttrack the growth of connected buildings and their services in 2017. The connected homes market will grow beyond US$ 150 billion, with a revenue growth rate of 14.9 per cent in 2017. Smart thermostats, Internet protocol cameras, smart door locks, and personalised mobile health services will see strong growth. Data analytics will penetrate beyond energy management in 2017, eg, equipment management, people management, and supply chain. The cloud’s full potential in energy management will be realised by developing a centralised data repository for customers to access their building’s energy data. Connected HVAC systems in the commercial segment will augment predictive maintenance and remote diagnostics capabilities in 2017. Germany, Australia, the United States, and Japan will collectively witness over 90 per cent growth in photovoltaic (PV)-associated storage capacity additions in 2017. Solar PV, LED, and lithium-ion technologies will have a high impact on the industry in the near term, with facilities management contributing the most revenue to the home and building industry. The residential energy storage market will witness significant growth in 2017, largely driven by international rollouts and government incentive schemes. “The homes and buildings industry is crowded with both proprietary and open communication protocols, creating challenges related to interoperability and data security. The future industry is moving rapidly toward wireless communication protocols due to scalability and flexibility,”said Bhaskaran, adding,“To seize a significant growth opportunity, hardware manufacturers must develop products that are compatible with both wired and wireless protocol, while software manufacturers must develop vendoragnostic, secured, open-source platforms that make all hardware work on a single platform, irrespective of the manufacturer.”
To sum it up: The GCC has nearly US$ 42 billion worth of water and wastewater projects in the study and design phase in the next 10 years. Commercialisation of new concepts for desalination, including forward osmosis, membrane distillation, tri-hybrid applications using nanofiltration, and low-temperature distillation, is increasing. These technologies will step up efficiency and lower the energy footprint of plants. The planned plant capacities of RO for the GCC are increasing every quarter and improving economies of scale. About US$ 17 billion worth of desalination plant projects are in the offing in the next 10 years. Lowering the NRW losses will help curb the deficit and create more accountability. Membrane bio-reactors (MBR) systems for wastewater reuse and recycling are on a growth trajectory in both the GCC and non-GCC countries. Industry convergence and the Internet of Things will bolster implementation of smart systems. Real-time data from treatment plants and networks, performance metrics, and customer consumption patterns will begin to dictate the operations and investments of utilities. Initiatives like Smart Dubai and DIES 2030 will have a profound impact on the competitive landscape. New capabilities in leveraging the collected data using management tools and improving operational efficiencies will require alliances with software firms. Water companies in the Middle East focus on rapid customer acquisition, strategic alliances and competitive strategy, leadership in operations, reinventing product/service propositions, and realigning core competencies. Key players in the Middle East water solutions market include Veolia, Dow Water and Process Solutions, Abengoa, Almar Water, Xylem, Suez, Doosan Heavy Industries and Construction, and Pentair Water.
MAY 2017 35
OIL AND GAS
Kuwait Oil Company Deputy CEO Badria Ali Abdul Rahman offers insights into Kuwaitâ€™s strategy to boost heavy oil production
s Worley Parsons completed the front-end engineering and design (FEED) for the first phase of the Lower Fars Heavy Oil Development facility project, in January 2015, Kuwait Oil Company (KOC) awarded a US$ 4.1 billion contract to Petrofac to execute the engineering, procurement, and construction (EPC) activities of the project.
36 MAY 2017
The project encompasses a comprehensive set of production segments, from upstream to downstream. The scope of work covers greenfield and brownfield facilities, and includes engineering, procurement, construction, pre-commissioning, commissioning (EPC), start-up and operations, and maintenance work for the main central processing facility (CPF) and associated infrastructure, as well
OIL AND GAS
as the production support complex. This includes a pipeline of almost 162 kilometres, which will transport the heavy crude from the CPF to South Tank Farm located in Ahmadi, from where KOC has the option to send it to the future Al-Zour refinery in the south of Kuwait. “The project is currently in the detailed engineering and construction phase, and will start commissioning in August 2018,
while turnover will be in May 2019,” informs Kuwait Oil Company Deputy CEO Badria Ali Abdul Rahman. To date, over 1,040 wells were drilled, from which a large volume of data were collected, and studies were conducted. The completion campaign of HO phase one project related wells has commenced, in which 930 wells will be completed and equipped by SRP by January 2018.
