CASE STUDY: MHK’s unique automated cold chain hub
MHK Logistics has opened its new cold chain distribution centre in Ras Al Khor Industrial Area, partnering with local STOW representatives Genavco for the installation of semi-automated shuttle racking.
“This facility is 65,000 square feet, with 14 chambers and 6,000 pallet positions in total. Its purpose built to our requirements and we’ll be working closely with 3PLs requiring this kind of facility in this area,” says P. P. Kariappa, CEO, MHK.
“We can adjust the temperature in all 14 of the chambers independently, with Genavco having supplied the STOW shuttle racking. Initially we were going to go with conventional racking, but then we decided that if we’re going to invest in this facility, we should invest in state of the art material handling and storage systems as well,” he adds.
MHK chose Ras Al Khor Industrial Area because it is more central to the Northern Emirates and Sharjah.
“We purchased this plot of land and initially we were going to develop a general logistics facility, but as we planned the project we realised that actually there is a significant requirement in this area for cold chain operations,” says Kariappa. “Location wise this is more central in terms of the Northern Emirates and Dubai itself, and there’s very good road connectivity. With all this in mind we decided to build a cold storage warehouse.”
The only other cold store facility in the area is the vegetable market nearby according to Kariappa, but there isn’t enough to meet demand. “Fruits and vegetables is not the only sector we’re targeting, though. There is a lot of demand for cold stores in Sharjah, Ajman etc, and although there are cold chain providers there, they don’t have the same state of the art systems as us.”
MHK decided to use shuttle racking because they wanted to maximise the storage capacity within each chamber. “Shuttle racking increases the capacity of each chamber, the number of pallet positions we can handle, and also the picking and sorting time,” says Kariappa.
“It makes our operations more economical and also enhances our revenues,” he added. Shuttle racking increases the capacity of each chamber, the number of pallet positions MHK can handle, and also the picking and sorting time. It makes its operations more economical and also enhances its revenues. “There are very few shuttle systems for cold chain operation in Dubai, although more of the new warehouses in DIP are investing in automation, but not for cold chain,” adds Kariappa. “We’ve been using it now for several months and we’ve had no issues with it whatsoever.”
According to Kariappa, MHK went with STOW after considering all the major shuttle racking providers in the region.
“We chose STOW because we wanted a globally respected name, but also we wanted the 24/7 after sales support that they provide and we were very impressed by what they did for the new IKEA Distribution Centre,” he explains. “We looked at all five of the big racking systems provided, but STOW led the pack in terms of quality and dependability.”
“Another deciding factor was the fact that when it comes to automation STOW are able to provide the racking itself as well as the machines, whereas most other racking providers work with a third party for the machines,” says Kariappa.
MHK has been in the Middle East for the past 18 years, its active in various verticals, from education to healthcare, to real estate and marine repairs. In terms of logistics, this is its first facility in the UAE that the company has developed. “The food and beverage sector was our entry point because food is an ever expanding market and with the constant population growth in the UAE it will always be one of the better performing sectors of the logistics market,” explains Kariappa, “but we also entered the industry with a cold chain operation because MHK has been active in ship chandlery for many years, so we already know about food logistics and F&B cold chains.”
With the Expo 2020 coming up there is also going to be even further demand for cold chain logistics, he says. “Going back to our location, a lot of the new cold storage facilities are opening near the Expo site, creating an oversupply, and Sharjah and the Northern Emirates are being forgotten. It is much easier for us to supply customers in these emirates than the cold storage operators in Dubai South, Jebel Ali, DIP and so on. For them it takes an extra hour to reach these areas. For the frozen, the minus 18 in particular, there is very little supply in this area.”
According to Kariappa, this uneven supply across the area is not so much because of a lack of demand in Sharjah and the Northern Emirates, but due to a shortage of space in the established industrial areas.
“The demand is here though, but the question is space,” he says. “Al Qouz for instance is absolutely packed, there’s no more room and the roads are too congested. This area here provided the ideal strategic location for the markets that we wanted to target. Up in Dubai South and Jebel Ali there is a cold chain oversupply, but that will stabilise in the coming years as Al Maktoum grows and the Expo 2020 gets nearer.”