Shock closure of Ecolog operations in Middle East
Ecolog, an international specialist in automated warehousing solutions, has announced the closure of its operations in the Middle East.
The company, which has acquired by Austria's TGW Group in July 2007, has claimed the Middle East is "no longer a strategic market for Ecolog" following a major restructuring of its international operations.
"As the parent company of Ecolog, the TGW Group has decided to concentrate on established markets, such as Europe and the United States, rather than emerging markets such as the Middle East," commented Reinhard Wind, general manager of Ecolog in the Middle East.
"I'm aware this development will cause some upset within the Middle East's logistics industry. I have already received a truly overwhelming response from clients, partners and friends, who have expressed their shock and offered immediate help," he added.
Since entering the Middle East marketplace in 2005, Ecolog has established a regional office in Dubai Investment Park and played an important role in promoting the concept of warehouse automation throughout the region.
Despite facing some initial reluctance from the logistics industry, the company announced its first major contract in the Middle East last year, beating stiff competition from a number of international vendors to secure an order with the regional food distributor National Trading and Developing Establishment (NTDE).
As part of the lucrative contract, Ecolog was selected to implement a fully automated storage solution for NTDE's forthcoming 40,000m2 warehouse, which is currently being constructed in Dubai Logistics City.
"The new management team at Ecolog has assured NTDE that its existing contract will be honoured as previously agreed," said Wind. "In addition, we have reached the final stages of negotiations for a number of other contracts and I understand these will be executed too. Nevertheless, I feel personally responsible for my clients and remain committed to satisfying their needs."
Following the closure of its Middle East operations, Ecolog has cancelled its forthcoming warehouse automation congress, which was expected to take place at Jumairah Beach Hotel in Dubai this month. In addition, its plans to launch a flagship office in Dubai Logistics City have also been cancelled.
"We had ambitious plans to expand within the Middle East this year and naturally I am disappointed about the recent developments. This is very hard for me," said Wind.
"However, I remain confident about the potential market for automated storage solutions in this region. I have proven that demand exists and I know a number of our potential clients have postponed their decision to purchase an automated solution because Ecolog was their first choice. I am therefore planning to remain in Dubai and continue my work in the logistics industry to ensure that automation becomes a reality in this region," he added.