Logistics industry executives are bullish about the African Continental Free Trade Agreement but concerns are rife around its implementation. Geoffrey White, CEO of Agility Africa joins CNBC Africa to discuss what the core value chains need to speed up the implementation of the trade pact.
In this episode I am joined by Ronald Philip, Senior Director Strategic Planning at Agility. Ronald shares a great insight to the data center market in the Middle East and Africa region, as well as providing an update on Agility’s recent data center campus site announcements.
First, we discuss Ronald’s career and how he made the progression to working in the data center sector.
We then discuss the recent announcement by Agility to develop data center campus sites in the Middle East & Africa regions. Ronald outlines the locations of the sites, why these locations were identified, the strategy around the developments, and the types of customers attracted to these sites.
Finally, we discuss the Middle East & Africa regions: how they are developing as data center markets, and why connectivity is so important to the people living across the region.
This is a great insight to the rapidly changing markets of the Middle East & Africa.
Learn more about Data Center Campuses by Agility.
This blog was originally published by Inside Data Center Podcast.
By Tarek Sultan
Vice Chairman, Agility
There can’t be a time in human memory when travel, shipping, trade and commerce have been jolted as badly by severe weather and extreme climate events as in recent months.
In China this past summer, scorching heat forced power cuts and factory shutdowns. Apple, Foxconn, Toyota, Volkswagen, Tesla and others suspended operations, cancelled orders or took other emergency measures.
Low water on the Rhine River crippled German barge shipments as Europe experienced its worst drought in 500 years. In the United States, water levels fell so low along the Mississippi River and tributaries that farmers and others were left without routes to market for agricultural and industrial goods as barges were grounded, blocked and delayed. Dry weather and snarled transport are expected to push U.S. wheat exports to their lowest levels in 50 years.
Punishing climate-related events contributed to India’s decision to ban rice exports and caused the destruction of much of Spain’s olive crop. Historic floods left 7 million people homeless in Pakistan and displaced 1.4 million in Nigeria overnight.
“Climate change and the extreme weather it spawns are making it harder for tangled supply chains to sync up with a slowing global economy,” Bloomberg says.
At some point, post-COVID supply chains may come back into some sort of equilibrium, but don’t expect an end to ruinous climate events. This past summer was the second-warmest on record for the Northern Hemisphere. The world has not experienced a cooler-than-average year, compared with the 20th century average, since 1976.
Axios reports that a climate migration has begun. It says a number of manufacturers, hospitals, airlines and other businesses are looking to put critical infrastructure and operations on higher ground to avoid coastal flooding and storms.
“Companies large and small, some with longtime roots in their neighborhoods, are on the hunt for new real estate that is less prone to weather and climate extremes,” Axios says.
Skeptics, of course, are vocal as ever. Some warn that climate policy is the real threat. “Anyone who still thinks climate change is a greater threat than climate policy to financial stability deserves to be exiled to a peat-burning yurt in the wilderness,” one wrote recently.
Hardly. Instead, it would be foolish not to be giving serious scrutiny to your business and any vulnerability it might have to climate extremes. Some questions to ask as you do:
1. Do you need to “harden” buildings and infrastructure?
Do you need a new home for essential operations in order to safeguard against flooding, high winds, catastrophic storms, rising sea levels or drought-driven fires?
2. Are you too water-dependent?
Do you rely too much on hydropower or on inland river transportation? What’s your backup?
3. Are extreme high temperatures putting employees at risk?
How are you safeguarding them? What about your vehicles, equipment, raw materials and finished products?
4. How well do you truly understand your supply chain?
Have you mapped your T1, T2 and T3 suppliers? Do you know where they get their inputs? How vulnerable are your sourcing and transport? Do you have built-in redundancy?
5. Do you have a handle on carbon taxes?
Do you know where you might face the prospect of higher taxes simply by moving the same goods across the same borders? Or where carbon taxes could come into play when you are sourcing from and selling into new markets?
6. What if you have to move?
Can you afford to shift locations of key operations? Do you have a new location in mind? Can you find the right employees there? What kind of reputational damage would you face if you left or shrunk your footprint in a community where you have roots?
7. What’s your plan if suppliers or carriers negate agreements through force majeure?
Finally, are you committed to change? Are you all-in on the battle to reduce emissions and work toward a safer, cleaner, greener world?
WTO chief Ngozi Okonjo-Iweala says we’ve entered an era of “re-globalization.” By that, she means companies are de-concentrating production to guard against the supply chain turmoil caused by the COVID pandemic and the war in Ukraine.
Businesses are choosing redundancy and resiliency over low cost because they think supply chain disruption will be with us for a while and because they want to protect against future shocks. The result, Okonjo-Iweala says, is the remaking of companies’ global footprints and supply networks.
Re-globalization raises lots of big questions. Among them:
Who benefits?
Okonjo-Iweala says the trend could benefit developing countries. “It could bring them into the mainstream of globalization,” she says. “We see at the WTO a clear opportunity for decentralization to go to countries that normally don’t benefit from the global supply chain and could be brought in.”
