Saudi Arabia’s first and only major privately-owned port is expecting dramatic growth after the kingdom last week unveiled a vision to wean its economy off oil.
The King Abdullah Port, which sits on Saudi’s western Red Sea coast and began operations in late 2013, “represents the future of maritime business,” Abdullah Hameedadin, the managing director of the port’s owning firm told the Saudi Gazette.
The King Abdullah Port is around 160 kilometers away by road from Jeddah, the kingdom’s second city and major trade hub. It is jointly owned by the Saudi branch of Dubai mega-developer Emaar, which built the Burj Khalifa, and the Bin Laden Group, a Saudi building conglomerate.
Saudi’s other major ports are state-controlled, while the King Abdullah Port, which is part of the huge King Abdullah Economic City megaproject, operates independently of the kingdom’s ports authority.
Hameedadin believes that Saudi Arabia’s plans, which include plans to develop non-oil sectors such as mining, manufacturing, retail, tourism, pilgrimage, and healthcare, put his port in a prime position to capitalize on the upcoming changes.
Saudi’s strategy, unveiled by its Deputy Crown Prince Mohammed bin Salman, also envisages developing the country as a logistics hub for East-West trade, becoming a financial services center, localizing defense manufacturing, and enabling more small and medium-sized enterprises.
The port has a three-pronged strategy: to increase its container handling, expand facilities needed to ship and unload cars and trucks - referred to in the industry as roll on, roll off cargo – and build more storage capacity for bulk commodities.
“Our plan is to boost capacity to 7 million TEU of container handling,” said Hameedadin, a reference to container ship capacity.
More storage includes temperature-controlled facilities – a key industry in a country which imports most of its food. The port has already signed on Almarai, the region’s biggest dairy firm.
The food industry “has already shown signs of growth at the port,” he told Saudi Gazette.
The two most “significant” exports currently handled by the port are petrochemicals and construction materials.
Around three-quarters of the port’s revenue is through transshipments – goods in transit to another destination. Another quarter directly handles exports.
As well as Saudi’s new vision, Hameedadin is banking on the port’s strategic location along the Suez route, which saw close to 17,500 vessels pass through last year, and the kingdom’s fast-growing population to boost growth.
“Population growth is one of the most significant factors in predicting increased consumption of goods, so [port] is perfectly situated to serve the kingdom and the region,” he said.SHOW MORE