Aramco and DHL form joint logistics company
8 February 2024
Register for MEED's guest programme
Supply chains have become a key issue for businesses over the past three years as the global economy emerged from Covid-19 lockdowns and then faced disruptive events such as the grounding of the EverGiven in the Suez Canal and the war in Ukraine.
More recently, Houthi attacks on shipping passing through the Red Sea have forced many vessels to travel around Africa rather than through the Suez Canal. This has delayed deliveries and driven up costs.
These disruptions, together with technological advances such as AI and a growing emphasis on sustainability, are forcing logistics providers and their customers to rethink how their supply chains are managed.
Locally in Saudi Arabia, the supply chain challenge is of particular importance as the kingdom seeks to overhaul its economy with large-scale capital expenditure projects as part of Vision 2030.
Joint venture
Two of the world’s largest players in their respective fields, Saudi Aramco and DHL Supply Chain, are responding to these challenges and aim to revolutionise logistics for the energy, chemical and industrial sectors by joining forces to incorporate a new joint venture company known as Asmo.
Salem Al Huraish, chairman of Asmo, described the new company in a speech at its launch in Khobar on 5 February as “a national champion that will reform the supply chain industry for the energy, chemical and industrial sector in the region.”
The company involves two industry heavyweights combining their expertise. “Aramco is a massive procurement beast, and is very successful. DHL is a logistics company. Everybody does their respective pieces separately,” said Craig Roberts, CEO of Asmo.
“Bringing the two together in a separate entity is something that hasn’t been done before. We believe there are massive efficiencies for the industry from doing this.”
The company, which has been planned for three years, comes at an opportune time for Aramco and DHL, but also for Saudi Arabia and the global logistics sector.
“We are launching a company with an ambitious vision to become a market leader in the Mena region,” said Wail Al Jaafari, Aramco executive vice-president of technical services.
“Asmo can offer world-class end-to-end supply chain solutions, creating value for customers while enhancing the resilience of their supply chain.”
New technologies
As well as changes in Saudi Arabia, the nature of the logistics industry is being transformed by new technologies, notably artificial intelligence (AI).
“We stand at a defining junction of the logistics industry where global trends are dramatically reshaping the landscape,” said Oscar de Bok, CEO of DHL Supply Chain. “The world is grappling with supply chain disruption, rising costs and the urgent goal for sustainability.”
Asmo intends to take a smart approach to revolutionising supply chain logistics. “It’s a lot about being smart,” said De Bok. “We talk a lot about deploying technology, digital marketplaces and warehouse technology … there is a lot of cool stuff being deployed, but it is not always rocket science. Some of it is pretty basic stuff you need to do,” he said.
The journey for Asmo is just beginning. It is a long-term venture that aims to develop a significant presence in the kingdom over the coming years.
“We are in partnership together and at the start of that journey right now,” Roberts added. “We are looking at our supply chains, gaining insights and asking how we get smarter. When we build in new warehouses, the question is, where do you put them? What technology do we deploy? We are in that discovery phase right now.”
One of the critical aspects of Asmo’s strategy involves assessing physical infrastructure needs. “For physical infrastructure, Asmo is assessing its options. We are looking at that right now. Aramco has a number of facilities for itself and its affiliates. We are looking at the best places to put the warehouses,” Roberts said.
Saudi infrastructure
As well as Asmo’s dedicated infrastructure, the Saudi government is also building infrastructure to support the kingdom’s logistics industry. “They’re putting infrastructure in place. They’re making it quite easy for us to do this. I think the support of the government is vital,” he said.
Once established in the kingdom, Asmo aims to take its operations overseas. This is likely to involve expanding into other GCC markets first and then further afield. Both Aramco and DHL can support this strategy as both companies have significant operations outside Saudi Arabia. DHL is a global logistics player, and Aramco, while primarily being a Saudi company, has operations in many other markets worldwide, including the US.
If Asmo gets it right, the rewards are significant. “The supply chain and logistics market in the Mena region is worth around $100bn. Our goal is to have a major share of this. It is truly a new giant in the making,” said Al Jaafari.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Emirates awards $5bn engineering complex deal18 May 2026
-
-
Saudi Arabia tenders Mecca metro design18 May 2026
-
-
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Emirates awards $5bn engineering complex deal
18 May 2026
Register for MEED’s 14-day trial access
Emirates Airline has awarded a AED19bn ($5bn) contract to build one of the world's largest engineering complexes in Dubai South.
