Saudi Arabia Chemical Logistics Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 10.64 Billion |
| Market Size (2029) | USD 14.27 Billion |
| CAGR (2024 - 2029) | > 6.12 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Saudi Arabia Chemical Logistics Market Analysis
The Saudi Arabia Chemical Logistics Market size is estimated at USD 10.64 billion in 2024, and is expected to reach USD 14.27 billion by 2029, growing at a CAGR of greater than 6.12% during the forecast period (2024-2029).
Chemical firms from the Gulf Cooperation Council (GCC) should be more robust to rising borrowing and energy prices than their bigger European competitors. In light of the current stresses of rising interest rates and higher energy costs, GCC chemical companies are likely to be more resilient than international peers due to low feedstock prices, long-term supply security, and solid customer and shareholder bases (75%-80% of GCC chemical companies' revenue).
Saudi Arabia's logistics business is worth USD 18 billion by 2022 and its services are extended internationally. The country's substantial transport activity heavily supports Saudi Arabia's economy. Furthermore, the Kingdom of Saudi Arabia (KSA) has implemented several economic reforms in the industry, hastening its progress towards its development program 'Vision 2030.' The program calls for strengthening the Saudi economy by relying less on oil and focusing more on logistics, health, education, and infrastructure, among other things.
Saudi Arabia's freight network is enormous, with an estimated 40,000 vehicles operating in eight countries throughout the Middle East and Central Asia. The ministry oversees a network of 71,500 km of paved roads, 5000 km of which are motorways and 49,000 km of which are single-lane roads. There are also 144,000 km of improved dirt roads. To improve road safety, the ministry has rolled out automated voice-warning signs on 58 km of roads, alerting drivers who veer outside lane markers, use mobile phones, or are driving in inclement weather.
The projected GCC railway, a USD 15.5 billion project that will connect the six nations with a network of 2172 km of track, will handle up to 29 million tonnes of the total 61 million transferred within the area yearly across all modes of transport (see study). It is also projected to help the Kingdom handle its sustainability concerns by reducing CO emissions by 70% to 80% as compared to trucks. According to studies, the project may reduce container and bulk freight costs by up to 30% while also creating up to 80,000 employees. It may also help to clear the shipping lane via the congested Strait of Hormuz.
In 2022 Al Jasser, as minister of transport and logistic services, signed two memoranda of understanding with Jean-Baptiste Djebbari, France’s minister of transport, to collaborate on rail and other upcoming logistics innovations.
As of February 2022, the primary entry point for imports is Jeddah Islamic Port (JIP), which accounts for 26.7% of the total. Because of its location on the Red Sea, Saudi Arabia's west coast serves as the principal entrance point for containers, while its east coast ports serve as the key loading point for energy exports. While JIP is the busiest commercial port, the two King Fahad Industrial Ports - one on the Red Sea and one on the Gulf - remain the busiest industrial ports due to their significance to the petroleum sector.
The construction, which will be completed in 2024 by Dubai Port World (DP World), will increase capacity from 2.4 million TEUs to 3.6 million TEUs. In June 2022, DP World inked a 30-year concession deal with JIP for the building of a logistics park for SR500 million (USD 133.3 million). The 415,000-square-metre facility will feature a container depot capacity of roughly 250,000 TEUs and 100,000 square meters of warehouse storage space.
Saudi Arabia Chemical Logistics Market Trends
The Rise in Chemical Production is Expected to Propel the Growth of the Chemical Logistics Market
The region's larger chemical companies benefit in general from competitively low feedstock prices, which are priced at significant discounts to the European benchmark, the Dutch TTF, which briefly exceeded USD 70 per million British thermal units (mmbtu) in mid-August 2022, compared to USD 25/mmbtu at the beginning of June 2022 and USD 18/mmbtu at the end of 2021. Saudi Arabia, for example, kept methane and ethane prices stable at USD 1.25 and USD 1.75/mmbtu, respectively. When combined with a strong consumer and shareholder base, the GCC players' profitability outperforms their European counterparts.
Higher commodity prices (particularly natural gas) benefit commodity players in the GCC. This is shown in their comparatively excellent performance in 2021 and their rather resilient first-half performance in 2022. Overall market expectations are for publicly traded chemical companies to maintain healthy unadjusted EBITDA margins of around 30% in 2022, compared to 34%-35% in 2021, despite some margin softening this year due to global capacity additions outpacing demand in some segments and high inventory levels.
