SISCO unveils new corporate strategy to drive growth in 5 years

Main Pillars of SISCO’s Strategy

Pillar

Details

Expand logistics services with an emphasis on asset light model

- Increasing SISCO’s presence in the fast-expanding

logistics segment, as the company is well positioned to take advantage of the significant opportunities, presented under the National Transport and Logistics Strategy, which will strengthen the integration of logistic services and future technologies.

-The strategy will focus on two core areas, including to continue developing logistics real estate offering through LogiPoint and increasing its presence in logistics services across the value chain, by pursuing an asset-light strategy. This approach will enable SISCO to achieve synergies across its existing portfolio to offer end-to-end solutions over the entire supply chain, from ports to customers.

 -Key focus areas will target high margin third- and fourth-party logistics (3/4PL) in the general, specialized and cold chain segments, value-added services in underdeveloped segments to complement SISCO’s existing ports and logistics offering, as well as investments in adjacencies to SISCO’s core segments covering multi-modal transport and logistic services in collaboration with strategic local and international partners.

International expansion of the ports segment

• A key component of RSGT’s strategy is to replicate its local success in regional and international markets in partnership with its new shareholders, Public Investment Fund (PIF) and COSCO SHIPPING Ports Limited (CSPL). A compelling opportunity exists for RSGT to expand its footprint globally by transforming from a single port operator to a multi-port operator differentiated by the ability to deliver additional capabilities in key strategic markets. 

• RSGT will predominantly target brownfield assets due to their potential to accelerate cash returns compared to greenfield assets. RSGT is currently reviewing a pipeline of investments of over SAR 2 bln in Asia and Africa, covering a mix of container and multipurpose terminals that have significant revenue potential.

• Investments will only be considered on a risk adjusted basis, and on their ability to generate long-term sustainable returns. A separate entity, backed by a favorable capital structure, will be used to bring onboard other potential shareholders for specific assets. The company will continue to drive growth by supporting its existing assets to achieve their full potential.

Drive the full potential of existing portfolio companies

       Ports

As the largest terminal operator on the Red Sea, RSGT will focus on fortifying its leadership position in its core Saudi market, where significant growth opportunities exist by actively bidding for new concessions to service the steady demand for increased throughput capacity in the Kingdom. RSGT will also focus on diversification to other cargo types where favorable concession opportunities may exist for bulk and general cargo ports/terminals.

The ports segment will continue to develop the expanded JIP terminal to increase its short-term capacity to 5.2 million TEU with total CAPEX of SAR 1 billion to be fully funded by RSGT’s cash flows and debt finance. Further investments will be made as demand for additional capacity growth. 

        Logistics Real Estate

         LogiPoint is currently undertaking a capital expenditure program of SAR 340 mln, which will predominantly be funded by debt finance, to primarily develop new warehousing capacity for global and local blue-chip clients on long-term contracts.

        Water Solutions

        SISCO’s strategy for the water portfolio is to optimize and scale up by consolidating its assets and developing an integrated service offering with a leading market presence and a focus on sustainability.

The recent successes of TAWZEA provide a strong base to further scale the business to capitalize on the new independent sewage treatment plant projects as well as long-term operation and maintenance contracts for the National Water Co.’s existing sewerage treatment plants. The focus will also be on achieving the full potential of Kindasa through improved efficiencies, pursuing new opportunities and exploring acquisitions in the desalination space.