Uruguayan airport aiming to be LATAM’s pharma hub

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Ambitious Montevideo (MVD) Free Airport has big plans and is aiming to be Latin America’s (LATAM) main pharmaceutical hub.

Last month, the Uruguayan gateway became a member of Pharma.Aero and the 7th airport to join following the launch by founding members Miami International Airport and Brussels Airport last year.

MVD Free Airport managing director, Bruno Guella says overall tonnage has increased 404 per cent year-on-year (YOY) in 2017, as a result of initiatives it has been running since mid-2015.

These have included inaugurating Phase 1 of its Pharma Hub, restructuring information systems for further automation and traceability and developing a consultative commercial approach to global players.

Guella says it has received “widespread acceptance” given the understanding of regional complexities and challenges alongside a “convenient geographic location and unique tax and legal framework”.

He says pharma plans have been well received: “Global players in the pharma and high-tech industry have located their regional distribution centres at MVD Free Airport, having deposited their trust in early stages of our development.

“This has done nothing, but increase our commitment to service-level excellence and to continuous improvement, and is also a very strong vote of confidence from the pharma industry itself, a validation of our value proposition to the pharma supply chain.”

The airport is seeing strong interest in pharma and Guella notes a big pull is its easy access to large emerging markets such as Brazil and Argentina – which are the main drivers.

Joining Pharma.Aero is set to drive business and Guella says it is a firm believer in the value of knowledge sharing and a strong sense of community – essentially what it is all about along with creating standardised trade lanes.

He explains: “Understanding local complexities, the underlying culture, the variance in terms of infrastructure, quality partners, climate, all these things drive the need to understand the supply chain from a global perspective, and in that sense we feel we can add value operating in the third largest emerging region in the world while being up to date with tendencies, benchmarks and innovation.”

MVD is positioning itself as a pharma gateway into LATAM and Guella says it is easy to enter, has a convenient tax and legal framework, in a country oriented towards providing a lean supply chain, best-in-class information systems and infrastructure and the possibility to seamlessly enter the larger markets.

He adds: “Global pharma players are currently distributing to South American major markets via MVD Free Airport, including cargo that is not inbound nor outbound by air. Our multimodal capabilities facilitate the development of tailored solutions to any distribution need, no matter how cargo arrives or leaves.

“Large pharma players are centralising purchase orders at MVD Free Airport, allowing for a smarter stock management, just-in-time replenishment based on having their safety stocks for the region based at MVD Free Airport.”

The opportunities he feels are vast and Brazil remains the powerhouse market in terms of potential growth, while Argentina has recently reopened its markets to the world and both combined serve more than 200 million people.

There are also smaller markets like Colombia, Chile, Peru, Paraguay and Bolivia, which Guella says are supplied from a distribution centre in Uruguay with significant benefits, not only based on logistic issues, but also based on taxes and transfer pricing management. “Many global pharma players are turning their eyes towards this region,” he notes.

MVD is targeting more routes and Guella says it is currently working on developing a freighter route to Brasilia Airport in Brazil.

“One of our roles is to consolidate the aggregate demand of different shippers with distribution needs in the region, helping to improve their supply chain management operating via MVD, and providing input to forwarders and airlines so new solutions are created,” he says.

MVD is part of Corporacion America, a holding company operating 53 airports across LATAM and Europe and Guella says it is always looking for “synergies” to find solutions to specific needs.

Developing infrastructure is high priority and with Phase 1 of its Pharma Hub project complete, it expects to operate at near full capacity during the peak season.

He says it expects to start working on the Phase 2 executive project shortly, and is developing projects tailored to strategic clients that have demanding requirements for pharma warehouses adapted for primary and secondary packaging activities.

Guella says it has developable area of more than 250,000 square metres inside the airport premises, so there is vast potential.

But is LATAM focused enough on air cargo?

Guella says several countries are improving and increasing their professionalism, but there is still a lot of work to be done in terms of providing a “homogeneous context”.

“There are different regulations, cultures, human capital issues, costs, infrastructure, information systems, and all of them together generate a highly complex scenario difficult to grasp for companies with distribution needs in the region,” he explains.

Guella is optimistic for the LATAM region despite the largest economy Brazil underperforming so consistently. “Argentina appears to be bouncing back with a more liberal approach towards economic activity, while Mexico is growing, Colombia has been growing at high rates, Peru is doing very well and Chile maintains its historical consistency.

“All in all, the region has been able to maintain reasonable growth rates even after the drop in the price of commodities, the main economic driver for over a decade,” he adds.