Switzerland’s ABB Marine and Ports is setting up a local division in Saudi Arabia in a bid to expand its client base in the Kingdom as Riyadh’s plans to develop its shipping, ports and offshore sector gather pace.
In December, the Saudi Ports Authority (Mawani) signed concession contracts with global port operator DP World and the Red Sea Gateway Terminal (RSGT) regional port operator to develop and operate container terminals and use Jeddah Islamic Port as a regional hub for transshipment. Saudi Arabia’s Public Investment Fund (PIF) has also been busy and in January bought a 20% equity stake in Red Sea Gateway Terminal Limited, a privately owned independent terminal operator.
Jeddah’s Red Sea location has always made it of strategic importance to the worldwide shipping industry and an important link between Asia, Europe and Africa. In volume terms, more than 13% of all international maritime trade passes through there each year and the number of transhipment containers processed by the Jeddah Islamic Port grew by 12% last year, despite the global slowdown in trade brought on by the pandemic.
Partly thanks to this, in 2019 the Saudi authorities identified trade and transportation as central pillars of its $427bn National Industrial Development and Logistics Program (NIDLP) diversification initiative. Approximately $36bn of that total has since been earmarked for a mix of government and private spending across a range of ports, airports, rail and road infrastructure projects.
The NIDLP is also looking to tap into the Kingdom’s existing digitalisation agenda that seeks to use information technology and, increasingly, IoT to streamline licensing, registration, passenger and cargo flow, import and export financing. ABB’s new operation should give its Saudi-based customers the benefit of round-the-clock customer support from local engineers and access to its global predictive remote diagnostics and maintenance service.