Swift growth

In its first 15 years of operations, Swift Freight International has created a significant niche for itself as an emerging markets specialist.

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By  Neil Denslow Published  February 8, 2005

|~|Issa Baluch_m.jpg|~|Issa Baluch, the founder, chairman & CEO, Swift Freight International|~|Towards the end of 2004, Swift Freight International celebrated its 15th anniversary. In those 15 years, the company has come a long way. It started operations in 1999 with just 12 people, but it now employs over 250 in the UAE alone, with another 600-plus stationed overseas. These people work in over 19 countries, and they helped to generate nearly US $100 million in turnover last year. “These figures tell you that we have been working 29 hours in every day,” says Issa Baluch, the founder, chairman & CEO, Swift Freight International, who has also found time to be the president of FIATA since 2003, as well. The Dubai-based company has racked up such impressive growth through a two-pronged strategy. Firstly, the company has opted to focus on areas other than the oil & gas sector. Instead, Swift Freight has developed its business working with manufactured goods, and it now boasts such blue chip companies as Adidas, Creative Technologies and Materfoods among its customer base. “It is a deliberate intention [of ours] to avoid the oil-based markets,” comments Baluch. “We took a strategic decision around 12-13 years ago that we would move into markets that source goods and that use Dubai as a sourcing point,” he explains. “That is how we have grown our business since then… [mainly by] moving finished goods into Africa, from where we were established.” The focus on Africa was also a deliberate decision, as Swift Freight has chosen to operate in emerging markets around Dubai rather than moving into more advanced markets elsewhere. This strategy has seen the company open offices in such seemingly unpromising locations as Ghana and Burundi. This plan creates its own challenges in terms of getting business done, but Swift Freight has successfully developed a significant niche for itself as an emerging markets specialist. “We go into these countries, as that is where the challenge is,” says Baluch. “I am sure it is a lot easier to establish an office in the Far East, Europe or North America, but I don’t want to be around 1000 competitors; I want to be unique,” he explains. The challenges of operating in these countries was recently shown by the problems Swift Freight faced as it tried to open an office in Mumbai, its first in India. In many ways, India has a strong logistics set-up, with good communications and a well-educated workforce. However, Swift Freight’s attempts to expand into the country were quickly caught up in a web of red tape. “The challenges of the bureaucratic processes [in India] are still very high,” says Baluch. “It took us quite a while — we are talking double digits in terms of months — to set up the office… However, now it is all done, I think it will be business as usual in terms of export/import and transport.” Having established a foothold in India, Swift Freight is now aiming to rapidly build up a strong network in the country. “We are looking at acquisitions... so that we can expedite our growth,” adds Baluch. Swift Freight has grown equally quickly in other countries it has launched in, despite facing similar challenges to those it found in India and often worse. “Some of the markets we are dealing in do not even have a banking mechanism, so we are really talking about starting from scratch,” says Baluch. “As such, we have to look very much at the basics: power shortages, manpower problems — either insufficiently skilled manpower or not enough experience,” he adds. “All the day-to-day facilities that here [in Dubai] we do not need to think of — there we have to think about.” Given these infrastructure problems, Swift Freight often has to buy in basic equipment, such as generators, water filters and its own security in order to be able to function. The company also has to invest in developing the local workforce, so that it has people on the ground to run its operations. “Whenever we establish a presence, we bring in the nationals of the country, train them and move them into other markets, so that they have this nice global view,” explains Baluch. “We also move our existing people to those countries as well, as they have the ability to train the locals.” The success of Swift Freight’s strategy is clear from its growth in the UAE alone. The company has facilities across the country including in Jebel Ali, the Dubai Cargo Village, Port Rashid, Hamriya, Sharjah and Abu Dhabi. In September, the company also opened a fourth warehouse in Dubai, in Rashidiya. This 50,000 ft2 site has 1800 pallet positions, eight container bays, a covered warehouse and an attached Dutch barn. “We needed this new facility for two reasons,” says Baluch. “The first is the generic growth of business from our existing customers: their businesses are growing and that pushes our facility to expand as well… We also have growth from new markets, so on all levels there is pressure on facilities.” This growth is set to continue, also driven by the GCC’s moves to become more business-friendly for import/export. This process has already begun with the establishment of the customs union and the introduction of greater standardisation of processes and regulations. This has helped business in the region, although Baluch says that it has not yet fully bourn fruit. “At the moment, what we see as practitioners is that [the customs union] is there in theory — parts of it have been implemented — but we are yet to see the follow impact of the harmonisation. However, I think it is just a matter of time to debug the system,” he adds. This is beginning to happen, and Baluch hopes the trend towards regional standardisation will eventually lead to a single market and currency. “A single market will just create so many opportunities for the residents and the businesses in the GCC, and it is going to come… A single currency will also be a reality before this generation closes,” he predicts.||**||

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