With the nation’s ‘Vision 2030’ on the horizon, Saudi Arabia has ramped up its efforts to diversify its economy and reduce its dependence on oil.
As such, it has turned its attention to another lucrative commodity – petrochemicals.
The Saudi petrochemical industry is critical to the Kingdom’s non-oil economy, with chemical and plastic exports accounting for around $30bn in export revenues in 2015.
Saudi Arabia’s efforts to tap into the global petrochemical market is paying off and it seems no company understands this better than S.A. TALKE.
Earning its stripes as one of the country’s leading logistics service providers, S.A. TALKE offers a range of specialised logistics services such as on-site and off-site operations, packaging, storage, transport as well as value-added services.
Established as a joint venture between the German TALKE Group and the Saudi Sisco and Al-Jabr Groups, Managing Director Oliver Klingbeil says that S.A. TALKE has worked hard to cement its position in the region.
“I’ve been in the logistics business for over 30 years,” Klingbeil says. “When I first started at S.A. TALKE in September 2010, I had a team of around 274 staff and we had one project. Now, eight years later, we have close to 1,800 employees and 12 operations in place.
“In the beginning, we were not well known in the market, but since we were founded we have consistently developed our expertise and reputation.
“We depend on certain parameters, like the oil price, but where others haven’t been so successful, we have seen strong growth,” he continues. “We’ve significantly increased our revenue and our net profits. We are always project-driven and have gained awards for our projects. We’ve branched out from our European partners (ALFRED TALKE) and established our brand of S.A. TALKE, which is well-known in Saudi Arabia and the Middle East.”
As part of the business, S.A. TALKE handles solids and liquids in the petrochemical sector from companies such as SABIC and Chevron Phillips – both offsite and onsite.
The firm can manage entire logistics centres or individual facilities on its client’s behalf and can also offer offsite multi-user facilities to manage and handle products.
Last year S.A. TALKE handled around 8.4mn tonnes of products for its customers. Yet, despite its growing reach, Klingbeil says the firm takes a project-driven approach to ensure each project receives the utmost care and diligence.
“One of my personal goals was to step into the market in the western region. Today one of our biggest projects is the Petro Rabigh project phase II in the western region, which is a joint venture between Saudi Aramco and Sumitomo. Through the project, we manage five plants and we have started with 350 staff but we plan to increase the number of staff to up to 800 people based on how many additional projects we see there.
“Of course, we also have projects with various SABIC affiliates,” he adds. “We manage their Portside Logistics Facility, which is a 350,000 sqm container yard where we have the daily movement of around 500 to 700 containers. We also work with Chevron Phillips where we manage the entire site for them with two dust free warehouses on the site close to around 100,000 sqm.
“On top of this, we have the Tasnee project where we now have five existing operations we manage. We also have business with Dow Chemicals, where we have a dedicated warehouse which we manage for them.
“Additionally, we also have business with Sadara, which is a joint venture between Aramco and Dow Chemical where we manage their container yards and some of their products. Then, not to forget, in Yanbu in the Western region, we have a contract with NATPET where we also manage their onsite operations.”
With experience in projects stretching across Saudi Arabia, one thing remains constant at S.A. TALKE – the company’s drive for efficiency and productivity. With scrupulous monitoring and technological ingenuity, S.A. TALKE ensures that it upholds best in class standards.
“Every day we measure our operations to see how we can become better, more efficient and productive. We have regular meetings about safety, operations, optimisation and finance, for example, because the business is not standing still.
“We manage and monitor every product individually. Every project stands for itself,” he adds.
This continuous improvement is also having a knock-on effect on the company’s safety standards. In fact, in January, the Saudi firm achieved 6mn safe man-hours without Lost Time Injury (LTI) across all the company’s projects.
It’s a proud achievement, says Klingbeil, and one which he believes wouldn’t be possible without the company’s high safety standards.
“We have a very dedicated safety department and a strong safety culture,” he observes. “Our safety standards and procedures are important to the firm. It starts with myself and we live this culture through every single person.
