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29 March 2024

Ceva to invest Dh3bn for Mideast expansion

Shamsudeen Ahmed is optimistic about Ceva's aggressive expansion plans (SATISH KUMAR)

Published
By Ashaba K Abdul Basti

As part of its move to strengthen its presence in the region and tap into the opportunities within the regional logistics industry, Ceva is investing more than Dh3 billion in the region over the next two years.

Ceva, one of the leading supply chain and forwarding companies in the world, is hoping to expand its operations within the region through building new facilities, acquiring and merging with existing companies.

"We intend to maximise the opportunities presented by the region's logistics industry through an aggressive expansion plan to enable us to tap into the fast growing market," Shamsudeen Ahmed, Regional Director of Ceva told Emirates Business.

"Ceva is currently a 6.3bn euro company and our plan is to make it a 10bn euro company by 2010. We believe that this region has great potential to enable us achieve this target."

The company, whose regional headquarters are in Jebel Ali, is in the process of expanding all its existing facilities within the region.

Two of its new facilities will be opened this year and they include a 8,000 square metre warehouse in Jebel Ali to be opened in October as well as a 11,000 square metre facility also in Jebel Ali to be opened in December.

A state of the art 63,000 square metre facility in Jebel Ali that will provide integrated supply chain solutions is under construction and is expected to be ready by mid-2009.

"For us, this is just the beginning," said Ahmed. "We are finalising the concept design for a new facility dedicated to oil and gas as a major sector our business. We are making similar programmes in other countries across the region."

The company is also in advanced talks with officials of Dubai Logistics City where it intends to lease land for further expansion within the UAE, which it considers its core market within the region.

Ceva already has three branches in Saudi Arabia and has operations in Oman, Kuwait and Qatar. It is currently in the process of setting up operations in Bahrain through a local partner.

In Jordan, the company has signed up with United Holding Group to form a logistics partnership in the country.

However, Ceva has plans to acquire some of the existing logistics companies in the region as part of its strategy to widen its reach.

Ahmed noted that in order to withstand competition from already established contract logistics players in the region, Ceva would focus on employing state-of-the-art technology aimed at ensuring timely and cost effective services.

"As competition stiffens, customers are looking for a provider who will offer them faster services at affordable costs. We are investing heavily on the latest technologies to guarantee the best services," said Ahmed.

The company will also create a Middle East road network for its fleet of FTL (Full Track Load) and LTL (Less Than Truck Load) trailers. The trailers will be leased from transport companies across the region and branded as Ceva.

Ahmed said that the company had no plans to purchase its own trucks adding that leasing would be the most suitable model for its business.

Ceva, headquartered in Netherlands, was formed in 2006 when Apollo Management, a private equity group based in New York acquired the logistics division of TNT and re-named it Ceva.

In mid-2007, CEVA merged with Eagle Global Logistics (EGL) and integrated it under the Ceva brand.

EGL, whose operations in the Middle East stretch back over ten years, was rebranded as Ceva early this year and all its management in the region moved to Ceva.

Last week, the company reported revenues of 1.7bn euros for the second quarter of 2008, helped by a strong performance in Contract Logistics and Freight Forwarding, an indication of a 9.4 per cent revenue growth over 2007 for the same period.

"The fact that Ceva was born out of two established logistics companies with the best network, know how and expertise in supply chain management, the company is poised for better performance in the coming years," said Ahmed.

He said that Ceva's revenues in the Middle East region are projected to grow between 10 and 15 per cent this year, but added that this could even go higher considering the strong results in the first half of 2008.