New Saudi complex aims to tap re-export market

A re-export zone at Dammam port aims to exploit the growing business opportunities in neighbouring countries in line with similar operations in Dubai and Singapore. For Saudi Arabia, which has started to open up its economy, it is the second re-export zone after that in Jeddah last year.

"The 140 million riyal re-export zone at Dammam allows storing of imported goods without any demurrage for three years," said Salman Al Habib, project manager of Saudi Development and Re-export Services Co, operators of the facility. The private sector project covers 400,000 square metres with 22 insulated or airconditioned bonded warehouses. If the materials are brought in for re-exports, they will not be cessed with customs duties.

But if the goods are to be sold within the country, customs clearance is given only after payment of the normal customs duty. The zone has its own specially built-up facility for inspection of bonded goods by the customs officials. "Goods stored within the zone can be re-exported without payment of any customs duty by sea or road," said Habib.

The idea of a re-export zone was initially mooted by the Eastern Province Chamber of Commerce and Industry and the government has permitted this new pattern of trading to exploit growing business opportunities with neighbouring countries. The move came as a direct result of the liberalisation of re-export policy announced in April 1998 and the country has allowed transit and transshipment facilities at three of its ports — Dammam, Jeddah and Jubail — since then. Eastern Province chamber sources said both Jeddah and Dammam ports have the potential to emerge as the major Afro-Asian re-export centres.