March 29, 2017
Agility, a leading global logistics provider, and the largest in the Middle East, is investing USD 10 million into expanding its Bahrain regional hub.
Due for completion in late 2017, the expansion will enable Agility to meet increasing demand for sophisticated integrated logistics services across the GCC.
The company will invest in warehousing, freight, transport and speciality logistics solutions. Specifically, Agility’s hub will expand to 28,000 square metres, storage capacity will increase by 19,000 pallet positions and the workforce will grow by 25% to around 250.
Bahrain’s biggest third-party logistics company, Agility has operated here since 2003, with its main facility in Hidd.
The company’s core commercial business includes air, sea and road freight forwarding, warehousing, distribution and specialised services in project logistics, chemical logistics, fairs and events, and fuel logistics. Its services encompass:
Agility also owns and operates a 200-strong fleet that includes refrigerated trailers, and is a major provider of cross-border transportation and customs brokerage for multinational organisations based in Bahrain.
Significant logistics opportunities
As Agility has discovered, Bahrain is the ideal location to service regional business.
The Kingdom’s attractiveness and standing is robust and improving. In Agility’s own 2017 Emerging Markets Logistics Index, which it compiles with research company Ti (Transport Intelligence), Bahrain ranks 23rd globally– up five places in 2016. The Kingdom registered the third-highest improvement in rank, featuring highly for Compatibility (market accessibility and business regulations – 4th) and Connectedness (transport infrastructure connectivity – 7th). Overall, Bahrain is seen as having ‘good prospects and easy entry’.
Four clear reasons account for Bahrain’s position:
- A strong logistics sector. Together with transport, logistics is a major contributor to Bahrain’s GDP (around 7% in 2015) and has gained from an 80% increase in manufacturing output over ten years. Apart from Agility, several major logistics companies have regional hubs here including DHL, which recognises Bahrain as its second most important ‘Global Hotspot’ in its 2016 Connectedness Index.
- Progressive business reforms. Bahrain’s liberal economy and low operating, port and manpower costs make it easy to set up a business here. And it is becoming even easier. Not only is it possible for foreign investors to enjoy 100% ownership of regional distribution and value added logistics activities; they are now allowed a 49% stake in shipping, air and sea freight agencies. In addition, we have recently reduced the minimal capital requirement for starting a business, ensuring that market entry is highly cost-effective.
- Improved customs efficiency. Bahrain offers the Gulf’s fastest clearance at all entry points, so goods move quicker and at lower cost. Advanced ICT and online systems make a huge difference with initiatives such as the single window customs clearing system, which covers customs enquiries and submissions, and Sijilat, a portal that streamlines commercial licensing and registration.
- Ongoing infrastructure investment. The Kingdom continues to open up commercial prospects for logistics companies by building on its central Gulf location with more than USD 32 billion investment in infrastructure projects. These include the modernisation and expansion of Bahrain International Airport, which will increase air cargo volumes four fold to one million tonnes per year by 2023 via a modular development plan aimed at attracting high value cargo and contract logistics operations. In addition, the King Hamad Causeway, Bahrain’s second road link to Saudi Arabia serving passengers and freight, is expected to help reduce import costs by up to fifty per cent.
Final words on Agility’s expansion
Essa Al-Saleh, President & CEO Agility GIL, commented: “This investment reflects Agility’s commitment to our clients in the region, and also the strength of Bahrain’s offering as a regional hub with efficient customs clearance, established transport links and an attractive operating environment. The expansion of our Bahrain logistics hub will increase the storage capacity and help meet the increasing regional demand for sophisticated and integrated logistics services.”
Khalid Al Rumaihi, Chief Executive of the Bahrain Economic Development Board, added: “Agility’s investment is a reflection of Bahrain’s strengths as a regional hub for logistics providers. The unique geographical location, with direct access to the region’s largest economy, combined with the ongoing liberalisation of the logistics sector and availability of a well-educated, bilingual local workforce are the key drivers behind the growth of the logistics sector in the Kingdom.”