Groundbreaking international growth predicted for Aramex
The success of Aramex's unique business model has set a precedent in the Middle East logistics industry, according to regional finance group The National Investor (TNI).
A team of researchers have analysed the recent performance of Aramex throughout the world and concluded that the Middle Eastern logistics company is poised to enter a breakthrough period of growth over the next five years.
"The Middle East is establishing itself as a powerful entity in the international logistics industry. It is one of the fastest growing markets in the world and Aramex is strategically placed to benefit from this boom," said Hassan Awan, investment researcher at TNI.
"The mission statement of the company is precise and leaves nothing to the imagination. It has clear goals, a different business model, comparatively faster growth rates and a smart acquisition strategy," he added.
Although organic growth has played an important part in the company's success, Aramex has successfully entered a number of key markets throughout the world, with recent acquisitions helping the brand to establish its services in regions such as Europe and Asia.
"Aramex has adopted a twofold approach when entering new geographical markets. The first involves the company being a strong competitor to existing logistics players in the market, while the second involves Aramex creating a niche in the more competitive markets, where the barriers to entry are higher," said Awan.
According to TNI's research, profit margins at Aramex have historically been quite stable, although operating margins have been squeezed at times due to expansions within the company's management team.
"The management also insists on following a non-asset based approach, which entails practically no leverage for the company. This might be in stark contrast with giants of the logistics industry but Aramex is convinced it is the right way to differentiate itself," he added. "The advantage of this approach is that Aramex is free to choose from a number of transporters when it needs to deliver its goods. Owning and running its own aircraft would deprive the company of such flexibility and would result in significant maintenance costs."