The popular Materials Handling Middle East arrives in Saudi Arabia 28 29 November, marking its first step into the Gulfs largest MHE market. Ahead of the opening at Park Hyatt Jeddah, Logistics News ME goes behind the scenes and speaks to show director Jasmeet Bakshi
This month, for the first time in Saudi Arabia, the popular Materials Handling Middle East will gather hundreds of trade buyers from manufacturers, retailers, and third party logistics providers, to shippers, construction companies and freight and warehousing companies to meet and interact with the worlds leading suppliers of warehousing, materials handling and lifting equipment.
The launch of the show in Saudi Arabia follows several years of biennial exhibitions in Dubai, covering the entire region. With the launch of this new show, organiser Messe Frankfurt will alternate between the Saudi Arabia and Dubai editions on an annual basis.
Announced in June of this year, the highly anticipated show expanded in partnership with Saudi-based Al-Harithy Company for Exhibitions (ACE) will offer global suppliers and regional manufacturers direct access to the Kingdoms thriving logistics, warehouse, freight and cargo industries.
Materials Handling Saudi Arabia is the latest development in our ongoing expansion in the Kingdom, and together with Materials Handling Middle East, we have a dual platform offering intralogistics and supply chain players unmatched access to one of the most promising markets in the world, said Ahmed Pauwels, CEO of Messe Frankfurt Middle East.
Saudis logistics and materials handling industry is undergoing immense expansion and change and with it challenges that are unique to the Kingdom. We felt the need to provide a dedicated trade and networking event so key stakeholders can share their experiences, understand the market realities, and prepare for future developments, he added.
Muwaffaq Al-Harith, chairperson of ACE, said: The warehousing and logistics sector in Saudi Arabia is currently on the upswing, riding on a phase of sustained industrial and retail expansion, along with infrastructural development.
Over the years we have succeeded in identifying demand for focused trade events and we look forward to continuing our association with Messe Frankfurt Middle East to bring Materials Handling Saudi Arabia to fruition.
Why has Materials Handling launched in Saudi Arabia?
Jasmeet Bakshi: Having successfully organised Materials Handling Middle East in Dubai for the last several years, we wanted to introduce a dedicated platform in what is the Gulf regions largest market for Materials Handling Equipment (MHE).
The Kingdoms warehouse and logistics market is undergoing a major redevelopment phase, driven by the governments objective to diversify its economy away from oil revenue into other sectors such as manufacturing, construction, automotive, and retail. To that end, the objective is to increase industrial contributions to GDP from 10% in 2013, to 20% in 2020.
Saudi Arabias logistics and materials handling industry will likely undergo immense expansion and change in the coming years, and new technologies are already transforming working practices in the warehousing, transport and logistics sector. There are challenges that are unique to the Kingdom, and we felt the need to provide a dedicated trade and networking event so key stakeholders can share their experiences, understand the market realities, and prepare for future developments.
What is the current value of the MH market in Saudi Arabia according to your estimates?
Bakshi: Its estimated that Saudi Arabia accounted for nearly 50% of the GCCs $3.78 billion MHE market in 2014, and this large share will likely remain over the next four years at least up to 2020, when the market is expected to reach between $4.8bn to $5billion.
How do you predict performance of the materials handling sector in Saudi Arabia will continue in 2017?
Bakshi: Recently Saudi Arabia unveiled a string of commitments to end the kingdoms dependence on oil by 2030 which will be good news for the materials handling sector.
A shift to more vibrant non-oil industries, such as manufacturing, FMCG, automotive, and retail will have a positive flow on effect for materials handling, warehousing and logistics landscape.
Were already seeing examples of this in the Jeddah region, where 45 million sqm of land has been allocated by Modon, a semi-government organisation that promotes investment and job creation in the industrial manufacturing sector through the development of industrial cities.
Of this, 25 million sqm has already been developed in Jeddah, with the remaining 20 million sqm still in the construction pipeline.
