GAC Logistics, part of GAC Group, is expecting its profit and operations to grow by 20 per cent this year as a result of the transportation boom in Dubai, according to its vice-president.
The company is planning to enter new sectors this year and is hoping to take advantage of Dubai’s position as a re-export hub to improve its multimodal logistics services.
“We do not foresee any slowdown in the logistics market. With the pace of expansion and the growing demand for imported items in the country, we can easily see a growth of more than 20 per cent this year,” said William Hill, GAC Group Vice-President, Logistics Services.
Continuing its impressive expansion in the past five years, GAC Logistics recorded a 20 per cent growth in 2007 across all its service areas, including air, sea, warehousing and distribution. The company’s flagship GAC Logistics Park in Jebel Ali has undergone continual expansion over the past 15 years to meet the growing demand and has been key to the group’s sustainable growth.
The company will invest Dh18 million this year to purchase new handling equipment and to reconfigure rackings.
Last year, GAC Logistics added more capacity with the acquisition of a 42,000 square metre pallet warehouse in Jebel Ali Free Zone – South. The purchase was driven by increasing 3PL business in Dubai, according to Hill.
The enlarged facility is the largest and most advanced of its kind in the region, spreading over 150,000 sq m.
“With the expansion of the Jebel Ali Free Zone, and the upcoming Dubai World Central (DWC), we expect the demand for our end-to-end logistics solutions to increase exponentially. This is a wake up call for us to do something about our capacity,” said Hill.
To augment its operations at the GAC Logistics Park, the group has reserved a 200,000 sq m plot of land at Dubai Logistics City (DLC), which will reinforce its ability to serve the future needs of its customers.
GAC Logistics also handles logistic demands for major brands including Marks and Spencer and it serves the region through land transport, air to sea and sea to air and boasts a leading warehousing operation.
GAC Dubai, the headquarters of a 70-strong office network, is among the largest of its operations in terms of manpower, employing close to 800 people.
The company moved its headquarters from Athens to Dubai as the emirate is a global hub. “In Dubai we constantly have clients passing through,” said Hill. “We also get closer to our clients and their operations.”
Hill said the firm’s sea freight operations were on a slowdown since the business is seasonal and volatile as it is determined by international freight rates.
“In recent years, we have noticed a shift in preference towards using air freight. By leveraging our global agreements with major air carriers such as Emirates airline, we have managed to negotiate some attractive rates for our clients. This is particularly appealing to those who are dealing with time-definite products or those operating with low inventories in rapidly changing industries.”
GAC continues to expand its international business, sealing agreements with Tyco Fire and Security Asia and the Swedish Meteorological Institute, which provides routing aides at sea.
Within the next five years the company hopes to add Iraq to its increasing Middle East portfolio. “We are already one of the biggest transshipment operators in the Suez, and we are looking to grow westwards into Africa – our next target will be Algeria,” he added.
GAC Logistics currently has a fleet of 120 trucks, and around 60 will be added this year. It plans to expand its fleet by at least 100 per cent next year to strengthen its regional road network.
is the amount that will be invested by GAC Logistics this year to purchase new handling equipment and to reconfigure rackings
GAC Logistics targets 20% growth in 2008