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Aramex eyes Middle East expansion

Aramex is to greatly expand its logistics and trucking service in the Middle East over the next year. The company is building facilities across the region, and it is also aiming to make a number of acquisitions.

Aramex is to greatly expand its logistics and trucking service in the Middle East over the next year. The company is building facilities across the region, and it is also aiming to make a number of major acquisitions to further expand its Middle East capacity.

The main regional focus for Aramex in the short term is a new 15,000 m2 logistic facility in Jebel Ali. This centre is not due to open until next month, but Aramex is already planning a 8000 m2 extension. “From the demand we are getting, the Jebel Ali presence is already virtual full,” commented Fadi Ghandour, Aramex’s president & CEO. “The pipeline is full of clients who are just waiting for us to get that operation up and running... so we are starting to think about [the second phase] very seriously,” he added.

Aramex already has an extensive presence across the region, but it is looking to add more capacity in key markets, such as Saudi Arabia, Bahrain and Jordan. A facility is also under construction at Beirut’s seaport, and the company is planning a centre in Dubai Logistics City. The 3PL also expects to pick up more facilities, as companies in the region begin to embrace outsourcing.

Alongside infrastructure, Aramex is also boosting its trucking network in order to keep up with surging demand. Road haulage has been booming in the region since the signing of the GCC customs union, which has greatly simplified land border crossings. Aramex, which runs scheduled road services across the Gulf and Levant, has already benefited from this demand. However, it now expects to see a further increase, as it is set to secure permission to make its Jebel Ali centre a bonded facility. “Our [road] volumes are up easily over 60-70% and they have been growing like that for the past three or four years,” said Ghandour. “The daily demand is even a little bit above our capabilities, so we are continuously adding new trucks and new lines of service.”

Aramex is also planning a number of local acquisitions in order to boost its volumes and expertise. In particular, Ghandour suggests the company could buy two local rivals in the next nine months. “Within the first six months of next year, we will probably see a major logistics and freight forwarding company within our portfolio. You may also see another forwarder as well,” he said. “We were excited early on, but this is serious stuff. If you add another US $100 million of revenue, that is major growth for a company that is $250 million [in size].”

Aramex is also in talks with both the Jordanian and Lebanese governments about buying their national postal services. Jordan Post’s privatisation is still at an early stage, but Aramex is hoping to wrapping up the Liban Post deal in the next few months. “It has hit a bit of a snag, but we are continuing to discuss it,” said Ghandour. “I would like to conclude this before the end of the year, and I am pretty confident that we will.”

The deal will also put Aramex in a new market, mail, which Ghandour believes could become a significant business. “There are privatisations happening in other emerging markets... [and] we think there is a niche for us there,” he said. “But, the interesting side to this story really is the last mile, as post offices are everywhere,” he added. “It allows them to do so many other things aside from just delivering mail.”

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