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ARTIST IMPRESSION: Pharma World Holdings has acquired 10,000m2 of land at Jebel Ali Free Zone in Dubai, which will host its regional distribution hub. (Dmitry Dolzhanskiy/ITP Images)

Although the bulk of pharmaceutical products arriving in the Middle East have been manufactured in Europe and North America, a percentage also originates from countries such as India, Pakistan, Jordan and Egypt.

These are primarily transported by sea freight, although urgent requirements are occasionally handled by airfreight, whilst products manufactured in local countries such as Jordan are sent by road.

Pharma World Holding plans to store these products in a central facility in Dubai and distribute them by road throughout the Middle East and North Africa. A limited amount of stock is also shifted by sea freight, mainly to North Africa.

One of the biggest regional markets for the company is likely to be Saudi Arabia, which has a pharmaceutical sector valued at approximately $1.7 billion a year - representing around 65% of the total GCC market. Other important trading countries include the likes of Kuwait, Bahrain, Qatar and the United Arab Emirates.

"Imports represent between 80-85% of the Saudi market alone, which is growing astronomically," says Kheder. "Although these figures are very encouraging for manufacturers, distribution for international companies within the GCC has been notoriously time and money consuming in the past.

The traditional model of distribution meant foreign manufacturers would supply products through distributors who place and receive orders directly from principal manufacturing facilities.

This model lacks flexibility for principals and means that they need to find a distributor with excellent regional knowledge to optimise the process. Our offering allows us to share the responsibility with our customers to lower distribution costs through better logistical services and greater inventory control, creating an overall streamlined process."

Pharma World Holdings has acquired 10,000m² of land at Jebel Ali Free Zone in Dubai, which will host its regional distribution hub. The facility, which is currently being constructed, includes 6000m² of warehousing space and will be fully operational by the middle of 2008.

"Our Jebel Ali facility will not only provide high-tech pharmaceutical warehousing, but also third party logistic provisions never before seen within the Middle East," says Kheder.

"The warehouse provides a new and totally unique offering to local and international manufacturers. It allows for more effective and efficient forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption to meet customers' requirements.

The storage period for pharmaceutical products is very limited and the turnaround is huge because we don't store products for over a month.

The warehouse will feature high-level storage, spanning seven levels in total and with the capacity to store a maximum of 8,000 pallets. The temperature is maintained between 220C and 250C, except for the cold chain storage areas, where temperatures range from 40C to 80C degrees. The facility also includes a dispatching and receiving area, together with separate sections for expired and damaged goods.

The Ministry of Health stipulates that controlled drugs must be kept in a separate warehouse, which should be locked with a single key that is held in the custody of one person. The facility must also be monitored and made available for members of the Ministry of Health committee to inspect at any time," says Kheder.

"If the product is damaged or expired, we normally communicate with the manufacturers and arrange for the products to either be shipped back or destructed. Obviously, there are policies and procedures for destruction and additional costs are involved.

The process is not done in the warehouse because there are specially designated areas by the municipality and the Ministry of Health, who supervise the process.

The storage capacity of the facility is large enough to handle the company's initial operations, however with ambitious growth plans, Kheder is already looking at building a wider portfolio of warehouses within his coverage area.

"In the long term, this facility will not be large enough to cover our Middle East and Africa operations," he explains. "The market is huge and we need more facilities over the next five years, so we are looking to expand further in Dubai.

We are also looking at other developments, such as King Abdullah Economic City in Saudi Arabia and the free zones in Egypt. I am very optimistic about our future operations and we're looking forward to becoming another major success story in the Middle East logistics industry.

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