Sinotrans Ltd, one of China's leading logistics services providers, inked an agreement with Saudi Arabia-based Al Majdouie Group to establish a joint venture in Saudi Arabia for providing engineering services to the logistics industry, said sources citing the company's announcement.

Newspaper reports indicate it is the first time for the Chinese logistics services provider to set up a joint venture abroad and it may turn out to be a significant step towards globalization of its operations. Previously, the company had tied up with the U.S.-based National Retail Systems Inc (NRS) to set up a joint venture in China in the third quarter of last year, for providing logistics services to retailers.

The joint venture will be 50% owned by Sinotrans and the other half by Al Majdouie, according to both sides' statements. However, details of capital outlay of the venture have not been disclosed.

Reports said cooperation between Sinotrans and Al Majdouie started as early as 2005. They jointly accomplished inland transportation of five cement production lines for China Sinoma International Engineering Co. Ltd (SIEC) over the last three years. In addition, Al Majdouie has provided excellent services to SIEC's cement project in Saudi Arabia.

Sinotrans announced in December 2007 it would partner with South Korea-based Korean Air Lines Co. Ltd and several other overseas enterprises to set up Grandstar Cargo International Airlines Co. Ltd in Tianjing, northern China.