
That the Jebel Ali Free Zone is steamrolling ahead at considerable pace is clear from the figures.
Within less than a year and a half, since the Offshore Companies Regulations was enacted in May 2003, some 600 companies have registered with the free zone authority.
That’s outside the 3,860 onshore companies already in operation at the free zone by the end of September 2004.
The offshore list would have been lengthier, had the authority not been too strict with the offshore regulations, said a top official overseeing the free zone’s operations.
“Had we kept it as open as many others have done, we would probably have had more than a thousand instead of the 600,” said Sultan Ahmad Bin Sulayem, executive chairman of the Ports, Customs and Free Zones Corp (PCFC). But that’s not the prime objective. We want them to operate as per our laws.”
Businessman Dr Khalid Maniar, founder partner of AGN-MAK, said offshore investment would have been higher “had the processes been simplified and relaxed like those in the British Virgin Islands, Cayman Islands or Isle of Man.”
The Jebel Ali Free Zone had a new tenant with the Chalhoub Group opening its Dh36.75 million ($10 million) corporate headquarters there to cash in on the rapid development taking place in the UAE in several sectors of business activity.
The Chalhoub Group represents a number of lifestyle brands in the UAE and comprises more than 30 companies with a total of more than 2,500 employees. One of its important deeds was helping bring Saks Fifth Avenue to Dubai.
Group managing director Patrick M Chalhoub remarked that turnover in his organisation surged at least 10 times in 14 years. In comments about business prospects in the region, he said rapid infrastructure development in the region had triggered a business boom, particularly in the region where tourism had made great strides causing sales of lifestyle products to grow.
Degussa, one of Europe’s top chemical companies has set up base at the free zone. “The recent relocation of the regional office from Sharjah to the Jebel Ali Free Zone is offering Degussa better access to key service providers such as warehousing and logistics, which is a further step towards improving the support to customers,” said Reto Schoch, its Middle East manager.
Another company to establish itself in the free zone is ART International whose assembly facility is producing 2,500 PCs a month. The company, which initially set out as a PC component supplier, is now exporting its assembled products to the Middle East, Africa and Europe.
Companies operating in the free zone include brand leaders such as ABB, Black & Decker, PFAFF, Komatsu, Cussons, CIBA-Geigy, Tetra Pak, Colgate-Palmolive, Nestle, HJ Heinz, Unilever, Nivea, L’oreal, BP, Total Lubricants, Shell, BASF, Honda, Tata, Nissan, Mitsubishi, Bridgestone, Acer, Bose, JVC, Toshiba, Sanyo, Yamaha, Sony, Matsushita, Philips, Siemens, Nokia, and Daimler Chrysler.
According to the Jebel Ali Free Zone Authority (Jafza), more than 800 licences have been issued since January 2004, which in course of time will yield trading and manufacturing enterprises.
That number could rise expeditiously considering that Jafza plans to usher in significant changes in the registration process and regulations to make the free zone more investor friendly.
Infrastructure development is also proceeding side by side. Work is proceeding briskly on the south side of Shaikh Zayed Road to create more space to accommodate new companies.
Construction work is in progress for Dubai Ports Authority’s (DPA) Master Plan for the Jebel Ali Terminal, which will offer three major terminals and 82 berths equipped with 125 quayside cranes . The development will enable DPA to handle 21 million teu. By October, DPA handled 5.2 million teu while the total for the whole of 2004 is expect to touch 6.1 million teu.
One of the important developments in Dubai in recent years was the merger of Dubai Ports Authority, Customs Department and the Jebel Ali Free Zone Authority to form the Ports, Customs & Free Zone Corporation, aimed at promoting greater efficiency and growth for all business and administrative operations.
The shared expertise has promoted an exchange of information and better functioning in the areas of marketing, technology and management with the result that customers of the free zone have benefited greatly.
The PCFC has gained international prestige through its overseas port and free zone management arm, Dubai International (DI). Established in May 2003, DI reflects the growing global portfolio of Dubai Ports Authority and Jebel Ali Free Zone Authority. It serves as a leading port and free zone operator and consultant through Dubai Ports International and Jebel Ali Free Zone International (Jafzi).
DI has announced it will bid for the management of the Cochin Free Zone in South India. It expects to use Jafzi’s expertise gained from the running of the Jebel Ali Free Zone. DI is currently managing a container terminal in Cochin.
Recently, DI signed an agreement with the Tangier Mediterranean Special Agency (TMSA) on technical consultancy and business management for its free zone project. DI also has management contracts for free zones in Djibouti and Port Klang, Malaysia.