EVENT GUIDE 2020

NOTES Saudi Arabia

88 www.saudimaritimecongress.com RSGT saw container throughput rise 24%, to 1.94m teu in 2019 Seatrade Proof High Resolution PDF

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introduced at bonded and re-export zones at JIP, King Abdullah Port and Dammam Port, allowing for ‘light manufacturing activities’ to promote value addition. Dammam Port’s Terminal 1 Customs processes in Dammam, as elsewhere in the Kingdom, appear to have improved dramatically, with dwell times down from On the cusp 10 days to four, a sizeable reduction of six days, according to SGP officials. Jeddah’s LogiPoint and RSGT, as well as Dammam’s of opportunity Saudi Development and Export Services Company (SDES), are among the main beneficiaries of the new system. Seatrade correspondent Peter Shaw-Smith travels to the Kingdom of Saudi Arabia to interview Elsewhere, the new IMI (International leading shipping and port officials on the country’s Maritime Industries) shipbuilding and repair yard at Ras Al Khair on Saudi ambitious maritime and logistics plans. Arabia’s east coast, is also making its mark on maritime activity in the Kingdom. It is expected to be fully ready in around 2022. he future of the Saudi maritime, Total port throughput at Dammam is ports and logistics industries believed to have been 1.8m teu last year, Until then, some 160 apprentices is generally considered to be compared to a total capacity 3m teu. SGP is and engineers will participate in the Textremely bright thanks to understood to have handled around 500,000 construction of a VLCC ordered by IMI a number of factors. Macro-economic teu in the second terminal, up 25% over the joint-venture partner Bahri, for delivery in indicators point to the country’s strong previous year, and SGP officials said they late 2021, at the yard of another partner, economic growth buoyed by greater were ‘very optimistic’ about the prospect of Hyundai Heavy Industries; national oil government spending, especially from winning the second concession in Dammam. major Saudi Aramco - fresh from its world the Public Investment Fund, allowing record-beating $2trn IPO in December - is a predominantly youthful population The precedent of Red Sea Gateway the fourth partner in the joint venture. to enjoy strong GDP per capita. On Terminal (RSGT) having successfully won exports, the Kingdom is seeking to the concession to operate North Container In the offshore sector, Zamil Offshore has reduce its dependence on oil revenues Terminal alongside its existing RSGT consolidated its fleet, reducing the size from but the petrochemical market will facility at Jeddah Islamic Port (JIP) is around 75 vessels to just under 60. It has continue to mature, offsetting lower perhaps pertinent, as it suggests that the also signed a memorandum of understanding commodity prices. Saudi Ports Authority may be following with IMI, which is likely to lead to greater a strategy of consolidating the number of employment opportunities for Saudi This year’s Saudi Maritime Congress taking operators in order to improve efficiencies engineers, technicians and naval architects. place in Dammam will celebrate some of the and streamline handling processes. A new maritime law in the Kingdom opportunities that lie ahead for shipping, mandates that vessels involved in cabotage but before then an important decision looms However, landside port players say they fly the Saudi flag, and Zamil expects at local port Damman concerning the new prefer a situation where there are two opportunities for work and employment to concession for Terminal 1, which may be incumbents in Dammam, as this provides increase as a result. decided as soon as the second quarter. price competition as well as choice, and avoids any monopoly situation. With RSGT preparing to run a container Currently Dammam’s Terminal 1 is operated terminal at JIP with capacity of 5.2m teu, by Hutchison Ports Dammam, while a Meanwhile, Saudi Customs has won plaudits and the new concession at Dammam Port second terminal at the port is run by Saudi for implementing improvements which have likely to lead to improved performance Global Ports, a joint venture between the led to a significant reduction in inspections there, industry executives are confident that KSA’s Public Investment Fund and PSA and cargo clearance time at the Kingdom’s the Kingdom’s maritime sector is on the International (see following articles). ports. In particular, new regulations have been cusp of turning an important corner. •

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RSGT boosts traffic, Floe said the advancement of plans for the Saudi Landbridge, a rail link from Jeddah to Riyadh, would revolutionise the looks to the future contribution of the west coast to Saudi Arabia’s overall ports business. •