The contract was awarded to Beijing-headquartered China Railway Construction Corporation (CRCC).
CRCC is being supported by French firm Artelia, as the project consultant.
The complex will cover over 1 million square metres (sq m).
It will comprise 77,000 sq m of dedicated workshop space for maintenance and repairs, 380,000 sq m of storage and logistics capacity, a 50,000 sq m administrative building for Emirates Engineering and 15,000 sq m of training facilities.
It will be the world's only complex with a capacity to service 28 wide-body aircraft simultaneously.
The airline officially broke ground on the project on 18 May.
The groundbreaking ceremony was attended by Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and CEO of Emirates Group; Tim Clark, president of Emirates Airline; Khalifa Al-Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South; and Dai Hegen, chairman of CRCC.
The facility will enable large-scale retrofits, cabin redesigns and structural modifications to be performed in-house, thereby reducing turnaround times.
The engineering complex is scheduled for completion in 2030 and will be located at Al-Maktoum International airport.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16895218/main.jpg -
Contractors submit King Salman Bay project interest
18 May 2026
Contractors submitted expressions of interest in April for a contract to undertake marine infrastructure works at King Salman Bay, on the Red Sea coast north of Jeddah.
The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres (km).
The project client is gigaproject developer Red Sea Global (RSG).
The invited firms include:
- Archirodon (Greece)
- Boskalis (Netherlands)
- China Harbour Engineering Company (China)
- Jan de Nul (Netherlands)
- Modern Building Leaders (local)
- Nesma & Partners (local)
- NMDC Group (UAE)
King Salman Bay is expected to be a waterfront development aimed at reshaping the city’s northern Red Sea frontage into a mixed-use destination anchored by public realm improvements and leisure-led development.
The update follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a material recycling facility, a transfer station, an administration building and a vehicle maintenance building.
In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.
According to an official statement, “The funding is led by Riyad Bank as the sole underwriter, along with Saudi Investment Bank and Bank Al-Bilad as mandated lead arrangers.
“The loan arrangement comprises a mix of conventional and Islamic financing and adheres to RSG’s Green Loan Framework, which was first established when it secured private funding from a consortium of four banks for the Red Sea destination in 2021,” the statement added.
The announcement followed RSG’s opening of its first properties for sale at Amaala, including branded residential communities and a five-bedroom villa on a private island.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16894122/main.jpg -
Saudi Arabia tenders Mecca metro design
18 May 2026
The Royal Commission for Makkah City & Holy Sites (RCMC) has tendered a contract inviting firms to undertake initial design studies for its long-planned metro network in the holy city.
The scope includes the review of existing studies, preparing a concept design, land acquisition studies, future phases integration concept and other related studies.
The notice was issued earlier this month, with a submission deadline of 5 August.
The latest development follows RCMC’s invitation to contractors to attend an early market engagement meeting for the project in September last year, as MEED reported.
In an explanatory document inviting companies to attend the event, the RCMC’s General Transport Centre said it was seeking to gauge market interest in the multibillion-dollar project and obtain feedback on its proposed procurement approach.
MEED exclusively reported in June last year that the project was restarting. Current plans envisage a four-line network, named lines A-D, with 89 stations and three depots, to be implemented over three phases between 2032 and 2045.
Project scope
Stage 1 focuses on lines B and C, involving 2.4 kilometres of tunnelling under the Masar project and integration with the existing Mashaer line.
The network will run just over 62km and comprise 31 stations, 21 of which will be underground, including three iconic stations. A total of 19.5km will run through tunnels, while 41.2km will be elevated, with the remainder at grade.
The 66 required trainsets are projected to provide a daily passenger capacity of about 450,000, equating to annual ridership of 171 million.
The 84.7km-long second phase, due to be operational by 2038, will extend the two lines towards the outskirts of Mecca and includes construction of the initial inner and central segments of lines A and D.
Comprising 61.1km elevated and 18.6km underground, Phase 2 is planned to add 45 stations serving the two new lines, as well as two depots and a potential interconnection with the planned Saudi Landbridge. The 59 trainsets for Phase 2 will increase the network’s projected total annual passenger capacity to more than 500 million.
