New JV for Tibbett & Britten in Middle East
Tibbett & Britten, the UK based contract logistics company, has extended its operations in the Middle East through a strategic alliance. It has joined with one of the United Arab Emirate’s largest players, Al Futtaim Logistics, to create a new joint venture, AFTB, in which it owns a 49% stake.
AFTB is a development of an existing relationship which has been in place since 1997. The JV will provide import management, warehousing, product reconfiguration and delivery by road, sea and air with particular focus in the retail, automotive parts and FMCG sectors. AFTB’s clients include Carrefour, Chep, Honda, Ikea, Panasonic, Sanyo, Toyota and Volvo.
The company has been present in the region since 1997 and has operations in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE through a joint venture with Saudi Arabian company The Olayan Group, known as OTB. In addition to the 43,000 sq m of warehousing operated by AFTB, OTB has a further 45,000 sq m.
The region has attracted investment from a number of the large European logistics companies. T&B’s rival Exel is headquartered in Dubai with air, sea and contract logistics operations in a number of countries. DHL has a network of strategic parts centres serving, amongst other industries, the oil sector. Many other forwarders have operations throughout the region providing international services such as project forwarding and marine and oil spare parts. However few have attempted to develop logistics solutions for the domestic market.
Although the region offers reasonable prospects of growth due to increasing levels of disposable income amongst the general population and the oil industry, the market is also highly vulnerable to political developments. Tibbett & Britten’s management commented at the release of its latest annual results that OTB had a difficult trading year due to the conflict in Iraq. However it expects growth to return to the market in 2004. This view may be affected if terrorist activities, such as those seen recently, manage to de-stabilise the region.