Furthermore, national oil companies are investing in the development of gas fields to increase gas production, which aids in the provision of raw materials for electricity and petrochemical production. In particular, Saudi Aramco announced in March 2022, as part of its long-term strategy, that it is considering potentially increasing gas production by 50% by 2030 and is investing to increase gas production for electricity and petrochemical production by developing gas fields unrelated to oil production.
Rising Demand from Various End-User Industries
Despite global financial difficulties influencing the building industry, Saudi Arabia's construction industry remains a leader in the Middle Eastern area. In Saudi Arabia, construction production growth is predicted to be around 3.5% in 2022. Construction chemicals are usually used to increase the speed of work in construction projects that are in the planning stages or to give strength and stability to new projects. Bulk chemicals are critical components for constructing complex structures and have completely revolutionized the construction sector.
Government projects such as King Salman Park, Neom City, Red Sea Project, Jabal, and other infrastructure projects are increasing the demand for products made from petrochemical or bulk chemicals such as adhesives, tiles, and others, thereby supporting the growth of Saudi Arabia's bulk chemical market.
Butyric acid, along with acetic acid and propionic acid, is one of the three most prevalent short-chain fatty acids (SCFAs) in the stomach. Around 90–95% of the SCFAs in the gut, which are created when gut-friendly bacteria break down dietary fiber, are made up of these saturated fatty acids. Butyric acid is used to give buttery overtones to food tastes, and its esters are frequently used as food additives to boost fruit aroma.
Butyric acid is widely known for its anticancer qualities since it stimulates morphological and biochemical differentiation in several cells while concurrently reducing neoplastic tendencies. According to Arab News, the pharmaceutical business in the Kingdom is expected to export more than SR 1.5 million per year and grow at a pace of 5% per year, with more than 40 recognized pharmaceutical enterprises in Saudi Arabia supplying 36% of the country's medical needs. As a result, demand for butyric acid is expected to rise in Saudi Arabia, driving market development.
In December 2022, Saudi Basic Chemical Industries (SABIC) announced the opening of a new unit, the Saudi Industrial Chemicals factory situated in Jeddah. This new factory helps SABIC in producing dioctyl terephthalate from ethyl hexanol.
Saudi Arabia Chemical Logistics Industry Overview
There are multiple big and small players in the Saudi Arabia Chemical Logistics market. The sector is highly fragmented. The sector has been observing many innovative and digital trends in recent years, like adopting big data analytics and IoT technologies to further fuel the growth of the chemical logistics industry. Given the region's visibility of long-term feedstock supply from national oil companies and competitive feedstock pricing in the lowest cost quartile, which provides margin support and mitigates volatility amid higher input costs globally, regional chemical companies are emerging as better positioned. Some of the major players are A&R Logistics, Agility Logistics, Al-Futtaim Logistics, C.H. Robinson, and BDP International, Inc.
Saudi Arabia Chemical Logistics Market Leaders
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Bahri Chemicals
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Saudi Transport & Investment Co. (Mubarrad)
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Almajdouie Group
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Arabian Chemical Terminals
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DHL
*Disclaimer: Major Players sorted in no particular order
Saudi Arabia Chemical Logistics Market News
February 2023: A. P. Moller-Maersk, a global integrator of logistics, and Saudi Ports Authority ‘Mawani’ broke ground for Saudi Arabia’s largest Integrated Logistics Park at Jeddah Islamic Port. Spread over 225,000 sq. m., this Integrated Logistics Park upon opening will provide Maersk’s customers extensive infrastructure for warehousing & distribution, cold storage, e-commerce and serve as a hub for transhipments, petrochemical consolidation, air freight and LCL (less than container load) cargo.
March 2023: Aramco, one of the world’s leading integrated energy and chemicals companies, and international contract logistics provider DHL Supply Chain have announced the signing of a shareholders’ agreement for a new Procurement and Logistics Hub in Saudi Arabia to enhance supply chain efficiency and sustainability. It would be the region’s first such hub catering to customers in the industrial, energy, chemical, and petrochemical sectors.
