Tusdeer has devised a new strategy that calls for the bonded and re-export zone (BRZ) to develop as an integrated logistics hub, its CEO and board member says.

Aamer A Zainal Alireza told Gulf Industry that the hub would have three components, namely a containerised zone, a new third-party warehouse and support for shipping lines and other parties in the logistics business.
The move was an outcome of the expertise the zone had gained over five years since it started operations.
Zainal said one of the advantages Tusdeer enjoyed was its proximity to downtown Jeddah. Space was also not an issue. “We have been granted approval from the port authority to build a multi-tenant office park for the logistics and shipping line business,” Zainal said.  He added that Tusdeer was moving from a single-focused zone to a multi-focused one.
The company is building Jeddah Islamic Port’s third terminal at a cost of SR1.6 billion ($443 million). “We will have two extremely large berths equivalent to four existing berths, and we are adding a new series of warehouses and office buildings,” he said. “For instance DHL will have its own office and across the street it will have its own warehouses.”
The official said Tusdeer saw new opportunities emerging for its integrated logistics hub. “We are now focusing on the polymer logistics business,” he said. There was a lot of potential as petrochemical industries in Rabigh and Yanbu were using Jeddah port for exports.  The new Tusdeer hub within the BRZ also saw business potential from the high-end electronics sector.
Zainal attributed the BRZ’s success to its location close to the city’s business cluster, its world-class infrastructure, inter-modal connectivity, and a huge demand for its services.
The BRZ had excelled in the general cargo sphere, particularly with regard to car agencies and car imports and other export-oriented business. Testifying to that was the fact that all the tenants in the zone had expanded their operations.
Tusdeer was poised for greater achievements.  Zainal revealed that the company was working with the government for the removal of regulations that prevented the company from achieving its full potential
Considering the demand for container volume, the CEO said the biggest challenge was to ensure that the container terminal was built in two and a half years. He added that Tusdeer’s design team was meeting global contractors to select a suitable world-class contra-ctor willing to take up the project, which had a large drainage component, a reclamation component and a construction compo-nent. The container port should be ready in time to meet the demand awaiting it. In anticipation, Tusdeer had begun its marketing efforts and was acquain-ting shipping lines with the value the terminal would offer them.
Zainal said the dredging and reclamation contract would be awarded in the second quarter of this year. Next would be the contact for the construction of the wharf and other facilities. The third component, which would be internationally tendered, related to equipment. Tusdeer was already in touch with the equipment provider to deliver what was required in the next two and a half years.
Tusdeer has teamed up with Seaport Terminal of Malaysia under a build-operate-transfer (BOT) licence granted by the Saudi Seaport Authority (Seapa). The Malaysian firm, holding a 20 per cent stake in the project, was brought on board for its expertise and success in building and developing the Port of Tanjung Pelepas (PTP), the fastest growing port in Asia.
Tusdeer appointed Maunsell from Australia to conduct a detailed rail and road network analysis for solutions to ease traffic around the port area and effectively connect to the upcoming Saudi Land Bridge Project.
Zainal said Tusdeer was working with the municipality, the port and the Ministry of Transportation for a 30-year plan to eliminate road traffic bottlenecks.
In other remarks, Zainal clarified that, strictly speaking, Tusdeer did not operate a free zone. “It’s a bonded facility, which is a little different,” he said. He explained that a free zone was an area exempted from paying customs duty. Tusdeer came under the Saudi commercial and labour laws and its facility was actually a bonded and re-export one, which was different from a free zone. Goods in the BRZ area were treated similar to goods in a free zone. But companies could not set up their offshore offices, he stressed.
Tusdeer won a government tender to set up the BRZ as a build, own transfer (BOT) project and spent about SR225 million to reclaim 1 sq km of land. “A lot of promises didn’t initially pan out as planned. That was because we weren’t able to import containers from port into the BRZ. The only containers allowed were the general volume ones,” said Zainal, adding that the situation prompted the company to re-evaluate its strategy and develop as an integrated business hub.