DP World renews Jeddah concession

DP World has had its 30-year concession to operate South Container Terminal (SCT) at Jeddah Islamic Port renewed by the Saudi Ports Authority (MAWANI), having surpassed promised productivity to date and successfully handled a number new-generation A mock-up of the future combined operations of RSGT and NCT at Jeddah Islamic Port mega-vessels during the past year, according to Mohammad Al Shaikh, ceo of DP World Jeddah. eddah-based Red Sea Gateway The physical process of upgrading this Terminal (RSGT) had a banner facility will take a couple of years, to get Total container throughput at SCT year in 2019, with overall container everything correct. It will take the immediate increased 14% last year to 1.69m teu, Jthroughput up 24%, to 1.94m teu. capacity to around 5.2m teu,’ he said, adding thanks to strong import-export volumnes. Transhipment, at 956,640teu, was up 26% future capacity could reach 8.8m teu. while imports and exports also grew by Under the new agreement signed in more than 20% each. ‘Until now, Ocean Alliance [calls at JIT] had December (pictured), DP World is been split between RSGT and NCT, and the to invest up to $500m to improve and RSGT ‘outperformed the market’ and like same for PIL,’ he explained. ‘It’s not optimal modernise the port, including major Saudi Arabia in general had ‘a really good for the shipping lines that business is split infrastructure development for ultra- year’ in 2019, ceo Jens Floe told Seatrade. between two different suppliers, and on local large container carriers. Capacity will ‘We make the bulk of our profit on high-yield import-export, it’s inconvenient having to deal be upgraded from 2.4m teu to 3.6m import and export cargo,’ he added, while with two customs areas, depending on which teu, modern gantry cranes will be ‘transhipment offers low contribution margins vessel your cargo came in on. … Efficiencies are installed, draught deepened to 18mtr, and is fiercely competitive in this region.’ part of the game going forward.’ plus gate automation, yard automation, and advanced IT systems installed to The split between different Saudi ports on Floe said significant restructuring has enhance terminal performance. import and export is well established and taken place in the Saudi port industry has been ‘stable’ in recent years, Floe added. over the last couple of years, especially in MAWANI has also implemented ‘You have King Abdullah Port, with some of customs, processes and the Fasah (customs several measures to ensure faster the petrochemicals that is up in the North, reconciliation) system. Saudi has also made turnaround of containers from the port, but there’s very little import-export, though strong strides in digitalisation and processes he added, including a 24-hour customs they do transhipment. Then you have improvement. ‘Our dwell times have gone clearance, reduced manual paperwork Jeddah [Islamic Port], which services the down, since I came three years ago, from requirements and pre-arrival electronic Mecca region, and Dammam, which services around 12 days to around four, four-and-a-half submissions enabled through the ‘Fasah’ the east coast and Riyadh.’ days,’ he said. ‘The most efficient customers single window platform. can clear the cargo the same day now.’ In late December, RSGT officially announced the consolidation of North He said the truck queues that had blighted Container Terminal (NCT), previously port access in the past had disappeared. ‘We managed and operated by Gulf Stevedoring have automated gates now, but the port and Contracting, a unit of the UAE’s community system does not at the moment Gulftainer, into its operations at JIP. facilitate truck appointment. So new systems are expected to be implemented this year and ‘The takeover is now due to take place on that will, from our side, further facilitate April 1,’ informed Floe. ‘We are doubling our efficiencies. We don’t have congestion anymore, space and adding another 40-45% volume. but it will further facilitate traffic flows.’

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for development depends on the possibility Saudi Global Ports of consolidation in Dammam Port, as well as market demand. Generally, SGP will develop the phases well in advance to meet ‘in it for long term’ future market needs.’ Improvements in Saudi customs handling audi Global Ports (SGP), Meanwhile, gateway and transhipment have led to a reduction of dwell times in the expects greater import growth as dynamics in East and West coast ports port from 10 days to less than 5 days, while the Kingdom embarks on greater are evolving. ‘In the short term, we do introduction of the Fasah system, as well as Soil diversification projects, while not expect to see changes in the gateway SGP’s participation in the CrimsonLogic consumer consumption is also expected to hinterland for East and West Coast.,’ Tah trade-facilitation platform, has also reduced grow, particularly related to the tourism added. ‘Dammam will continue to service documentation needs and improved manual industry and organic growth. the import market for Riyadh. For export, box inspections rate at SGP to 10-15%. Dammam will continue to be a competitive Introduction of a truck appointment system ‘SGP is here to stay for the long term, as the option for shipping lines and shippers to to improve turnaround time and match vision is to develop the terminal’s facilities export the petrochemical commodities.’ terminal operations during peaks and lulls in advance to cope with the expected has also been beneficial. growth. Planning and building a future- ‘As for transhipment, the Red Sea is ready terminal is a long-term project, and well positioned to service the Asia, Tah also commended the Saudi Ports SGP is positioned to support Saudi Arabia Mediterranean, and Africa market regions. Authority (MAWANI) for its greater as a growing market in the long run,’ ceo We expect more shipping lines to use Red involvement in reducing logistics costs. Edward Tah said. Sea ports as a transhipment point to these In 2019, he said he had seen a reduction destinations. Nevertheless, SGP has been in terminal handling charges for imports A joint venture of Singapore-based global exploring with various shipping lines to of empty containers at Jubail, and a 57.5% port operator PSA International and Saudi provide transshipment services to Upper reduction at Yanbu Port. Lower inspection Arabia’s Public Investment Fund, SGP was Gulf countries.’ charges at Dammam Port, coupled with the awarded a concession to build and operate consolidation of operators at Jeddah Islamic the second terminal at King Abdulaziz Port Tah said he doubted whether the growth Port, held out the possibility for greater port in Dammam in 2012. Tah himself started of Saudi ports would ever threaten Jebel investment, he said. his career with PSA in Singapore in 2007, Ali’s position as leading port in the region. joining SGP as head of operations in 2013; ‘Equipped with state-of-the-art equipment, Manpower considerations are also important he took over his current position on mega-vessels are able to make direct calls for SGP. ‘We are looking to recruit and train January 1, 2019. at our terminal in Dammam, providing an more Saudis into the company. At present, alternative option for shipping lines in the our Saudization level is at 35% and our target Last year, SGP made good headway, Gulf region. However, the UAE and Eastern is to achieve more than 50%. In addition, in with the introduction of mega-vessels in Region of Saudi Arabia services are serving line with the kingdom’s direction, we will the current MEA5 service generating different markets. SGP’s immediate aim is to continue to recruit female employees to our more throughput. service local import and export cargo better company,’ he said. and more efficiently.’ ‘For the whole year, throughput registered ‘We have plans to introduce a higher around 471,000 teu, which was within SGP has completed Phase One work level of automation into the terminal, expectations,’ Tah said. ‘Notably, SGP on the terminal, bringing capacity to with equipment such as automatic yard experienced higher Riyadh import volume 900,000teu, and has the option to build out gantry cranes and possibly prime movers due to greater consumption in the Kingdom. a second phase, to double this to 1.8m teu, in the future. Working closely with PSA In the last quarter, geopolitical issues affected depending on concession arrangements International, we will be providing more exports slightly, but this is not expected to be and market demand. ‘There are still plans innovative cargo solutions to the shipping a long-term downward trend.’ to develop SGP,’ said the ceo. ‘The timing community,’ he concluded. •

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King Abdullah Port expands

On its first visit to the Kingdom, the 23,656teu MSC Mina berthed at King Abdullah Port (KAP) last October. Hutchison Ports Dammam saw throughput rise 25% in 2019 The call represented an affirmation of the port’s ability to handle the world’s largest ocean-going boxships, the Panama-flagged vessel measuring Hutchison Ports 400mtr in length, 61mtr in breadth with a draught of 16.5mtr.

