The $50m Dubai Flower Centre (DFC), a major new project, to be located in the Dubai Cargo Village at the airport, will establish a major new logistics hub for the floriculture and produce industries.
Those involved in the project also claim it will place Dubai firmly at the centre of global trade in perishables.
The 32,000 square metre facility will be built in three phases, with an initial construction of 10,000sqm to be completed for launch in latter half of this year - a provisional date of October 1 has been mooted. Two further phases, each of 10,000sqm will be built as dictated by demand. Each part of the facility will have the capability to handle more than 150,000 tonnes of flowers and perishables.
The Flower Centre will act primarily as a logistical hub, taking advantage of Dubai’s location and rapidly growing international transit connections, to provide exporters and importers with a cost-effective, high-quality base to consolidate and route shipments. Significant investment is being made in innovative technologies and processes to ensure a world-class, unbroken cool chain at the facility, including the operation of refrigerated transit and the use of pre-cooling and segregated storage systems.
In addition, the Dubai Flower Centre will operate as a free zone, where the international floriculture industry (wholesalers, importers and exporters) can establish offices and warehouses for added-value services, including consolidation, repackaging, bouquet-making, and packaging for supermarkets. A range of additional technical and commercial services will be offered to tenants at the Flower Centre. More than 15 major international floriculture and logistics companies have already indicated their intention to locate in the facility.
It is a bold new project that will establish a distribution hub for temperature sensitive perishables in one of the hottest environments on earth. Dubai has a reputation for “hard to believe” projects; it also has a reputation for making them work.
Perishables is an increasingly critical element of the air cargo trade. It now makes up about 14 per cent of all air cargo, and is the largest single category of air cargo. Perishables is also projected to grow at 10 per cent a year. It is therefore an increasingly important topic for the trade.
Although perishables capabilities are being established in many airports, the Dubai Flower Centre project is the most expansive and progressive. It is one of the very first projects to establish “from scratch” a perishables redistribution hub. It also represents the largest single investment ever made in an airport perishables facility.
Speaking of the plans, Khalifa Alzaffin, director of engineering & projects for the Dubai Department of Civil Aviations, says: “Development of the facility has progressed rapidly - from the initial concept stage, we have completed designs and are ready to move forward to construction. There is no time to waste - the market needs this now. African and Asian exporters in particular have a tremendous opportunity to expand their floriculture exports, but they face significant logistical and commercial constraints. This facility will really open up trade opportunities in the industry. “
Ali Khalfan Al Jallaf, director of the Dubai Flower Centre and Dubai Cargo Village, notes: “The free zone will offer flower exporters and buyers a huge opportunity to get in on the ground early - no red tape, no restrictions, no delays. As the facility develops and new services are offered, these tenants will be in a position to take advantage of tremendous growth opportunities.”
“Exporters will be able to send their flowers or produce into Dubai for consolidation and redistribution to other regional and international markets,” Jean Godart, president of project consultants ADI Services FZE, tells the Journal. “Having one consolidation point as a hub will reduce logistics costs considerably.”
The location of the centre also offers great potential for shipment by sea and air, which is a method that is beginning to catch on as exporters from long distances take advantage of better storage and packaging techniques to lower their distribution costs.
The Dubai centre is seen as competition for the flower auctions and importers in Amsterdam, but Godart prefers to look at it as a complimentary channel into the European marketplace.
“Dubai itself has excellent potential as a market,” says Godart. “It is booming and the population is increasing very quickly. The Gulf region as a whole is also showing tremendous growth and it is estimated that demand for cut flowers will double to 30,000t a year in a very short time.”
ADI was appointed as contractor for the management of the Flower Centre in January. Working under the management of the Dubai Cargo Village, ADI will be responsible for commercial and operational aspects of the Flower Centre.
The Zurich-based company specialises in the planning and management of perishables logistics and transport projects.
Godart says: “The vision of the Dubai government in identifying this opportunity is matched only by their commitment to making it work. We were excited about this project from the first day we heard about it.”
MAJOR BENEFITS
According to the main players, the major benefits of the DFC to the trade will be:
• Improved access to growing Middle East market: DFC will not only provide exporters and traders with a high-quality base for managing deliveries throughout the region, but will provide access to the largest, most reputable buyers in each of the major countries. Moreover, DFC is developing trading services and mechanisms to ensure rapid, guaranteed payment by importers.
• Consolidation opportunity: Dubai provides the ideal base for a consolidation hub for exporters or importers (buyers consolidation), either as single companies or in an industry-wide consortium. Regular freighter services can be established between key supply markets and Dubai, where shipments can be deconsolidated and shipped onward directly to major cities in the Middle East, Asia, Europe and even North America. Cost effective “end-to-end” rates can be developed.
• Trading and value-added activities in a free-zone environment: Industry players can establish a free-zone entity in the DFC, enabling the entity to operate in an environment with no corporate or personal taxes, no restrictions on profit / currency transactions and no requirements for local sponsors. This can provide an extremely efficient vehicle for both trading and value-adding operations.
No comments yet