Bahri Annual Report-2017

Annual Report 2017

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Strategic Partnerships

Bahri’s Strategy and Saudi Vision 2030

Bahri developed its five-point strategy in 2017, in line with the Kingdom’s objectives. This strategy also aims to realize the Saudi Vision 2030 through participation in national efforts to develop the logistical services sector via effective partnerships with global logistics leaders. The Company also plans to partner with a group of investors in a project to develop the free industrial zone overlooking the Red Sea, in turn boosting the capability to drive further macroeconomic benefits for the Kingdom and enable optimal utilization of its geographic location. In turn, this will allow the country to secure a large share of the maritime transportation market. The Red Sea project is a strategic center for shipping and a promising industrial zone that can be a pillar for the marine transportation and shipbuilding industries, especially with the construction of the first shipyard in the Kingdom that will support the shipbuilding and heavy metals industry.

The Saudi Vision 2030 was announced by HRH Crown Prince Mohammed bin Salman, Minister of Defense, Chairman of the Council of Economic Affairs and Development, and Chairman of the Public Investment Fund (PIF); and approved by Custodian of the Two Holy Mosques King Salman bin Abdulaziz. It has laid the operational basis for the maritime industry while highlighting the Kingdom’s role as a key player in the region, especially with its coastline of more than 1,500 miles. Great importance has been placed on this sector, resulting in the development of many national strategies and plans. As the loads of commercial ships increase and global transportation traffic expanded, the Kingdom has started to increase its businesses in this vital sector by building modern ports supplied with the latest equipment and capacities to provide the best services to customers. The government had previously entirely financed the operations of Saudi ports. However, a royal decree was issued to procure the ports’ jetties, equipment, and operations and offer these assets to the private sector on a lease basis through a public tender process. This major transformation in the way Saudi ports operate led to a transfer of such costs from the government to the private sector and increased government’s returns on seaport operations to more than SAR4.5 billion.

A result of this restructuring is the establishment of the Red Sea Gateway Terminal, which acts as Saudi Arabia’s latest state-of-the-art container terminal. It was developed through a prosperous Saudi-Malaysian venture as well as local and global capital investments. It is the first private sector venture in transportation and is in line with the Saudi Vision 2030’s aim to engage the private sector in driving the Kingdom’s economy. As the Kingdom started adopting a new approach towards managing its economic affairs and facilitating sustainable development in accordance with the Saudi Vision 2030 and the National Transformation Program (NTP), attention again turned to Saudi seaports due to the important role they are expected to play in the country’s ongoing economic diversification. The Vision 2030 is based on certain key pillars, among which is Saudi Arabia’s strategic geographical location as a key global gateway and hub that connects three continents while being surrounded by the most important marine channels. Therefore, Saudi seaports will have many responsibilities and challenges ahead. They are succeeding especially as Saudi Arabia’s ranking in the Logistics Performance Index (LPI) increased from 49 to 25 globally and first regionally.

90% of the Kingdom’s imports and exports are delivered through maritime routes

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