NEOM’s new US$10 billion joint venture
26 October 2023
NEOM, an ambitious new mega city planned in Saudi Arabia, has announced an US$10 billion exclusive logistics joint venture (JV) with DSV. The partnership will focus on providing logistics services for the new development in the coming years.
Under the agreement, the JV 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% of the JV; DSV 49%.
NEOM is a 26,500-square-km (10,230-square-mile) high-tech development on the Red Sea with several zones, including an industrial and logistics areas as well as ‘The Line’ a 100 mile long horizontal structure. The total cost of NEOM is estimated to be more than US$500 billion.
In a press release, NEOM said it envisions unparalleled demand for construction logistics through to December 31, 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 and creating more than 20,000 job opportunities.
“The projected demand in both construction and non-construction logistics will make NEOM one of the largest customers in the world, and this partnership allows NEOM to create value from its demand. Working alongside one of the world’s leading logistics companies, the joint venture with DSV will build on expertise and know-how to drive innovation and sustainability throughout the logistics value chain,” said Nadhmi Al-Nasr, CEO of NEOM.
“The economic benefit to this partnership will not only provide tens of thousands of jobs, but it will also enable growth to capture local and regional market share.”
Jens Bjørn Andersen, Group CEO, DSV, called NEOM “one of the largest and most complex projects in the world” and added that it provided a “unique opportunity for DSV to support a development that is at the forefront of innovation, technology and digital transformation.”