As it celebrates its 25th year of operations this year, Jebel Ali Free Zone (Jafza), the flagship entity of Economic Zones World (ECW), has played a key role in attracting foreign direct investments (FDI) into the UAE, with new inbound projects and the expansion of existing businesses during 2009-10.

One of the biggest developments at Jafza this year was the launch of the Dubai Logistics Corridor.

The corridor brings together for the first time in the Middle East all of the components needed to create a true multimodal logistics platform linking Jafza and the Jebel Ali Port, the sixth-largest container port in the world to Dubai World Central, home to Al Maktoum International Airport and Dubai Airport City Corporation. The corridor spreads out over an area of approximately 200 sq km and aligns processes, systems and services to create a unique model that will enhance the global competitiveness of Dubai as a logistics hub.

At the official launch of the Dubai Logistics Corridor in October, Salma Hareb, chief executive officer, ECW, and chairman of the corridor’s board, commented: “The corridor bridges and leverages the strengths of Dubai’s major logistics enablers. What makes this initiative truly ambitious is that it aligns various organisations, people, processes, services, standards and systems to create the region’s largest and finest logistics hub.”

An important outcome of the launch will be an improvement in the flow of sea-to-air cargo through elimination of the processes of exit and entry from one zone to another. Additionally, there will be a potential elimination of double customs inspection, said Hareb adding that the move was just one step forward and plans were to further integrate to achieve the greatest possible efficiency.

Horeb: overseeing key developments

The streamlining of logistics processes will play a key role in achieving further economic development within the corridor, which already collectively represents more than 26 per cent of Dubai’s GDP.

“We are also going to strengthen our partnerships with other entities and logistics enablers like Dubai World Central. As mentioned before, Dubai Logistics Corridor is the future of logistics for this region and we expect it to stimulate economic development and quadruple Dubai’s logistics efficiencies,” says Ibrahim Mohamed Al Janahi, deputy CEO and chief commercial officer, Jafza.

More than 6,500 tenants
Home to over 6,500 companies today, Jafza entered its silver jubilee year with 6,421 companies. Last year 315 new companies had joined the free zone.

This sterling performance has enabled Jafza to play a central role in the flow of foreign investments into the country, which amounted to $69 billion, according to figures announced by the UAE Ministry of Economy in June 2010.

The current year has also seen Jafza receive an impressive number of inbound projects. New arrivals so far have included Mitsubishi Corporation, Petrochina, JVC Professional, Proclad Stream-Flo, Schoeller-Bleckman and Isuzu Motors.

Some of the new companies that had joined the free zone in 2009 included multinational giants and leading international players such as the US-based Halliburton, DQE International, a subsidiary of CNPC, China’s largest petroleum technology service enterprise; Saiga, AMES (a 50/50 joint venture company created by Air France Industries KLM Engineering and Maintenance and Aircelle, Safran Group), and Michelin from France.

Al Janahi: 'Jafza is an integrat part of the UAE's evolution'

Jafza has seen uninterrupted year-on-year growth in the number of companies over the past 25 years along with a corresponding increase in the number of their employees. In 2001 a total of 56,663 people were employed by the 1,537 companies then operating from Jafza. The number advanced to 139,000 people in 2009.

Since the turn of this century the Jebel Ali Free Zone has grown over 330 per cent. When Jafza was established in 1985, the 19 companies that set up base in the free zone were in light manufacturing, oil and gas and commodities. Since then it has attracted global companies spanning a wide spectrum of industries.

Regional powerhouse
Jafza has also witnessed a sharp rise in the number of manufacturing units - 50 per cent up between 2005 and 2009. Even between 2008 and 2009, when the regional economy was hard hit by global recession, the number of new entrants in the industrial sector in Jafza saw a growth of 40 per cent.

Commenting on the free zone’s journey over the past 25 years, Al Janahi, says: “This year, Jafza proudly celebrates 25 successful years of operation. Since our inception we have successfully redefined supply chain management in the region creating opportunities for ourselves as well as our customers, partners and the communities in which we operate. Today Jafza is considered an integral part of the evolution of the UAE, having played a key role in its transformation into a regional economic powerhouse and one of the most welcoming business hubs in the region.”

He further states: “The key to Jafza’s evolution and success is that it adapts and innovates more often than any other business hub in the region. Going forward, Jafza’s future development will focus on enhancing its logistics infrastructure and increasing its own logistics network. This includes improving our infrastructure and service offerings as already mentioned and expanding our international network in markets such as Africa, the US, Asia Pacific and the Middle East. International companies view market access as a key deciding factor for a free zone partner and we are strengthening our global network each year.”

2009 saw Jafza coming up with a number of projects and customer-oriented support services, including the innovative Light Industrial Unit-15 (LIU-15), the South Zone warehouses/showrooms, the re-engineered customer service facility and EZ Post, the exclusive free zone courier service.

Adaptive and on the move
Commenting on the impact of the economic downturn on Jafza business, Al Janahi says: “The slowdown affected many businesses including global businesses based in the free zone. Jafza, for its part, is increasingly adaptable and works closely with tenants and clients enhancing its capability and competitiveness by introducing innovative initiatives, be it providing better logistics, custom-built solutions, enhanced services or multiple investment models for customers to choose from.”

The free zone authority has also been taking initiatives to attract more investments. “Global reports indicate that recovery post-recession is being driven by the emerging economies of Asia and Latin America. Emerging economies with high saving rates and large domestic markets continue to outperform and naturally Jafza is targeting these companies in emerging markets which are looking to expand their horizons.  Dubai is a vital intermediary hub for the Asia-Europe trade while it is also well positioned for delivery to the growing North African and Middle Eastern economies,” observes Al Janahi.

“We are working closely with business councils and government institutions in different international markets as well as Dubai-based organisations on best approaches and practices to stimulate investment. We periodically conduct road shows and seminars in key markets,” he adds.