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Driven by generics, pharma focus heads east

By Hpanchal on January 27, 2012

It straddles two worlds. Situated squarely between the East and the West, the Middle East flanks Eurasia and North Africa, two vastly different lands. Although the region has garnered considerable press lately due to political and religious strife, the Gulf is also known for its prime geographical position.

Location has been especially key to earning the region a reputation as a global aviation hub, maintains Emirates Airline’s divisional senior vice president, cargo, Ram Menen.

“With its geographical [setting], the Middle East is well positioned to connect the East and the West,” he says. “It has historically served as a global trading hub, and aviation has added a new dimension.”

Peter Scholten, Saudi Airlines Cargo’s vice president, commercial, projects that it’s a reputation that will only grow with time — particularly in relation to cargo. “In five to 10 years, the Middle East hubs and its cargo carriers will have a significant market share of the world trade lanes such as Asia-Africa, Asia-Europe and Asia-Middle East,” Scholten says. What’s more, he estimates that the Middle Eastern airfreight market will continue to grow at a rate of 5 percent to 10 percent annually.

Equipping Middle Eastern airports to handle the anticipated growth has been no small task. Facilities such as Cairo International Airport have undergone major renovations, while Dubai’s Al Maktoum International Airport opened in 2010 to serve cargo operators worldwide. The latter airport is so large, in fact, that analysts estimate that up to 12 million tonnes will move through its doors each year starting in 2013. Menen credits Al Maktoum International Airport’s proximity to the Jebel Ali Free Trade Zone with propelling growth.

Lauding the United Arab Emirates’ creation of a “multi-modal logistics hub,” Menen says freight forwarders and airlines alike are benefiting from the opportunities afforded by these facilities. And of the goods inundating the Jebel Ali Free Trade Zone, numerous cargo experts point to pharmaceuticals — driven by neighboring India’s prolific pharmaceutical sector — as the commodity to watch.

Addressing the demand

It’s no secret that India has become one of the hottest manufacturers of pharmaceuticals in recent years. Along with housing some of the biggest names in biotechnology, India is also home to one of the fastest-growing pharma sectors, developing at an estimated rate of 10 percent per year. Such proliferation has demanded the deployment of various transportation services, specifically airfreight.

Nowhere is this more evident than among Middle Eastern carriers, numerous logistics experts say. Take Falcon Cargo, for instance, maintains Gulf Air Senior Manager Rory Black. Gulf Air, which launched Falcon Cargo in November to transport high-value freight, regularly sees strong volumes of Indian-manufactured pharmaceuticals on flights, Black reveals. It’s a matter of catering capacity to demand, he explains. “For us, pharmaceuticals are a very interesting product that suits the aircraft we fly and our network,” Black says.

Black expects pharma to become an even bigger business segment for Falcon Cargo as the Indian pharmaceutical market continues to explode; recent projections place it as the fourth largest in the world, according to Black. “We’re close to at least two-thirds of pharma manufacturing through our stations in Mumbai and Delhi,” he says, “so pharmaceuticals are an absolute priority for us.”

Black says the UAE freight carrier also boasts sub-three-hour connection times from Bahrain to East and North Africa, enabling it to deliver Indian pharmaceuticals to some of their key export destinations in a timely manner. After all, Africa, which is home to more than two-thirds of the world’s HIV population, continues to require medical goods at an alarming rate. Again, it’s a case of proximity, Black says.

“Bahrain, through Gulf Air’s Falcon Cargo, is perfectly geographically positioned not only for movements throughout the Middle East, but to serve developing markets like Kenya, Uganda and South Sudan — all markets relying on imports for their pharma consumption,” he says. Black also credits Falcon Cargo’s centrality with bolstering volumes out of Europe, which, he says, is another strong market for pharmaceuticals.

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