Today, 28 Liebherr cranes are being Dammam sees installed at the port in a new phase of container terminal expansion. KAP’s owner, the National Container growing volumes Terminal Company, signed a Memorandum of Understanding in utchison Ports Dammam is the chairs, 1km away from operations, in an 2018 to coincide with the official largest import-export terminal air-conditioned area. Each crane is equipped opening of the port by Crown Prince in the Kingdom handling over with cameras that scan the profile of the Mohammed bin Salman. The work of H25% of total gateway cargo, containers on deck to provide the optimal technical teams currently installing and with a 78% market share of the total arc for the container being offloaded and the cranes is expected to be complete laden import volume of Eastern Province. guarantees a higher level of safety and lower early this year. Annual container throughput stands at risk for all concerned. New refers to the just over 1m teu. cranes as ‘a quantum leap forward for port Opened in 2013, KAP occupies a services in the Kingdom’ and confirmation total area of 17.4sq km and is situated Last year proved ‘very successful’ with of HPD’s commitment to offering the adjacent to King Abdullah Economic throughput growing by more than 25% highest possible levels of service at the port. City’s Industrial Valley and re- over 2018, HPD ceo Jay New told Seatrade. export zone. The port is expected ‘Hutchison Ports Dammam is the only HPD has also invested in providing supply to contribute to the promotion of gateway for ro-ro units in the Eastern chain services through its partnership with the Kingdom’s role in the fields of Province of Saudi Arabia, he added, with the Saudi Development and Export Services trade, logistics, and shipping. When that traffic ‘up about 21%’ year-on-year.’ Co. (SDES) in which Hutchison Ports complete, KAP will be able to handle holds shares. SDES operates an integrated 20m teu, 1.5m vehicles, and 15m HPD has been the terminal operator at King bonded warehousing, storage and cargo tonnes of clean bulk cargo a year. Abdulaziz Port in Dammam since 1997 and handling facility inside Dammam Port, has cumulatively handled more than 23m teu situated less than 1km from HPD terminal during this time. It is the Eastern gateway infrastructure. ‘With the new changes in MSC Mina – largest vessel to call KAP to the Kingdom, for both local distribution customs practices, a bonded facility is a and with quick access to Riyadh through valuable asset offering deferred duty and three railway lines, connecting Dammam VAT payments,’ New explained. Port to Riyadh. At its 116ha site, it operates seven container berths, three multi-purpose The future is large in many ways for Saudi berths and has a total of 17 quay cranes and Arabia,’ Andy Tsoi, Hutchison Ports Middle 53 rubber-tyred gantry cranes. It has its East and Africa md has said, suggesting the own dedicated customs inspection area with group might need to eventually provide separate facilities for dry, dangerous and capacity of 3m teu in the country. In the reefer cargo inspection. meantime, Hutchison Ports will ‘continue to work closely with the Saudi Ports Authority The terminal has brought the latest port to invest in technology, automation and technology to the Kingdom, putting it at human capital in Saudi Arabia, ensuring the the forefront of Saudi port development. Kingdom remains on track to achieve its Its remote-controlled gantry cranes allow targets under the Vision 2030 programme,’ operators to sit in comfortable ergonomic he pledged. •

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Bahri bucks difficult market

he National Shipping Company The company expanded its market presence the future,’ he said. ‘In addition, employees’ of Saudi Arabia (Bahri) saw in December when its multipurpose vessel welfare and development was one of the revenues increase last year, as Bahri Jeddah made its maiden call at two of prime goals, and several initiatives and Twell as a jump in annual profits, India’s leading ports, Ennore and Chennai, actions [have been] taken in line with despite worsening conditions in the global offering direct calls from South India to international best practices.’ tanker market as the year wore on. the US East Coast. The ship is owned and operated by Bahri Logistics, which deploys Gender diversity is another focus for the ‘2019 was another challenging year for a fleet of six multipurpose vessels on a company and as a result its Saudi-based female Bahri, but the company managed to regular liner schedule, all designed to carry workforce increased by more than 800% overcome all hurdles and achieve [its] goals,’ project, breakbulk and container cargo, as last year. The company was also involved in ceo Abdullah Aldubaikhi told Seatrade. ‘To well as heavy lifts, special purpose vehicles, several CSR activities in 2019, intended to further reinforce [its] leadership position in and mining equipment in a single voyage, develop young local talent in the maritime this sector, the company strengthened its the company points out. industry by providing practical training for internal structure and capabilities, focusing both on and offshore jobs, and partnered with on long-term sustainability and growth. In January 2020, Bahri’s General various platforms to support this cause. Assembly appointed a new Board for the ‘Vessels were deployed wisely, monitoring next three years, mostly comprising re- In December, Bahri joined the Maritime market response and trend, maintaining elected members. The move will smooth Anti-Corruption Network (MACN), to operational efficiency and optimal implementation of ‘the company’s strategy fight against malpractice at a global level, utilization, he added. ‘New business and development plans during this year,’ ‘reaffirming our resolve to work with contracts and partnerships were also Aldubaikhi said. ‘Bahri is headed by a all stakeholders in tackling bribery and executed during 2019.’ visionary leadership and strong financial corruption, as well as promoting free, fair support, focusing on business diversity, and open competition in the maritime Bahri recorded a strong financial performance growth and sustainability.’ sector,’ said Aldubaikhi. last year. The company’s full-year net profit jumped 29% to SAR621m ($85.5m) from He added Bahri was one of the earliest ‘We are confident that the collective efforts SAR481m the year before, and total revenue maritime companies to voluntarily of MACN will accelerate the development reached SAR6.1bn, up 7.1% year-on-year. implement ISO 50001:2018 Energy of a safe and sustainable shipping and Fourth-quarter net profit surged 172% to Management standards across its fleet, trade ecosystem.’ The company also SAR249m, up 172% y-o-y, on total revenue in addition to holding existing ISO recently became a member of the World that had increased 8.9% to SAR1.9bn. 9001:2015 and 14001:2015 operational Economic Forum. excellence certifications. Bahri’s fleet is today comprised of 88 ‘Bahri has ended 2019 with renewed hope vessels: 42 VLCCs, 30 chemical carriers, ‘The company has partnered with Lloyd’s and aspirations, confidently continuing our five product tankers, six ro-ro vessels and Register to help analyze and build on its journey through an era full of opportunities five dry bulkers. In addition, four dry bulk existing safety culture so we can continue to to stimulate the growth of global trade newbuilds are on order. uphold our outstanding safety record into movement,’ the ceo concluded.•

