INTERVIEW: Madhav Kurup, Hellmann Logistics
With increasing demand for pharmaceuticals in the Middle East, it’s difficult to ignore the growing importance of storage and transportation efficiencies for the healthcare sector. After all, the sensitive nature of this cargo would make exposure to the region’s unforgiving climate an expensive mistake.
To address this challenge, drug manufacturers and distributors have started to look for logistics companies with specialist expertise in the handling of pharmaceutical goods, a situation that Madhav Kurup, chief executive officer of Hellmann Calipar Healthcare Logistics (HCHL) has actually welcomed with open arms.
“We need to create specialisation within industries,” he states with conviction. “This product cannot afford to sit on an airport tarmac for three hours, it simply can not happen. And we realise that healthcare is a fast growing sector, and thus it needs to be supported with a proper supply chain.”
As a fourth-generation family business, Hellmann Logistics was launched in 1871, with a focus on transporting goods throughout Germany. The veteran company has since grown into a multinational logistics provider, seeking to fill niche markets such as healthcare, aviation parts, automotives, high-tech goods, and biotechnology.
The Middle East is expected to play a fundamental role in its future growth, especially with the opening of a flagship warehouse facility at Dubai Logistics City last month – one of the first to commence operations at the multi-billion dollar development.
A joint venture between Hellmann Worldwide Logistics of Germany and Calipar Integrated Logistics of India, the 100,000 square foot facility is being marketed as the latest pharmaceutical hub in the MENA region, and certainly one of the most advanced.
The US$8 million (Dh29 million) centre is strictly dedicated to the healthcare sector, maintaining capacity for up to 9000
pallets, as well as cages for expired or damaged goods. Kurup hopes to have 60% of the warehouse stocked within the year, having already signed commitments from a European manufacturer and a handful of regional companies.
“We have a huge interest in more clients,” he explains. “We are currently in talks with others and will finalise contracts with four to five clients in the next few weeks.”
Valued at more than US$12 billion, the Middle East’s pharmaceutical market has steadily increased over the years, and is expected to grow at a healthy clip of 10-15% annually. With more than 450 pharmaceutical manufacturers in the region, Kurup is confident that HCHL will be well positioned to capture a fair share of the market.
With the exception of Egypt, all Middle Eastern countries are high importers of branded drugs and pharmaceuticals. With Saudi Arabia responsible for over a 49% market share, it is the largest regional market by volume, while the United Arab Emirates comprises 35% of total GCC drug market spending. “The profile in this region has been very low to date. Prominence has risen now though, and we have had to meet demands,” says Kurup.
According to Business Monitor International (BMI), the prescription sector is indeed on an upward swing, boosted by a growing population and changing disease profiles. For instance, the UAE is tackling an obesity and diabetes epidemic, which will require the long-term treatment of related health conditions such as increased blood pressure and heart disease.
BMI’s report goes on to state that the health challenges plaguing the UAE have come to reflect the wider GCC community; together, the six states have the highest rates of obesity in the world and, within 10 years, their populations are expected to increase by a third to reach 53 million.
This bodes well for HCHL, as the company has strategically positioned itself, as well as the Dubai Logistics City facility, for the influx in this consumer-driven demand. Consider that one major benefit of HCHL’s new hub will be the proximity within Dubai World Central, and Al Maktoum International Airport, which allows it to rapidly redistribute goods within minutes to markets around the region and world.
“We are at the doorstep to the new airport on one side and Jebel Ali sea port on the other. This will prove invaluable as we move forward, as our clients will have near immediate access to markets,” says Kurup. While the future looks bright for this market-specific sector, Kurup is also quick to acknowledge some of the challenges facing operators in the Middle East.
“Although this is the hottest global region in temperature, there are inconsistent standards and a lack of regional quality hubs. It’s no wonder the providers have been slow to act. However, we feel that this has presented an opportunity that we are more than capable of filling.”
In an attempt to bring more transparency to supply chains, Kurup describes the role of what he likes to call “validated freight management” in guaranteeing uniformity within storage and distribution. In utilising the latest technologies, validated freight management is the act of recording temperature across the entire supply chain.
The information is presented in real-time to HCHL’s clients, and should there be any spikes in temperature, it will be seen immediately. For manufacturers and distributors trying to take back some control over their product, additional oversight has proved a major selling point.
“You have to gain customers’ confidence to gain credibility. This industry will gain more respectability as it creates greater solutions,” argues Kurup.
“There was once a time in Dubai where customers demanded assets. ‘How big is the facility,’ they would ask. They thought an established brand became so by being rigid, yet credible. It quite effectively reinforced a company’s reputation to its clients. This however, is no longer the case. Our flexibility in offering solutions has presented us with far more opportunity to satisfy our clients’ demands.
We pride ourselves in being based in solutions, processes, IT systems, and skilled people,” he adds.
“Some other companies out there are weighed down and severely limited in what they can offer. They are asset heavy, and largely inflexible. If approached by a customer with a specific request, they can’t always guarantee that the service can be provided.
We’re different in that we don’t ask the customer to come and fit in a box. Rather, we create tailor made solutions to meet the demands of each customer.”
While Kurup and his team are actively seeking clients to fill the company’s new warehouse, the executive remains confident about the the facility, as well as the HCHL brand itself. So in terms of space, costs, and efficiency, are they looking for smaller clients or larger more wholesale-minded clientele? “In terms of capacity, we are flexible.
One customer can even take up the entire warehouse,” says Kurup. “This facility will be successful if we listen and react to our customers’ requests and expectations.”
Within this niche market, such as attitude does indeed sound like a prescription for future success.