To date, companies uprooting from China, Vietnam and other Asian manufacturing hubs seem to be opting for established regional production hubs and domestic reshoring rather than setting up shop in markets they see as riskier or untested. India, Turkey, Israel and Mexico, for example, have positioned themselves as alternative production centers for home goods and furniture, luring Overstock, La-Z-Boy and others looking to build new supply lines after battling endless delays out of Asian ports.
Manufacturing decentralization and “future-proofing” are causing pains of their own. Often, the issue is less about final assembly and proximity to markets than ready access to raw materials and proximity to suppliers. High-tech companies have invested in new production facilities in India only to encounter turbulence there: Foxconn and Wistron have faced labor unrest; Apple has run up against logistics problems and unfriendly export policies.
There’s a clear gap between what CEOs want to do and what they will do. A survey by the consulting firm Kearney found 70% of American manufacturing CEOs were considering or expect to move production to Mexico – but only 17% had done so.
Who gets hurt?
In 2019, China accounted for nearly 29% of global manufacturing output. Efforts by businesses to spread and decentralize their production are almost certain to come at China’s expense and potentially hurt other Southeast Asian manufacturing hubs such as Vietnam, Thailand, Indonesia and Malaysia.
Russia’s invasion of Ukraine makes losers of both countries. Global buyers of Russian grains, fertilizer and minerals have been sent scrambling for new suppliers. Many may make their new arrangements permanent in light of the huge array of international sanctions now aimed at Russia. Similarly, customers that bought Ukrainian agricultural goods and auto parts also have seen supplies dry up and might be wary of relying on Ukraine in the future.
Inflationary pressures arising from pandemic chaos and the Ukraine conflict have rippled to unexpected places. One example: Indonesia, supplier of 60% of the world’s palm oil, cut off all exports in late April. It said Indonesians could no longer afford cooking oil because of a surge in global demand for edible oils caused by the loss of Ukrainian sunflower oil shipments.
Is the world shrinking?
It seems that way to many.
In his annual shareholder letter, BlackRock chief Larry Fink recently warned: “(T)he Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades. We had already seen connectivity between nations, companies and even people strained by two years of the pandemic. It has left many communities and people feeling isolated and looking inward.”
Adam Posen, head of the Peterson Institute for International Economics, predicts that the world economy will split into blocs, “each attempting to insulate itself from and then diminish the influence of the other.” He predicts that “with less economic interconnectedness, the world will see lower trend growth and less innovation.”
Friction between China and its U.S. and European trading partners suggests that rival blocs are already emerging. U.S. Treasury Secretary Janet Yellen recently spoke of the need for “friend-shoring” — production relocations to countries “we know we can count on.” She warned against allowing countries to gain leverage in key raw materials, technologies and other products that would allow them to disrupt the U.S. economy.
Appliance maker Whirlpool is one company that says it is preparing itself for a “less global” world. Whirlpool is reviewing its businesses in Europe, the Middle East and Africa, and reassessing its mix of products and brands. CEO Marc Bitzer says the company sees less advantage in global scale and more in building its strength in individual countries and regions.
Does re-globalization hurt the global economy?
Not necessarily. Supply chains are always in flux, always evolving. And that’s healthy. Putting aside the pandemic and Ukraine conflict, there are profound structural changes taking place today and many of them could help bring about a cleaner, fairer, more prosperous world.
BlackRock sees “permanent transformations unlocking exponential growth opportunities.” One is the increasing spending power of millennials – particularly those in emerging markets. “Millennials have entered their peak spending years. Emerging market consumers and millennials are driving more than 50% of global spending,” says BlackRock’s Alex Eldemir.
McKinsey describes it as the changing geography of demand. The rising middle class in developing countries is accounting for more and more consumption. McKinsey says emerging markets will consume almost two-thirds of the world’s manufactured goods by 2025; developing countries will account for more than half of global consumption by 2030, signaling their growing role in the flow of goods, services, finance, people and data.
Keep in mind that the demand shift, triggered three decades ago by China and its Southeast Asian neighbors, has barely begun in India, Africa and the Middle East, all of which will be dominated by youthful populations hungry for jobs that offer higher living standards, connectedness, and upward mobility.
At the same time, BlackRock sees regulation, technology and consumer demand driving a powerful “industrial renaissance” that is just beginning. In the supply chain, that involves new digital platforms, AI, blockchain, IoT, manufacturing automation, and 3D printing, all of which are radically lowering the cost of logistics and production.
Even more broadly, though, climate awareness and geopolitical friction are driving energy and materials revolutions that will change every facet of our lives, from how we travel and eat, to where we live and what we wear.
Re-globalization will be what we make of it.
Security is a key warehousing factor. You have to protect your assets. Poor security can lead to theft, inaccurate inventory control, and lowered employee morale. Many businesses understand why security is key to good warehousing in Ghana, Mozambique, and Cote d’Ivoire. For that reason, many companies have turned to logistics parks that include security solutions to protect their assets and make a positive impact on the global supply chain.
Why security is important to good warehousing in Ghana, Mozambique, and Cote d’Ivoire
Security is key to good warehousing regardless of geographical location. And in countries and industries that play a large role in the supply chain, it’s even more important.
What role does security play in warehousing in Ghana, Mozambique, and Cote d’Ivoire?
