Logistics firm targets Saudi Arabia for expansion

25 March 2008
Global logistics provider, DHL has set aside AED1bn (US$272m) for investment across the Middle East and identified Saudi Arabia as the largest potential market for logistics providers in the region.

“There is no doubt that Saudi Arabia is the largest future potential market,” says David Christmas, managing director of DHL Middle East. “We estimate that as much as €1.2bn ($1.8bn) is available to third party logistic providers.”

DHL is seeking opportunities to grow its presence in the kingdom, where it already operates in partnership with the local Snas.

“We are looking at all industrial cities in Saudi Arabia,” Christmas told MEED on the sidelines of the MEED Gulf Logistics Forum in Dubai on 25 March. “That is where the focus needs to be.”

DHL recently secured four new sites in the kingdom, but poor transport links are the major obstacles to expansion. "Saudi Arabia's Achilles' heel is transportation," says Christmas. "Any logistics provider is struggling with transportation."

Last year, DHL signed a 10-year contract worth $467m with state-owned oil company, Saudi Aramco. The company also provides supply chain management services to the local Olayan Group.

Elsewhere in the region, DHL has signed a 10-year agreement with Dubai Industrial City to develop a logistics park in the emirate. DHL also owns a 55,000-square-metre site in the Jebel Ali free zone, and has recently secured a further 150,000 sq m in Dubai Logistics City.

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