Fri, 09/11/2018 - 07:35
Current Issue 34
Driving Through a Gap in the Market
Formed in 2016, Etmam Logistics is the long-standing Shahini Group’s latest venture that seeks to provide first-class 3PL services across Saudi Arabia
Writer: Tom Wadlow
Project Manager: Richard Thomas
As Saudi Arabia seeks to diversify its economy away from a near total dependence on oil exports, the country is increasingly evolving into a regional trading gateway.
The likes of retail, ecommerce and healthcare are among the industries fuelling this diversification, and with it crucial infrastructure development covering roads, ports, rail links and airports to help such sectors deliver their respective goods.
This is therefore an exciting time for KSA’s logistics industry. In 2015 it was worth $19 billion and is set to play a vital part in the country realising its plan for the future, Vision 2030, which sets out to decrease dependence on oil and emerge as a leading transhipment hub.
Food distribution is one of the most important segments within the Saudi logistics market and has been the staple business of family-owned Shahini Group, set up by Shaikh Abdulaziz Shahini in 1965.
In 2016 the decision was made to establish a separate third party logistics (3PL) enterprise, a company which now operates as Etmam Logisitcs and is run by General Manager Samer Shahini, Shaikh Abdulaziz’s grandson.
“Founding Etmam was driven by the gap we saw in the market for quality third party logistics providers and the need that the Group has for its own expansion geographically,” he states.
“My journey started much earlier. I have been working with the family since 2003, joining the ladder from its very lowest rung, working on the ground with workers and drivers, knowing exactly how they feel and what the difficulties and challenges are.”
Shahini worked his way through the ranks, becoming a key part of the supply chain team and using his technological education to improve the Group’s ERP and other IT systems. Having been promoted to a leadership role within the logistics arm of the business, he was assigned the role of General Manager of Etmam upon its formation.
Currently the firm has warehouses in seven locations spread across Saudi Arabia, with the two most significant distribution centres based in Jeddah and Riyadh.
This equates to a capacity to handle more than 38,000 pallets, a process carried out by its 400-plus staff who have access to an advanced warehouse management system that provides real time inventory updates.
“What makes us unique and different from others is that we appoint the best people and recruit stand-out talent, all the while investing in the most advanced technology,” Shahini says.
“Further, our locations are all geographically strategic, and we offer flexible, customer-centric services that are tailored to meet our clients’ diverse needs and add value, save costs, or increase their efficiency and productivity.”
By staying flexible and listening to partners, Etmam Logistics has fine-tuned its service to offer a full range of logistical and supply chain solutions. This includes warehousing and inventory, transportation and customs clearance, as well as on-site logistics management.
Indeed, Shahini prides the business on its ability to offer an integrated one-stop-shop answer to clients’ needs. “With the quality of our people, our expertise, our assets and our strong network, we handle our customers’ end-to-end logistics, simplifying the process and minimising hassle,” he adds.
One vital area of food transportation that Etmam specialises in is the cold chain. This area of logistics is big business in Saudi Arabia, the country accounting for 35 percent of the entire GCC market for these services.
“With a large fleet of vehicles and truck capacities ranging from four to 26 tonnes, we can serve our clients as per their needs,” Shahini continues. “We also have access to a network of 2,000-plus vehicles.
“Asides temperature control, our vehicles are equipped with advanced live vehicle tracking systems, engine status, door open/close activity and other measures to monitor the entire operation, which can be accessed through our website.”
Staying in pole position
Maintaining such a modernised operation requires almost constant investment, Shahini explaining how the Company has recently upgraded its main distribution hub in Jeddah.
“To stay at the forefront, we must keep abreast of the developments in the industry,” he says. “That is why we have renovated our major facility. Now it is equipped with advanced refrigeration systems, a temperature controlled staging area, automatic temperature log, advanced dock leveller and racking system.
“We have two systems to run the Company’s operation smoothly – SAP’s ERP system and Infor’s warehouse management system, a powerful programme that adapts to any client requirement.”
Beyond this, Etmam is also looking into the possibility of fitting out its warehouse roofs with solar panels, working closely with an industry specialist. The firm is also working on methods to recycle grey water that is being used in its evaporative condensers.
In terms of staying abreast of key trends, one major industry development Shahini is keeping his eye on is the rise of online retail in Saudi Arabia.
Research body Statista estimates 2018 ecommerce revenues will hit $6.36 billion, a figure set to rise by 11.3 percent a year to $9.75 billion by 2022. More than two thirds of Saudi’s will be buying online by this time, with popular product categories expected to include toys and DIY.
For Etmam Logistics, this presents a lucrative opportunity to support the growth of online retailers, with Shahini pointing towards increasing use of automation as a means of processing optimal fulfilment services for consumers.
Whether supporting local Saudi retailers or international sellers doing business in the country, the General Manager is excited by the opportunities that lie ahead, especially considering the role KSA may have to play in the wider region’s logistics setup.
Commenting on his priorities for the future, he concludes: “There are a countless number of opportunities, especially under the Saudi vision 2030, focusing on logistics industry making Saudi Arabia a Middle East hub for cargo coming from east or west.
“Currently we are assessing a number of opportunities that match our vision and are scaling up our business in order to serve our clients better and faster.”