Flower Power

As perishables become increasingly important to the logistics industry, its boom time for Dubai Flower Centre, which has established itself as the ultimate distribution centre for perishable goods.

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By  Robeel Haq Published  October 1, 2006

|~|LOG_OCT_COVER4_HR2.jpg|~|Ibrahim Ahli, marketing director at Dubai Flower Centre|~|Although visitors of the Dubai Flower Centre may expect warehouses full of roses, tulips and carnations, the US$70 million facility actually handles the entire spectrum of perishable goods, acting as a ‘one-stop shop’ for companies working in the industry, including local and international importers, exporters and producers. “Perishable goods can include everything from the flowers and plants in our homes, hotels and offices, to fresh or frozen fruit and vegetables, seafood and meat, or even pharmaceutical products,” explains Ibrahim Ahli, marketing director at Dubai Flower Centre. “Some people think we only deal with flowers, because of the facility’s name, but it’s actually a more varied selection of products, don’t you think?” It’s hard to disagree with Ahli. The selection is undoubtedly wide-ranging, and potentially lucrative too. During its first month of operations, in July this year, Dubai Flower Centre handled approximately 5000 tonnes of flowers, fruit and vegetables, which were transported between various different regions. Once the facility is fully operational, this figure could potentially reach 180,000 tonnes annually – an impressive amount by regional or international standards. From flower growers and exporters in the East and South of Africa, to consuming countries such as Russia, Japan and beyond, the centre serves a market that has virtually no boundaries. “The initial response from these countries is very positive. In the future, we will target other important markets, such as South-East Asia, Latin America and China. The Indian subcontinent is also very important and we already have one Indian tenant, Thakur Flowers, from Mumbai,” says Ahli, who recently returned from a business trip to India, where he visited flower growers and other industry players in Bangalore, Pune and Mumbai. “This is a very exciting stage in the development of the flower centre, so I am visiting many different places at the moment. Some of these farms are amazing places to visit. I have seen beautiful red roses the size of cabbages, truly stunning. During these visits, we are spreading the word about Dubai Flower Centre and companies are interested to hear what we can offer.” The centre’s business strategy is already proving successful. It has allocated 62% of warehousing space and 73% of office space, with the first generation of tenants including Kampac Flora, Alissar Flowers International and Rio Roses Worldwide. “There is a waiting list of companies who want to operate in the centre,” says Ahli. “However, we want a good mixture of major players from different parts of the world, each with different strategies, products and sizes.” Logistics companies have also started to look at opportunities at Dubai Flower Centre. Swift Freight International was the first to open a subsidiary, Swift Perishable Logistics (SPL), providing a range of airfreight options to dispatch perishable goods within time and handling constraints. SPL operates weekly charter flights and has belly load capacity from Africa to its Dubai headquarters at the flower centre. The company recently completed its first two shipments, with consignments of temperature-sensitive flowers being shipped from Nairobi to Rome and Japan, via Dubai Flower Centre. As the facility becomes more active, there has been talk in the international logistics industry about the Dubai Flower Centre taking on a role traditionally filled by Holland. Since the European country has already established itself as a perishable distribution hub, Dubai could potentially experience difficulties in grabbing a share of the market. “We don’t view the situation like that,” says Ahli. “On the contrary, we hope that the Dubai Flower Centre will help to complement Amsterdam, and help ensure efficient logistics for the industry. We plan to work closely with Amsterdam, as well as other key perishable hubs, like Frankfurt, Miami and Singapore.” The management team at the flower centre should be encouraged by recently published figures from the International Air Transport Association (IATA), which states global air cargo traffic increased 5.7% during the first four months of 2006, with the Middle East leading the accelerated growth. Dubai International Airport, in particular, has reported a consistent 20% growth in cargo traffic and Dubai Flower Centre, which is located adjacent to the airport, is well positioned to capitalise on the lucrative industry boom. “The flower centre’s location, near the airport, is very attractive to the marketplace. At the moment, we’re handling all perishable transit cargo from Emirates Airline and further business opportunities will be created once the Cargo Mega Terminal is completed, as part of the airport’s expansion project,” says Ahli. The cold storage facility at Dubai Flower Centre is fully bonded and measures 34,000m2. It operates as a free zone and offers a number of business incentives to prospective clients, including 100% foreign ownership, no personal income tax, quality control facilities, customs inspection and a multi-modal transportation network to countries in the Middle East and further afield. “The concept is very unique and should boost the regional cargo market, especially in the transhipment of perishable goods from the Middle East, Asia and Africa regions,” says Ahli. The logistical challenges involved in the transportation of perishables mainly revolve around the potential damage of goods. Industry standards assume that approximately 20% of the product’s value is lost during the distribution process. Taking this into account, Dubai Flower Centre has implemented a tightly controlled environment to reduce the potential risks, especially in the heat of the Middle East. “Each seasonal change will inevitably create challenging conditions for perishable products, including flowers,” says Ahli. “By working in a closed-loop cool supply chain system, we can ensure the right temperature from aircraft to the climate-controlled zone. This means the products arrive on time and maintain their market value as long as possible.” This cool chain process involves the rapid handling of perishable goods with automated handling equipment, such as refrigerated dollies, which carry entire airline pallets and ensure the products are completely protected, avoiding exposure to weather anomalies. In terms of storage, the facility has segregated storage chambers with varying temperature zones to suit the individual requirements of each product. This is supported by value-added services, such as rapid cooling and hermetically sealed bays for ethylene producing products. The facility is also equipped with eight loading docks for full-size refrigerated trucks, which allows non-interrupted access to the domestic market or other destinations in the Middle East. Dubai Flower Centre has also implemented a range of technology solutions to increase visibility in the supply chain. This includes a bespoke cargo handling and warehouse management system, which handles the management and monitoring of perishable consignments, from the moment an aircraft arrives at the facility. In addition, a cargo tracking system enables customers to track their flight status, shipment loading and the temperature of their products throughout the supply chain. “To maintain the quality of perishable goods, companies need very specialised conditions, which we are equipped to provide at the flower centre,” says Ahli. “The facility can help customers to optimise their perishable supply chains, which is obviously very beneficial in today’s competitive marketplace. We have taken care of everything, so customers have peace of mind, and can concentrate on their core activities.” ||**||

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