According to the Saudi Ministry of Commerce and Industry, the Kingdom is home to nearly 7,000 operating factories, with 19% of these (1,296), located in the Makkah region. And further expansion is on the cards, with the construction of the fourth industrial city to the north of Jeddah, and the expansion south with more facilities to become available in the second and third industrial cities.
What will be the primary factors driving this?
Bakshi: Saudi Arabia still has a high import dependence. Even if the manufacturing sector takes off for example, much of the raw materials will still need to be imported. This of course translates into international logistics consignments in most cases that require use of MHE at multiple stages of the value chain starting from shipment receipt at ports to final delivery at retail stores.
The construction, retail, and automotive sectors will continue to account for the majority of demand for warehouse space and manufacturing land. High purchasing power, a growing young population, and consumer confidence are all factors that will help drive this.
What are the primary industry trends you see in this sector currently?
Bakshi: E-Commerce, and now Industrie 4.0, or cyber physical systems (the convergence of robotics, Internet of Things and cloud computing) are what will propel the industry forward in the future.
Automation and mechanisation in Saudis warehousing and logistics sector is still in its nascent stages, but there is a clear desire to upscale operations to increase efficiency and throughput in the supply chain.
Considering the importance of usage and expectations as well as challenges of logistics service end users, Saudi Arabias logistics market presents tremendous scope for automated solutions.
A key pre-requisite for the success of such solutions is affordability and adoption by logistics service providers who can pass the benefits of usage to their customers.
In Focus: Supply Chain and Logistics Forum
Headlining Materials Handling Saudi Arabia, this forum will bring together leaders, academics, and solutions providers to address the opportunities and challenges of the rapidly evolving market.
The two day conference will cover retail strategies, last mile and e-commerce, cost cutting, change management and risk allocation.
The co-located exhibition will also feature the biggest global brands and world-leading suppliers of warehousing, materials handling and lifting equipment, including launch partners Swisslog, along with Daifuku and SSI Schaefer – the worlds top two materials handling systems providers.
Among the more than 20 industry partners on board, are Abdul Latif Jameel Industrial Equipment Company the Saudi distributor for Toyota forklifts Log Square, and Al Samaani.
Exhibitor Focus: Daifuku
Andry Krass, Daifuku, talks to Logistics News ME about exhibiting at the first Materials Handling Saudi Arabia
What are the main trends in materials handling currently in Saudi Arabia?
We see changing trends in shopping behaviour and the growth of the e-commerce industry, as well as TV shopping industries, are all slowly but steadily re-shaping the views on material handling and logistics in general. In other words, the success in a new business environment hinges on how well your logistics and intra-logistics processes have been organised. In this sense, the warehouse stops being just necessary burden on business but becomes a cornerstone of its success.
What do you see as your main challenge in the industry currently?
Several things. First, deeply entrenched beliefs that throwing in more people will help you get more orders out of the door. Labour is still cheap, and no matter how poorly skilled and unreliable the labour is, the managers have long resigned themselves to the fact that this is a given of their work environment.
Secondly, the major challenge today is an economic slump caused by low oil prices. Our only hope is that sooner or later business owners will come to terms with the new conditions of the business slower company growth accept them on top management level, and the companies will again start planning their investments.
Which part of your business has seen the strongest performance this year?
The pharmaceuticals, plastics and food industries show interest in automated storage solutions more than other industries.
In light of the recent advances in automation, how are you integrating new technology with your operations?
We do not integrate automation into our operations but we help this to happen on the clients side. In order to sell an automated warehouse, we need to fully understand the clients operations, so that a new toy that they buy from us would facilitate their business and would never become a burden.
Why have you joined the first edition of Materials Handling Saudi Arabia?
For the past several years since we started doing business in the Middle East we have come to an understanding that Saudi Arabia has more potential for the storage and factory automation market than any other GCC country and were glad to learn that the MHME organisers think alike. In addition, since it is from companies located in Jeddah that most of the inquiries come to Daifuku, we found it to be the right decision to hold this show in Jeddah.
Visit Materials Handling Saudi Arabia, 28 29 November at Park Hyatt Jeddah. For registration and show details visit: www.materialshandlingksa.com