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Jeddah - Yasmine El Tohamy - RIYADH: The Saudi logistics sector is poised for growth with DP World’s investment of SR900 million ($250 million) to build a distribution center at the Jeddah Islamic Port.

With this strategic move, the UAE multinational logistics company will also enhance its operational capabilities, providing more efficient and comprehensive services to its clients.

 Sunday’s announcement signals the start of construction on the quarter-billion-dollar project, which will be developed in two phases and is scheduled to open in the second quarter of 2025.

The park offers an in-land container depot with a handling capacity of 250,000 twenty-foot equivalent units and warehouse space of 100,000 sq. meters, said a press release.

Integrated with the recently awarded 30-year concession for the South Container Terminal, the state-of-the-art facility will bolster trade to enable Saudi Arabia’s strategy to become an economic powerhouse by 2030.

In June 2022, DP World and the Saudi Ports Authority, known as Mawani, signed a 30-year agreement, with an investment exceeding SR500 million, to construct a cutting-edge, port-centric logistics park in Jeddah.

The deal aims to develop the park, covering 415,000 sq. meters, featuring an in-land container depot capable of accommodating around 250,000 TEU and warehousing storage space totaling 100,000 sq. meters. Potential expansions could raise the storage capacity to 200,000 sq. meters.

The agreement was signed under the patronage of Saudi Minister of Transport and Logistic Services Saleh Al-Jasser, who is also chairman of the board of Saudi Ports Authority,

According to a statement from the Dubai government’s media office, the 415,000 sq. meter greenfield facility will include 185,000 sq. meters of warehousing space and a vast multi-purpose storage yard, establishing it as the largest integrated logistics park in the Kingdom.

The statement further mentioned that the park will accommodate over 390,000 pallet positions, providing customers with an efficient platform for the smooth movement of goods to and from Jeddah.

The collaboration between Mawani and DP World also includes the management of the South Container Terminal through a separate 30-year concession signed in 2020, the media office said in its release.

It added that the terminal is currently in the final phase of a comprehensive modernization project, scheduled for completion in the last quarter of 2024. This project will ramp up the handling capacity to 5 million TEU. 

“Saudi Arabia has always been a deeply important market for DP World, and this milestone represents our ongoing commitment to the Kingdom,” Sultan Ahmed bin Sulayem, chairman and CEO of DP World, said.

He added that Jeddah Logistics Park, strategically located on the vital Asia-Europe shipping route, will provide world-class multimodal connectivity and market access for customers while supporting the ambitious aims of Saudi Vision 2030.

“This investment marks a significant step as we mark 25 years of operations in Jeddah and underscores our enduring commitment to facilitating the flow of trade,” Sulayem added.

On the other hand, Mawani President Omar bin Talal Hariri highlighted that this new logistics area will be connected to DP World’s South Container Terminal at Jeddah Islamic Port, facilitating growth and increasing the number of containers handled at the terminal.

“The project is part of Mawani’s broader efforts to expand the number of logistics centers in Saudi ports, in partnership with major national and international companies, and in line with the objectives of the National Transport and Logistics Strategy and Vision 2030,” Hariri said.