“As we all know, low oil prices have been a prominent feature of the market lately, and at Kuwait Petroleum Corporation and KOC, we recognise that it is essential to make investments now, as an enabler, to ensure a competitive, flexible, and better position for Kuwait in the future,”he explains, adding,“We are proceeding with plans to enhance Kuwait’s role in the oil industry, to be more effective in securing the supply of the world’s energy.”
MAY 2017 37
OIL AND GAS
KOC aims to achieve and maintain a lead position, among regional and global national oil companies, as one of the top gas and oil exploration and development companies, and be a major supplier of energy. Accordingly, the Kuwait 2040 strategy lays out an ambitious future to explore, develop, and produce oil and gas at a greater scale and complexity than at any time in KOC history. The strategy was developed to ensure that Kuwait will definitely play a role in meeting future energy needs, targeting higher crude oil capacity. “The development of heavy oil is an integral part of our strategic vision and plans. Of course, developing such resources tends to be challenging, and more expensive, compared to many conventional crude oil developments. Managing costs, optimising energy consumption, and creating long-term sustainability are considered some of the major challenges facing KOC today. These are being mitigated by adapting an integrated approach, and obtaining technological solutions from top operators and industry leaders,” says Abdul Rahman. Another major challenge is to overcome the scarcity of experienced professionals. Significant
38 MAY 2017
levels of skilled workforce, with expertise in thermal enhanced oil recovery, engineering and construction, and operation and maintenance capabilities, takes years to develop.“Therefore, we bring in international operators and recognised international services companies, who provide on-the-job support and competency development to young Kuwaitis in preparation for future projects,”he adds. Similar to any international and national company, KOC has recognised the instability of oil price as one of the major challenges. However, KOC’s strategies have always helped it to sustain its operations amid a challenging oil market in the past, and will continue to weather the storm of the present oil market as well, he states. There are factions that consider the production of heavy oil to be harmful to the environment, and KOC is not deaf to those concerns. Kuwait has adopted an ambitious vision to generate 15 per cent of its total energy needs by 2030. Additionally, the drop in the price of crude oil has highlighted the attractiveness of renewable energy’s relative isolation from fuel-price fluctuations.“KOC recognises that alternative energy sources will
not only reduce the cost of heavy oil projects, but will also make heavy oil extraction a cleaner process, and result in a better environmental outcome. Hence, there are several initiatives that we, at the KOC, are considering to apply, in order to keep the impact of heavy oil extraction on our ecosystems to a minimum,”clarifies Abdul Rahman. One of the initiatives in the framework of heavy oil is the application of solar energy to generate steam and power for thermal enhanced oil recovery operations. KOC is currently developing a scope for a solar pilot project to generate steam, to be implemented on KOC HO phase one project. In this way, they will maximise the synergies already available in the industry, reducing the consumption of fuel in steam plants and other processes.“The ecosystem in the Middle East is very sensitive, and its protection one of our most relevant objectives,”he states. The Lower Fars project will have a grass root refinery at Al-Zour area, south of Kuwait City, with a total capacity of 615,000 barrels per day. Al-Zour Refinery, which will be one of the largest oil refining plant worldwide, will fulfil the downstream strategy of the Kuwait Petroleum Corporation. In addition to its domestic benefits as the prime supplier of feedstock to the power plants, Al-Zour Refinery will enhance competitiveness of Kuwait petroleum products on the world markets because of its ability to meet the stringent requirements of those markets. “The refinery will handle KOC’s heavy oil production. In June 2015, KNPC awarded the new refinery project at Al-Zour, and it is expected to be commissioned by 2019,” informs Abdul Rahman. Abdul Rahman was a keynote panellist at the Middle East Heavy Oil Congress, held in the Kingdom of Bahrain last month.“The Congress presented a great opportunity for oil and gas professionals to learn more about the dynamic sector of heavy oil, and provided an opportunity to network with experts and professionals from the community. It offered attendees in-depth knowledge, and helped them understand the key drivers and risks involved in developing heavy oilfields, especially those in the Middle East region. KOC shared its recent progress in the development of heavy oil, covering KOC’s Heavy Oil Production Strategy, as well as targets and progress made on those strategic projects,”he concludes.
