Kuehne + Nagel completes phase 3 expansion in Dubai South
Kuehne + Nagel UAE opened its new warehouse extension in the Logistics District of Dubai South in the presence of H.H. Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority (DCAA) and Chairman of Dubai Aviation City Corporation (DACC).
The inauguration coincided with Kuehne + Nagel’s 40-year anniversary since establishing operations in the UAE, ten years after it launched its phase one warehouse expansion in Dubai South.
“We’re celebrating two occasions, the opening of the new warehouse extension, and also our 40th anniversary in Dubai,” says Thorsten Pook, managing director, Kuehne + Nagel UAE. “We opened our first facility here in 1978. This extension is the Phase 3 of our Dubai South expansion. The building adjacent is the Phase 1. It was built in 2008 and was then expanded in 2012 as part of Phase 2 that added an additional 15,000sqm to the existing 16,000sqm.”
The new warehouse is intended to serve aerospace and other high-tech industries. This will further boost Dubai’s global competitiveness through state-of-the-art infrastructure and facilities in the logistics sector, Pook added.
“Phase 3 is 10,000sqm and the key focus will be on a mix of cargoes for different industry verticals,” he said. “We have consumer, high-tech, aviation and pharma. The cage at the front of the warehouse extension for example will be for Rolls-Royce and their jet engines for Emirates. We are storing and delivering all of their jet engines globally and Emirates is of course a major client here in the UAE.”
The expansion has also enabled Kuehne + Nagel to further grow its pharmaceutical operations in line with international guidelines in governance, risk and compliance standards, as the extension allows more capacity in the existing Phase 2 warehouse to be utilised for pharma logistics.
All the cargo currently in the warehouse extension was actually transferred from Phase 2, which is being upgraded to be pharma GxP Compliant. “That process was started in 2016 with one chamber retrofitted for -24’C, high-spec pharma, and then because we are signing on our first customer on January 1st, 2019, we needed additional capacity and took the second chamber to have a total footprint of 10,000sqm for pharma GxP Compliant logistics,” explains Pook.
“The reason we did it in the Phase 2 warehouse and not here in this new facility is because Phase 2 was built originally for pharmaceutical logistics. So the existing infrastructure, the walls, the roof and so on were already designed for its requirements,” he adds. “It was only the interior of the structure that was not suitable for pharmaceutical logistics and required some upgrades.”
According to Pook, this process was relatively easy. “The first customer signed up in May, 2016 and within 12 months we had it upgraded to GxP and MoH requirements,” he says.
The biggest change required to the cold chambers was the temperature control and temperate mapping. “We already had the cold chamber, but that’s not enough for guaranteed temperate control. Another system we implemented is active humidity control, so when the humidity is very high outside it remain stable indoors. Most logistics companies have mobile humidifiers, but we have an active in-built system,” says Pook.
The new warehouse facility is spread over an area of 10,000 square meters, built with one main chamber as the general storage area and a mezzanine chamber. The new building is also equipped with the latest warehousing technology and has 10 docking stations and one drive in door with a ramp for the aerospace materials and large engines.
“The extended warehouse is already 70% full, as you can see, but this isn’t staged cargo, we didn’t move it here for the event, its actual cargo that will be kept in this warehouse,” says Pook. “So while pharma is driving a lot of the growth we’re seeing, our customer portfolio is still very diverse.”
With the new warehouse, Kuehne + Nagel has now extended its capability to a total of 41,000sqm storage capacity to meet the growing market demand in the coming years. Pook has full faith in the regional logistics market, despite the current conditions.
“We recognize the tremendous growth potential of the Middle East and situating our operations in Logistics District is the ideal choice to drive growth for our customers and significantly contributing to the efficiency in their value chain,” he says. “The current market is tough, which means that goods stay longer in the warehouse, but we are also securing new business and are already thinking about building Phase 4.”
When asked about the timeline for Phase 4, Pook countered that Kuehne + Nagel was only ‘thinking’ about it. “The plots behind this warehouse are reserved for Kuene + Nagel and give us the option to expand by a further 40,000sqm. This year will be the year of implementations, which takes some time, so in the middle of next year we might start getting the necessary approvals, but that in itself could take up to eight months,” he says.
The Logistics District is fast becoming the supply chain capital for international markets, given the convenience, proximity and easy access to seaports, airports and major roads and Pook expects its value-add services in the mezzanine to also be a major driver of growth. “Value-add is a growing sector especially for pharma, and we also do it for our consumer customers during major shopping periods like Ramadan and Christmas,” he says.