The healthcare logistics market is heating up in South America. Last week, UPS announced plans to open two healthcare dedicated facilities in this region. In Brazil, it will open its second such facility which will be located in Sao Paulo and will include 80,000 sq ft of space. It is expected to open in third quarter 2013. UPS is also planning to open a facility in Chile later in the year. This facility will include 21,000 sq ft of space and will be located in Santiago.
According to John Menna, UPS Vice President, global healthcare strategy, these facilities will support a full range of temperature-sensitive requirements of 2° to 8°C, -10° to -20 °C as well as cryo-storage solutions.
Menna also notes that with these additional facilities, along with another new healthcare-dedicated facility in Mexico, UPS will be able to serve almost 70% of the healthcare consumption and manufacturing market in Latin America.
Indeed, other logistics providers are initiating resources to focus on the South American healthcare market. CEVA recently noted its interest in Brazil’s pharmaceutical-healthcare sector while Kuehne + Nagel manage warehousing and related activities for Roche and Bayer in Chile.
Why the interest in South America? Changes in government regulations, an expanding middle class and its attractiveness as a location for clinical trials and the outsourcing of manufacturing are among the reasons for the interest.
It seems though that much of the focus is on the domestic market, particularly for Chile. However, exports are promising and as the infrastructure needed for healthcare expands, exports will likely increase too.
For example, US imports of pharmaceutical goods (harmonized code 30) show a mixed picture with imports from Brazil indicating a slight shift favoring containerized vessel shipments. But even this mode appears to have peaked in 2011 with a slight increase in 2013 over 2012. This 2012 decline may be due to the dip in overall economic activity experienced by Brazil.
Meanwhile, US pharmaceutical goods imports from Chile are much lower which may indicate government regulatory requirements favoring the Chilean domestic market.
Ti will be publishing its 2014 Global Healthcare Logistics report later this week, for more information on this report, please contact Leon Morris, Business Development Manager at [email protected].
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)