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Wed 1 Jun 2005 04:00 AM

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High end goods

BANZ and BMMI have formed a joint venture, B&B Logistics, to operate temperature controlled facilities across the region, starting with warehouses in Bahrain and Djibouti.

|~||~||~|Late last year, Bahraini-based BANZ and BMMI formed a joint venture to operate bonded warehouses across the region. The joint venture, B&B Logistics, was formed to cope with an increasing demand for high end fast moving consumer goods (FMCG) in both the Gulf and East Africa. The company has already opened two temperature controlled facilities, one at Mina Salman port in Bahrain and the other in the Djibouti Free Zone, and it is now looking to open up more temperature controlled warehouses across the region.

One half of the joint venture, BANZ (Bahrain New Zealand Cold Storage & Warehousing company), was established over 20 years ago by the governments of New Zealand and Bahrain to ship frozen lamb to the Kingdom. It was later taken over by Bahraini businessmen, and now handles a wide range of frozen, chilled and fast food products.

BMMI (Bahrain Maritime & Mercantile International), the other partner in the deal, was set up in 1883 by a merchant called Gray Mackenzie. The company, which in 1999 became a Bahraini owned public company, now specialises in FMCG product distribution, supply chain management and shipping services in six countries over three continents.

The two companies decided to create the joint venture in order to leverage on each other’s strengths. Thus BANZ designed and built the two new warehouses in just six months, while BMMI installed the communications and IT systems. The larger facility, which is in Bahrain, opened in January. It boasts 7421 m² of warehouse space on 15,718 m² of land, and it has already seen strong demand.

“At the moment, half of the Bahraini warehouse is at full capacity with four companies currently occupying the area, handling FMCG products, in particular, high-end beverages. We are also storing goods like chocolate and toys for Bahrain’s Duty Free,” says Mark Clarke, operations manager, BANZ.

“We have had discussions with a couple of local companies and an American government department that want to use the rest of the warehouse. As yet, we are not 100% sure what the rest of the facility will hold, but it will most likely be high end FMCG products because of the chilled and frozen areas that are available,” adds Clarke.

To manage the flow through of goods and stock rotation, which are vital for FMCG products, B&B Logistics has opted for an inhouse warehouse management system (WMS), which has been developed by BANZ over the last six years.

“The WMS is based on our food business and batches and production control values, so we have just adapted it to take care of customs duty and things like that. We did look into some off the shelf packages but we did not see any that were close to our own application. It was a case of we have been in the business a while, we know what we want and we have it already,” says Clarke. ||**|||~||~||~|As far as the racking goes, B&B opted for a narrow aisle system from SSI Schaefer. Narrow aisle was chosen as it allows good selectivity for products and user-friendly stock rotation.

“We did look at other systems. For example, BMMI has just implemented a mobile racking system in one of its new warehouses, but at the end of the day we thought narrow aisle was the best one for the job,” Clarke adds.

The warehouse is in the old port of Mina Salman and it is one of the only air conditioned units available in there. Many other companies are looking towards the new port, which is not due to come online for another two years. However, B&B Logistics decided to base itself in Mina Salman due to its ideal location for shipments entering the region, and also because it was a Brownfield rather than a Greenfield area.

“We built the facility here because of the availability of land, and also because it is in the middle of the port, so it backs up onto the container terminal. It is also linked to the new Hidd causeway, linking the warehouse right to the airport, so for distribution purposes it is ideal as it is right on our doorstep,” adds Clarke.

Aside from the Bahraini facility, B&B Logistics is also planning warehouses throughout the GCC. Beginning with Qatar and Jebel Ali. The joint venture is also targeting East Africa, where it has already opened its second facility in the Djibouti Free Zone. Sized at just over 2200 m², this warehouse is capable of holding 480 pallets in the freeze section, 220 in chilled and 816 pallet spaces in the air conditioned area.

The facility in Djibouti is run as an extension of the Bahrain warehouse where all purchasing decisions are made. The shipping documentation is then forwarded to Djibouti for clearance over the internet using a secure virtual private network (VPN).

Like the Bahrain facility, the Djibouti warehouse supports B&B’s current contract with the US government for holding frozen food and high end goods. Goods that are sourced in the local market are shipped by ocean freight from Bahrain via Jebel Ali to Djibouti, whereas US goods are transhipped directly from the USA with a high percentage coming through Jebel Ali.

“Obviously, the facility is used for high end food products, as well as high end beverages, serving NGOs and embassies across the East Africa region,” says Robert Smith, chief operating officer, logistics & supply chain, BMMI, and director, B&B Logistics.

“However, once this warehouse is well established, we also hope to move across the region and open up facilities in neighbouring countries, like Ethiopia and Somalia, with Djibouti being the central point for storage and distribution, acting as a hub for the region,” he adds.||**||

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