meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11500762/main.jpeg
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Diriyah signs land lease deal with King Saud University

    19 December 2025

    Saudi Arabia gigaproject developer, Diriyah Company, has signed a long-term land lease agreement with Riyadh Valley Company, an investment arm of King Saud University.

    Diriyah Company will lease 552,000 square metres (sq m) of land from King Saud University for a period of 70 years. 

    The deal will enable the company to add the land bank to its second phase of the Diriyah Project, which is also known as DG2.

    The agreement was signed by Diriyah Company's Group CEO, Jerry Inzerillo, and the acting president of King Saud University and Riyadh Valley Company chairman, Ali Masmali.

    Diriyah Company is already developing the area adjacent to King Saud University. In April, it awarded an estimated SR4bn ($1.1bn) contract for a utilities relocation package for the King Saud University project located in the second phase of the Diriyah Gate development (DG2).

    The contract was awarded to the joint venture of Beijing-headquartered China Railway Construction Corporation and China Railway Construction Group Central Plain Construction Company.

    The scope of the contract covers the design, construction and relocation of KSU's utilities and administration offices, as well as the construction of a district cooling plant, water storage facilities, a sewage treatment plant, a natural gas plant, a diesel transfer pumping station, a utility tunnel, irrigation water storage tanks, office buildings, warehouses and maintenance workshops.

    In addition to KSU, DG2 will feature residential developments, hotels, an opera house, the Saudi Museum of Contemporary Art, six academies, an arena and a mosque.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15287776/main.jpg
    Yasir Iqbal
  • Kuwait to sign Mubarak port agreement next week

    19 December 2025

    Kuwait and China are expected to sign the agreement to develop the subsequent phases of Kuwait’s Grand Mubarak Port next week.

    According to media reports, the announcement was made by Kuwait’s Public Works Minister ​Noura Al-Mashaan on Thursday.

    The contract value is estimated to be about KD1.2bn ($4bn).

    In May, Beijing-headquartered China Harbour Engineering Company, a subsidiary of China Communications Construction Company (CCCC), signed an early contractor involvement (ECI) agreement with Kuwait to develop the next phases of the project.

    The initial works include surveying, investigation, hydrological observation, geophysical exploration, testing, model testing, process simulation, design review, owner inspection, preliminary design of sand-retaining embankments, and on-site services and management.

    The project launch ceremony was held in mid-April. It was attended by several high-profile representatives from Kuwait and China, including Fu Xuyin, China’s vice-minister of the Ministry of Transport, Zhang Jianwei, the Chinese ambassador to Kuwait, and Nora Mohammad Al-Mashaan, Kuwait’s minister of public works.

    In January, MEED reported that Kuwait’s cabinet had approved a bid from China Communications Construction Company to implement all stages of its Mubarak Al-Kabeer Port project.

    The country ramped up its efforts on the project after meetings between Kuwaiti and Chinese officials in June last year.

    In 2023, the two countries signed a memorandum of understanding to develop port infrastructure.

    Phase one of the project cost $1.2bn and was completed in 2014.

    The project’s first phase included site levelling and the development of a marina, quay walls, berths, a navigational terminal and port buildings.

    The port is not operational because the phase one works did not include vital equipment such as cranes.

    It is understood that the completion of phase two will allow the port to start operations.

    The full scope for phase two of the project is expected to include:

    • Construction of loading and unloading facilities
    • Construction of quay walls and reclamation
    • Construction of the container yard and the back of the port
    • Infrastructure works
    • Construction of buildings
    • Construction of a container terminal
    • Construction of associated facilities
    • Installation of safety and security systems

    A third phase is also planned to further expand the port.

    The latest developments follow a series of agreements signed in September 2023 to deliver some of Kuwait’s immediate development goals for 2024-28. These agreements will position Chinese companies to play a leading role in the Fourth Kuwait Master Plan 2040.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15287252/main.jpg
    Yasir Iqbal
  • Metito consortium wins Mecca sewage scheme

    19 December 2025

    A team comprising Metito (UAE), Etihad Water & Electricity Company (UAE) and SkyBridge Company (UK) has been awarded a contract to develop the Hadda independent sewage treatment plant (ISTP) project in Mecca Province, Saudi Arabia.

    The contract was awarded by Saudi Water Partnership Company (SWPC), the kingdom’s principal off-taker for water and wastewater public-private partnership (PPP) projects.

