In May 2021, our subsidiary Tradex Corporation received a government grant from the RVO (Netherlands Enterprise Agency) to carry out a feasibility study for setting up a Smart Hub in Dar es Salaam, the biggest and economically most important city of Tanzania.
Lack of financial resources and storage capacity in Tanzania
Based on experience, we know that many European shippers prefer to ship a full container (FCL) to Tanzania. Local importers and distributors often have neither the financial resources nor the storage capacity to purchase such large volumes. They prefer to order pallet by pallet. In addition, local distributors often lack knowledge of customs procedures and the necessary product permits. Their network is too limited to come into contact with suppliers who are willing to ship small volumes.
Lack of knowledge and experience in Europe
On the other hand, there are plenty of European companies interested in exporting to Tanzania, one of the world’s 20 fastest-growing economies. They are faced with the problem of not knowing any Tanzanian distributors who are financially robust enough to buy full containers. They also lack knowledge and experience as regards the required customs formalities in Tanzania. And they often do not know how to obtain the required product permits to launch a product on the Tanzanian market.
SMART HUB as link between European producers and Tanzanian distributors.
To overcome this impasse, our subsidiary Tradex Corporation wants to set up a hub in the Dar es Salaam region, following the proven success formula of the SMART HUB concept in ’s-Hertogenbosch, the Netherlands. Smart Hub Tanzania can become a key link between European producers and Tanzanian distributors.
How does Smart Hub Tanzania work?
- Goods (FCL/LCL) are stored at the Smart Hub after arrival in a well-secured multi-user warehouse, managed by Tradex Corporation
- Smart Hub can take care of all necessary customs formalities on site
- Smart Hub can provide the required product permits as an add-on service
- Distributors can purchase goods on a pallet basis
- Smart Hub facilitates payments between the supplier and the local distributor
- In addition to storage facilities for suppliers, Smart Hub also offers small office spaces for distributors, including limited storage options.
Smart Hub can thus become a ‘meeting place’ for suppliers and distributors.
Additional services that Smart Hub Tanzania can offer:
- By involving local banks in this initiative, it is possible to set up attractive financial arrangements for both banks and distributors.
- In collaboration with the University of Dar es Salaam, a training facility will be created at Smart Hub, offering training to support local entrepreneurs in management, finance, marketing, sales and other topics. Consulting on developing a website and managing e-commerce activities is also available.
Result feasibility study
This feasibility study covered a period of 1.5 years and was completed at the end of 2022. The study aimed to demonstrate whether the implementation of the Smart Hub in Tanzania is feasible.
Meanwhile, Tradex has entered into a partnership with House of Procurements (HOP) in Dar es Salaam. Both parties signed a Memorandum of Understanding in October 2022, in which they expressed their intention to collaborate on the establishment of a Smart Hub. Tradex Corporation can utilize the existing warehouse facilities of HOP in Dar es Salaam for this purpose. Products from outside Africa can be introduced to the Tanzanian market from there.
Want to know more about our Smart Hub Tanzania project? Feel free to contact us!
