A section of the sprawling free zone

A section of the sprawling free zone

Food gains greater attention at Jafza

While the enclave has advanced relentlessly, reaching an “invincible” status, it is not about to be complacent, preferring to work even harder to increase its gains

November 2014

While the Jebel Ali Free Zone (Jafza) has progressed well in attracting to its fold firms in streams such as automotive, electronics and general engineering, the focus seems to be veering increasingly towards the food sector.

Recently, the hub participated in Sial Paris, one of the largest food and beverage exhibitions in the world in the hope of attracting even more F&B multinationals into its fold. It highlighted huge growth opportunities existing in the rapidly expanding affluent markets of the Middle East which it serves as a hub.

Clearly the huge halal market is a magnet for Jafza and the free zone has lost no time in developing its potential to host big and small players in the field. The Middle East is the logical premier market for halal products, currently valued at $300 billion, and Jafza plans to develop halal zones as all-inclusive hubs. The authorities want these hubs to integrate a one-stop-shop system covering every need of customers in the halal supply chain and offering ease of business. That would include both food and other products such as cosmetics and pharmaceuticals.

Jafza’s attention to food and health care has attracted more than 700 leading F&B and healthcare firms into its premises, generating trade worth $7.5 billion in 2013. Greater global awareness of the halal market will ensure that this sector will have a larger presence in the free zone and make a greater contribution to Jafza-generated trade.

Meanwhile, the automotive sector trade in Jafza has seen an awe-inspiring four-fold growth in the last 10 years, growing from $1.1 billion in 2004 to $4.7 billion in 2013 and a 13 per cent increase over 2012.

The automotive sector has been termed one of the most dynamic business sectors in Jafza with some 625 companies present. These include a galaxy of global brands such as Mercedes, Ford, GM, Honda, Toyota, Mitsubishi, Caterpillar and Scania, who have established their regional parts distribution centres and fabrication units in Jafza. The hub has, in recent years, attracted a significant number of establishments engaged in the designing, fabrication and manufacturing of a variety of industry-specific vehicles such as ambulances and emergency equipment carriers, construction and hospital care transporters and fire-fighting and security vehicles including armoured cars.

Another sector said to be doing well is electronics and IT. Jafza has seen 43 per cent growth there over the past five years, from 846 firms in 2009 to 1,248 today. The sector generated trade worth $28.44 billion in 2013, up 3 per cent from 2012. As preparations gather steam for hosting Expo 2020 a big surge is expected.

Jafza, recognised as one of the Middle East’s leading business hubs and a key driver of Dubai’s economic growth over the years, continues to tap into the FDI reservoir and aggregate a remarkable tally of tenants.

The enclave  has “reinforced its invincible status as the gateway to the Middle East and a key driver to attracting FDI into Dubai and the country,” remarked Ebrahim Mohammad Al Janahi, deputy CEO of Jafza and chief commercial officer of Economic Zones World, the parent company of Jafza, in comments on the strong surge witnessed in H1 2014. “The leading sectors that attracted new companies into the free zone included machinery and equipment, IT & electronics, building material and foodstuffs,” he added.

Big brands the company welcomed in that period included China National Petroleum Corporation, Novartis and Borosil. The juggernaut goes on as Jafza relentlessly builds on its business and industrial base which now accounts for almost 40 per cent of FDI into the emirate and 20 per cent into the UAE, half of Dubai’s exports, a quarter of its total non-oil trade and more than 21 per cent of Dubai’s GDP.  Jafza companies together were estimated to have generated trade worth $100 billion in 2013. The muster of Jafza companies has crossed the 7,500 mark and climbing quite feverishly.

Some 363 multinational firms came aboard in H1 2014, a few among them in the Global Fortune 500 list.  Interestingly, 50 per cent of the new tenants came from Asia and Australasia and 10 per cent from the Americas and Europe.

The hub could see an influx of Turkish companies following a road show it held in Turkey last month. A team led by Al Janahi introduced Turkish businessmen to Jafza and its key features, including the world-class logistics infrastructure and the world’s largest logistics corridor under a single customs bond comprising Jebel Ali Free Zone, Jebel Ali Port and Al Maktoum International Airport.

Earlier in September, Al Janahi led a seminar in Shanghai for Chinese businessmen looking to establish a base for their operations in the Middle East.

Jafza boasts 120 Global Fortune 500 companies. Among all tenants, 17 per cent are in the IT and electronics sector, 15 per cent in construction, 12 per cent in chemical and petroleum products, 12 per cent in machinery and equipment, 10 per cent in food and health care, 9 per cent in the automotive industry and 5 per cent in the logistics sector.

Most of these multinationals have chosen Jafza as their regional base for West Asia, the CIS, the Indian Subcontinent and Africa’s thriving markets. The hub overlooks a huge and increasingly flourishing market of 1.5 billion incorporating the Indian Subcontinent – a factor not lost on potential tenants looking to maximise their reach.

Sitting plumb in the midst of a logistics base of huge proportions and potential, Jafza has already garnered a significant share of freight – more than 50 per cent of the total volume of goods handled by Jebel Ali Port and which originated in Dubai or was destined there.

Jafza continues to be the darling of award-dispensing authorities.

Earlier this year, the UK-based Financial Times Ltd’s fDi Magazine awarded it the title, ‘Free Zone of the Year 2014 – Large Tenants, Middle East and North Africa’ as well as ‘The Free Zone of the Year 2014 – Large Tenants, UAE.’

fDi selected Jafza on the basis of its facilities, ease of doing business, valuable incentives, value for money and strategic location.

“The awards reaffirm Jafza’s unique position as the most favoured investment destination for large multinationals across the world. I attribute Jafza’s remarkable achievements to our most committed and efficient team that continues to help Jafza maintain its invincible leadership status today and the times to come,” commented Salma Ali Saif Bin Hareb, CEO of Economic Zones World and Jafza.

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