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Norabic thrives changing to an emphasis on chartering tonnage in. ‘It’s a mixed bag of things because sometimes you own some vessels 100%, via partnership some you have on partnership, and some are rented in the market. The shipping market has been volatile for several years now and there’s been a lot of di culties. Many owners are moving from traditional ship-owning to being asset-light players,’ he said.

A trade war between China and the US was having an adverse e ect on the charter market, he said, because in normal times half the world’s dry bulk tonnage is China- bound. Jeddah was becoming an important bunkering centre due to tightness of fuel markets, he added.

Petrochemicals exporters Sabic and Ma’aden dominate Saudi dry bulk trades, he continued, as well as an oversupply of clinker, which Saudi producers are looking Norabic has access to 70-80 Norden tankers on charter to export, often to India, South Africa, and Bangladesh, an economy which is said to be booming at the moment.

hen local businessman a strong, well-known partner would, of ‘Today, some 8-9m tonnes of clinker a year is Khalid Al Shathri decided course, create many opportunities.’ being exported, mostly from King Abdullah to set up his own shipping Port, on the west coast. Grains and iron ore Wcompany a decade ago his ‘Norabic is a joint venture between Alrayn for Saudi steel-maker, Hadid, are moving goal was to increase professionalism in Maritime and Norden, which controls over into the east coast. Some 5-6m tonnes of the Saudi shipping industry. To do this, 300 bulkers and tankers.,’ he continued. ‘The sulphur and pet coke for Aramco and Sabic his preferred route was to bring in foreign split is 70-80 tankers and the rest are dry are going out of Jubail and Yanbu.’ expertise. Norabic, a joint venture of bulk… from handysize, which is typically Danish shipowner Dampskibsselskabet 32,000dwt ships, up to panamax at around Previously Gaceb worked with international Norden A/S and Saudi Arabian shipping 80,000-82,000dwt. That’s our scope of work.’ shipping company Clipper Group in company Alrayn Maritime Co, was duly Denmark, and the close-knit nature of set up in 2015. In dry bulk, main commodities are grain the shipping fraternity in that country and steel products, various types of ores, enabled him to take up the opportunity with The business model envisaged taking up coal, fertilizer, cement clinker, sulphur, salt, Norabic, via Norden, in 2015. He remained shipping transportation opportunities bauxite and alumina. Common liquid bulk coy on whether Norabic would change its that could not all be dealt with by existing commodities are clean products like gas oil, stance on ownership if market conditions player Bahri (National Shipping Company gasoline, jet fuel, naphtha, ethanol, as well as improved. ‘That is of course under of Saudi Arabia). Given the increasing dirty cargoes, such as fuel oil and crude oil. discussion, and something that is up to the industry willingness to adopt an ‘asset-light’ Norabic also carries vegetable oil, molasses, board to decide. There are several scenarios business model, chartering has become focus palm oil, and caustic soda and other easy in the future,’ he said. • of Norabic’s business, giving it access to 300 chemical grades.

Norden vessels, as well as others available on Majority of business is dry bulk the open market. Norden vessel sizes range ‘Norabic focuses on local Saudi-controlled from handysize to panamax, while Norabic clients, like Almarai, Ma’aden, Sabic and charters in tankers up to 55,000dwt in size. Saudi Aramco,’ Gaceb explained. ‘Any Saudi-controlled freight is handled by ‘There are two shipowning companies in this o ce. The whole purpose of creating Saudi Arabia today, Bahri and Norabic,’ Norabic was to add value for Saudi clients, Riad Gaceb, Norabic’s senior chartering and to have a local presence.’ manager, told Seatrade. ‘You only had one player, and at that time our local owner Mirroring a trend in other transportation wanted to increase local presence. Getting sectors, Gaceb said vessel ownership was

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IMI readies first yard zones A rendering of how IMI could look as early as 2022

