IN PROFILE: Making Saudi Arabia a global logistics hub

Vision 2030 is indeed a remarkable document. The ambitious programme seeks to completely transform the economy of the Kingdom of Saudi Arabia, reducing its dependence on oil exports.

The growth and diversification will be achieved through a range of measures, including maximising the value capture from its massive energy sector through refining and chemicals manufacture, unlocking the potential of the non-oil sector in areas such as mining, manufacturing and retail, and positioning the Kingdom as a global logistics hub.

An integral part of the plan is to seek greater contribution from the private sector to the national economy and to attract foreign direct investment opportunities. It also looks at increasing employment opportunities for Saudi Arabia’s growing young demographic and the goal of nationalisation through ‘Nitaqat’. Finally, it seeks the further integration of the Kingdom into the regional and global economies as a hub connecting three continents – Asia, Europe and Africa.

“Saudi has the biggest port network in the Middle East – of nine ports, compared to just four ports in 1976; and is currently undergoing further major expansion,” says Jens O. Floe, Chief Executive Officer of Red Sea Gateway Terminal, the modern container facility at Jeddah Islamic Port (JIP).

“The government is undertaking a multitude of large investments in transportation infrastructure, with new projects such as the Saudi Rail-Roads Expansion, as well as substantial investments from the private sector e.g. JIP and the Dammam Port upgrade, the new economic cities, etc.”

Even as there is significant investment and expansion of major infrastructure projects, there is a crying need to improve the supply chain – and the Vision 2030 plan has dealt with this vital aspect. Ship agency services, for example, have been freed from the restriction of being performed only by 100% Saudi owned companies or by a Saudi national.

“SAGIA (Saudi Arabian General Investment Authority) and MAWANI (Saudi Ports Authority) have confirmed that a non-Saudi investor can now perform all ship agency services, except for supplying fuel and Customs clearance services,” says Rizwan Osman, Legal Director for the law firm Clyde & Co. “This will encourage foreign investors, raise standards and is in line with the privatisation of the ports.”

More than $750m is being spent on King Abdulaziz Port in Dammam; and over $70m is being spent on the Red Sea Gateway Terminal in Jeddah. There is the new King Abdullah Port in Rabigh, serving a new economic city; it will further boost over-all container handling.

“In the roads sector, a new motorway is being constructed between Saudi Arabia and Oman,” says Osman. “Once it is commissioned, there will be much lower lead times and trading costs will be lowered. Only the railway sector remains somewhat underdeveloped in terms of extent and usage, but whatever exists is of a relatively high quality.”

At the moment, there are five railway lines – a freight line between Dammam and Riyadh, via Abqaiq, Hofuf, Haradh and Al Kharj; a passenger rail line linking Dammam with Riyadh, via Abqaiq and Hofuf; the Dammam Port line which connects Hofuf with the Port of Dammam; a new railway service between Riyadh and the Qassim; and a line which opened only in October this year to service Makkah and Medina from Jeddah.

With over $10bn being invested on beefing up the roads, rail and port infrastructure over the next decade, and several Saudi ports in the process of being privatised, there is bound to be substantial international investment and a big improvement in cargo throughput by 2030, the terminal year of the vision of turning Saudi Arabia into a global logistics hub.

Bahri – scooping a fistful of awards for excellence  

Recently, in the closing days of October, Bahri (originally National Shipping Corporation of Saudi Arabia) underscored its position of leadership in the world of transportation and logistics by scooping a fistful of coveted industry awards at ceremonies held in Dubai and London. Read more

King Abdullah Port – unique location, incomparable infrastructure  

A prime example of the government-private joint-enterprise model, King Abdullah Port, located in King Abdullah Economic City, north of Jeddah, was established to foster a proper environment for successful and safe investment. Read more

Red Sea Gateway Terminal – modern cranes permit handling of ULCVs  

Red Sea Gateway Terminal (RSGT), the flagship container terminal at Jeddah Islamic Port, is a world-class facility, spearheaded by the Saudi Industrial Services group (SISCO). It was also the result of the first privately funded, BOT (build, operate, transfer) port development agreement in Saudi Arabia. Read more