Warehouse security plays a large role in sub-Saharan Africa countries like Ghana, Mozambique, and Cote d’Ivoire. There are several benefits to investing in warehouse security:
- Protecting your facility and employees against potential violence that can occur in rural or urban areas.
- Keeping your employees healthy and safe, even during outbreaks like malaria, HIV, and the COVID-19 pandemic. This includes health screenings and access to lifesaving medicine, including the COVID-19 vaccine.
- Encouraging stakeholders to invest more into your company. Investors want assurance that they’re investing their money wisely, and a secure warehouse helps achieve that.
What are the biggest security problems faced in warehouses in Ghana, Mozambique, and Cote d’Ivoire?
Unfortunately, many African countries face security problems. And this largely stems from lack of infrastructure and resources. Sub-Saharan Africa, home to some of the world’s fastest growing economies in recent years, has been hit hard by the pandemic. The IMF’s 2022 growth projection for the region is 3.8 percent – well below the 5 percent plus rates enjoyed in many years prior to the COVID-19 outbreak. Lack of widespread access to the COVID-19 vaccines will continue to hamper economic activity across the region.
These obstacles detract focus from security. The labor shortage and health risks caused by the COVID-19 pandemic have forced companies to choose between focusing on secure warehousing and running daily operations. The World Bank, among others, is trying to help stabilize the economy. As the economy stabilizes, more companies will have the resources to move into logistics parks with built-in security.
What can happen to warehousing in Ghana, Mozambique, and Cote d’Ivoire without good security?
Warehousing in any country can fail—including countries like Ghana, Mozambique, and Cote d’Ivoire. Subpar security can lead to theft by employees or outside parties, data breaches, and severe supply chain interruptions. Since all of this could lead to losses on your company’s bottom line, you need to make sure that your warehouse security is top notch.
Best security practices for warehouse space in Ghana, Mozambique, and Cote d’Ivoire
The best security practices for warehouse space in souther and West Africa rely on infrastructure and technology. There are also factors that affect security needs in these regions, and it’s important to understand them.
What factors affect security needs in warehouse space in Ghana, Mozambique, and Cote d’Ivoire?
All warehouse space faces security threats like burglary, vandalism and data breaches. However, many African countries are up against challenges that much of the Western world isn’t.
However, there is good news that can increase security and help alleviate safety concerns. And it comes in the form of logistics parks.
What do you need to have the best security in warehouse spaces in Ghana, Mozambique, and Cote d’Ivoire?
Logistics parks offer more than just warehousing. They are full-service work environments for your employees, clients, and operations. And because they offer 24-7 security solutions, they are the safest ways to do business in West and South Africa.
Here are a few ways that a logistics park can increase your safety and security:
- Walled compound to protect your facility, employees, and products
- Closed-circuit TV recording
- Fire-safety features like sprinkler systems
Additionally, logistics parks provide electricity, internet infrastructure, and custom amenities created to fit your company’s needs. In other words, to have the best security in warehouse spaces in Ghana, Mozambique, and Cote d’Ivoire, you need a logistics park.
What role does technology play in security for warehouse space in Ghana, Mozambique, and Cote d’Ivoire?
The best security for warehouse spaces involves technology. Here are a few examples of security measures that you can add to your logistics park to boost security:
- Security cameras and surveillance system
- Alarm system
- Trained guards
- Inventory tracking as an anti-theft measure
- Security software to prevent data breaches
To obtain the technology and resources for these security measures, you need the infrastructure to support the electrical, personnel, and internet needed to run them. And with the increase in profitable businesses like the automobile industry and solar power throughout Africa in recent years, the infrastructure needed to improve warehouse security is growing.
Improvements to warehousing security in Ghana, Mozambique, and Cote d’Ivoire
With the evolution of the African Growth and Opportunity Act in the United States, warehousing security is improving in Africa. This is especially true in countries like Ghana, Mozambique, and Cote d’Ivoire.
Who is developing improvements to warehousing security in Ghana, Mozambique, and Cote d’Ivoire?
Africa displays strong resilience in the face of its challenges. African economies are competing in the world market, attracting the interest of international investors, and beginning to trade with more countries around the world.
Thanks to these promising improvements, much of sub-Saharan Africa is trending toward economic growth. Companies like Agility Africa who see the region’s potential are providing technical assistance and building logistics parks to increase Africa’s presence in the global supply chain.
What factors drive improvements to warehousing security in Ghana, Mozambique, and Cote d’Ivoire?
The world economy is changing, and Africa wants to be part of it. The desire to increase their presence in the global supply chain is a significant factor that drives improvements to warehouse security.
Logistics parks are also increasing secure warehousing in West and southern Africa. The best parks offer on-site security management and routine perimeter sweeps to ensure the safety and security of the entire company. And as the African infrastructure improves, so will the capacity to make facilities even more secure.
How will improving warehousing security in Ghana, Mozambique, and Cote d’Ivoire impact the African economy?
Improving warehousing security in these nations should have a positive effect in the overall economy. As security improves, more companies will open facilities in the area. Each facility creates jobs, productivity, and innovation. And because more people will be working, the money they’ll put back into the economy will stimulate economic growth.
