Features

Jafza offices

Jafza offices



A hub of rare eminence

Jafza is a pillar of Dubai’s economy and has been instrumental in helping the UAE industrialise at a fast pace, giving it influence and reach far beyond its shores

November 2015

Jebel Ali Free Zone continues to be a strong force, driving economic growth and industrial diversification in the UAE with several sectors in the forefront that are helping build the enclave’s reputation as a hub of rare eminence.

Jafza’s steel and construction sector remains a growth proposition, generating total business of Dh13.6 billion ($3.70 billion) in 2014 and an increase in sector tenants of 8 per cent, according to the free zone authority.

Other sector to the free zzone s, including automotive & aeronautics and electronics & IT, have contributed to Jafza’s high profile.

Halal is potentially a tremendous growth sector with Jafza making strong efforts to gain both tenants and investments. Everyone sees the halal industry advancing globally as investors tap into opportunities and build the infrastructure necessary for the industry’s advancement, a scenario that Jafza is keen to participate in.

One of the reasons why the metal and construction sector has done well at Jafza is simply because Dubai is a burgeoning city and the emirate has exerted efforts to make it a hub to meet both its needs and those of the rest of the UAE and the region. Hundreds of companies linked to the steel and construction industry have set up base over the years, setting up production facilities and the stockyards to feed local and regional growth.

In fact, the free zone has developed a dedicated 1.1 million sq m steel and building material zone in Jafza South and 30 companies are already operating there, a development that was alluded to by Sultan bin Sulayem, chairman of DP World and chairman of Ports, Customs and Free Zone Corporation, recently.

Talal Al Hashimi, chief operations officer of Economic Zones World (EZW), the parent company of Jafza, commented: “The construction sector in the region is quite resilient despite challenging market conditions. Major projects currently underway in the GCC alone are valued at Dh1.2 trillion. These projects offer huge opportunities for Jafza-based companies. World Expo 2020-related projects will further accelerate demand for steel and construction material. We need to capitalise on these long-term prospects as best as possible.”

Jafza was home to 838 companies in the metal, steel and construction material segments at the end of June 2015, which included the world’s top multinationals like ArcellorMittal, Baosteel, Sumitomo Corporation, Tata Steel, Itochu, Nippon Steel, Makita and CNBM. In terms of segment breakdown,  54 per cent of the companies in Jafza are dealing in construction metal, 36 per cent in general metal and steel and the remaining 10 per cent in interiors and furniture.

 

AUTOMOTIVE & AERONAUTICS

 

Earlier this year, a customer forum threw light on the significant progress the industry has made. It was revealed that tenants related to the sector grew in number by 36 per cent since 2010 to reach 644 this year and sector trade amounted to $5.4 billion in 2014. Since 2010 trade in automotive & aeronautics has grown 69 per cent in the free zone.

The free zone is a strong contributor to Dubai’s economy

The free zone is a strong contributor to Dubai’s economy

“The Middle East is one of the world’s fastest growing markets for automotive products. Being the trade and logistics hub of the region, continued growth in the automotive sector in Jafza is quite natural,” said Ibrahim Mohammed Aljanahi, deputy CEO, Jafza. According to experts, demand for auto parts and accessories in the GCC is expected to grow at a compound annual growth rate of 15 per cent by 2017. This provides huge opportunities for Jafza-based companies.

One of the issues of concern to automotive firms in Jafza is counterfeiting. Yousef Al Hashmi, director of Jebel Ali Customs, commented: “Combating the menace of counterfeit is Dubai Customs’ key priorities. We have been fighting IPR infringements and counterfeit continuously over the years. Efficient and holistic handling of issues, however, requires a joint initiative of all key stakeholders from the public and private sectors. We are fully committed to sharing our experiences and expertise in raising awareness about intellectual property in different social segments and continue to take the fight forward.”

An opinion voiced at the forum was that greater vigilance and more stringent punishment should be applied for parties engaged in the counterfeiting business across the entire supply chain. It was noted that the problem being a global one, it had to be tackled at various levels starting from the point of origin, where such goods are manufactured, all the way to transit hubs and destinations.

 

ELECTRONICS & IT

 

More than 1,200 companies currently operate in this sector at Jafza and they generated trade worth over $38 billion in 2014. The trade is clearly one of the largest in the free zone in terms of volume.

EZW chief operations officer Al Hashmi said: “According to expert insights, the global electronics market is forecasted to be worth over $2.9 trillion by 2020. The wider Middle East region that Jafza as a hub serves will be one of the important markets for electronics and IT in the coming years.”

Warehouses in the free zone

Warehouses in the free zone

Al Hashmi indicated that the sector’s growth in the region is mainly driven by increasing disposable income, expanding population, growing tourist inflow, rapidly growing internet penetration and strong distribution capability of key players like Jafza. He noted that Dubai Expo 2020 will further augment the number of tourists visiting Dubai, other emirates in the UAE and countries in the region, which in turn will provide a further boost to the consumer electronics and IT industry.

He also touched on the introduction of the Dubai Smart City initiative by the Dubai government.

A poll has showed that retail and tourism are two sectors that attract the maximum number of transactions in the UAE and 67 per cent of the companies are using e-channel for their transactions.

 

THE DRIVE FOR GROWTH

 

Already, the largest free zone in the Middle East and one of the biggest in the world, Jafza wants more of the action. It recently conducted a seven-day road show in Germany that covered important industry and commercial centres such as Cologne, Dortmund and Munich and took part in Anuga 2015, the world’s leading food fair for the retail trade and the food service and catering market that was held in Cologne.

Bin Sulayem said initiatives such as the Germany road show pointed to one vision: making Dubai number one in the world in all fields.

Jafza and Jebel Ali Port together are said to generate 20 per cent of Dubai’s GDP. The hub is home to more than 7,000 companies.




More Stories



Tags