    The project will be developed on a build-own-operate-transfer basis and is expected to begin operations in 2028, followed by a 25-year operating term.

    The plant will provide an initial treatment capacity of 100,000 cubic metres a day and will feature a treated sewage effluent (TSE) reuse system with a storage tank and a 38-kilometre pipeline designed to handle 350,000 cubic metres a day.

    Earlier in December, MEED reported that the team had been named preferred bidder at a levelised tariff of SR2.354 ($0.63) a cubic metre.

    SWPC selected the Miahona-led consortium as the reserve bidder for this project with the second-lowest submitted bid of SR2.599($0.69) a cubic metre.

    According to SWPC, the TSE reuse system accounted for 31% of the preferred tariff for the Arana ISTP and 27% for the Hadda ISTP.

    In March last year, SWPC signed a 25-year water-purchase agreement with a team comprising the local Miahona Company and Belgium-based Besix for the contract to develop and operate the Al-Haer ISTP in Riyadh, as part of the third batch of the kingdom’s ISTP programme.

    Four months later, the Saudi-listed Power & Water Utility Company for Jubail & Yanbu (Marafiq) joined the developer consortium.

    The Miahona/Besix team offered to develop the project for SR1.9407 ($0.5173) a cubic metre, while the second-lowest bid, from a team comprising Spain’s Acciona and the local Tawzea, was SR2.2041($0.588) a cubic metre.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15287185/main.jpg
    Yasir Iqbal
  • Morocco awards $1bn Casablanca airport terminal deal

    19 December 2025

    Morocco’s National Airports Office (ONDA) has awarded a MD12bn ($1.2bn) contract to build the new terminal at Casablanca’s Mohammed V International airport.

    The contract was awarded to the joint venture of local firms Societe Generale des Travaux du Maroc (SGTM) and Travaux Generaux de Construction de Casablanca (TGCC).

    Construction work on the Mohammed V International airport expansion is expected to begin immediately.

    The project is slated for completion in 2029.

    The expansion will cover more than 600,000 square metres (sq m) and increase the airport’s capacity to 30 million passengers a year.

    The project is designed by a consortium comprising the local branch of French engineering firm Egis Batiment International, Morocco’s Ala Concept and UK-based RSHP Architects.

    The scope of work covers preparatory works, structural works, waterproofing, steel structural works, building facades, electrical, mechanical and plumbing (MEP) works, data centre works, HVAC systems and other associated works.

    The tender also covers the construction of a 300-key airside hotel.

    The new terminal is expected to be ready in time for the 2030 Fifa World Cup, which Morocco is co-hosting alongside Portugal and Spain.

    ONDA tendered the project contract on 4 November, with a bid submission deadline of 16 December, as MEED reported.

    In July, ONDA began early works on the new terminal building, awarding an estimated MD294m ($29m) deal for enabling works to local firm Societe de Travaux Agricoles Marocaine.

    In January, Morocco’s Transport & Logistics Minister, Abdessamad Kayouh, said that the study to expand the airport’s capacity was nearing completion.

    The project is part of Morocco’s MD42bn ($4.3bn) plan to expand key airports in anticipation of increased passenger flow for the 2030 football World Cup.

    Morocco plans to upgrade several airports, including those in Tangier, Marrakech and Agadir, increasing their respective annual passenger capacities to 7 million, 16 million and 7 million.

    There are also plans to add a new terminal at Rabat-Sale airport, raising its capacity to 4 million passengers annually, and to increase Fez airport’s capacity to 5 million passengers annually. 

    The new terminal at Mohammed V International airport will be connected to a high-speed train network linking Kenitra to Marrakech.

    READ THE DECEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Prospects widen as Middle East rail projects are delivered; India’s L&T storms up MEED’s EPC contractor ranking; Manama balances growth with fiscal challenges

    Distributed to senior decision-makers in the region and around the world, the December 2025 edition of MEED Business Review includes:

    > BAHRAIN MARKET FOCUS: Manama pursues reform amid strain
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15287093/main.jpg
    Yasir Iqbal
  • Batteries shape the region’s energy future

    18 December 2025

     

    This package also includes:

    > TECH THEMES: Key technology themes poised to shape 2026
    > EVs: Middle East drives electric vehicle revolution

    Batteries, having progressed from enabling consumer electronics to powering the first wave of electric vehicles (EVs), are now poised to become one of the world’s most significant industrial and geopolitical forces in the next decade, says GlobalData’s Strategic Intelligence platform. 