Best bonded warehousing in Ghana, Mozambique, and Cote d’Ivoire
Bonded warehousing can be difficult to come by. You need security to protect the goods, a strong warehouse receipt system to prove where the goods came from and are sold to, and the land and labor to support the warehouse’s operations. Fortunately, there are bonded warehousing opportunities throughout sub-Saharan Africa.
What is bonded warehousing?
A bonded warehouse stores imported or exported goods without having to pay customs duty or value added tax until the goods are sold to customers.
In other words, bonded warehousing provides a secure facility and logistics control for international goods. And since the logistics company doesn’t have to pay duties up front, it’s a lucrative way to warehouse.
What factors do the best bonded warehouses in Ghana, Mozambique, and Cote d’Ivoire share?
One of the factors is ethics compliance. To successfully compete in the global supply chain, warehouses and logistics parks must set high standards to attract new investors and avoid government scrutiny. When a company is on the up and up, it’s less of a risk for investors to finance their operations.
Additionally, high-end logistics parks have become a key factor in the best bonded warehouses. Logistics parks offer the storage, distribution, and operation capabilities that a bonded warehouse needs to efficiently transport their goods to their customers.
Technology is also a factor. In fact, 64 percent of supply chain executives believe that digitization and robotics are large elements to overcoming the economic recession caused by the COVID-19 pandemic.
Where can you find the best bonded warehousing in Ghana, Mozambique, and Cote d’Ivoire?
Bonded warehousing has become more available in West and southernm Africa in recent years. Land and labor are available in countries like Ghana, Mozambique, and Cote d’Ivoire, and companies are building logistics parks and increasing production in these developing regions.
Logistics parks are the best way to secure your warehousing in Ghana, Mozambique, and Cote d’Ivoire
You need an expert partner when you open warehouse space in southern and West Africa. Agility is that expert! Agility Logistics Parks provide infrastructure, round-the-clock services, and all the facility necessities and amenities to set you up for success.
Visit our website to find out how are flexible solutions fit your needs.
Since 2015, the United Nations has been working toward Sustainable Development Goal 7 (SDG7), which aims to ensure access worldwide to affordable, reliable, sustainable, modern energy. SDG7 has particular relevance for sub-Saharan Africa, where 75 percent of the population lacks reliable access to electricity. The burgeoning economy is trying to attract investment, which is one reason why 24-7 power and connectivity are key to warehousing in Ghana, Mozambique, and Cote d’Ivoire.
Companies looking to do business in sub-Saharan countries such as Ghana, Mozambique, and Cote d’Ivoire need dependable power to support their logistics. As organizations embrace automated solutions and use data to drive their operations, they also want reliable digital connectivity. Electricity and internet go hand-in-hand in modern supply chain and warehouse management. That’s why 24-7 power and connectivity are key to warehousing in Ghana, Mozambique, and Cote d’Ivoire.
How 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing modernize warehouse operation
According to the African Development Bank, Africa faces the largest man-made barriers to trade of any region in the world. Despite the obstacles, the US and other governments have pledged to continue economic engagement with African countries committed to self-reliance.
Importance of 24-7 power and connectivity in the supply chain
The purchasing power of Africa is growing rapidly, with a consumer market predicted to reach US$2.1 trillion by 2025. In the first ten months of 2021, US exports to Africa have increased 32 percent, and trade between China and African countries increased 40.5 percent in the first seven months of 2021.
Part of self-reliance involves the development of dependable electricity, which in turn lays the foundation for internet connectivity and industrialization. Internet access is especially critical to the development of e-commerce as well as construction of smart warehouses.
Smart warehouses
A warehouse management system that uses equipment and computers, instead of humans, to complete fulfillment and other operations is known as a smart warehouse. In other words, warehouse automation handles repetitive tasks, improving efficiency throughout the supply chain.
Although the US leads the world in warehouse automation, less-established markets such as the Philippines and Indonesia are catching up, according to the real estate firm JLL. Could the emerging markets of sub-Saharan Africa eventually follow suit?
Internet upgrades
In order to function, a smart warehouse must be able to connect to a 5G network. Reliable, secure internet is another reason why 24-7 power and connectivity are key in Ghana, Mozambique, and Cote d’Ivoire, and warehousing.
Already, high-speed subsea cables are improving connectivity for African coastal cities. In fact, a new submarine cable system across the Atlantic, MAREA, connects its hub in Spain directly to West Africa. This will facilitate high-speed data connections for warehouses in Abidjan as well as in Accra.
Digital infrastructure
According to the Financial Times, African countries are among the fastest-growing internet markets in the world. This presents opportunity for companies that wish to lease warehouse space in high-growth Ghana, Mozambique, and Cote d’Ivoire. Interest in digital transformation is on the rise.
Advantages to 24-7 power and connectivity
Technology plays a role in facilitating the movement of goods in the African supply chain. In smart warehouses, automation and proactive inventory help streamline warehouse operations.
Plus, 24-7 connectivity speeds the transition from paper to electronic documentation, optimizing the supply chain. The automation and digitization of routine tasks also eliminates the middleman, which reduces the potential for corruption in facilitating the passage of goods.
How to identify challenges in 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing
In Ghana, power outages are so frequent that there’s actually a word for them in Akan, a language spoken widely there. The word, “dumsor” (pronounced doom-sore), roughly translates to “off-and-on.”
