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With a staggering US$800 million investment to develop its Middle East operations, CEVA Logistics is the latest global powerhouse to cement its long-term presence in the region.
One year seems like a relatively short period of time in the business world. However, as the global recession has cruelly proven, the switch from boom to bust can occur at the blink of an eye. Back in June 2008, for example, the Middle East was considered a land of endless opportunity for warehousing and transportation providers, with double-digit growth a regular occurrence throughout the region. Unfortunately, the financial crisis has threatened to jeopardise these glory days, and whilst the market has not actually crashed, most companies are erring on the side of caution with their development plans.
There are, of course, exceptions to the rule and for the more courageous members of the logistics fraternity, it’s important to remember that the higher the risk, the higher the potential return. This philosophy seems particularly apt for CEVA Logistics, a global leader in the field that plans to revolutionise its Middle East operations over the next five years with a multi-million dollar investment.
At present, the Netherlands-based company has a network of 19 offices in the Middle East and North Africa (MENA) territory, providing its customers with everything from freight forwarding and contract logistics to transportation and distribution management. The bulk of activity has traditionally centred on the United Arab Emirates, which hosts a total of nine offices and has been selected as the catalyst for CEVA’s regional expansion.
“We’ve been present in the Middle East for two decades now and this region has been identified as a leading area of growth for our global operations,” states Gianfranco Sgro, president of CEVA Logistics in Southern Europe, Middle East and Africa.
“To support this expansion, around US$800 million will be invested to develop our infrastructure, technology and people, with an initial focus on the United Arab Emirates. However, it’s important to be realistic about these goals, because competition is strong in the regional market and customer volumes have continued to decline with the global recession. We will need to concentrate on organic growth to offset this situation.”
Benefiting from a generous budget, the company has revealed plans to significantly bolster its warehousing space in Dubai from 38,000m2 to approximately 163,000m2 by the end of the year. This includes a 65,000m2 facility that is scheduled to commence operations in October 2009 and will be located on a 123,000m2 plot of land in Jebel Ali Free Zone South.
“Our customer base has significantly expanded in the Middle East over the past year and we’ve experienced strong demand for the oil and gas, industrial, automotive, fast moving consumer goods (FMCG) and technology sectors,” reveals Sgro. “The publishing market is also emerging in this part of the world, especially for books and magazines in countries such as the United Arab Emirates and Saudi Arabia.”
CEVA has also placed a premium on employing a highly-skilled and dedicated workforce to support its growing operations in Dubai, with employee numbers expected to reach approximately 900 staff by the end of the year. “A significant amount of our regional budget has been allocated to human resources. In fact, we are investing a higher amount in people than in something like a trucking fleet at the moment, because our customers need a logistics partner with highly-skilled individuals to support them in these difficult times,” continues Sgro.