Diversifying strategy for
GWC recorded a substantial profit in the first quarter of 2017, thanks to various initiatives that have contributed to its growth as a company and that of the country
WC concluded the first quarter of 2017, achieving QAR 50.5 million, as compared to QAR 46.5 million at the end of the same period in 2016. The company’s revenue streams gained QAR 222.7 million at the end of the quarter, as compared with QAR 220 million in the first quarter of 2016. “Every effort has been taken to ensure that the company serves the best needs of the state as it transitions from oil dependency to a stable economic contributor to global wealth and trade,
40 MAY 2017
an essential element in achieving the Qatar National Vision 2030,” stated GWC Chairman Sheikh Abdulla bin Fahad bin Jassem bin Jabor Al Thani, adding,“It is through this lens that we find, in the current climate, a wealth of opportunity to develop, innovate, and prosper, thereby recompensing our stakeholder’s investment and trust in us.” GWC’s most recent contribution towards economic diversification has been the GWC Bu Sulba Warehousing Park, the first of the country’s public-private partnerships to bear fruit, which the company completed
on schedule at the beginning of 2017. The warehousing park was conceived for and is dedicated to serving the needs of the country’s growing SME sector by providing them the best possible logistics infrastructure, and the benefit of the company’s experience in delivering world-class supply chain solutions.
COMPANY NEWS - GWC, QATAR
to optimise performance and protect against possible risk. Among those programmes was the establishment of the Business Continuity Management and Enterprise Risk Management systems in the company. Put into practice in July 2016, the company successfully completed a test of the system during the first quarter of 2017 to ensure the company’s readiness to handle any disruption.
Further adding to the company’s revenues has been the participation of the company’s various departments in developing new revenue streams, including efforts to coordinate efforts between the various departments to offer fully-integrated services to each client. To that end, a major telecommunications client was recently signed on to receive services from the company’s contract logistics, freight, and records management department. To maintain the best services possible, the company has internally established a number of policies and procedures, intended
The company’s award winning performance was recognised by a number of independent authorities, with GWC earning a spot on INSEAD/Trends Magazine’s TOP CEO list for the third year in a row. For its contributions towards the nation’s social welfare, GWC also received the CSR Leadership award during Qatar University’s CSR Exhibition and Conference. The Qatar CSR Report monitors and evaluates the progress made each year in the area of sustainable development in society, with a particular focus on CSR and contributions to the Qatar National Vision 2030. A CSR award ceremony, honouring those who have made significant contributions to these causes, was held
during the conference, attended by a number of dignitaries, industry experts, and ambassadors. GWC Senior Corporate Communications Manager Mohammad Daoud received the CSR Leadership award on behalf of the company, from Qatar University president Dr Hassan Al Derham. “GWC aims to be a partner to the State of Qatar, both, through the services it provides, as well as by the programmes and initiatives we run and support,” stated Al Thani, adding, “Our well-proven, award winning services, solutions, policies, and standards will continue to support Qatar in its national vision.” GWC has participated in a wide variety of initiatives and programmes since its inception, with a focus on youth, health and heritage grounds. “GWC’s strong nationalistic orientation coheres strongly to the societal ideals put forth in the National Vision, and finds expression in the varied initiatives it supports towards cultivating the spirit of service to community that it promotes both within and outside the company,” Al Thani concluded.
MAY 2017 41
TMR SUPPLY CHAIN LEADERSHIP FORUM
Tom Magarry, Head of Group Freight - M.H. Alshaya Co. TMR SC Leadership Forum 1st Feb 2017
42 MAY 2017
Paolo Patti, Regional Operations Director - Anixter TMR SC Leadership Forum 1st Feb 2017
Geert Swinnen, Supply Chain Director, Agthia Group PJSC TMR SC Leadership Forum 1st Feb 2017
Ingo Kloepper CEO Middle East Area, Damco TMR SC Leadership Forum 1st Feb 2017
TMR SUPPLY CHAIN LEADERSHIP FORUM
Reducing demurrage and detention fees
Global Supply Chain magazine is pleased to be the official media partner for an ongoing series of exclusive, invitation-only Supply Chain and Logistics Leadership Forums (sponsored by Damco), which have been launched by Brian Cartwright, Founder and Managing Director of Top Management Resources (TMR) Group
ast month, Global Supply Chain Magazine participated in the 2nd Supply Chain and Logistics Leadership Forum, sponsored by Damco, and organised by Brian Cartwright, Founder and Managing Director of Top Management Resources (TMR) Group, as media sponsor. The main goal of these forums is helping organisations to improve efficiencies within their supply chains, by providing a neutral platform for senior executives to share ideas, best practices, and knowledge, in a relaxed, but business-focused environment. The event was attended by Supply Chain and Logistics VPâ€™s and Directors from several multinational and local organisations, which included Anixter, MH Alshaya, Fiat Chrysler Automobiles, Goodyear, Wrigleys and Agthia Group.
