Saudi Arabia plans logistics hub with China

Saudi Arabia is exploring plans to collaborate with China on establishing a logistics special economic zone, aiming to transform the kingdom into a key logistics hub linking Asia, Africa and Europe, officials said at a conference in Riyadh on Sunday.

The announcement came during the inaugural Global Logistics Forum 2024, hosted by Saudi Arabia's Ministry of Transport and Logistics Services. Construction of the KSA-Sino Logistics Special Economic Zone is set to begin next year, in alignment with Riyadh's ambitious Vision 2030 economic diversification plan.

Ewpartners, the first international private equity firm to establish a Saudi-Asia cross-border investment platform, will partner with the King Salman International Airport Development Company to spearhead the project.

The special economic zone, located within the King Salman International Airport in Riyadh, is expected to cover 4 square kilometers and will be developed in four phases over 12 years, said Jerry Li, founder and managing partner of Ewpartners, formerly eWTP Arabia Capital.

The zone aims to create an integrated ecosystem that "will encompass global enterprises, logistics facilities, supply chains and high-end manufacturing", significantly bolstering Saudi Arabia's capacity for regional and global distribution, Li said.

At the forum, Transport Minister Saleh bin Nasser Al-Jasser said Saudi Arabia has long been at the crossroads of global trade. The vital facilities are key to realizing Vision 2030, with more than 1 trillion riyals ($267 billion) set for investment by 2050.

"Current disruptions highlight the fundamental needs to ensure the safety and security of the supply chain and the seamless functioning of the backbone of global commerce, so economies thrive, goods get delivered and people are connected," Al-Jasser was quoted as saying by Arab News.

The project also envisions international companies establishing manufacturing capabilities within the zone and collaborating with Saudi enterprises to produce goods locally for global distribution. This aligns with the "Made in Saudi" program, which supports Saudi businesses to increase exports to key international markets.

The zone is expected to attract more than 3,000 wholesalers and retailers and about 200 light industrial manufacturers from China and across Asia, while also facilitating expansion into markets beyond the region.

Marco Mejia, acting CEO of the King Salman International Airport Development Company, said the partnership marked a significant step toward delivering on their vision of establishing the airport as a leading international logistics hub, serving regional and global logistics companies while supporting Saudi Arabia's trade expansion.

By collaborating with Ewpartners, he said, they are poised to enhance logistics infrastructure, boost efficiency and create new opportunities for economic growth in Saudi Arabia and the wider region.

Li said Saudi Arabia's vision to establish a major logistics hub has been a cornerstone of Ewpartners' presence in the kingdom.

"After nearly five years of dedication to this initiative, our expertise in technology-driven solutions and cross-border investment, coupled with the strategic location of King Salman International Airport — positioned as a gateway between Asia, Africa and Europe — will unlock immense potential for cross-border trade."

It will also pave the way for new growth and innovation in the kingdom's logistics and e-commerce sectors, he said.

"We know firsthand that there are thousands of top companies from China and the (Asia-Pacific) region eager to build a base in the region to be closer to their global customer base," he said, adding that through teaming up with the right partners, they are confident the project will become a "world-class platform" for both local and international companies.

The project site will include a logistics or light industrial park, as well as an international commercial park, designed to serve as a hub for global businesses to establish their presence, promote international trade and attract more foreign direct investment.

The site will also offer a living space and supporting facilities, providing comprehensive services for professionals' living and working needs, further enhancing Saudi Arabia's appeal as an investment destination.