AD Ports Group's subsidiary Kezad Group and online shopping platform noon.com on Wednesday broke ground on the UAE’s largest fulfilment centre in Abu Dhabi, which will form part of an anchor investment by Noon in the emirate’s fast-growing e-commerce space.
The 252,000-square-metre fulfilment centre, which is being designed and developed by Kezad Group under a build-to-suit agreement, is scheduled for delivery in 2024, AD Ports said on Wednesday.
The automated facility for storage, material movement and sorting will help quickly deliver products to millions of customers in the UAE and create thousands of new jobs, it said.
"More than 5,000 small businesses will use our fulfilment centre to store their goods and conduct business. This will allow our youth and small businesses to connect with the growing number of e-commerce customers without having to invest in technology or real estate," said Mohamed Alabbar, founder of noon.com.
It will also help core sectors such as retail and logistics accelerate their online operations.
"This is not your typical real estate project — technology infrastructure projects of this scale are change agents for the future, not just for our company, but also for our community and country," he added.
The UAE provides a big opportunity for e-commerce companies. The sector in the country is projected to grow to more than $8 billion by 2025, as consumers across the region continue to shift towards online retail, according to Euromonitor International.
Noon.com, the portal backed by Emaar founder, Mr Alabbar, and Saudi Arabia's Public Investment Fund, was the third biggest e-commerce player in the UAE last year, with net sales of about $169 million, data from ecommerceDB shows.
The noon.com fulfilment centre aligns with AD Ports Group's mission to position Abu Dhabi as a global hub for trade through the development of an industrial ecosystem within Kezad, said Mohamed Al Shamisi, managing director and group chief executive of AD Ports.
"The facility will bring significant economic benefits with the creation of thousands of jobs and will offer new opportunities for the private sector looking to reach customers across the Middle East, Africa, Asia and Europe," he said.
The facility "represents an important milestone in our collective journey to enable the rapid expansion of e-commerce and same-day delivery models in the region", he added.
Fulfilment centres are key to the operations of e-commerce companies. Unlike ordinary warehouses that simply store products to be distributed at a later time, fulfilment centres temporarily hold items that are meant to be packed and delivered to customers faster.
The global e-commerce fulfilment services market is projected to grow at a compound annual rate of 9.5 per cent to hit about $195 billion by 2030, from $86.4 billion in 2021, according to Grand View Research.
While noon already has a facility at Kezad, it decided to expand its operations to a larger area by using Kezad Group’s build-to-suit service, which will facilitate the design and delivery of noon’s facility.
The development has been tailor made to meet the company’s specific operational requirements, helping to reduce costs, boost productivity and offer essential supply chain efficiencies, the statement said.
Additionally, the completed facility will be a sustainable building conforming to Estidama 2 Pearl rating which incorporates initiatives to enable water, energy and waste minimisation.
The Abu Dhabi Investment Office (Adio) is providing Noon with financial and non-financial incentives as part of the continued expansion of Abu Dhabi’s fast-growing information and communications technology ecosystem.
"Abu Dhabi’s e-commerce sector has taken another step forward with work commencing on the country’s largest fulfilment centre," said Abdulla AlShamsi, acting director general of Adio.
