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Neom and Denmark’s DSV in $10bn logistics partnership

The first residents of Oxagon, a Neom project, are due to move in next year Neom
The first residents of Oxagon, a Neom project, are due to move in next year
  • Joint venture to serve giga-project
  • PIF-owned Neom has 51% stake
  • DSV expands Saudi presence

Saudi Arabia’s Neom and Danish freight forwarder DSV have entered into a $10 billion logistics joint venture (JV) that will serve the $500 billion giga-project in the kingdom’s northwest.

The JV will provide supply chain management including delivering goods and materials to Neom, the companies said in a joint statement.

Neom, owned by Saudi Arabia’s Public Investment Fund, will hold a 51 percent stake in the JV and DSV the remainder.

Neom spans 26,500 square kilometres and will feature several major residential and tourism developments. These include The Line, a 170-km long linear city that will be 200 metres wide and 500 metres tall. Neom predicts The Line’s population will be 9 million by 2045.

PIF is investing $500 billion in Neom, according to its website. The first residents at another Neom project, Oxagon, will move in next year.

“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,” Neom CEO Nadhmi Al-Nasr said in a joint statement with DSV at the Future Investment Initiative (FII) in Riyadh.

“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.”

DSV is the world’s third-largest freight forwarder by annual logistics revenue, according to research company Armstrong & Associates, behind DHL and Switzerland’s Kuehne + Nagel.

“Neom is one of the largest and most complex projects in the world,” said Jens Bjørn Andersen, DSV’s group CEO, in the statement. “DSV already has a strong presence in Saudi Arabia, and this is a significant growth opportunity for us in the region.”

The JV’s launch is pending regulatory approval, which the companies expect to receive in the second quarter of 2024.