For Tusdeer, the licence to build, develop and operate a container terminal at Jeddah Islamic Port (JIP) is a natural development, considering it already has a presence in the port area.

The company is operating a free zone at the port and inviting companies to set up commercial and light processing industries across 1 million sq m of land reclaimed from the sea.
“Tusdeer’s main aim is to become a world-class operator of free zones by providing exceptional facilities and services to customers and by promoting and developing the re-export, export, import, transshipment and in-transit businesses in Saudi Arabia and worldwide,” it says.
Tusdeer commenced operations in 2002 and now counts some 80 tenants, including some prominent names in Saudi business, who are availing themselves of its facilities.  According to sales and marketing director Mohammed Al-Zuabi, 50 per cent of these are engaged in the service sector including shipping, freight forwarding, transport and logistics, 30 per cent in the automobile business and 20 per cent in commercial and trading products.
It expects another 20 companies to come aboard this year.  At the beginning of 2006, the free zone had 55 firms on its roster.
There are no fully-fledged manufacturing operations going on, and only one company is into processing, namely Oriental Perfumes based in Dubai.  That’s because of space limitations. “The free zone land was reclaimed and is costly, and international companies would need on an average 30,000 sq m for their manufacturing facilities,” says Al-Zuabi.
So Tusdeer is encouraging trading firms believing there is a big potential for that market.
Leading car companies including Isuzu, Toyota, BMW, Hyundai, Mitsubishi and Mercedes Benz are represented through several dealers. Other heavy equipment companies, represented by agents, include Caterpillar, Mann, IVECO, Astra and Volvo. Also among the tenants are the agents for Lacoste and Guess Watches, Yamaha, Procter & Gamble and BenQ Computers Company.
The facilities on offer include storage yards for containers, general cargo and vehicles as well as pre-built warehouses.
As well as assembly, repackaging and labelling of goods, the free zone facilitates temporary cargo storage for status adjustment from issues related to country of origin and shortage of documents.
 “At the time Tusdeer was being contemplated, the emphasis was on international customers, or at least we thought attention to local and international parties would be 50:50. However, when we started Tusdeer, we changed the equation to 80 per cent for Saudi customers and 20 per cent to others,” said Al-Zuabi.
The official explained that 70 per cent of cargo in free zones in the Gulf such as Jebel Ali was destined for Saudi Arabia. Tusdeer worked on that figure and favoured Saudi parties so that Saudi-bound goods could have a “short cut” in coming to the local free zone rather than having to come via a circuitous and very costly route. 
Twenty per cent of the customers come from other GCC states and 10 per cent from other countries including Sudan, Lebanon, Iran, India and Pakistan.
Compared to free zones in other GCC states, Tusdeer offers customers tremendous advantages in costs and time, says Al-Zuabi. “For instance, if one considered neighboring free zones vs Tusdeer, you will be saving at least 17 days if you are coming from Europe. You will lose at least another five days overland through customs at the UAE border and the Saudi border. So the customer will be losing a minimum of three weeks in transit through Gulf states. During this time, he could have sold his goods.”
Al-Zuabi does not believe the emergence of economic cities such as King Abdullah City and other enclaves in Jizan and Hael will harm Tusdeer Free Zone’s prospects. “We do not look at them as competition at the national level, rather we seen them complementing each other. In fact we were the first to initiate the concept of a free zone. I am sure there will be co-operation in using our know-how,” he commented.