MAY 2017 43
TMR SUPPLY CHAIN LEADERSHIP FORUM
The main topic was about reducing demurrage and detention fees for sea freight. As a group, there was discussion around the root causes for detention/demurrage, and this highlighted four main areas where the potential exposure to fees was greatest. 1. From the vendors 2. At order placement 3. At time of shipping 4. At arrival POD Although many organisations are losing thousands of dollars each month in DET/ DEM charges, it was agreed that much of this could be avoided with better planning and visibility, and a clearer understanding of customs regulations and conformity
44 MAY 2017
requirements of each country for certain products. Unfortunately, in many countries in the MEA region, managing this has proven challenging for Supply Chain and Logistics professionals, due, in part, to frequently changing customs regulations, and not receiving adequate information regarding the changes - especially in markets like Saudi, Kuwait, Qatar, and Egypt. Consequently, not having all the documentation required to clear the cargo, and not knowing all the processes required was cited as one of the main reasons for delays which are generating additional fees. It was also discussed that simply the changing of customs officials, for example,
in Saudi Arabia, can have a significant impact on timelines. There were also cases where nonregistration of a particular commodity with local municipal authorities had caused delays of clearance. Home furnishings, lighting, and cosmetics, for example, are complex commodities where delays would often occur. The shippers felt that, more often than not, the ability to reduce these fees is out their hands, as the majority of service providers are not providing enough DET/ DEM visibility. They felt it would be helpful if the service providers would give regular updates about border process changes. Other reasons for accruing fees unnecessarily included full warehouses,
TMR SUPPLY CHAIN LEADERSHIP FORUM
and no space to offload the cargo, leading to delays; no visibility of containers arriving to destination; and no ASN received about cargo shipped and en-route. Lack of visibility is compounded by everything often being managed via excel manually, through multiple sheets, leading to some companies taking the decision to employ a person whose job is to specifically monitor all cargo, and ensure that the focus on reducing DET/DEM fees is being managed on a daily basis. During the discussion, there were number of excellent suggestions where Supply Chain and Logistics professionals could make an immediate positive impact to reduce DET/DEM fees.
Actions that can be taken to manage detention/demurrage: 1. Often, country requirements are not understood properly and less detention/ demurrage is negotiated in annual RFQ with carriers. This, in turn, leads to immediate DET/DEM payout once cargo hits the destination. To manage this better, organisations are advised to do the following: â€˘ Understand clearance timeline specific to the port/country, budget realistic timelines and negotiate with carriers accordingly. Example: African destinations can take +20 days, be sure to negotiate these free days â€˘ Best practice sharing: One of the attendees shared the experience of
collecting all the destination country requirements/vetting after discussing with destination teams/distributors/ consignees before the RFQ season and negotiations with carriers began. This helped them to obtain optimum DET/ DEM days from carriers for current year 2. DET-free days vs freight balance. Often, carriers build in DET/DEM requirements into the freight, and seeking excessive DET/ DEM will affect freight negatively as taking too much DET/DEM to mask operational failures is not a good practice. Hence, it is important to hit the right balance to optimise overall costs. 3. The key to reducing DET/DEM is careful planning, including planning warehouse
MAY 2017 45
TMR SUPPLY CHAIN LEADERSHIP FORUM
capacity, demand planning, and RM requirement planning. Also, another key area is documentation planning. Talking to vendors and educating them about document requirements can solve the majority of the issues, right from the point of origin. A different approach needs to be taken though when training or educating the smaller vendors vs larger ones. Smaller vendors may not be aware of requirements, larger vendors can be too big to bother about your specific requirements. If you utilise a good logistics service provider, they will be able to help you to manage and train vendors to comply to specific requirements. 4. Standard operating procedures and service level agreements regarding documentation compliance with vendors/ service providers should be agreed in advance and properly monitored. Better visibility is always an enabler for better risk management. Chris Van Eijk, Damco’s Chief Information Officer for the IMEA Region mentioned that Damco have been actively addressing this by developing a detention/
46 MAY 2017
demurrage management app, which they had released recently in the market. The app can help customers see the containers that are awaiting clearance, and gives a quick indication of where any urgent action is required. Management at origin is key; with all documentation + clearance in place before cargo is accepted. This is likely to fix the problem early in the chain. In the GCC, many companies prefer to bring all of their cargo to Jebel Ali, and then re-distribute to GCC, as processes / timelines are considered to be reliable in UAE. Take a pro-active instead of a reactive approach: currently most of detention/ demurrage management is reactive, rather than pro-active. Weekly monitoring of goods in transit and goods arrived is key to avoid spending on detention/demurrage. Dig deeper into your own operations by conducting a root cause analysis on previous years detention/demurrage spend. Pick 80-20 per cent causes, and devise actions to attack the major causes.
