Cummins Inc. and The Olayan Group have announced the formation of Cummins Arabia, a 50-50, three-country distribution joint venture company in the Middle East.
The joint venture consolidates the distribution of Cummins products in the United Arab Emirates (UAE), Saudi Arabia, and Kuwait. Those products are currently distributed by Cummins’ wholly-owned UAE distributor and Olayan-owned independent distributors – General Contracting Company (GCC) in Saudi Arabia and General Transportation and Equipment (GTE) in Kuwait. Cummins said the partnership will allow it to greatly expand access to the Saudi Arabian and Kuwaiti markets, and operate closer to its customer base. At the same time, it said the joint venture will provide a valuable platform for the training and employment of nationals in each country.
The joint venture will also allow Cummins and Olayan to achieve greater scale, improve parts availability and inventory management, and centralize specific functional support across these countries to provide enhanced and consistent service to customers in the region, according to Cummins.
The joint venture entity will be formed and the new operating structure implemented in the second half of 2016. It will be headquartered in Saudi Arabia. Plans are underway to build dedicated facilities there, according to Cummins.