A strategy of diversification and JVs for the Saudi market

Saudi Arabia

Fahad Al Daihani, CEO of Sedres Maritime, talks to The Energy Year about the company’s main activities, how it helps different stakeholders with its ship agency services, the expected demand for ship chandelling services and how digitalisation trends have affected the ship agency business. Sedres Maritime provides marine and logistics solutions.

Could you elaborate on the main activities of the Sedres Group?
Sedres Group, a Saudi-owned company, maintains offices in the Western, Central and Eastern provinces of Saudi Arabia. Our marine and logistics solutions encompass shipping agency services, crew changes, ship chandelling and integrated land and sea transportation services.
Furthermore, through our partnerships with various joint venture partners, we deliver speciality gases, chemical solutions, non-destructive inspection, commercial diving, marine engine maintenance and services related to LSA [life-saving appliances] and FFA [forward freight agreements].
Dialog is a fully owned subsidiary consisting of a 10,000-square-metre facility in Jubail that provides machining, maintenance, fabrication and shutdown services for the oil and gas industry. Additionally, we operate the Dialog Jubail Supply Base in collaboration with our joint venture partner, which serves as a centralised offshore marine logistics hub and resource centre for oilfield services, equipment and supplies.

What are the primary ship agency services you offer, and how do they benefit various stakeholders in the industry?
As a ship agency service provider, our aim is to streamline operations for vessel owners, shippers and charterers conducting business in Saudi Arabia. We represent commercial vessels through liaison with government bodies and entities such as SABIC and Aramco to ensure seamless cargo movements. Our role involves facilitating effective communication between vessel owners, charters, shippers, receivers, terminals, port authorities and other involved parties.
Vessel owners seek prompt departures from point A to point B to deploy vessels for other voyages, while buyers aim for swift receipt at their designated ports. Through our efforts and by optimising all logistics processes, we endeavour to achieve a swift turnaround of vessels in our ports.

What are your expectations for the demand in ship chandelling services?
Considering the anticipated positive cycle in oil and gas prices from 2022 to 2026, we estimate a doubling of offshore crafts and rigs in the kingdom’s waters. To remain active in the industry, we are enhancing our capabilities accordingly. We are doubling our fleet of crew boats from two to four to cater to shallow water activities and marine logistics.
Ship supplies, especially regarding provision deliveries, represent a highly active department in Sedres Maritime. To cater to such high-volume movements, we maintain warehouses totalling 60,000 square metres. These include space for offshore marine equipment handling, huge chiller and freezer facilities, and a fleet of logistics assets and freezer, chiller, and dry provision containers.

How have recent digitalisation trends impacted the ship agency business?
The kingdom is currently witnessing a digital transformation in almost every sector. The most important component is ZATCA [Zakat, Tax and Customs Authority], which is impacting every business big and small in a positive way. An important tool that impacts our shipping agency activity is the Tabadul online platform.
The introduction of Tabadul has reduced manual paperwork, resulting in a better utilisation of human resources, which has thereby brought efficiencies to our clearance processes while minimising human error.

What is Sedres’ value proposition in the chemical container supply segment?
We have achieved notable success through a joint venture with a Singaporean company that specialises in reusable containers for hazardous chemicals. Recognising the capacity of one of SABIC’s subsidiaries in Saudi Arabia to produce chemicals that require the deployment of these specialised containers, we proposed a joint venture with our Singaporean partner.
This collaboration exemplifies our approach to joint ventures and reflects our ability to bring in technical expertise into the kingdom while we contribute through meaningful business support, development and execution.

What are your aspirations in the plant maintenance sector?
Jubail is the world’s largest petrochemical complex. Thus, significant opportunities exist for organisations seeking to serve specialised maintenance needs of the sector.
We observe that the plant maintenance services sector has remained unchanged with respect to methodology, technology and practices for a long time. We believe that through a suitable partnership with an innovative foreign company, a fruitful JV could be formed to introduce time-saving solutions. It’s time the industry moved away from traditional methods and witnessed disruptive technological advancements.

What is your strategy for achieving sustainable growth in the coming years?
Our primary focus remains horizontal growth through JVs. Our roots in JVs originate from the oil and gas industry, and while our approach hasn’t always been systematic, it has naturally evolved through personal connections and industry demands.
We are currently exploring new markets and diversification opportunities beyond oil and gas since only a diversified service portfolio can provide sustainable growth and resilience.

How has the landscape of JVs changed in Saudi Arabia?
The process of introducing JVs in Saudi Arabia has evolved over time in various industries. We noticed a few local companies forming numerous JVs to serve only as support and guides for the establishment of legal entities. They lacked engagement, and I believe that such distancing from active business results in JVs not resulting in sustainable growth.
Now, however, establishing a company in Saudi Arabia is achievable without the need of a local partner. The decision to engage in JVs now depends on individual circumstances and on how the collaborating entities plan to add value to the new entity.
While there is no definitive rule, sincerity and mutual support are crucial elements for successful JVs. We carefully evaluate these relationships and strive to actively contribute at each step of the journey.

Could you please comment on the opportunities arising from the acquisition of Dialog Service Saudi Arabia (DSSA) in 2023?
DSSA’s acquisition came naturally, as we wished to turn around the JV through our dedicated efforts to capitalise on Jubail’s strength of housing the largest industrial facilities in the world.
By acquiring DSSA we expect to gain access to a broader range of expertise and capabilities. This includes maintenance, repair, turnaround services, asset management, engineering and other specialised services. The expanded service portfolio is expected to allow us to offer comprehensive solutions to petrochemical plant owners, improving customer satisfaction and potentially increasing our market share.
Over time we intend to bring advanced technologies, proprietary methodologies and innovative solutions to this industry to improve operational efficiency and to differentiate ourselves in the market.
We believe cross-selling and upselling should also present significant opportunities, as we wish to leverage our existing customer base and relationships to offer Dialog’s services to our current clients, thereby strengthening customer loyalty.

Read our latest insights on:

• Saudi Arabia