Shortages in power supply
Like in many nations of sub-Saharan Africa, demand for electricity in Ghana outpaces supply. The country has made significant progress in increasing electricity generation and access over the last ten years. However, the electrical grid continues to experience high distribution losses.
Specifically, Ghana experienced a 23 percent distribution loss in the World Bank’s most recent analysis. This means that 23 percent of electrical output in Ghana did not get to consumers. Other nations in sub-Saharan Africa, such as Mozambique and Cote d’Ivoire, fared slightly better, with distribution loss percentages of 15 and 14 percent respectively. By comparison, both the United States and United Kingdom experienced distribution loss in the single digits.
Need for reliable power
Unreliable power can cost companies up to 31 percent in lost revenue, according to a Center for Global Development study. Specifically, companies involved with perishable goods must have consistent power in order to use cold storage. Otherwise, a power failure in a warehouse can destroy a company’s inventory and disrupt the supply chain.
One potential solution is the decentralization of energy grids, according to the US Agency for International Development. For one thing, solar- and wind-generated power can circumvent central electrical grids that may still be in development. In general, smaller, decentralized energy grids can help reduce cost and increase availability.
How to implement 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing
To solve the issue of distribution loss and related issues, the United Nations is encouraging access to clean fuel and technology. Slowly, investment in support of clean energy is increasing.
Finding solutions through technology
The United Nation’s Sustainable Energy for All initiative reports a 46 percent increase in international financial flows to developing countries in support of clean energy between 2010 and 2018. Furthermore, it is developing countries that are installing the majority of new renewable capacity, specifically solar and wind technologies.
Recognizing the importance of why 24-7 power and connectivity are key in Ghana, Mozambique, and Cote d’Ivoire warehousing, Agility features renewable energy in all its warehouse designs. For example, Agility warehouses feature solar panels on rooftops as well as wind-driven roof fans. Skylights reduce the need for lightning electricity during the day. And indoor and outdoor LED lighting reduces energy use as do solar-powered street lights.
Managing cost
A study published in the journal Energy Economics in 2012 found that it would require a US$160–$215 billion investment to provide consistent electricity to sub-Saharan Africa. Since then, the International Energy Agency has found that the least expensive way to achieve universal electricity access is to use renewable energy sources.
Cultivating local employees
The emphasis on 24-7 power and connectivity in warehousing has helped Agility attract skilled staff. Its well-lit, attractive warehouses appeal to potential local workers.
In turn, this helps benefit the economy by improving employment opportunities, since Agility hires locally for its logistics parks. This directly contributes to the growth of a skilled local workforce, which eventually feeds back into local modernization efforts to upgrade infrastructure and bridge the digital divide.
How 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing support African supply chains
In 2021, the African Continental Free Trade Area (AfCFTA) launched, boosting intra-African trade. AfCFTA creates a unified market of 1.2 billion people with a combined gross domestic product of $3 trillion. As a result, warehousing in Ghana, Cote d’Ivoire, and Mozambique affects other African countries as supply chains become more interconnected through the removal of trade barriers.
Importance of modern warehouses in the supply chain
Modern warehouse facilities help drive economic growth, creating the conditions for highly efficient supply chains, the CDC Group reports. In particular, Grade-A warehousing supply businesses with the infrastructure they need to grow. The Agility Logistics Park in Mozambique, for example, features warehousing with round-the-clock power, reliable internet connectivity, electrical power, and backup.
As a result, local and international companies have leased warehouse space. Oil and gas, automotive, electronics, and other companies use the facility for distribution, storage, assembly, and processing.
Cultivation of business opportunities along the supply chain
Stable power and internet form the backbone of supply chain management in the region. For instance, the French hypermarket chain Carrefour is expanding in southern Africa on the ground and in e-commerce.
The CDC Group report found that Grade-A warehousing improved tenants’ ability to scale and resulted in improved margins. For example, companies using Grade-A warehouses saved 45–60 percent on storage cost per pallet. Companies also reduced turnaround times and significantly reduced inventory losses.
Development of untapped resources to stabilize the supply chain
Mozambique experiences one of the largest electricity access deficits among countries in sub-Saharan Africa, according to Science Direct. However, the country is rich in renewable energy resources with the potential to become a regional energy hub, Science Direct found. Opportunities for investment and rapid economic development abound, holding promise for a robust supply chain.
How to find out more about warehousing in Ghana, Mozambique, and Cote d’Ivoire
Power and connectivity in the region are slowly improving. Contact Agility today to find out more about why 24-7 power and connectivity are key in Ghana, Cote d’Ivoire, and Mozambique warehousing. Agility’s logistics parks can solve your reliability questions and provide solutions in warehouse management.
The physical and geographic features of a commercial real estate property determine its value. Rather than listing a long series of features, agents and brokers can summarize this value with a classification system ranging from A to C. At the high end are international-standard Class A warehouses.
More than simply storage buildings, international-standard Class A warehouses are the linchpin in modern, efficient supply chain logistics strategies. Read on to learn more about the characteristics and benefits of state-of-the-art Class A warehouses, the difference between a Class A warehouse and a Class A facility, and how to choose a Class A warehouse.
