Expansion to fuel GAC Logistics' growth

The logistics division of the GAC Group is hoping to leverage its parent company's regional and global expansion programme to register continued growth this year.

Dubai-based GAC Logistics is hoping to exceed the 25 per cent growth registered last year as the group ventures into new regions and sectors.

The company aims to maximise the region's growing prominence as a logistics hub to enhance its operations and improve its multi-modal logistics services.

"As a company dealing in logistics among other things we have been on an upward curve in the region given the strong growth in all sectors," said Group Director Bengt Ekstrand. "The expansion of the group's services helps to stretch our network further to enable us take care of customers wherever they are."

He said the logistics market in the region was not anticipating any slowdown due to the pace of expansion in all sectors and the growing demand for imported goods. GAC Logistics currently offers air and ocean freight, warehousing and distribution services, but hopes to enter new sectors by the end of this year on the back of the group's planned expansion programme.

GAC Group is a world leader in shipping, logistics and marine services with clients across the globe, though the Middle East remains its core market.

The group started as a shipping agency operating in the Middle East but later adopted a global approach and diversified.

GAC has invested about Dh200 million in acquisitions and expansion programmes in Algeria and Australia for shipping services and Kazakhstan for oil logistics services – all based on recommendations from customers and partners.

Early this year the group acquired 100 per cent of UK-based shipping and logistics group OBC. The acquisition saw OBC rebranded as GAC-OBC and the company will continue to handle vessels in ports in the UK, the Netherlands and the US Gulf Coast. "We believe that any expansion we make directly benefits all our units in terms of extended reach and improved revenues," said Ekstrand, adding that the group's main business areas complemented each other and contributed equally to the general growth.

The company's flagship GAC Logistics Park in Jebel Ali has undergone continuous expansion over the past 15 years to meet growing demand and has been the key to the division's sustainable growth. Last year GAC Logistics added new capacity with the acquisition of a 42,000-pallet warehouse in Jebel Ali Free Zone – South. The purchase was driven by increasing third party logistics business in Dubai.

The enlarged facility is the largest and most advanced of its kind in the region, covering 150,000 sq m with more than 125,000 pallet positions. To augment its operations at the park the division has reserved a 200,000 sq m plot at Dubai Logistics City, which will reinforce its ability to serve the future needs of its customers.

GAC continues to expand its international business, sealing agreements with Tyco Fire & Security Asia and the Swedish Meteorological Institute, which provides routing aides at sea.

Within the next five years the company hopes to have Iraq in its bulging Middle East portfolio.

GAC, which began operations from Kuwait in 1959, has built up an integrated worldwide network of more than 300 offices spread across 45 countries.

It has 8,500 employees and an annual turnover of Dh5.49 billion. The group has achieved a 15 per cent year-on-year revenue growth across the board over the past three years and expects the figure to rise this year.

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