Role of the destination customs clearance agency in local markets is also key to ensure reduction of DET/DEM. • Penalty vs incentives after timelines are agreed in SOP • In-house vs agent benefits Ingo Kloepper, Damco’s CEO for the Middle East, mentioned that he could recommend a number of various ways for shippers to reduce demurrage and detention fees, ranging from very quick and simple to quite complex solutions. Brief examples he gave would be to negotiate a combined detention/demurrage free time with carriers, instead of asking separate number of days for both. This may help in managing the overall spend using the combined free days given by carrier. Or to negotiate average dwell time with carriers. Instead of asking a particular number of detention/demurrage for each container, why not ask if you can negotiate on overall/average dwell time for full volume throughout the year? - Photo Credits: Luke Garlick Photography
Locally Invested, Locally Invested, Globally Connected Globally Connected
OFFICES IN UAE, QATAR AND NETWORKS ACROSS THE GLOBE OFFICES IN UAE, QATAR AND NETWORKS ACROSS THE GLOBE Logistics Solutions for Logistics Solutions for Retail | Automotive | FMCG Retail| Engineering | Automotive| |Humanitarian FMCG Chemicals Chemicals | Engineering | Humanitarian 45,000 Pallet Positions 45,000 Pallet Positions 1,500 Sq Meters Open Storage 1,500 Storage 2,000 Sq Sq Meters Meters Open Chemical Storage 2,000 Sq Meters Chemical Storage Temperature Control Storage Temperature Control Storage JEBEL ALI, DUBAI Tel: +971 4 8819600 JEBEL ALI, DUBAI Fax: +971 8817231 Tel: +971 448819600 E-mail: email@example.com Fax: +971 4 8817231 E-mail: firstname.lastname@example.org
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48 MAY 2017
Cold chain services in pharmaceuticals is a complex process, with demand in the region rising. Albert Asool, CEO Agility, Dubai gives his
Success in the pharma
he global demand for a secure pharmaceutical supply chain is a key contributor to the rapid growth of the cold chain market. By 2020, the pharma cold-chain logistics will be worth US$ 16.7 billion. Success is determined by managing inventory through planning and forecasting, boosting the efficiency of storage systems, and reducing lead times. In the region, rising income levels, population, tourism, and policies, including the AED 160 billion 2030 Industrial Strategy will only amplify the demand for such specialised services. In addition, companies are adopting a â€˜hub and spokeâ€™ model, with goods stored in a central location, such as Dubai for the region, offering economies of scale and faster response time. This model enables pharmaceutical companies to better serve their customers, react to commercial opportunities, and have greater control over product integrity before reaching their distributors.