Characteristics of an international-standard, Class A warehouse
In short, international-standard Class A warehouses are state-of-the-art properties built specifically for warehousing and logistics. They have not been converted or renovated for this purpose. They are designed and built from the ground up to benefit the supply chain.
Before delving further into Class A characteristics, a brief look at other levels might prove helpful. A step down from Class A is Class B. Such a building may be a little older but renovated to have the latest and greatest technology. It will also have lower ceilings than a Class A building and may have multiple floors, which is not ideal for warehousing.
Class D and Class C buildings fall at the low end. They are typically older buildings converted from their original purposes, such as former hangars and manufacturing facilities. They often lack modern amenities, such as climate control and accessibility.
Building specifications and materials
Noncombustible or fireproof raw materials, flexibility, and mobility are essential aspects of Class A warehouse construction. Steel and sealed concrete are the most common structural elements with the possible addition of masonry, plaster, gypsum, or other noncombustible materials. Note that sealing concrete is essential to reduce dust that can cause wear and tear on equipment.
Glass, ceramic or stone tile, and stucco can enhance the aesthetic value of interior and exterior walls. Few people want to work in a bare steel and concrete box.
The warehouse might store a variety of inventory with different storage needs. To accommodate these needs, a Class A warehouse will have ceilings at least thirteen meters high, support columns at least twelve meters apart, and spans of at least twenty-four meters.
And that’s just inside the building—what’s outside is just as important. It must have at least one automatic docking gate for every five hundred square meters of interior space and sufficient outdoor space to maneuver large trucks and for employee parking.
Warehousing innovation
Technology and innovation are increasingly important in warehousing logistics. Four walls, support structure, and a roof are no longer sufficient. At a minimum, a Class A warehouse includes climate control, fire safety features, security monitoring and alarms, high-speed internet, and an electrical substation.
Beyond those requirements, automation is the future. An automated warehouse will include tech-based solutions such as drones that easily reach the highest shelves, robots (or “cobots” that work alongside humans), composite panels that improve the building’s energy efficiency, and more. Smart warehouses make smarter, more agile supply chains.
Location, location, location
The old adage that location is everything in real estate is particularly true with warehouses. Class A warehouses are located at the confluence of airports, railways, ports, and highways for quick access to major domestic and export markets.
Other building classes might not be as ideally located if their region has grown and changed since their construction. For example, industrial facilities built before 2000 are often converted and renovated, but they might be gridlocked within cities that have grown up around them.
Benefits of an international-standard, Class A warehouse
Because Class A warehouses are built specifically to suit a modern supply chain, the benefits are innumerable, ranging from optimized retail logistics to sustainability to safety. A few highlights include reduced carbon footprint and increased efficiency and accuracy.
Reduced carbon footprint
Inefficient heating and cooling systems—such as those you might find in a Class C building—mean high carbon emissions. Just by virtue of being new construction, Class A warehouses have the proper insulation and roofing materials to maximize indoor climate control.
Green warehouse design is also a common feature in Class A warehouses. Such sustainable design might include solar panels for alternative energy, skylights for daytime lighting, LED bulbs to reduce electricity consumption, xeriscaping to reduce water usage, and regionally sourced building materials to reduce transportation-related emissions. Individually and collectively, these features reduce the building’s carbon footprint.
Finally, a prime location reduces transit times and fuel use, giving you both increased efficiency and a reduced carbon footprint.
Increased efficiency and accuracy
Many of the features built into Class A warehouses increase efficiency right from the start. Smart warehouse management can then further reduce warehousing challenges and inefficiencies.
Optimal warehouse layout and layout flexibility, in particular, are huge time savers. High ceilings and wide spaces between columns and spans provide this flexibility. Stacking shelves higher puts related products in closer proximity. Wider aisles give people and equipment more room to maneuver quickly and safely.
Creating and adapting your rack design to your particular workflow ensures optimal movement throughout the space. A flexible layout also allows you to reorganize as inventory changes with supply and demand.
Zoning, both inside and outside the warehouse, is another important aspect of efficiency enabled by Class A space. With more automatic docking gates, some gates can be dedicated to receiving and others to dispatching to reduce traffic jams. Positioning popular products in proximity to dispatch areas gets them to market faster.
And as we all know, haste equals waste. Employees have more time to do their jobs thoroughly and effectively when efficiency is increased. Paired with warehouse automation, errors and waste are minimal.
Class A warehouse versus Class A facility
Unfortunately, building classification isn’t always consistent from market to market, and confusing language sometimes arises. Commercial real estate agents use the Class A designation on a variety of facilities, such as office space, light industrial space, distribution centers, and even warehouse space that doesn’t quite meet the criteria of a Class A warehouse.
In the case of warehouses in particular, distinguishing between these types of buildings is important. A large space dubbed a Class A “facility” instead of “warehouse” might have lower ceilings (at least ten meters instead of thirteen), which reduces options for shelving, and fewer automatic docking gates (one for every seven hundred meters of interior space instead of five hundred).
While these differences may seem small, each amenity can impact effective warehouse management and inventory management. In either case, however, “Class A” designates best-in-class property, and warehousing innovation can happen in a variety of settings.
