Kuwait's Agility said it will invest 611 million Saudi riyals ($163m) to build a warehousing complex near Jeddah, after Saudi Arabia rolled out a new initiative aimed at attracting global industrial companies to the kingdom.
The logistics park project for storage and distribution is part of a land-concession agreement announced by Saudi Arabia’s State Properties General Administration (SPGA), Agility said in a statement on Thursday.
Construction on the Agility Logistics Park will start in the first quarter of 2023 and the opening is scheduled for the first quarter of 2025, the company said.
The facility in Jeddah will serve international and local tenants in the retail, consumer goods, technology, automotive, energy and e-commerce sectors.
“Agility’s Jeddah complex will accelerate Saudi economic growth and make it easier for international and local companies to expand in the kingdom,” said Michel Saab, chief executive of Agility Logistics Parks and Global Operations.
“Ultra-efficient warehousing and distribution are a huge competitive advantage. Companies operating from these parks shorten their time-to-market, reduce cost and risk, increase inventory turns and boost productivity.”
The move comes after Saudi Arabia introduced the Global Supply Chain Resilience Initiative (GSCRI) to attract industrial players and to shore up 40 billion riyals' worth of investments in the first two years of the launch.
Under the GSCRI, launched by Saudi Crown Prince Mohammed bin Salman, the kingdom will earmark 10bn riyals for financial and non-financial incentives for investors.
Under the terms of its agreement with SPGA, Agility has the right to operate the park for 25 years.
Agility currently operates several logistics parks in the kingdom, including the 870,000-square-metre Agility Logistics Parks in Riyadh and the 200,000-square-metre logistics park in Dammam.
“The SPGA is studying its real estate portfolio and working towards transforming its assets into lucrative investment opportunities by providing suitable property for sustainable, pioneering projects with private-sector partners,” SPGA governor Ihsan Bafakih said.
This week, Saudi Arabia opened its first Special Integrated Logistics Zone at King Khalid International Airport in Riyadh to boost its cargo capacity, bolster supply chains and become a global logistics hub.
US tech company Apple is among the first tenants at the three million-square-metre area that is designed to attract the world's top multinational companies from sectors including electronics, technology, pharmaceuticals and aerospace components.
Saudi Arabia is also undertaking feasibility studies for additional Special Integrated Logistics Zones in Jeddah and Dammam.