MAY 2017 49
As the regionâ€™s healthcare industry expands, owing to a rise in lifestyle diseases, increased local manufacturing, and the introduction of mandatory private health insurance; the security of pharmaceuticals against health epidemics and increased counterfeiting is a keen concern for logistics providers, who are, in turn, introducing tracking solutions among other surveillance solutions. Materials must be maintained within a very narrow range of temperature conditions to ensure that efficacy and safety to use is retained. International shipping guidelines and customs regulations are affecting the cross-border movement of pharmaceuticals and biological material. This often includes dedicated shipping lanes and
50 MAY 2017
decontamination protocols. Standardised industry processes, such as Good Distribution Practices, established by global health authorities in maintaining product integrity, are also increasingly observed in the Middle East by logistics companies. This is alongside industry-specific expertise, capabilities, and assets, giving the customer access to visibility throughout the supply chain, especially when temperaturesensitive products are involved - a key prerequisite in being able to provide a complete cold chain. Ongoing growth and expansion will continue to characterise the pharmaceutical logistics market in the region. There is
increased manufacturing in Jordan and Egypt, and a regulatory framework that will see homogenised legislation being implemented across the GCC region. We foresee developments as direct deliveries to hospitals, pharmacies, and patients grow in demand, meaning that increased professionalism and access to resources will be key to helping support the growth of the cold chain. An example of Agilityâ€™s end-to-end services for the industry is the delivery of medical specimens in Abu Dhabi. Agility has created a more responsive, visible supply chain that achieves rapid pick-ups and specimen stability. Staff members receive special training to process documentation and handle samples. Alarms trigger the need for corrective action en route if temperatures fluctuate out of range. The amount of time fragile specimens spend in transit is reduced with Agilityâ€™s customised software for handheld devices, a route optimisation module, real-time dispatch, and live updates. Together, these solutions provide detailed visibility for each step. In Dubai, their specialist pharma competence provides warehousing and distribution across the region for a number of industryrelated clients.
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WORLD AVIATION SAFETY SUMMIT
52 MAY 2017
WORLD AVIATION SAFETY SUMMIT
Aviation safety on the forefront The next generation air traffic management, with a heavy focus on safety, was examined by safety experts from all over the world at the fifth World Aviation Safety Summit. GSC reports
mprovements to air traffic management (ATM) and airspace design were critical points of debate at the fifth edition of the World Aviation Safety Summit (WASS), held in Dubai last month. Next generation ATM technology was analysed, in addition to airspace design planning, and how to minimise unstable runway approaches. This topic is of significant concern to GCC aviation leaders, who have, for a long time, debated about improving airspace collaboration across governments to reduce congestion, and ultimately improve safety. It was recently announced that a centralised air traffic management system in the
MAY 2017 53
WORLD AVIATION SAFETY SUMMIT
GCC had reached a very advanced stage, according to the Director General of UAE General Civil Aviation Authority (GCAA). It is expected that this will be improve access, collaboration and safety across the region. Industry experts discussed air traffic control (ATC) security and resilience,
54 MAY 2017
avoidance of Airprox incidents on international routes, as well as how to enhance crew and ATC communication. The Summit addressed topics from flight over conflict zones, and threats of terrorist activities, to safety monitoring and measurement, each with contributions
from leading experts in the fields, and an assessment of the international best practices being applied. With increased instability and the existing armed conflicts around the world, the effects on civilian aviation security have been a notable public interest topic. Security experts
WORLD AVIATION SAFETY SUMMIT
It was recently announced that a centralised air traffic management system in the GCC had reached a very advanced stage, according to the Director General of UAE General Civil Aviation Authority (GCAA)
and policy-makers considered related topics during the ‘overflight and handling a complex geopolitical environment’ on day one of the conference. In particular, they addressed safety risk assessment for overflight of militant areas and zones, with many airlines no longer flying over conflict
hot spots, following a number of incidents over recent years. The panel also provided up-to-date insights concerning coordination of safety information around war zones, and increasing threats of terrorist activities. The Summits Association Partner, IATA said,“Air Traffic Management (ATM) is
a key component and critical enabler to the growth of international air transport. Fragmented ATC operating standards create challenges in meeting the need for increased capacity and growth of air traffic. Improvements in military/civil cooperation and partnerships to address the use of military designated airspace for civil operations (when not utilised by the military) will assist States to further mitigate overcapacity and associated safety related concerns, whilst, at the same time, providing for positive economic growth. To be completely effective, it is also imperative that airport development aligns with the airspace efficiency.” Inflight tracking is also another pertinent topic that was discussed, with a dedicated panel at the close of day two. Specific areas of attention included the implementation of continuous air tracking systems that could provide real-time locations of airborne vehicles from departure to destination. While disappearances are an incredibly rare occurrence nowadays, a number of highprofile incidents have highlighted the need for improved inflight tracking technologies. Other panels focused on management of staff, dealing with such matters as creating a safety culture within aviation organisations, including applying effective safety training management and programmes. Fatigue management and flight time limitations are also important issues for all airlines, and were discussed, alongside pilot fitness, crew health, and other factors to reduce human error in aviation.