nternational Maritime Industries our responsibility to cater to our customers, common work that is needed for either (IMI), the ship construction and repair like Bahri, and others’ requirements. So ship construction or fabrication, he yard being built on Saudi Arabia’s we are happy to support them through our continues. ‘As a matter of fact, that’s part Ieast coast at Ras Al Khair, anticipates partners,’ he said. of our competitive advantage, that we are the handover of Zone D, for offshore rigs combining in a very advanced technical newbuilding, and Zone C, for commercial Building on a memorandum of way some of the common work for both. vessels newbuild, respectively in late 2020 understanding signed in June, Saudi Whatever is manufactured in fabrication and early 2021. shipowner and IMI jv partner Bahri will then move to the dedicated area for signed a Vessel Purchase Agreement last vessels, or the rigs area.’ Full build-out of all facilities is expected to September with IMI, and Hyundai Heavy be complete in around 2022. Industries (HHI) as subcontractor, to build In addition to IMI, the King Salman yard is a 319,000dwt VLCC at the South Korean also intended to host American oil and gas ‘The internal readiness for IMI to operate shipbuilder’s Ulsan yard, for delivery in contractor, McDermott, and a ship engine the yard, I would say, is, all in all, in good October 2021. HHI is another of IMI’s manufacturing facility. IMI will also benefit shape,’ Taher Al Dabbagh, IMI’s svp - four shareholders, as are Saudi Aramco from plans for a rapid increase in maritime corporate services, told Seatrade. The and Lamprell. training in the kingdom. shipyard itself was also progressing well, he said, with the different zones due to be ‘The VLCC newbuild in South Korea ‘We have a plan to have 5,500 graduate completed within schedule. will have a big contribution from Saudi apprentices by 2024, qualified in nine manpower,’ said Al Dabbagh, adding that IMI different disciplines, such as pipe-fitting, ‘While the yard is under construction, and anticipated sending ‘around 160 employees, welding, mechanics, instrument technicians, we are preparing our operational readiness… apprentices and professionals’ to Korea to electrical technicians, scaffolders, heating, we are also in the market,’ he added. ‘We participate in the tanker’s construction. ventilation and air conditioning (HVAC) have a collaboration agreement with technicians, riggers and crane operators. All companies like Dammam Shipyard, and ‘They will have training, especially the are Saudis,’ the svp detailed. started some MRO (maintenance, repair & graduate apprentices,’ he continued. ‘When operations) business jointly.’ the yard is ready, they will return with ‘A big part of this project is nationalization. hands-on experience, to give us a stronger We will have the first batch of 700 Al Dabbagh said he expected Zone C, for push for construction of the No.2 and No.3 graduating in March this year and we will the construction of commercial vessels, VLCCs, when the time comes.’ deploy them into different places. The to be ready in early 2021. ‘[Although] the second cohort of 700 trainees was accepted yard is not 100% ready, we will not cease Zone C is to be a joint zone for basic in November 2019.’ •

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• • • • • • • • • • • • • • • • • • • • •

064 SMR20-1 GAC.indd 1 17/02/2020 11:13 MIDDLE EAST SAUDI ARABIA Alblagha optimistic on future work prospects

Alblagha Industrial, owned by Saudi Alblagha Industrial has a presence in in recent years on marine and maritime, Arabia’s diversified Al Blagha Group, is most Saudi ports ‘but the main facility including an emphasis on localization and in- confident of winning new work in coming is in Dammam - and it’s not limited to Kingdom total value, where the challenge is ‘to years, and signed a joint service agreement ship repair. It has some aspirations in improve quality and competitiveness.’ with International Maritime Industries, shipbuilding and has [launched] its oil and the new super-yard at Ras Al Khair, which gas services division,’ according to group ceo ‘King Salman maritime complex is not promises to revolutionise yard operations in Eng. Fares Al Balwi. only a facility, it is an ecosystem for the the Kingdom, in 2019. maritime industry. For companies like us, Regarding the new Saudi mega yard having 27 years history in the maritime Alblagha Industrial complex, he mused: ‘Is IMI an opportunity industry, with 11 years in ship repair, this began operating Jeddah or a challenge? We signed a joint service complex presents an opportunity given our Shipyard in 2008 and agreement in 2019. Its spirit is to collaborate early mover advantage and the value we took over management so that we and IMI can work together in can add there.’ • of Dammam Shipyard actually doing

in 2012. It also carries maintenance and Alblagha Industrial manages and operates out engineering engineering work in ship repair yards in Dammam and Jeddah services, rig and OSV the yard on rigs and Eng. Fares Al Balwi, repair work, and ships. There is only Alblagha Group chief executive operates two floating a limited number docks at Dammam of companies who Shipyard. In recent months, the shipyard specialise in what appointed a new managing director, British we do - and I believe executive Darren Edwards. in the long-term prospects of the Through its Maritime Company for business.’ Navigation (MACNA) subsidiary, Al Blagha is also a shipowner and operator, with a Al Balwi said there fleet of vessels based in the Red Sea and was a new and more operating from the ports of Jeddah, Yanbu, general focus in the Diba and Jazan. government’s strategy

Saudi Landbridge Project looms closer

After being stuck on the drawing board for Last October, it was reported that the Saudi SAGIA said. ‘The train will have the a decade, it looks as if the work on the Saudi Railway Company had signed a new MOU capacity to carry up to 400teu. It will also Landbridge project linking the Red Sea port with China Civil Engineering Construction be involved in passenger transport and of Jeddah to Al Jubail on the Arabian Sea Company to implement the whole project serve millions of passengers every year. The may finally be about to get underway. for an agreed value of $10.6bn. Landbridge project is expected to carry 35-40 freight trains and five to six passenger To recap, Italian rail consultant Italferr The Saudi Landbridge Project is envisaged trains per day.’ won a contract from the Saudi Public as paving the way for the first direct link Investment Fund to extend detailed design between the Red Sea and the Arabian Gulf. Unconformed reports suggest that the work back in 2017. Then at the Saudi According to an official Saudi Arabian Hyperloop concept may be under study for Maritime Congress in 2019, transport General Investment Authority (SAGIA) the Jeddah-Riyadh route. Last year, the BBC minister of the time Nabil Al Amoudi said document published in 2018, some 950km of quoted US company Virgin Hyperloop One that the Landbridge was a ‘key project’ due new railway line is planned between Jeddah as saying technology could reduce a journey to be undertaken ‘in the next few years,’ and Riyadh, and another 115km of track from Riyadh to Jeddah to 76 minutes, adding that the government had signed between Dammam and Jubail. compared with more than 10 hours currently. an MOU with China Civil Engineering Construction Corporation, a unit of China When the line beomes operational, ‘over 8m Officials working on the project told Railways Corporation, and a Saudi company, tons of freight cargo would be distributed in Seatrade they were unable to share any to study further project development. Saudi Arabia and neighbouring countries,’ further information until March. •

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parts you bring in, you can do all Value- Added Services prior to re-export.

