Almajdouie Logistics has said higher fuel costs will eat into margins but that the company will leverage its expertise and assets to fulfil its commitments.

The Dammam-based company, which celebrated its golden jubilee in 2015, has some of the largest transportation fleets in the Middle East, terminals in key areas in Saudi Arabia and joint ventures and strategic partnerships with experienced international firms.

Almajdouie pointed out that the fall in oil prices was reflected in the Saudi fiscal deficit, resulting in price hikes for fuel and utility services.

“These unfavourable economic factors will definitely impact our operational costs and result in the fall of our margins. Having said that, as we are an asset-owned company with the largest fleet and facilities, we will be able to leverage our resources to fulfill our commitments to the main industries that are driving the Saudi economy and the region,” said Almajdouie Logistics chief executive Baheej Beqawi.

“We understand that 2016 presents us with even greater challenges in the ever-changing business and economic environment. As a result, we have to keep our prices competitive while maintaining the ‘added value services’ we provide our clients,” commented Beqawi, who took over last year, in remarks to Gulf Industry magazine.

Beqawi also said the company would continue to focus on developing its human capital and invigorating the safety culture.

Almajdouie offers complete onshore services ranging from transportation and freight forwarding to warehousing solutions and caters to diverse industries including oil and gas, petrochemical, infrastructure, utilities and fast moving consumer goods (FMCG).

Over the past two years the company added new clients to its portfolio in various sectors but acknowledged “these growth areas did not warrant the cash flow fluctuation due to delays or postponements of various infrastructure projects.”

Some 60 per cent of its business comes from handling logistics for the petrochemical and oil and gas industries, 20 per cent for FMCG and 20 per cent for others.

For petrochemical firms, Almajdouie provides on-site logistics, starting from silos and baggage management to production, planning, warehouse management, container-handling, drumming and filling, bulk loading, storage and shipping.

“Our joint venture with Sumitomo Warehouse Company of Japan – Rabigh Petrochemical Logistics (RPL) – has been instrumental in PetroRabigh’s expansion plan and the development of King Abdullah Economic City,” said Beqawi.

Another joint venture, MdR, is also active in the petrochemical industry. MdR, a JV between Almajdouie Group and De Rijke Group, is considered one of the largest petrochemical logistics firms in the world, handling over 10 million tonnes of product annually. It is also active in piloting Responsible Care in the region.

For FMCG, Almajdouie has been providing total supply chain solutions from inventory control, packaging and labeling to palletising.


PROJECTS SUCCESS

A highlight of 2015 was outsourcing by Sadara of its solids packaging centre activity to MdR.

Sadara, a pivotal joint venture between Saudi Aramco and The Dow Chemical Co of the US, is investing $20 billion on 26 plants. MdR is managing all on-site logistic operations, such as unloading of raw materials, internal transport, packaging and storage of finished products, loading of finished products and handling of containers and cargo for railways.

Almajdouie also has a hand in the logistics side of Ma’aden Alimunium where its services include transportation and warehouse management.

Almajdouie’s role in the Saudi Eastern Province’s and the GCC’s logistics industry goes back to the 1970s.  The company executed major cargo projects in the Eastern Region and has some ongoing.

The Saudi Western Region has also been an area of accomplishment for the company as it has participated in some of the largest projects in Jeddah, Jazan and Yanbu. Project cargo in the region accounted for more than 80 per cent of all such consignments handled in 2015.

The company is esteemed for its expertise in receiving and delivering project consignments, some of them very heavy and oversized. In fact, in 2012, it got itself into the Guinness Book of World Records for transporting the world’s heaviest item weighing 5,391 tonnes by road freight.

Last year it moved three transformers weighing 450 tonnes each and a 395-tonne generator from Jeddah Port to the Jeddah South Power plant, near Almajdouie’s Khura Terminal.

For the Shuqaiq steam power plant in Jazan its solutions comprised inter-coastal RoRo barge operations numbering 25 voyages. The services included customs clearance, handling transport and barge equipment, engineering, sea fastening and ballasting.

For a recent Clean Fuel Project in Kuwait, it offered fast and effective customs clearance, despite limitations in port infrastructure. Services included land transport of break bulk and containerised cargo and heavy lifting equipment. Typically, Almajdouie provides not only transportation of sometimes very heavy equipment but also installation.

In 2015, the company executed major cargo projects in the Eastern Region for clients such as Sadara, Kemya, Ras Al Khair, Shaybah, Wasit Gas Plant, Tasnee and Ma’aden Aluminium.

This year it moved 34 heavy and oversized units by road from Jazan Port to Jazan Economic City, 140 km away. It was part of a contract that included the moving of 20 units in 2015.

In addition to a large fleet of cargo vehicles deployed in hubs, Almajdouie has sky terminals covering a total of around 2 million sq m across Saudi Arabia. The company is also designing, developing and delivering best-in-class automation and optimisation solutions for new hospital concepts, warehouses and distribution centres.


JVS AND OPTIMISM

As well as MdR and RBL, the company has JVs including Star Marine Services, Sinotrains-Almajdouie Middle East, MaxxLogistics, Petrology and Almajdouie Kazemi. It also has strategic partnerships with Intrerbulk and Swiss Log, among others.

Petrology was launched in 2015 as a JV in Bahrain between Almajdouie Logistics, De Rijke and Sumitomo Warehouse. In the same year, Almajdouie Kazemi, operating from Kuwait, came into existence.  The company also opened an office in Japan.

Other Almajdouie highlights of 2015 were the initiative Amaan to reinvigorate the safety culture at work and at home, winning of the Scata manager of the year award and certification as an Integrated Management System (IMS) company.

Despite the latest economic troubles, Beqawi exuded optimism: “With our 50-year-old legacy of being resourceful and reliable – the foundations of our success – we are able to fulfill our vision to be the region’s most trusted partner.” – TradeArabia News Service