How to choose a Class A warehouse
The first step in choosing a Class A warehouse is asking yourself and your team the right questions and sharing that information with your internal or external commercial real estate team. Here are just a few of the questions to consider:
- What functions will you perform on this property? Will it simply serve as well-staged storage for your company’s internal use? Will it be a distribution center with order picking, packing, and processing? Will you need co-located manufacturing facilities? Will you need a designated area for office space?
- How much space do you need now and in the next five to ten years? (Remember to plan for your success.)
- What type of inventory will you store and process, and will these goods have specialized storage needs, such as refrigeration or reinforced rack design?
- Do you already have a warehouse inventory management system, or do you need help creating one?
- How will you maximize warehouse efficiency? If you aren’t sure, consider consulting one of Agility’s experts.
- What warehouse technology and automation would be nice to have, and what do you absolutely require to meet your goals?
- What warehouse layout will you need to maximize traffic flow and safely maneuver people and equipment?
- Do you need rack design consultation?
- What location optimally positions your goods for your supply chain needs?
- What security features do you require to protect your assets (people and products)?
- Do you need a bonded warehouse or bonded space within a warehouse to manage dutiable goods?
- What’s your budget? Be sure to factor in how the features and benefits will offset your warehouse space’s costs.
Your answers will help determine the class of warehouse you truly need and prioritize the features and benefits of each promising property identified in your search.
Warehousing solutions simplified
Agility Logistics Parks designs, engineers, and operates the most advanced international-standard warehousing complexes and light industrial facilities in emerging markets. Our flexible solutions are ready. Contact our team to begin your search for an international-standard, Class A warehouse in the Middle East, Africa, or South Asia.
Mining companies in Ghana face complex and unique logistics challenges. From safely transporting different types of raw material to complying with various rules from Ghanaian government agencies, entering the Ghanaian mining community is not an easy task.
The mining industry requires localized, integrated logistics solutions while operating in Ghana, and logistics parks may be the answer. By investing in these facilities, mining companies can reduce capital expenses, improve sustainability, and de-risk entry and expansion into West Africa.
This article will discuss logistics parks as ideal for gold mining companies in Ghana, their features, and how Agility Logistics Parks can help streamline the mining supply chain.
Features of logistics parks for mining companies in Ghana
Mining is a labor- and resource-intensive operation. Companies need space to store large, expensive mining equipment, manage inventory, and transport heavy materials to various ports. Managing these daily activities can be challenging without the proper infrastructure.
Using legacy supply chain systems, a mining company can harm efficiency and struggle to stay competitive. However, logistics parks streamline these complex processes so companies can focus on growth and innovation.
The current state of mining company logistics in Ghana
As of the second quarter of 2021, Ghana’s mining and quarrying sector contributed 4.9 billion Ghanaian cedis to its gross domestic product. The West African country is the largest producer of gold on the continent and a major producer of valuable materials like bauxite, diamonds, and manganese. There is also ample columbite-tantalite, feldspar, iron ore, limestone, quartz, and salt deposits.
The mining industry is an economic pillar, and there are several gold companies in Ghana. Since the 1980s, Ghana’s mining production and logistics have been privatized, which has led to flourishing foreign investment. With this, significant infrastructure is available to support mining companies’ supply and distribution needs, including logistics parks. The best logistics facilities enable easy access to major airports, seaports, roads, rail networks, and capital cities.
For example, the Agility Logistics Park (ALP) in Ghana is in the Tema Free Trade Zone, a major industrial city in the country. Tema is approximately twenty-four kilometers from the Kotoka International Airport in Accra, Ghana’s capital.
The 165,000-square-meter facility is adjacent to the Tema-Aflao road, part of a central corridor connecting Abidjan, Côte d’Ivoire, to Lagos, Nigeria. Additionally, the ALP is close to the Port of Tema, the largest seaport in Ghana, covering over 3.9 million square meters.
Benefits of logistics parks over legacy supply chain infrastructure
Historically, mining companies have managed their value chain across separate divisions, leading to siloed operations. Rather than host all supply chain activities for a region in one location, distributed teams manage individual tasks.
As a result, many mining companies face bottlenecks, poor communication, and other challenges while trying to stay ahead in a rapidly changing industry. However, logistics parks can help break down these silos and facilitate faster innovation and growth.
Logistics parks are large facilities that offer key amenities to support companies’ operations, including warehousing, laydown space, and even on-premises corporate offices. These modern facilities provide the storage, processing, and warehousing space mining companies need.
By investing in a logistics park, mining companies gain access to valuable features and amenities, including the following:
- Ample storage and warehousing space: Mining equipment can be large and heavy. Logistics parks provide ample and secure storage space for this equipment and raw materials. These facilities also include laydown space for temporary storage.
- Inventory planning and supply chain streamlining: Logistics parks enable a better way of managing inventory and supply.
- Waste management services: For mining companies, the safe disposal of waste is a key regulatory consideration. Many logistics parks have full waste management and recycling services to support their operations and drainage systems.
- Full security: Many mining companies must invest in their security services, which can be expensive. Logistics parks feature fully secure and walled compounds and CCTV monitoring systems, preventing unauthorized users from entering controlled facilities.
