Dubai Free Zones

Dafza advancing, keeping momentum

The Dubai Airport Free Zone Authority headquarters

A combination of location advantage, facilities, investment opportunities and aggressive marketing has propelled Dubai Airport Free Zone (Dafza) into becoming one of the fastest growing hubs in the region.

Hosting more than 1,600 establishments, the free zone registered a Dh69 billion ($18.7 billion) climb in the trade volume in 2012, 73 per cent up over the previous year, with sales revenue growing 26 per cent compared to the previous year.

“The free zone’s strategic location, next door to Dubai International Airport, has given it unique strength and made it a favourite place for foreign companies. The availability of many facilities, hassle-free procedures and investment opportunities has secured its place as a significant contributor to the country’s growth,” said Dafza director general Dr Mohammed Al Zarooni.

“We have worked hard to continuously develop the investment climate by training our workforce to best serve clients and satisfy investors. After a successful 17 years, Dafza has become one of the most experienced authorities in attracting foreign capital.”

Echoing Al Zarooni’s sentiments, Sheikh Ahmed bin Saeed al Maktoum, chairman of Dafza, said: “Dubai Airport Free Zone has proved its unrivalled capability in attracting international companies which add value to the local economy and consolidate Dubai’s status in the global markets as a business hub. We will continue to provide Dafza with all the support it needs to ensure it continues to rank among the top global free zones.”

Dafza is among the fastest growing hubs in
the Middle East

Some 201 licences were granted last year to global organisations to operate within the free zone. Over the years, it has attracted investors from industries such as aviation, freight and logistics, IT and telecommunications, electronics, pharmaceuticals, engineering, food and beverage, jewellery and cosmetics.

Strong growth came from the IT sector in line with large-scale investments the sector has been witnessing in the UAE and wider Middle East.

“Information technology is one of the fastest growing sectors in the UAE, and this trend is set to continue, with double-digit growth anticipated for 2013,” said Ayoub Alhammadi, senior director of corporate support at Dafza. The technology arena is represented fairly at Dafza with companies including Twinmos, Planet Optics, Juma Al Majid, GET group, Brightpoint, OKI, Simmtronics, Thales, Sandisk and Casio Computer. As consumers in the Middle East continue to increase their influence, international brands look for opportunities across the region and Dubai remains the most popular choice, said Alhammadi.

Middle East IT spending is forecasted to hit $192.9 billion in 2013, a 5.5 per cent increase from 2012. The telecom services market continues to be the largest spending market, representing 77 per cent of total IT spending in the region this year.

Dafza’s IT tenants in the free zone come from several regions with 37.7 per cent originating in the Middle East, 21.93 per cent in Europe, 16.67 per cent in the Indian Subcontinent, 8.77 per cent in the Far East, and the remainder in Africa, North America and the Offshore Islands.

Some 16 per cent of companies in the free zone operate in the IT and electronics industry.

The free zone has also witnessed a 37 per cent surge in construction and engineering companies. This figure directly reflects increasing investment in Middle Eastern construction projects, according to a report issued by Bank of America Merrill Lynch. Total construction investment in the Middle East is expected to jump to $4.2 trillion by 2020 with the UAE enjoying the biggest chunk, $698 billion. Another key sector that saw growth in Dafza was the jewellery industry, with tenants operating there increasing by a staggering 140 per cent throughout 2012.

While Dafza has made big strides, it is also engaged in maintaining the momentum and making it more attractive for current and future tenants. A new building is being built where seven floors are dedicated to offices for international organisations and a large food court with mixed-use recreational facilities will be among its features. Another building is planned to house Dafa’s strategic partners from various government institutions. Capacity at the main power station will be upped by 40 per cent. A multi-storey car park is also among the plans.

Dafza is building strategic partnerships with global companies to enhance its international status and broaden its reach. It concluded a number of bilateral agreements including one with Dallas Fort Worth Airport and another with HSBC Bank, the latter for providing financing solutions for foreign investors and better access to international banks through the HSBC network.

The hub is in the process of finalising cooperation agreements with national entities such as the Dubai Chamber of Commerce and du, the telecommunications provider.

2012 was also a productive year awards-wise with nine international accolades coming its way. Among these were the American Richard Goodman Strategic Planning Award, the title of Number One Free Zone in the World granted by Foreign Direct Investment (fDi) magazine and the Stevie business awards.

Dafza picked up the ISO:50001 certificate for energy management and reduced energy consumption by eight per cent. It was also presented with the ISO:28000 mark for security management.