Jebel Ali Free Zone (Jafza) continues to be one of the mainstays of the UAE economy. Now with a re-intensified focus on infrastructure development, the enclave is poised to contribute significantly to that effort and help diversify further the economy.

A hub of global significance, Jafza’s more than 7,000 companies generated trade worth Dh80 billion ($21.7 billion) last year. As a companion enclave of Dubai World Central, the world’s largest aerotropolis, and the high-capacity Jebel Ali Port, Jafza is poised to grow even more significantly, leveraging the advantages that DWC and the sea port have to offer.

With the GCC and other states within the Middle East looking to build infrastructure and grow their non-oil revenues, investment prospects are rife. “More than $4 trillion is expected to be spent in the region on infrastructure development in the next 10 years. This provides huge opportunities for businesses,” said Ibrahim Al Janahi, deputy CEO of Jafza and chief commercial officer of Economic Zones World, Jafza’s parent company.

Al Janahi: connectivity and cost advantages

At a recent customer forum for companies in the steel, metal and building materials industry, Al Janahi said: “The total construction market in the UAE at the end of 2012 stood at Dh375 billion, almost 44 per cent of the GCC’s combined construction market of Dh845 billion. Though the construction sector in the region was worst affected by the global financial crisis it is perhaps the sector quickest to recover from the downturn.”

Added the official: “Jafza, as the region’s trade and logistics hub, is the best location for investors to set-up their base to serve the entire region most efficiently in terms of both connectivity and cost.”

Jafza appears to be solid ground for construction-related firms as close to a thousand of them from across the world have chosen it to be their base for the region. They have together generated trade worth Dh18 billion and the sector accounts for 13 per cent of Jafza’s total strength, growing at a compounded annual growth rate of 7 per cent.

While the construction boom will give fresh impetus to Jafza, the free zone is already a hefty contributor to Dubai’s and the UAE’s economy, accounting for more than 25 per cent of Dubai’s total trade, 50 per cent of its total exports and more than 21 per cent of its GDP while contributing approximately 40 per cent of net foreign direct investment into the UAE on a year-to-year basis.

Even with a presence of over 7,000 firms including 120 Gobal Fortune 500 companies, Jafza has not let up on efforts to generate a larger tenant base.

Powerhouse Korea, a Jafza partner, is being targeted for greater business. The free zone held a customer’s forum recently on its premises. “Since the turn of the century Korea-Jafza bilateral trade has more than quadrupled to cross $2.25 billion, but for a global industrial leader like South Korea, this trade volume needs to grow in multiples in the coming years,” said Al Janahi. He said the changing dynamics in the Middle East provided big opportunities to Korean companies. “We want Korean companies in Jafza to capitalise on the emerging opportunities and also to attract more Korean businesses to the free zone who could extend their presence in this dynamic region,” Al Janahi said.

The forum was attended by Korean companies including Hyundai Steel, Kia Motors, LG Electronics, Samsung, Mobis, Daewoo International and G-Buildings and by the Korea Trade Promotion Agency (Kotra). Senior Jafza officials and Jafza’s key service partners such as Dubai Customs, DP World, Dubai Trade, Dubai Chamber and Trakhees addressed customer issues.

Some 54 leading Korean multinationals, including 4 Global Fortune 500 enterprises, have a representation at the free zone.

Another Southeast Asia state Jafza is looking at is Singapore which saw its companies record a 400 per cent rise in tenant numbers at the hub, reaching a total of 65.

At a “Dubai Means Business” seminar in Singapore in recent weeks, it was revealed that Singapore-Jafza trade grew 16 per cent between 2009 and 2011 and possibly to Dh3.3 billion at the end of 2012, up 17 per cent over the previous year. Al Janahi invited Singaporean firms to set up base at the hub.

Business units at the free zone

Khalid Al Marzooqi, regional manager for Asia Pacific, Jafza commercial sales, highlighted Jafza’s outstanding infrastructure and excellent connectivity. Later, he commented: “We successfully evoked huge interest in Singaporean companies keen on exploring opportunities in the region through Jafza. A few of them have shown definite interest in setting up their operations in Jafza.”

A major infrastructure upgrade underway at Jafza will help streamline traffic flows and facilitate efficiency and cost savings for tenants.

The $30 million Jafza-DP World joint project to build the new Gate 4 and restructure Roundabout 6 is moving on track. The initiative launched in September 2012 is scheduled to finish and become fully functional in the first quarter of 2014. The project on completion will make the traffic flow and connectivity to and from the free zone absolutely smooth and seamless.

Gate 4 will put in place an eight-lane entry and eight-lane exit arrangement to facilitate smooth passage. Gate 4 now provides only a three-lane entry and two-lane exit facility. The gate is meant for passenger cars.

Roundabout 6 will be replaced with a flyover that will facilitate seamless traffic flow direct from the container terminal to Jafza customers and major exit gates. The flyover will serve both passengers and freight. The internal road network will facilitate connections to other parts of the free zone, which were being served by Roundabout 6.

Al Janahi said: “The project is in a real sense an engineering feat. On completion it will make Jafza one of the most seamless free zones in the world. The project reflects Jafza’s commitment to providing its customers the best and smoothest operating environment, which will eventually enable them to optimise productivity and improve the bottom line.”