(MENAFN- Khaleej Times)
Published: Sun 19 Jun 2022, 3:26 PM
Last updated: Sun 19 Jun 2022, 8:24 PM
DP World, one of the world's largest port operators, on Sunday signed a Dh490 million ($133.4 million) deal to build and operate a logistics part at the Saudi port of Jeddah.
The Dubai-based logistics provider and the Saudi ports Authority (Mawani) signed a 30-year agreement to build a state-of-the-art port-centric logistics park at the Jeddah Islamic Port to bolster bilateral trade and investment between the UAE and Saudi Arabia.
The deal aims to establish a 415,000 square-metre logistics park with an in-land container depot capacity of 250,000 twenty-foot equivalent units (TEUs) and a warehousing storage space of 100,000 square metres and it could be expanded to 200,000 square metres in future. The purpose-built logistics park will expand DP World's regional footprint and bring pioneering multi-modal logistics solutions to the Kingdom of Saudi Arabia.
Omar bin Talal Hariri, president of Mawani; Sheikh Nahyan bin Saif Al Nahyan, UAE ambassador to the Kingdom of Saudi Arabia; Sultan Ahmed bin Sulayem, group chairman and CEO of DP World; Mohammad Alshaikh, CEO DP World Saudi Arabia; and a delegation of senior Saudi government officials as well as representatives from DP World's leadership team attended the signing ceremony on Sunday.
New jobs creation
Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, said this historic agreement will contribute to increasing efficiency and productivity levels and creating new jobs.
“We are committed to enhancing the role and the status of the Jeddah Islamic Port, which is strategically located on the Red Sea and has historically played a pivotal role in facilitating the movement of trade between the East and the West,” Bin Sulayem said.
Under the deal, DP World will invest more than Dh2.94 billion to expand and modernise the South Container Terminal as part of its agreement signed in 2020 to operate and manage the terminal for 30 years. The project to revamp South Container Terminal will increase Jeddah Islamic Port's container handling capacity from the current 2.5 million TEUs to four million TEUs by 2024.
“As an end-to-end supply chain solutions provider, a key part of our strategy is to package logistical services for our customers and bridge existing market gaps. Facilities like this logistics park will enable us to make deeper inroads into the Kingdom by extending our collaboration with leading logistics service providers,” Bin Sulayem added.
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Big deal for Jeddah port
The port-centric park will boost Jeddah Islamic Port's re-export activities and reduce the time and cost of logistics for importers and exporters. It will provide an integrated service platform that links port operations with last-mile activities. It will also offer processing, labelling, fulfilment, consolidation, de-consolidation, and temperature-controlled storage for cargo.
Omar Hariri, president of Mawani, said the park will provide advanced and eco-friendly e-services by integrating the operations of the South Container Terminal with the new logistics park.
“The authority's move to develop a holistic logistics park will enhance the competitiveness of the Jeddah Islamic Port. It will also contribute to raising the quantity of trans-shipped goods in line with the national strategy for transport and logistics services,” he said.
Hariri said this partnership will connect the port's operations to the new logistics park to offer end-to-end logistics services with high efficiency.
“It will also help us further expand our collaboration with major logistics service providers, enhance the re-export operations and cut costs of the logistics services to provide best-in-class services to stakeholders and investors,” Hariri added.
Strong bilateral ties
Atik Munshi, managing partner, FinExpertiza UAE, said DP World has made its mark globally as one of the most successful and efficient ports and logistics operator.
“With its experience locally and internationally particularly in Asia and Africa, DP World can deliver and Saudi Arabia has recognised this expertise and thus selected DP World to develop Jeddah port. This will also further enhance the already strong relations between UAE and the Saudi Arabia,” he said.
“Covid has boosted and triggered further demand for logistics and such demand is expected to continue in the foreseeable future, port facilities are an integral part which helps the last mile delivery,” Munshi told Khaleej Times.
DP World and global investment group CDPQ recently announced an investment of $5 billion in three DP World's flagship UAE assets. CDPQ will invest $2.5 billion in the Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park through a new joint venture in which it will hold a stake of approximately 22 per cent.
Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park through a new joint venture in which it will hold a stake of approximately 22 per cent.
Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, said the UAE and Saudi Arabia are two pillars of the GCC and rising bilateral ties between the two strong members will give a positive message not only to other Gulf members but also to the world.
“Saudi will benefit big way from DP world's expertise in port and containers handling,” Gianchandani said.
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