Aramex is one of the region’s success stories. Its founder Fadi Ghandour has built up from scratch a company that now competes with large global brands such as DHL and UPS. The company has shown itself to be ambitious in its growth targets, pursuing expansion opportunities well beyond its Gulf and Levant home base. Its ‘asset light’ structure gives it more freedom than some of its competitors, able to negotiate better deals on warehousing on an annual basis.

But the challenges are numerous as it seeks to grow overseas. It is, for example, having to confront tough competition in certain segments such as freight forwarding and international express. Nonetheless, the big international players have so far been unable to match Aramex’s robust domestic express network.

The strategy of seeking out well-managed local players that are profitable and not asset-heavy appears coherent. Strong revenue streams means Aramex should be able to finance its growing international portfolio without too much discomfort. 

However, with such a strong Middle Eastern presence, it is no surprise Aramex has been impacted by the Arab uprisings. Services in trouble-hit economies including Egypt, Syria, Libya, Yemen, Bahrain and Tunisia have undermined earnings growth this year.

Egypt contributed an estimated AED155m ($42m) to group revenues in 2010, but this figure will be down substantially this year. Unrest in Syria, Libya, and Egypt cost it an estimated AED4.4m in earnings in the second quarter and 8 per cent lower profit growth, according to Bahrain-based Sico Research. 

Another factor that has dented profits this year,  which rose by just 3 per cent in the third quarter, is fuel prices. The company acknowledges that increased overheads are hitting hard, due in part to investment in new infrastructure, such as at Dubai Logistics City.

On the upside, revenues still look impressive, rising 19 per cent in the third quarter to AED545m. The company is still winning new customers and its ongoing expansion into new locations should bring the Aramex brand to a far wider audience over the next 10 years.