PIF and Cosco purchase 40% stake in Jeddah’s Red Sea Gateway Terminal
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, and Cosco Shipping Ports of Hong King completed the acquisition of a 40 per cent stake in the Red Sea Gateway Terminal in Jeddah.
The two entities each bought a 20 per cent share in the company that owns the terminal for $280 million. Saudi Industrial Services Company has sold a 21.2 per cent stake for 556.5m Saudi riyals ($148.4m), it said in a separate statement. However, it will retain a 36.36 per cent shareholding in the terminal operator.
The transaction will bring global shipping expertise through Cosco to the Jeddah operator and help boost its business volumes, RSGT said.
“Both new shareholders will help to drive future growth on seaside and landside logistics,” the company said.
“Working closely with the PIF and CSPL, we will accelerate our shared vision, further strengthen our customer offering, and elevate our mandate to meet the increasing demand for terminal and logistics services,” said Jens Floe, chief executive at RSGT.
“RSGT will continue to focus on developing a niche emerging market operator with a keen focus on ports in the Red Sea and East Africa.”
RSGT began operations in 2009 at Jeddah Islamic Port. It is now the biggest terminal in Saudi Arabia, having expanded capacity from an initial 2.5 million twenty foot equivalent container units, or TEUs, to 5.2 million. A 30-year concession was signed with the Saudi Arabia Ports Authority to operate the terminal in 2019, with a view to expanding capacity further to 9 million TEUs.
Developing the kingdom’s logistics and transport is a key facet of Saudi Arabia’s Vision 2030, which looks to diversify the earnings of the world’s largest oil exporter away from hydrocarbons.
Earlier this month, Saudi Arabia announced plans to invest more than 500 billion riyals ($133bn) by 2030 to expand its transport sector as part of a strategy to make the kingdom a global logistics centre.
The Arab world’s biggest economy has plans for more than 300 projects through partnerships with the local and international private sector.
They include launching a flagship airline, expanding airports, enlarging its railway network, increasing ports’ capacity, and investing in futuristic public transport technology such as the Hyperloop.