Saudi Arabia Chemical Logistics Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS AND INSIGHTS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Increase in awareness regarding product security and safety in the chemical industry
4.2.2 Rising Demand from Various End-User Industries
4.3 Market Restraints
4.3.1 Complexities in chemical logistics
4.4 Market Oppurtunities
4.4.1 Growing demand for a modernized green warehouse in the chemical industry for sustainable business operations
4.4.2 Growth in adoption of IoT enabled connected devices
4.5 Value Chain / Supply Chain Analysis
4.6 Porter's Five Forces Analysis
4.6.1 Bargaining Power of Suppliers
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Threat of New Entrants
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Technological Innovations in the industry
4.8 Government Initiatives to Attract Investment in the Industry
4.9 Insights into the 3PL Market (Market Size and Forecast)
4.10 Impact of COVID - 19 on the Industry
5. MARKET SEGMENTATION
5.1 By Service
5.1.1 Transportation
5.1.2 Warehousing, Distribution, and Inventory Management
5.1.3 Other Value-added Services
5.2 By End User
5.2.1 Pharmaceutical Industry
5.2.2 Cosmetic Industry
5.2.3 Oil and Gas Industry
5.2.4 Specialty Chemicals Industry
5.2.5 Other End Users
6. COMPETITIVE LANDSCAPE
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 Al-Futtaim Logistics
6.2.2 Bahri Chemicals
6.2.3 Arabian Chemical Terminals
6.2.4 Saudi Transport & Investment Co. (Mubarrad)
6.2.5 International Chemical Logistics
6.2.6 DHL
6.2.7 Agility Logistics
6.2.8 CEVA Logistics
6.2.9 AAA Freight Services LLC
6.2.10 Bertschi AG
6.2.11 Brenntag
6.2.12 S.A. TALKE*
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
8. APPENDIX
Saudi Arabia Chemical Logistics Industry Segmentation
Logistics deals with planning, procurement, and implementation of different activities in the overall supply chain. Chemical logistics refers to transportation, delivery solutions, and distribution of chemicals, which also manage the way resources are stored and as well as delivered to end-users. The mode of chemical logistics includes transportation through the sea, road, rail, or airways. The chemical industry provides products for the majority of industries. Liquid or solid chemicals are used to make pharmaceuticals, food, and other everyday items.
A comprehensive background analysis of the Saudi Arabia Chemical Logistics Market, covering the current market trends, restraints, technological updates, and detailed information on various segments and the competitive landscape of the industry. The impact of COVID-19 has also been incorporated and considered during the study.
Saudi Arabia's chemical logistics market is segmented by service (transportation, warehousing, distribution, and inventory management) and by end-users (pharmaceutical industry, cosmetic industry, oil and gas industry, specialty chemicals industry, and other end users).
The report offers market size and forecasts for the Saudi Arabia Chemical Logistics Market in value (USD) for all the above segments.
| By Service | |
| Transportation | |
| Warehousing, Distribution, and Inventory Management | |
| Other Value-added Services |
| By End User | |
| Pharmaceutical Industry | |
| Cosmetic Industry | |
| Oil and Gas Industry | |
| Specialty Chemicals Industry | |
| Other End Users |
Saudi Arabia Chemical Logistics Market Research Faqs
How big is the Saudi Arabia Chemical Logistics Market?
The Saudi Arabia Chemical Logistics Market size is expected to reach USD 10.64 billion in 2024 and grow at a CAGR of greater than 6.12% to reach USD 14.27 billion by 2029.
What is the current Saudi Arabia Chemical Logistics Market size?
In 2024, the Saudi Arabia Chemical Logistics Market size is expected to reach USD 10.64 billion.
Who are the key players in Saudi Arabia Chemical Logistics Market?
Bahri Chemicals, Saudi Transport & Investment Co. (Mubarrad), Almajdouie Group, Arabian Chemical Terminals and DHL are the major companies operating in the Saudi Arabia Chemical Logistics Market.
What years does this Saudi Arabia Chemical Logistics Market cover, and what was the market size in 2023?
In 2023, the Saudi Arabia Chemical Logistics Market size was estimated at USD 10.03 billion. The report covers the Saudi Arabia Chemical Logistics Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Saudi Arabia Chemical Logistics Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Saudi Arabia Chemical Logistics Industry Report
Statistics for the 2024 Saudi Arabia Chemical Logistics market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Saudi Arabia Chemical Logistics analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