    According to a recently published report, this progress is due to stored energy’s accelerating and expanding role in mitigating climate change. 

    For the Middle East, a region defined by its energy leadership and major economic diversification strategies, the battery revolution presents not just a commercial opportunity, but a strategic imperative focused on securing key components of the new global supply chain. The region’s success in the coming years will be judged by its ability to navigate the raw material shortages, geopolitical rivalries and technological shifts that define the market.

    The cornerstone of this theme is the soaring demand for cheap, safe and high-performance batteries, driven predominantly by the automotive sector, which is forecast to account for over 80% of aggregate battery demand between now and 2035.

    Industry growth 

    Global lithium-ion battery industry revenues are forecast to surge to over $408bn by 2035, up from $88.6bn in 2022. 

    This growth is spurring industrial expansion, with the global transition to EVs requiring an accompanying build-out of battery gigafactories. While China currently dominates this landscape, accounting for 77% of EV gigafactories in 2022, Europe and North America are taking steps to reduce their dependence on Chinese supply chains by 2030, driven by the US Inflation Reduction Act and European ambition.

    This geopolitical tension directly impacts the Middle East’s emerging industrial strategy. The need for regionalised supply chains is critical, and North Africa has already taken a step towards this with Chinese investment establishing a battery gigafactory in Morocco, aimed at supplying the European market. 

    Furthermore, Gulf nations are exploring direct investment in manufacturing capability, demonstrated by the Statevolt plan to build a $3.2bn gigafactory in the UAE’s northern emirate of Ras Al-Khaimah, specialising in advanced battery cells. 

    These efforts are essential to integrating the Middle East into the global manufacturing network, leveraging its geographical position between the major consuming markets of Europe and Asia.

    Beyond manufacturing, the most significant threat to the industry is the impending shortage of low-cost, easy-to-purify raw materials like lithium, cobalt and nickel, which is largely due to a lack of investment in new mines over the past five years. 

    Lithium extraction, in particular, requires significant investment to meet the growing demand. This crunch has been exacerbated by China’s control over the entire supply chain, from the mines to the refining of critical battery metals. 

    This situation is as much an environmental and geopolitical concern as it is an economic one, necessitating a shift towards a circular battery economy. The region, therefore, has an immediate need to invest in recycling facilities to offset near-term supply shortages, securing local access to processed materials for its emerging domestic battery production capabilities.

    Green hydrogen capacity in the region is projected to grow at a compound annual growth rate of nearly 150% in 2025-30

    Clean energy edge

    The Middle East’s position as a source of clean energy and a major energy exporter makes the deployment of hydrogen fuel cells a crucial complementary theme. Hydrogen has been championed for decades as a clean fuel, and a UN-sponsored Green Hydrogen Catapult Initiative, involving Saudi and European founding partners, aims to scale up green energy production. 

    The Middle East is pursuing this with projects like Dubai’s Green Hydrogen project, which uses solar power to produce hydrogen, signalling the region’s intention to be a major player in clean fuel production. 

    Though hydrogen is unlikely to power small vehicles like cars, its future dominance is expected in heavy industrial processes and heavy transport, such as lorries, trains, ships and planes, making it highly relevant to the Gulf’s core logistics and industrial sectors. 

    Green hydrogen capacity in the region is projected to grow at a compound annual growth rate of nearly 150% in 2025-30, although this starts from a low base.

    Finally, the shift towards battery-powered EVs appears to be gaining regional momentum. Although EV adoption in the Middle East is still in its early stages – with the UAE leading with just a 3% penetration of new car sales – projections show EVs could account for as much as 64% of the new car market by 2035. The transition is supported by major investment in charging infrastructure and a market poised to be worth tens of billions of dollars. 

    Impending consumer demand will be a primary driver for the strategic battery manufacturing and hydrogen production investments now being made by policymakers and industrial leaders in the GCC. The confluence of these factors – securing the raw materials, establishing domestic manufacturing and deploying complementary clean fuels like hydrogen – will be central to the Middle East’s role in the global energy transition over the next decade. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15278484/main.gif
    MEED Editorial