The Aragon region is in the vanguard of R&D regarding the application of digital technologies to its cornerstone logistics, automotive and agribusiness industries. Capital city Zaragoza is home to a research centres such as the Technological Institute of Aragon (known as ITA Innova in Spanish) and Zaragoza Logistics Center (ZLC).
ITA Innova is located next to the University of Zaragoza’s Ebro River campus on the northern outskirts of the city. This campus includes the university’s faculty of engineering, which has a total of 6000 students. ITA Innova also has a second campus at Walqa Technological Park in the city of Huesca, 75 kilometres north-west of Zaragoza. The institute has an annual budget of €15m, and about 70% of its income comes from research work for SMEs across the world.
A global reach
ITA Innova specialises in R&D in the following fields: nano materials (including composites), metals and paper; mechatronics (including robotics); big data and data analytics (including how artificial intelligence can be applied to logistics); and electromagnetism and power electronics (including how these technologies can be applied to electric vehicles).
It employs a total of 230 researchers, working on projects from companies in 13 countries, and it collaborates with about 250 universities, technological institutes and academic institutions around the world.
“We work with about 1000 companies a year, including around 500 SMEs,” says ITA Innova director Ángel Fernández. “The work we do is very important for SMEs in particular. We are strong in R&D into metals and plastics and about how composites, materials and bonding are adapting.”
ITA Innova is carrying out research into how cameras can be used in self-driving cars and how blockchain technology can be applied to the logistics industry. “Many freight containers end up empty,” says Mr Fernández. “We are researching data analytics that can be used to maximise the number of containers that are full up with merchandise.”
ZLC's mission of excellence
ZLC is currently located in the heart of Plaza, Zaragoza’s logistics park – the biggest logistics centre in south-west Europe – but will move to a new location at Expo, closer to the city centre, later in 2018. It was established by the regional government of Aragon in 2003 in partnership with the Massachusetts Institute of Technology and the University of Zaragoza.
Its mission is to create an international centre of excellence for research and education in logistics and supply chain management for students and executives. Currently it has four students studying for PhDs, 30 students on its masters of engineering in logistics and supply chain management programme (in English) and a further 40 students on its masters in supply chain management programme (in Spanish).
“Our professors teach but also undertake research and publish papers,” says ZLC director Susana Val. “Our research centre is now well known in the logistics field throughout the world. Aragon itself is well placed for the future. Many companies here are preparing themselves for the changes coming to the logistics industry.”
Victor Rovira, logistics and manufacturing country manager at French sporting goods retailer Decathlon International, adds: “ZLC does really important research in the logistics field. It is easy to find staff who are well educated in Zaragoza and who have a strong work ethic.”
Cheap and easy
Decathlon has a logistics centre located at Plaza, which distributes 180 million units of sporting goods annually. This is one of Decathlon’s main distribution centres in southern Europe and in the future it will distribute merchandise to France, Spain, Portugal and Italy.
“There are a number of factors that make Aragon attractive to foreign investors. Location is key. Land prices are also comparatively low. Excellent railway connections to Barcelona and even Paris are also important for us,” says Mr Rovira.
Zaragoza is up to 26% cheaper than central Barcelona in terms of overall rental, transport and personnel costs and up to 23% cheaper than central Madrid, according to Aragon Exterior, the region’s inward investment agency. The cost of renting a warehouse in Aragon is about €2 per square metre per month compared with up to €4.50 in central Madrid and €5.80 in central Barcelona.
Total labour costs in Aragon average €2575 a month, compared with €2828 in Barcelona and €3106 in Madrid. Office rentals are also cheaper in Zaragoza: €138 per square metre annually compared with €258 in Barcelona, €336 in Madrid and €770 in Paris.
Aragon has more than 50 incubators – including many in digital technology – and 420 technology start-ups. These include Libelium, a maker of sensors to connect to the cloud; Ebers, a producer of equipment for research in cell culture; and Epic Power, a maker of systems that recover, store and re-use electricity.
The region sees itself as a potential bridge between China and Latin America. Many global companies, including Chinese ones, already use its logistics platforms as a way of distributing physical goods to Latin America, but Aragon also has a key role to play in providing intangible services such as legal, accountancy, market research and digital consultancy to the continent’s companies.
“There is great potential for companies from Aragon and China to enter into joint ventures to penetrate the Latin American marketplace,” says Isabel Velasco, commercial director of the Aragon Logistics Platform. “Many Chinese companies have already invested in Aragon and now trust us. Word of mouth is importance to the Chinese and companies from Aragon are ideal business partners for Chinese firms that want to do business in Latin America.”
In June 2017, Chinese maritime company Cosco Shipping acquired a 51% stake in Noatum Port Holdings, the Spanish container terminals operator, for €203m (the remaining 49% is owned by institutional investors advised by JPMorgan). The purchase includes Noatum Rail Terminals Zaragoza (NRTZ), a rail yard company located at one of the most important intermodal rail hubs of the Spanish public rail network.
“We transport 30 million containers a year,” says NRTZ director Carolina Gay. “Car parts and animal feeds are among the main products that we transport. We are very important to the logistics park at Plaza.” China’s interest in Aragon’s logistics potential could facilitate the next step in the region’s global ambitions.