- Data centers and IT infrastructure: Modern mining companies are more digitally connected than ever. As a result, the industry requires a fast, secure data infrastructure. Some logistics parks provide mining companies with data centers and other key technologies, providing complete supply chain visibility.
- Better connectivity: Logistics parks are typically situated in industrial belts near important airports and ocean ports. Because of this, companies operating in logistic parks benefit from maximum connectivity required to foster business growth.
Environmental benefits for mining companies using logistics parks in Ghana
Global mining companies face tight restrictions and increased pressure from governments, investors, and the public to reduce environmental harm. Mining news in Ghana points to these challenges.
Mining has contributed to severe environmental damage in Ghana, particularly affecting water bodies. The country’s per capita availability of water resources decreases every day due to pollution from illegal mining and extraction-related waste. That has made it an urgent priority to clamp down on illegal mining in Ghana.
The quarry and mining industry has also contributed to significant air pollution and land degradation in Ghana, affecting agricultural activities and public health. In response to the environmental impact, the Ghanaian government has implemented strict regulations for mining companies across the country.
It is crucial for mining companies to search for sustainable solutions when expanding into markets like Ghana. This fact has been long recognized, but most attempts to lessen the sector’s environmental impact have been internally focused. Mining companies are called to achieve corporate sustainable solutions, socially-sound practices, and environmental thinking to improve their supply chain and logistics design.
By investing in infrastructure at a logistics park, the mining industry can facilitate regulatory compliance, as well as reduce its overall carbon footprint.
For example, the Agility Logistics Park in Ghana offers the following sustainability benefits:
- The ALP is close to major roads, seaports, and other distribution networks, reducing the distance that mining companies need to drive to transport their materials. This maximizes a company’s distribution efficiency as well, saving money.
- Agility Logistics Parks operates sustainable infrastructure to reduce environmental impact. Solar panels reduce energy costs and consumption, helping mining companies commit to sustainable change.
- Mining companies also have full waste management services when they invest in the ALP, helping them safely dispose of mining waste. Additionally, Agility Logistics Parks includes full recycling zones, helping further reduce carbon emissions.
These sustainable initiatives not only help companies reduce their environmental impact but also help them save money. In one case, Agility Logistics Parks helped increase a customer’s reuse rate from 47 percent to 72 percent through efficient waste management, unlocking $78,000 in savings.
How mining companies can find the right logistics park in Ghana
Logistics parks are ideal solutions for mining companies operating in Ghana. To find the right facility to support their operations, the Ghanaian mining community must consider compliance requirements, amenity availability, and options for sustainability.
There are several laws and regulations that mining companies must follow in Ghana. For example, the Minerals and Mining Act of 2006 is the primary piece of legislation governing the industry. This Act sets rules for mineral rights, small-scale mining, and other activities.
The Ministry of Lands and Natural Resources holds overall responsibility for the mining industry, while the Environmental Protection Agency sets environmental regulations. For example, mining companies must renew environmental permits every eighteen months in Ghana and follow key waste disposal and storage regulations.
The mining community requires deep expertise and knowledge of Ghanaian mining regulations to select the ideal logistics park. Additionally, companies should look for key features such as ample storage space, strong security, and entire property and facilities management.
A logistics park should also offer IT infrastructure for maximum connectivity and sustainable practices to enable efficiency. However, many logistics facilities do not offer these key amenities.
Agility Logistics Parks works to ensure strong sustainability, compliance, and reliability across its facilities. By investing in space at the Agility Logistics Park, mining companies gain strategic access to valuable distribution hubs and complete value-added services to support their supply chain.
Mining companies using logistics parks in Ghana
The mining industry is highly visible in Ghana. The Ghana Chamber of Mines is an organization of representatives of mining companies in the country. Some of its Represented Members, who have commercial operations in Ghana, include Asanko Gold Ghana, Newmont Ghana Limited, Golden Star Resources, and Perseus Mining (Ghana) Limited.
Forward-thinking mining companies and related operations rely on logistics parks to power their operations. For example, a gold company in Ghana, Weir Minerals West Africa (Weir) provides industrial equipment, such as pumps and valves, to support some of the world’s leading mining operations.
Weir hosts its West African storage and office operations at ALP, enabling the company to execute critical services in one location. Weir also used ALP offerings to bring its facility into compliance, satisfying its parent company’s safety standards.
It’s clear that migrating to a logistics park can provide key benefits and amenities to mining companies. However, leaders often want to establish a business use case before investing in a facility. To compare legacy systems to integrated logistics parks, track the following metrics fully:
- Resource usage and efficiency
- Shipping and distribution costs
- Ease of inventory management
- Speed to market in Ghana
- Capital expenses
- 24/7 power and security
Expand into Ghana with Agility Logistics Parks
“Logistics parks as ideal for mining companies in Ghana” is more than a thought experiment. These integrated facilities are vital for mining in Ghana, promoting sustainability, efficiency, and continued growth.
If your mining company wants to expand into Ghana, you need a strong infrastructure to support your complex operations. The Agility Logistics Park in Ghana has the space, amenities, and industry knowledge you need. Visit Agility today to learn more about this sophisticated facility and discuss your next steps.