UAE's first pharma 3PL provider springs up

By Kirsty Barnes

- Last updated on GMT

Related tags: United arab emirates

A new enterprise in the United Arab Emirates (UAE) is establishing
itself as the region's first pharmaceutical-focused third party
logistics (3PL) provider.

The firm is looking to capitalise on what it believes to be a significant opportunity in the UAE's $3bn a year drug industry, which is growing at a rate of 9 per cent. Pharma World Holdings is in the process of setting up a distribution and warehousing hub in the Jebel Ali Free Zone (JAFZA), a global trade and shipment centre located in Dubai. The company was recently born out of a joint venture between UAE private equity firm Ithmar Capital Fund I and Banaja International Group, the parent of Saudi Arabia-based distributor Banaja. Pharma World intends to provide a one-stop 3PL offering for international as well as local manufacturers, something that it says will be unique in the region at present. Presently the way drug distribution is carried out in the UAE requires foreign manufacturers to supply products through distributors who place and receive orders directly from principal manufacturing facilities. Maher Kheder, business development group director of Pharma World Holdings believes the current model "lacks flexibility and means that principals need to find a distributor with excellent regional knowledge to optimise the process."​ Specifically, the company said it will be able to accepting orders from the customers of drug manufacturers directly, transport the orders from their warehousing facility, invoice customers on behalf of the manufacturer and advise manufacturers when to order replacement product. Furthermore it will be capable of handling the return inventory and provide other outsourcing support services. "The Pharma World system provides an integrative approach that better links principals with distributors, removing layers of inefficiency and improving service quality,"​ said Kheder. He also believes that improving access for manufacturers in the region will be critical in boosting growth in the region by opening the UAE up to more manufacturers and improving profitability. The gap in the market also appears to have been spotted by large international logistics firm Kuehne+Nagel, who announced in October that it has started building a new warehousing facility in Dubai, part of which will house dedicated storage and handling equipment for the specific needs of the pharmaceutical industry. "The Middle East is a very important market",​ said the firm, who is now "aligning its activities to meet the requirements of the dynamic Middle East logistics industry."​ The new facility is expected to become operational by the middle of this year.

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