‘You don’t need to clear the goods to re-export them,’ he added. ‘Today, value addition can be done without registering a legal entity in the country. In the Free Zones in neighboring countries, you must get a company registered in the free zone. Here you can do this without even Farooq Ahmad Shaikh, LogiPoint CEO registering your company.’

Logistics space is also fast becoming a big consideration in Jeddah, especially in the south of the city. LogiPoint has set up two LogiPoint eyes fresh logistics facilities there: Logistics Park Modon 1, spread over 120,000sq mtr is located in the heart of the Jeddah Industrial logistics opportunities Area, close to the Jeddah Islamic Port, and Logistics Parks South Jeddah, spread across 662,900sq mtr and located in Al-Khumra, he introduction by Saudi and prefer not to channel products to the second largest logistics hub in the Customs of allowing ‘Light market all in one go. Kingdom. Shaikh said these parks operate Manufacturing Activities’ in the on a different model to the BRE, with focus Tcountry’s bonded and re-export ‘One of the global tech giants is benefiting being on efficient storage and handling of raw zones (BRE) is set to revolutionize the from using LogiPoint BRE as a regional materials as well as on effective handling and efficacy of these Saudi BREs, creating a assembly and distribution facility for their distribution of finished products. value proposition similar to so-called ‘free products. Luxury automobile brands carry zones’ in the UAE but with perks all of out value additions to their cars destined With the possibility of transferring their own. for the African market using the LogiPoint airborne cargoes arriving at Jeddah advantage. And the fact that LogiPoint International Airport into containers for Farooq Ahmad Shaikh, ceo of LogiPoint, at Jeddah Islamic Port also has a ‘Non- onward forwarding, Shaikh highlighted told Seatrade that given business Bonded’ facility, has allowed one of the the potential of JIP to become the specialization new opportunities were world’s premier e-com giants to establish region’s leading logistics hub – Jeddah’s opening up rapidly for clients of LogiPoint, a fulfillment center in our state-of-the-art strategic location on the Red Sea has been which in 2017 transformed from a BRE logistics park,’ he related. underutilised by the entire region, he said, pioneer into a leading network of integrated but LogiPoint has leveraged that potential logistics parks across the Kingdom. Goods can stay in LogiPoint BRE in Saudi and started offering cross-border trucking Arabia for up to three years during which under bond into all GCC destinations. This ‘The BRE was a new concept once, but it time no duties are applicable. Clients can now means that GCC imports originating is one that is well-understood and well- lease space according to their own needs, from the European and American can be utilized by the market today,’ he said. ‘The whether it is purpose-built customized delivered to destinations in neighboring optimum utilization of the facility is now warehouses, pre-built warehouses, container states within 3-4 days, saving precious 8-10 being driven by the client.’ yards or open yards and enjoy bonded storage days to the supply chain. until they finalize their re-export formalities Some clients benefit by being able to do all or complete their import modalities. Shaikh is optimistic about the prospects of Value Added Services such as repackaging, LogiPoint in the years to come, ‘We look to labelling or assembly, he explained; others ‘You can store un-cleared goods at the the future as we have always done – with an are able to operate in the Kingdom without bonded zone. That was the original idea ambition to contribute to the transformation registering a company with the Saudi behind the BRE,’ explained the ceo. ‘It has of the logistics industry in the Kingdom and authorities. Again, some dealers, especially evolved as Saudi Customs have evolved. a will to enable its stakeholders through in the automobile industry, value storage, Now depending on the type of goods or going the extra miles ourselves.’ •

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Al Qahtani ‘Now businesses can move goods Dammam Bonded and into our zone, consider them as ‘bonded,’ perform what is referred to as ‘light manufacturing,’ and then export the goods Re-export Zone model to somewhere else. Companies can use this area as a platform for their business. We expect the new regulations to bear fruit in Dammam Bonded and Re-Export Zone As currently conceived, the BRZ allows the first quarter of 2020.’• (BRZ) was the first such facility on customers to defer duty payments, bonded Saudi’s east coast to drive import and storage of inbound cargo, full or partial export business on the east coast. Today, withdrawal of stored items from bond and Riyadh Dry Port in addition to Dammam, Saudi Arabia an onsite customs office for the exclusive has similar zones at Jeddah Islamic Port, use of Dammam bonded zone clients. Land Baas International Group (BIG), King Abdullah Port, while a new zone development plots prepared for custom operator of Riyadh Dry Port (RDP) recently launched operations at King designed construction projects, access to in the Saudi capital, recorded solid Fahad International Airport, Dammam. goods prior to customs inspection, reduced traffic growth of 21% in 2019. While A number of other facilities are in the port handling charges, faster clearance of volumes have fluctuated in recent planning phase, among them at in Al goods, duty free re-export of goods, and years due to handling dynamics at the Khumra and Riyadh. lower supply chain costs are also attractions. port of Dammam, it expects a further increase of 10-12% in inbound volumes ‘We were established in 1999 and have been in 2020. With capacity of 500,000teu it in operation for 20 years. This is the first is currently the only dry port or inland bonded zone to be set up in all of Saudi container terminal in the Kingdom. Arabia. The man who started this concept RDP has obtained ISO 9001:2008 was Sheikh Khaled Al Bawardi, one of the certification and is now working on a most popular and visionary businessmen here development plan ‘to further optimize in the Eastern region,’ Abdullah Al Qahtani, and increase its storage and handling project manager, SDES, told Seatrade. capacities, service levels, and operational efficiency,’ BIG chairman Bader Al- ‘He looked around the Gulf Cooperation Suweidan told Seatrade. Council (GCC) countries and found that Jebel Ali was doing amazing business using BIG employs the latest technology to the free-zone idea. We don’t have the same run its operations, including Navis, model in Saudi Arabia, so he come up Psilog-TechLogix, and SAP. The with this concept and presented it to the Terminal Operating System is NAVIS Abdullah Al Qahtani, Project Manager, SDES government. Until then, no clear regulations N4 2.3, while SAP handles billing, sales had been provided to enable investors to set and distribution, as well as human Dammam BRZ is situated on a 350,000sq up their businesses in the kingdom.’ resources, and materials management. mtr site at Dammam Port. It is owned and Its website has an online container managed by the Saudi Development and Export The SDES business continued to grow for tracking feature integrated with Navis, Services Company (SDES) - a consortium of a decade, before reaching a ‘convergence recording latest container positions. Hutchinson Port Holdings, Al Blagha Group point’ in 2010, when local company Al Completion of the Saudi Landbridge company MACNA (Maritime Company Blagha Group and global port operator rail project between Jeddah and Riyadh for Navigation), and a prominent group of Hutchison Ports joined as shareholders. The would also positively impact RDP’s Eastern Province businessmen led by SDES’s Hong Kong-based operator also embarked operations, Al-Suweidan predicted. chairman, Khaled Al Bawardi. It operates on on management of its concession at a 30-year lease granted by the Saudi Ports Dammam Port, allowing SDES to win new Authority, which commenced in 2000. international import-export business.

