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Saudi Arabia Anticipates More Investment in Kingdom’s Logistics Sector

Saudi Arabia Anticipates More Investment in Kingdom’s Logistics Sector

Saturday, 20 November, 2021 - 12:00
View shows the King Abdullah Financial District, north of Riyadh, Saudi Arabia, on March 1, 2017. REUTERS/Faisal Al Nasser

The Saudi market is bracing for the influx of more foreign and local investments in its logistics sector, especially as the world starts to recover from the coronavirus pandemic’s aftermath.

Meanwhile, experts predicted that giant Saudi entities specialized in supply chains and support, and logistics services will emerge because of alliances among small enterprises looking for a larger local market share.

On Thursday, Saudi Arabia handed over the first 32 logistic licenses for several international and local companies. The small and medium enterprises have investments in the Kingdom’s logistic services.

Experts confirmed to Asharq Al-Awsat that the local market will likely see more investments, especially with the announcement of signing an agreement to establish the largest integrated logistics zone in the Middle East at the Jeddah Islamic Port (west of Saudi Arabia) with investments exceeding 500 million riyals ($132 million).

Hussain Al-Zahrani, Chairman of the Aviation and Support Services Committee at the Jeddah Chamber of Commerce, told Asharq Al-Awsat that the logistics sector will witness a growth in the volume of investment flows in the coming period.

Zahrani pointed out that the growth is in line with the size of the Saudi market and the spread of large industrial areas in the Kingdom.

These areas need supply chains for many years, which means that the market is promising.

According to global expectations, the global logistics services market will reach more than 15 trillion dollars by the end of 2024, according to Zahrani, who stressed that the market was large.

Zahrani pointed out to the importance of the Saudi Cabinet approving the profit-sharing decision.

This will give a strong boost to investment, said Zahrani, noting that companies invest and the government shares profits without having fixed wages over the years. Such a plan helps in the presence of large entities, as firms suffer from long-term fixed rents.

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