Danish freight forwarder, DSV, has secured a $10 billion (USD) deal to support the development of an ambitious urban development in Saudi Arabia called NEOM.
The exclusive logistics joint venture will support the development of the project taking shape in the northwestern region of Saudi Arabia.
Under the agreement, the joint venture 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 per cent of the joint venture, with DSV holding the remaining 49 per cent.
“NEOM is one of the largest and most complex projects in the world,” said DSV Group CEO, Jens Bjørn Andersen. “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 leaders are predicting demand for construction logistics through to 31 December 2031, with sustained growth in non-construction logistics thereafter. In addition to its impact on the logistics landscape, the venture is expected to boost the Saudi economy through infrastructure development, creating more than 20,000 job opportunities.
Meanwhile, DSV has released its third quarter figures and reported that, despite soft freight volumes and declining rates, the results were solid. Gross profit was down 15.1 per cent and EBIT 30.6 per cent, which was expected given the challenging market conditions and record earnings achieved last year, the company said.
The Air & Sea division saw a 35.7 per cent decrease in EBIT for the first nine months of 2023, and the Solutions division reported a 16.9 per cent decrease in EBIT. The Road division achieved results on level with last year.
“A real recovery in global freight volumes does not seem to materialise in 2023, but based on its performance so far, DSV has raised the lower end of its 2023 EBIT guidance,” Andersen said.
In other DSV news, Danish transport and logistics company, DSV, has announced changes to its executive board.
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