The zone was launched with 22 prebuilt In 2019 the number of teu handled grew by warehouses, six office suites, a 100,000sq mtr 14% year-on-year, he added, and a further paved external storage site, and a 100,000sq increase of 10-15% is expected in 2020. mtr container storage and handling park. Expansion saw the installation Also, the government introduced new of a dedicated industrial storage area, regulations last May which have served to a temperature-controlled warehouse, a facilitate the process of handling bonded 50,000sq mtr auto storage zone, and the shipments, removing the requirement addition of 10 x 1,000sq mtr covered storage for international investors to register sheds for bulk cargo storage and processing. commercially at Dammam BRZ, explained

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SUSTAINING INNOVATION, INNOVATING SUSTAINABILITY SINCE 1975

EXPERIENCE, COMMITMENT & SERVICE PORT & SHIP MANAGEMENT & CONSULTANCY, ELECTRO MECHANICAL & HVAC SERVICES, MARINE ENGINEERING, MARINE CONTRACTING & REPAIRS, OFFSHORE MARINE CONTRACTING DISTRIBUTORS FOR: CHESTERTON, VOITH MARINE, D&B PARKDOCK, SAMGONG CO. & SINANDLE CORP., 1ST FLOOR, SUITE - 1, BINLADIN PLAZA, KING FAHD ROAD P.O. BOX 5971, JEDDAH 21432, SAUDI ARABIA Google Coordinates [21.498847, 39.194163] TEL: +966 12 648 2146 FAX: +966 12 648 2145 E-MAIL: [email protected] Branches: Abha, Dammam, Makkah, Rabigh & Ras Tanura An Al-Zakir Bokhari Group Company www.mscl-marser.com

069 SMR20-1 Marine Services.indd 1 17/02/2020 11:13 MIDDLE EAST SAUDI ARABIA

Al Harbi stressed that ‘Zamil is not a Zamil Offshore plays new company or startup. We have a huge yard here in Dammam and we have also have the Jeddah yard as well,’ meaning it vital role with fleet will have valuable expertise to o er IMI. Furthermore, the recent successful IPO by IMI partner Saudi Aramco has ‘underlined and yard operations the Government’s openness and willingness to involve its citizens in the national asset,’ he added. amil O shore continues to be With around 3,000 employees, Zamil a critical component of Saudi O shore has three business units: marine, Zamil has built various types of vessels, Aramco’s o shore oil and gas shipyards and o shore construction. Zamil including craft and aluminum vessels, he Zwork, with the company likely Marine manages supply boats, work boats, added, and also has ‘a newbuild project to benefi t from a new national Maritime utility boats, crew boats and one jack-up which is aligned with the Saudi Vision 2030 Law requiring vessels operating in the self-propelled lift-boat. Zamil Shipyards strategy to build new vessels. Kingdom’s territorial waters to be has delivered 50 vessels and performs Saudi fl agged. maintenance and repair on another 150 for ‘We are expanding maintenance and repair,’ various clients. Zamil O shore Construction he concluded. ‘Overall, we project a record ‘Last year was a challenging year for most has executed several projects for the oil and 2020 compared to last year. Newbuild is industries, but we took the opportunity gas industry. fully occupied, so maintenance and repair is to consolidate our fl eet,’ Mazen Al Harbi, where we are now expanding.’ Zamil O shore’s chief HR and Admin The advent of International Maritime o cer, told Seatrade. The former 75 vessels Industries’ (IMI) shipbuilding and repair Local content were slimmed down to ’50-plus’ by the yard at Ras Al Khair o ers opportunities Under the new maritime law the importance sale of 17 older vessels, and Zamil has also for Zamil to cooperate and contribute. ‘We of local content has been upgraded, and managed to increase its market share in the signed an MoU in December 2018 and have Zamil O shore says it now has ‘around 40%’ lift-boat market, with nine jack-up barges on performed various o shore projects with Saudi nationals on its payroll. contract with Saudi Aramco, he said. IMI to date. We believe Zamil O shore can contribute and seek further long-term ‘In 2018, we introduced a programme for ‘The plan for 2020 is to optimize processes partnership and engagement with them. o shore construction,’ explained Al Harbi. and improve operational excellence,’ Al We look forward to being part of the ‘We trained Saudis as welders and pipe- Harbi continued. ‘Some 95% of our fl eet is 2030 Vision.’ fi tters. We are replicating the scheme this on long-term contract with Saudi Aramco, year in the shipyard. We sent many Saudis mainly in the Arabian Gulf. We also started for training for aluminum molding. We hope a joint venture with McDermott to target a to involve more Saudis in shipbuilding and specifi c market segment.’ seek Saudi naval architects.