“We’re always defining new ways and new parameters to make safety. This is the culture we uphold and live by every day. You don’t achieve 6mn man hours without LTI without this culture.”
The future of logistics is one which is paved with new innovation and technologies and this is also the case at S.A. TALKE.
Using automation and SAP software, for instance, S.A. TALKE is driving efficiency like never before.
“Technology is very important as it’s helping us to save time and be more efficient,” Klingbeil says. “We’re also working on monitoring and managing truck terminals so that we can manage these processes and see the entire supply chain. Internally, we have also implemented several new software solutions in our finance, procurement, and HR department.”
With several large-scale logistics contracts in its portfolio, S.A. TALKE’s core competency is namely the transportation and handling of liquid chemicals.
However, keen to keep pace with a rapidly changing market, Klingbeil says that the company is preparing a plan B and C, in case of disruption in the market.
Leveraging the world-class reputation it has developed in the oil and gas market, the Saudi firm says it is going to combine its core competencies with other market niches to remain ahead of the curve.
“Our core business always will be in the petrochemical market, that is what we do best,” says Klingbeil. “But we are also looking to explore other market segments.”
“We’re exploring doing trucking in the future for dedicated customers in the chemical market because there is a huge demand for this and we’ve also been looking into managing railway terminals.
“We’ve just been awarded a contract from SABIC whereby we will manage their truck terminal in the future, which is a movement of around 750 trucks per day. At the moment we still have a long way to go but, on the other hand, you cannot start early enough if you want to get knowledge and experience in this field.”
It seems that agility is key to S.A. TALKE’s day-to-day operations, yet despite its dynamic ethos, the company is keen to uphold its core businesses and retain its existing customers.
“The world is changing, the market is changing, and therefore, we also have to be careful that we don’t lose existing business,” Klingbeil says.
“Like any other industry, we have competition and we shouldn’t underestimate them. Therefore, we are working hard to retain our business and we are continuously making an effort to offer our clients the best service at very competitive rates to make sure that we continue to grow and optimize our business on a day to day base.”
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Aside from the company’s best in class practices and distinctive strategy, Klingbeil believes that the true success of the company lies in its people.
The Saudi firm strives to reward employee accomplishments, promote open communication and hire a diverse range of people, even hiring the company’s first female employees.
“The biggest gift is that we have so many incredible team members and leaders who are supporting the company and our clients every day,” he notes.
In keeping with Saudi Arabia’s ‘Vision 2030,’ S.A. TALKE has also encouraged the employment of Saudi workers through the Kingdom’s ‘Saudization’ programme. However, Klingbeil doesn’t underestimate the challenges that this task brings.
“We’ve recently been awarded two new projects where we will need to bring in more manpower. It’s a challenge because we need experienced people, which we can’t always hire from within the country. On the other hand, the sector is also becoming more open and so we have hired our first female employees which I am proud to see.
“We do a lot of campaigns to support the government and the country’s ‘Vision 2030’. I hope from a mid- and long-term perspective, it will help the country to move in the right direction.”
By offering in-depth training and high-quality accommodation, the Saudi firm has created a work environment that Klingbeil describes as an “S.A. TALKE family”. With an employee turnover of only 3-5%, this close-knit atmosphere has paid off.
“In our organisation, an employee isn’t a number; an employee is a respected person who we are glad that we have on board,” notes Klingbeil. "We don't categorise, we treat everyone the same. We say to our people, ‘you’re not only an employee, you are more. You have valued assets’. This culture is important to S.A. TALKE.”
The road ahead is an exciting one for S.A. TALKE. With a proven strategy for success as a logistics service provider, the firm is also exploring other avenues in the market such as the FMCG and pharmaceutical sector.
With Saudi Arabia’s ‘Vision 2030’ ahead, Saudi Arabia is set to continue on its upward trajectory and S.A. TALKE is set to follow suit.