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WORLD AVIATION SAFETY SUMMIT
The aviation and aerospace sector in the UAE continues to demonstrate terrific growth, and was recently estimated to account for 750,000 jobs by 2020. Safety is a huge part of that, and represents a foundation for all other aviation activities Nick Webb, Managing Partner at Streamline Marketing Group, the event organisers, said,“The aviation and aerospace sector in the UAE continues to demonstrate terrific growth, and was recently estimated to account for 750,000 jobs by 2020. Safety is a huge part of that, and represents a foundation for all other aviation activities. As such, the World Aviation Safety Summit provides a sound platform for the ongoing discussions of these crucial issues, and contributes to maintaining Dubai’s leading position at the helm of the industry.”
Aviation safety should not be influenced by commercial agenda
H E Mohammed Abdulla Ahli, Director General at the Dubai Civil Aviation Authority, said,“With our growing presence on the global aviation scene and solid status as an international aviation hub, we are committed to improving safety standards across the sector. As the sector and industry continue to grow, so do the number of safety factors
56 MAY 2017
that need to be taken into account, and that’s why this year, we have discussed such a broad range of topics. The fifth World Aviation Safety Summit intends to advance local, regional, and international understandings of some of the most pressing issues facing carriers today, as well as providing cutting-edge and innovative response to current challenges.”
Delegates and attendees of the fifth annual World Aviation Safety Summit (WASS) discussed that aviation safety should not be threatened by commercial or political interference, such as the recent US and UK electronics bans that have caused controversy throughout the sector. Speaking during the opening ceremony, WASS Chairman and prominent aviation analyst Alan Peaford spoke of the need to maintain safety above other interests, calling for consistency in analysis and applications of intelligence material. The US and UK electronics bans, implemented last month, mean that passengers on certain flights outbound from the Gulf region are required to stow electrical devices larger than a smartphone in checked-in luggage. This has raised concerns over the fire hazards posed by Lithium-Ion batteries, with International
WORLD AVIATION SAFETY SUMMIT
application process for commercial drone operators, which includes detailed background checks and pre-authorised location selection. Rudolf highlighted that DCAA is working on signing an MoU with retailers to set up a process by which drone users must register their drone before being able to physically receive the devices. Another theme throughout the Summitâ€™s panel talks and keynote speeches was the discrepancy between reality and perception of aviation safety. While flying remains safest means of long-distance travel, highprofile incidents and other threats have affected perceptions. Peaford went on to highlight a recent survey by Ascend, in which 47 per cent of respondents felt that flight safety has either deteriorated or remained the same, despite the fact that aviation safety has improved five-fold globally over the past decade. IATA figures identified that there were 10 fatal accidents in 2016, representing improvements to aviation safety and security across the board. The overall accident rate reduced from 1.79 per million in 2015 to 1.61 last year. Among a series of other topics, the Summit went on to discuss regulation requirements for private drone use, safety management systems, and international best practices for wildlife management protocols.
and highlighted some specific reasons why other airports are reluctant to implement best practice. These reasons include a lack of a regulatory requirement, cost of implementation, more training being required, and, in some cases, not enough experience to implement. He also emphasised that most runway incursions occur in good MET conditions, with most accidents occurring at night or in poor visibility. Bhamidipati Srinivas, Head of Aviation Safety, Bangalore International Airport, commented that improved communications are necessary to reduce runway excursions. He also called for increased training for controllers and Air Navigation Service Providers, as well as improved speed control and clearer information for Automatic Terminal Information Services in global airports. David Gleave, a Chief Safety Investigator, argued that improved instructions are needed at all runways and that geometry should always be considered in order to improve safety. According to IATA, last year, some 3.8 billion travellers flew safely on 40.4 million flights. Flying is still the safest form of long distance travel. For IATA, safety remains the top priority of all involved in aviation, with a goal for every flight to depart and arrive without incident.