Phase 3 covers the elevated 36km extension of lines A and D and involves procurement of a further 72 trainsets, increasing the network’s ultimate passenger capacity to 1.2 million daily and 642 million annually by completion in 2045.
Associated development
The metro plan also envisages several transit-oriented developments (TODs) at different points on the route. These will typically comprise commercial, residential and retail elements to maximise the investment case.
The client’s proposed procurement approach involves three distinct packages: civil and systems works, TODs, and operations and maintenance.
The initial concept calls for some of the project to be delivered on a public-private partnership (PPP) basis, wherein the private sector, through special purpose vehicles, will part-finance, build, operate and then transfer commercially viable elements of the scheme.
The then-called Mecca Mass Rail Transit Company (MMRTC) first launched the metro project in 2013; however, the scheme has faltered for more than a decade due to funding issues, land acquisition challenges and scope changes.
The relaunch of the procurement process raises hopes that the project will now come to fruition, although it is likely to be at least 18 months before any definitive works are expected to start.
Mecca is home to Saudi Arabia’s first metro, the nine-station, 18km-long Mashaer line, which opened in 2010. It operates only seven days a year during Hajj, but carries more than 2 million pilgrims during that time.
Some 30 million pilgrims visit the city each year, with this number set to grow. The presence of a known, quantifiable and growing demand base will help facilitate the use of a PPP mechanism should the framework be adopted.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16893520/main.jpg -
Montage launches Ras El-Hekma hotel and residences project
18 May 2026
Abu Dhabi-listed Modon Holding has partnered with US-based hotel operator Montage Hotels & Resorts to launch Montage Ras El-Hekma, a new project within the Ras El-Hekma master development on Egypt’s Mediterranean coast.
The Montage development will be situated in Wadi Yemm, the first of 17 planned precincts to move into active delivery.
Wadi Yemm is a mixed-use cultural and hospitality district, anchored by the Ras El-Hekma Lighthouse and a 10,000-seat amphitheatre designed to host cultural and entertainment programming.
Montage Ras El-Hekma is expected to feature approximately 200 guestrooms and suites, along with 96 branded villas.
The villas will range from three to six bedrooms and will mark the first branded residences available for purchase at Ras El-Hekma, according to Modon.
No construction budget or project handover timeline was provided.
Ras El-Hekma is on a spur of land on Egypt’s northern Mediterranean coastline, about 240 kilometres west of Alexandria.
Abu Dhabi-based holding company ADQ appointed Modon Holding as the master developer for the Ras El-Hekma project in 2024.
Modon will act as the master developer for the entire development, covering more than 170 million sq m.
Modon Holding will develop the first phase of the project, which will cover 50 million sq m.
The remaining 120 million sq m will be developed in partnership with private developers under the supervision of the recently established ADQ subsidiary Ras El-Hekma Urban Development Project Company and Modon Holding.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16893415/main.jpg -
Bahrain completes repairs to chemical plant after Iran strike
18 May 2026
Repair and remediation work has been completed at the Gulf Petrochemical Industries Company (GPIC) facility in Bahrain, according to a statement from the country’s Ministry of Interior.
The repairs and clean-up operation were focused on damage caused by an Iranian drone strike on 5 April, the ministry said.
It also said that the strike was an act of aggression that constituted a war crime.
Prior to the repair works, an Iranian drone was lodged inside an ammonia storage tank at the facility, which had become a “grave and ongoing risk”, according to the ministry statement.
The ministry noted that, were it not for the swift pre-emptive measures taken by Bahrain’s government as part of its broader efforts to strengthen civil protection, the consequences could have been catastrophic.
It said that an ammonia leak would have spread across several kilometres, causing mass casualties and threatening the lives of civilians in the surrounding areas.
The ministry commended GPIC for its proactive decision to drain the ammonia tank prior to intervention — a critical step given the tank’s location in a densely populated area.
All residents evacuated from the surrounding area have now returned to their homes.
The evacuation, which covered a two-kilometre radius, was carried out on a voluntary basis, with temporary alternative housing provided as a precautionary measure.
GPIC manufactures ammonia, methanol and urea.
It operates as a joint venture equally owned by Bapco Energies of Bahrain, Saudi Basic Industries Corporation (Sabic) of Saudi Arabia and Kuwait’s Petrochemical Industries Company (PIC).
The facility that was attacked is located in the Sitra region of Bahrain.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16892300/main.png