Freight forwarder DSV and NEOM – Saudi Arabia’s mega project to construct a new urban area – have formed a USD10 billion exclusive joint venture to support the development the projects taking place.
The partnership will focus on providing logistics services for NEOM in the coming years. Under the agreement, the joint venture said it 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 percent of the joint venture with DSV holding the remaining 49 percent.
NEOM envisions unparalleled demand for construction logistics through to December 31, 2031, with sustained growth in non-construction logistics thereafter.
Jens Bjørn Andersen, group ceo at DSV, explained: “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 allocate a portion of the joint venture’s revenues to foster the development of new technologies and commercialise sustainable logistics solutions. The venture will also establish a dedicated innovation centre at NEOM’s clean and advanced manufacturing hub, Oxagon.
Completion of the partnership is awaiting customary regulatory approvals, which are expected to be obtained in the second quarter of 2024.
Nadhmi Al-Nasr, ceo 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… It’s a living example of Saudi Vision 2030 in action, fostering job creation and building a future-leaning economy.”
