Cummins and Olayan announce Middle East joint venture

Posted on 30 Mar 2016 by Tim Brown
A Cummins Turbo Technology eM2 Two-Stage turbo.
A Cummins Turbo Technology eM2 Two-Stage turbo - image courtesy of Cummins.

Cumminsand The Olayan Group have announced the formation of Cummins Arabia, a three-country distribution joint venture company in the Middle East that is equally owned by both companies.

This 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.

These three countries represent some of the largest markets for Cummins in the Middle East for its products including diesel and natural gas engines and related technologies.

Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 55,000 people worldwide and serves customers in approximately 190 countries with the company having earned profits of around $1.4bn from sales of $19.1bn in 2015

The partnership allows Cummins to greatly expand access to the Saudi and Kuwaiti markets and operate closer to its customer base. At the same time, Cummins says it believes the new structure will provide a valuable platform for the training and employment of local workers in each country.

“Cummins is pleased to partner with Olayan, which is a highly respected leader in the global distribution business, ” said Tom Linebarger, Chairman and CEO, Cummins.

“Olayan brings years of Middle East experience, and this partnership provides opportunities for our companies to grow and expand in this region while enhancing the service and support we provide to customers. Cummins will continue to look for new ways to build global partnerships that drive growth and success for our company, our partners, and our customers.”

Lubna Olayan, CEO of Olayan Financing Company, commented: “We view our new joint venture as a natural evolution of the close working relationship that has existed between us and Cummins for more than 60 years. We began distributing Cummins products in Saudi Arabia in 1956 and have always viewed ourselves as operating in a real spirit of partnership. This new company will further enhance our product offerings and services in the region and is truly a win-win proposition – for Cummins, for us, and for our customers.”

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 and plans are underway to build dedicated facilities there.