DSV and Saudi Arabia’s NEOM establish $10bn logistics joint venture
26 / 10 / 2023
DSV and Saudi Arabia’s ‘NEOM’ special economic zone have announced a $10bn logistics joint venture (JV) to support the development of NEOM projects.
The JV will focus on providing ground, sea and air logistics services for NEOM in the coming years.
Under the agreement, the joint venture will provide end-to-end supply chain management, development and investments in transport and logistics assets and infrastructure as well as transport and delivery of goods and materials within NEOM.
NEOM will hold 51% of the joint venture with DSV holding the remaining 49%.
NEOM envisions unparalleled demand for construction logistics to the end of 2031, with sustained growth in non-construction logistics thereafter.
In addition to its impact on the logistics landscape, the venture is expected to boost the Saudi economy, through infrastructure development and creating more than 20,000 job opportunities.
Nadhmi Al-Nasr, chief executive of NEOM, said: “The projected demand in both construction and non-construction logistics will make NEOM one of the largest customers in the world, and this partnership allows NEOM to create value from its demand.
“Working alongside one of the world’s leading logistics companies, the joint venture with DSV will build on expertise and know-how to drive innovation and sustainability throughout the logistics value chain.
“The economic benefit to this partnership will not only provide tens of thousands of jobs, but it will also enable growth to capture local and regional market share. It’s a living example of Saudi Vision 2030 in action, fostering job creation and building a future-leaning economy.”
Jens Bjørn Andersen, DSV Group chief executive, commented: “NEOM is one of the largest and most complex projects in the world. It provides a unique opportunity for DSV to support a development that is at the forefront of innovation, technology and digital transformation.
“DSV already has a strong presence in Saudi Arabia, and this is a significant growth opportunity for us in the region and we look forward to working with NEOM Company and bringing our logistics capabilities to the table.”
NEOM and DSV will use a portion of the JV’s revenues for the development of ground-breaking technologies and the commercialisation of new sustainable next-generation logistics solutions.
A dedicated innovation centre will also be established at NEOM’s clean and advanced manufacturing hub, Oxagon.
The JV builds on NEOM’s commitment to revolutionising Saudi Arabia’s logistics sector as the country works towards its Vision 2030.
Completion of the partnership is awaiting customary regulatory approvals, which are expected to be obtained in the second quarter of 2024.
It is not expected that the joint venture will have any material financial impact on DSV for the financial year 2023. It is expected that the return on invested capital be in line with DSV’s existing target.
NEOM is a smart and sustainable regional development and special economic zone in northwest Saudi Arabia that is being planned by the Kingdom of Saudi Arabia