LogiPoint – logistics service provider that “goes one step further”  

An established logistics service provider with a history of landmark logistics projects, LogiPoint is the brainchild of two established industry leaders, SISCO and the Xenel Group; and is a sister company of Red Sea Gateway Terminal (RSGT). Its slogan line is “We go one step further”. Read more

Saudi mega-yard IMI looks to build its supply chain  

The new $5.2bn mega shipyard complex being developed by International Maritime Industries (IMI) hosted a Q&A session for potential supply chain partners at the Seatrade Maritime Middle East event in Dubai in the last week of October 2018. Read more

Saudi Customs’ strategy to improve competitiveness  

The World Economic Forum’s 2018 Global Competitiveness Report published on October 17, 2018, revealed that Saudi Arabia’s Global Competitiveness Index (GCI) improved by two ranks compared to last year, placing the Kingdom in the 39th position among the 140 countries included in the report. Read more

Mawani works at privatising Saudi Arabia’s ports  

Foreign shipping agencies will soon have the right to operate independently at Saudi Arabian ports rather than having to work with a local investor. The move follows the Saudi Ports Authority’s (also known as ‘Mawani’) plans to privatise the kingdom’s ports, and could prove particularly attractive to Gulf-based shipping operators. Read more

Kanoo Logistics – providing nationwide network of warehouses  

A state-of-the-art 100,000 sq metre logistics facility has been opened near King Abdulaziz Port in Dammam by Kanoo Logistics, part of the Yusuf bin Ahmed Kanoo Group. The multipurpose facility includes a 10,000 sq m warehouse, as well as 500 sq m of elevated staging area and 5,000 sq m of parking space. Read more

Saudi Global Ports – new star on the Saudi maritime horizon  

Saudi Global Ports Co (SGPC), the new star on Saudi Arabia’s maritime landscape, is a joint-venture company, formed between the public investment fund (PIF) of the Kingdom of Saudi Arabia and Singapore’s PSA international (PSA). It will develop, operate and manage the second container terminal at the King Abdul Aziz port in Dammam, a key gateway in the Arabian Gulf. Read more

Haji Abdullah Alireza – multifaceted family business  

A company with a history dating back over a century and a half, and which has a company registration number ‘1’ – the House of Alireza (also known as Beit Zainal) is Saudi Arabia’s oldest family business, which actually managed and operated Jeddah Sea Port for a full decade. Read more

Dammam Shipyard – catering to the repair needs of Saudi vessels and rigs  

The port of Dammam on the Eastern Province of the Kingdom of Saudi Arabia, home of the national oil company Saudi Aramco, has seen tremendous growth over the last 30 years. Read more

Hutchison Ports Dammam – Saudi’s most modern export-import gateway  

Arguably Saudi Arabia’s most modern and heavily automated export-import gateway, Hutchison Ports Dammam (HPD, formerly known as International Ports Services) is a multi-purpose deepwater facility situated at King Abdulaziz Port, Dammam, in the Eastern Province of Saudi Arabia. Read more

Zamil Offshore – largest offshore services provider in the Middle East  

Acknowledged today as the largest provider of offshore and marine services in the Middle East, Zamil Offshore Services was founded in 1977 as a 100% Saudi company working in diversified business fields. Its scope of work covers offshore marine services, ship chandling, ship chartering, offshore hook-up projects, offshore shipbuilding, ship & rig repairs, and sea ports operation and management. Read more

Globe Group – well diversified marine portfolio  

Since its establishment in 1976, the Dammam-based Globe has  grown  into one of Saudi Arabia’s  leading marine services groups, with a diversified portfolio that includes shipping, logistics, transportation, port operations, logistics, operations and maintenance, container terminals, petrol and chemical plants, restaurants, real estate and retail fashion brands. Read more

 

Posted 01 February 2019

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Shirish Nadkarni

Contributing Editor - Indian Subcontinent and Middle East, Seatrade Maritime News

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