‘We have always given priority to the Saudi

A new maritime law in the Kingdom should mean more work for Zamil in 2020

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Al Harbi stressed that ‘Zamil is not a workforce,’ he added. ‘Whenever we get new company or startup. We have a huge Saudi CVs, we look at them carefully and see The Murjan 4, a 90-Ton BP Tug, operated by Marine Services yard here in Dammam and we have also if we can utilize them. In Zami O shore, we have the Jeddah yard as well,’ meaning it have good people, the best Saudis available will have valuable expertise to o er IMI. in the market. Even employees who leave Furthermore, the recent successful IPO by us return because of the work environment IMI partner Saudi Aramco has ‘underlined and job security. Roles and responsibilities the Government’s openness and willingness are clear, and we provide good support for to involve its citizens in the national asset,’ Saudis in terms of development.’ he added. Despite the challenges facing the o shore Zamil has built various types of vessels, industry in the past fi ve years, Al Harbi including craft and aluminum vessels, he was confi dent that the possibility of new added, and also has ‘a newbuild project work in the Red Sea would mean a boost to which is aligned with the Saudi Vision 2030 operations in the company’s Jeddah yard. strategy to build new vessels. In addition, the new Maritime Law issued in 2019 stipulated that only Saudi fl agged ‘We are expanding maintenance and repair,’ vessels should operate in the Kingdom’s he concluded. ‘Overall, we project a record waters, with international tonnage requiring Jeddah’s Marine Services 2020 compared to last year. Newbuild is an explicit government exemption. fully occupied, so maintenance and repair is o ers diverse expertise where we are now expanding.’ ‘In Saudi Arabia we expect to be in a better shape because of the changes brought about Marine Services Co. Ltd (MSCL) is a operating them for its client. Local content by the new maritime laws,’ Al Habri added. Saudi Arabian technical solutions and Under the new maritime law the importance ‘Our vessels are mostly Saudi fl agged. services provider, integrating industrial ‘Our main purpose is to provide of local content has been upgraded, and and marine knowledge with experience, technical services both in industrial and Zamil O shore says it now has ‘around 40%’ ‘I expect that there will also be a mandate technologies and skilled sta . marine industry. The company is geared Saudi nationals on its payroll. requiring a specifi c number of Saudis on up for ship owning, ship management, board vessels and this will also be linked ‘We consult, plan, design, engineer, ship repair, port management, and ‘In 2018, we introduced a programme for to repair,’ he continued. ‘With the local fabricate, implement, maintain and electro-mechanical contracting,’ o shore construction,’ explained Al Harbi. Saudi workforce at Zamil O shore, we will manage,’ the company states. Capt. Salah U. Ahmed, MSCL general ‘We trained Saudis as welders and pipe- be in better shape than [our competitors], manager, told Seatrade. fi tters. We are replicating the scheme this especially since the government is MSCL was set up in 1975 as part of year in the shipyard. We sent many Saudis supporting localization.’ the Al-Zakir Bokhari Group. It o ers Marine Services currently has a port for training for aluminum molding. We hope its clients highly specialized management contract with Petrorabigh to involve more Saudis in shipbuilding and improved. ‘That is of course under consultancy, professional management at Rabigh Port, situated 25km north seek Saudi naval architects. discussion, and something that is up to the and diverse engineering solutions of King Abdullah Port, overseeing board to decide. There are several scenarios for the industrial and marine sectors. the discharge of crude from VLCCs ‘We have always given priority to the Saudi in the future,’ he said. • Headquartered in Jeddah, and with for petrochemicals concern, Rabigh operational branches in Makkah, Refi ning and Petrochemical Company Dammam, Rabigh, Ras Tanura and (Petro Rabigh). Rabigh is a deep- Abha, the company provides services to water port, primarily serving Rabigh all major markets in the Kingdom. Refi nery, operated by Petro Rabigh, a joint venture of Aramco and Sumitomo In late 2017, MSCL took delivery Chemical. The port handles liquid of four 72ton BP ASD tugs and is bulk cargoes. •

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IMI SMR20-1.pdf 1 11/02/2020 10:21

072 SMR20-1 IMI.indd 1 17/02/2020 11:14 Seatrade Proof MIDDLE EAST SAUDI ARABIA Maritime academic lauds Saudi changes Hattan Timraz, Dean of the FacultyHigh of do wellResolution by everyone concerned. There is PDFfrom our point of view,’ he concluded. Maritime Studies at King Abdulaziz also a renewed realization concerning the University in Jeddah, is one of Saudi signifi cance of the maritime industry to the Nevertheless, he feels that member states of Arabia’s leading maritime legal experts, development of the national economy. As a the Gulf Cooperation Council (GCC) as a specialising in International Maritime result, large investments are being made in whole need to make greater e orts to adopt Law, and he is particularly interested the sector.” international conventions, including those of in the adoption and implementation of the IMO, to better manage implementation international maritime conventions. Timraz also praised the GTA on issuing the of safety and pollution regimes. fi rst Saudi Certifi cates of Competency for ‘Saudi Arabia, in particular, has made big 10 deck o cers and fi ve engineers. ‘All are ‘Having said that, individual countries institutional and legislative changes in graduates of The Faculty of Maritime Studies in the GCC have taken big strides in the past few years, such as establishing at King Abdulaziz University (KAU-FMS). improving their record of accomplishment the General Transport Authority (GTA), The prospects of the maritime industry in the in the [adoption] of IMO Instruments,’ the newly formed ‘competent maritime region appear very positive and encouraging, he noted. • authority,’ and the issuance of a number of regulations that ratifi ed international conventions. These changes and improvements were necessary to facilitate the execution of the government’s ambitious 2030 plan for the expansion of the maritime industry,’ he said.

‘It is safe to say that welcome improvements in the region are largely due to implementation of the [International Dr Hattan Timraz, pictured at Maritime Organization’s] Mandatory Audit the Faculty for Maritime Studies at Scheme, coupled with a genuine desire to King Abdulaziz University, Jeddah

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