Clear, safe and consistent operating environments are needed to improve airfield safety
Air Transport Association (IATA) Director General, Alexandre de Juniac, stating that US and UK authorities should work to maintain security without such measures being put into effect. Michael Rudolf, Head of Aviation Regulations and Safety at DCAA, discussed the Authorityâ€™s latest procedures and
In order to keep airfields safe, flight crews need a clear, safe, and consistent operating environment that avoids confusion, according to Andrew Green, Manager Aerodrome Safety & Standards, Aviation & Airports Safety Department at DCAA. He explained that a more consistent approach is needed in terms of signs and instructions at airport runways, to ensure airfield safety is kept to the highest standards. He added that Dubai International Airport is consistent in its runway environment,
MAY 2017 57
COOL CHAIN ADVERTORIAL
Khatib, Warehouse Manager, Mir Hashem Khoory
58 MAY 2017
COOL CHAIN ADVERTORIAL
Maximising potential GSC spoke to Varun Vishwanath, Assistant Sales Manager, Genavco, about how the new racking system they have installed meets customer - Mir Hashem Khoory (MHK) Groupâ€™s â€“ expectations and more
ive us a background of your client Mir Hashim Khoory. The Mir Hashem Khoory (MHK) Group, established in 1963, is a strongly entrenched local family business that includes real estate, healthcare, education, trading and ship chandelling, marine repairs, manufacturing, logistics facility management, and investment in security. We have established a state-of-the-art cold store for them, providing a one-stop business solution to address the growing need of temperature controlled storage facilities in Dubai, with a comprehensive supply chain management solution that includes warehousing, inventory management, security system, and distribution suitable to every type of client.
MAY 2017 59
COOL CHAIN ADVERTORIAL
invested to maintain the temperature in the space. We proposed the Stow Atlas Shuttle Racking System, creating space for storage of 6,040 pallets, which was pretty much in line with our customerâ€™s expectation. Indeed, after commissioning all the details, the customer was pleased, and the installation is 100 per cent successful. What were the client requirements from this new installation?
The only requirement was to optimise the space without affecting throughput. With Stow Atlas System, which is specifically designed for this application, the expected results were delivered. What was the solution proposed by Genavco to ensure the requirements were met?
Genavco, being the exclusive distributor for Stow Storage Solutions in UAE market, agreed with our proposed Pallet Shuttle System from Stow. Stow Atlas is a deep lane storage and retrieval system. A shuttle is used to move pallets with a specifically designed racking structure, thus optimising the storage capacity. Can you give us details of the project? What is the scope for increasing the total capacity in the future?
Their facility located at Ras Al Khor Industrial Zone 1, serves their clientele in the Dubai/Sharjah corridor, especially the Aweer Fruits and Vegetable market. This facility bridges the gap in the shortfall of Public Cold Store resources in the area, considering all the major providers are located in Al Quoz, DIP, Techno Park and Jebel Ali. The logistics centre facilitates storage of all kinds of food and specialised products, with 6,000 pallet positions under controlled temperatures, ranging from +10 to -20 degrees Celsius, accommodated in 14 Individual chambers. These chambers are equipped with robotic shuttle / racking system from Stow Belgium, which is a
60 MAY 2017
one-of-its-kind for cold store application in the UAE. There are six bays with automated ramps for loading / unloading to accommodate any kind of vehicle. The cold store is also equipped with reach trucks, pallet riders, and fork lifts to facilitate swift operation. What is the back story that lead to the creation of this semi-automated racking system? What changes have you (Genavco) made?
Our customer, who we created this project for, is into storage and distribution of frozen food products. It is very important to optimise the storage space in a cold store, considering the cost of energy being
We have racked 12 chambers out of 14 with Stow Atlas System, with a system height of 7.3 metres. The System is combination of five deep /10 deep lanes, according to room size. The total achieved capacity is 6,040 pallets. Racking in the remaining two rooms will be done later, which will take the capacity close to 7,000 pallet positions. There is no major increase in the footprint of the warehouse due to these installations. Was this installation done on the existing IT system? Or were there enhancements made to the IT infrastructure so this new system could be seamlessly incorporated?
Since this is a new facility, the installation was not based on an existing IT system. The IT Infrastructure was developed after installation of racking system, according to the operational needs, and we are happy to report that it is working fine.
Published on May 10, 2017
Supply Chain, Supply chain management , logistics and supply chain segmentation, warehousing, RFID, healthcare logistics, 3PL, 4PL, six sigm...