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Al Mazrouei: attracting investors

Al Mazrouei: attracting investors



Wooing investors

Sharjah’s two free zones – Hamriyah hub and SAIF Zone are redoubling their efforts to push for growth drawing from the emirate’s low cost base and developed infrastructure

July 2018

Sharjah, , the first emirate in the UAE to industrialise, has maintained its success in developing a thriving  industrial and manufacturing sector through a network of two free zones and 19 industrial zones, according to a new report.

In keeping with its history of being the industrial heart of the UAE, the largest component of Sharjah’s gross domestic product (GDP) according to the 2017 data was manufacturing, worth Dh15.7 billion ($4.3 billion), or 16.9 per cent of its total GDP, Oxford Business Group (OBG) said in The Report Sharjah 2018.

According to the report, the emirate’s GDP increased by 5 per cent from Dh88.5 billion in 2016 to Dh92.7 billion last year, with Sharjah accounting for around 7 per cent of the UAE’s GDP. While major contributions were from manufacturing industries, the oil and gas contributed less than six per cent to the GDP and no individual sector accounting for more than 20 per cent.

Concentrated in two free zones – the Hamriyah Free Zone Authority and the Sharjah International Airport Free Zone Authority – and 19 industrial zones, Sharjah’s industry and manufacturing sector benefits from the emirate’s low cost base, developed infrastructure and connectivity, and proximity to facilities in Dubai. As a result, Sharjah is one of the most important industrial and manufacturing centres in not only the UAE, but also the wider GCC region, stated the report.

Manufacturing may become even more important in the years ahead, with the government estimating that it will account for around 25 per cent of GDP by 2025.

The contribution of the oil and gas sector to Sharjah’s diversified economy is relatively small compared to the rest of the UAE. In terms of meeting its own needs, the emirate is working to secure more reliable energy supplies, while expanding and modernising its electricity generation and water desalination capacities.

The report said that Sharjah’s policy of diversification and its success in attracting foreign direct investment is driving the economy towards new heights.

It stated that Sharjah authorities have been undertaking a range of measures to boost foreign investment flows, supported by competitive advantages such as strong connectivity and a culture of entrepreneurship.

Hamriyah port supports import export operations of HFZA investors

Hamriyah port supports import export operations of HFZA investors

According to the Sharjah FDI Office, also known as Invest in Sharjah (IIS), the emirate attracted Dh5.97 billion ($1.622 billion) of foreign direct investment (FDI) in 2017 compared to Dh920 million ($808 million) in 2016 and sees a 15 per cent increase in foreign direct investment this year.

“We have a mission to look at markets from where we can get investments. There is a huge focus on home-grown entities too. We believe Sharjah has a cost advantage when it comes to doing business and the environment is highly friendly for investors to start a business. The government supports the private sector and listens to it with a vision to transform the emirate in a sustainable manner,” Marwan bin Jassim Al Sarkal, executive chairman of the Sharjah Investment & Development Authority (Shurooq) said during a panel discussion at the launch of Sharjah 2018 report by OBG.

He said the authorities are promoting Sharjah in countries across Asia, Europe and Americas. He also noted that the emirate has successfully created some local companies such as Gulftainer, Beeah, Shurooq and others.

Meanwhile, Sharjah FDI Office, the investment promotion arm of the Sharjah government has unveiled that the emirate’s foreign direct investment (FDI) inflows in various economic sectors have seen a sharp increase of 102 per cent between 2016 and 2017, with FDI inflows worth $1.622 billion (Dh5.97 billion) last year as compared to $808 million (Dh 920 million) in 2016.

One of the key benefits of the process of these enlarged foreign investments has been felt by the job market in Sharjah, which has reported a 174 per cent growth in 2017 with the creation of 2,815 new jobs as compared to 1,025 in 2016. More than 5,000 jobs were created in 2017 from all investments that came into Sharjah, including local, regional and international businesses.

Making these announcements the Invest in Sharjah CEO, Mohammed Juma’a Al Musharrkh revealed that the 2017 capital investments were made by 18 new projects that were set up in diverse sectors with the top three being architectural metal manufacturing investing $725 million (approx. Dh 2.7 billion); agricultural, construction and mining machinery with $356 million (approx Dh 1.3 billion); and real estate FDI standing at $344 million (approx. Dh 1.26 billion).

He noted: “Sharjah has witnessed a qualitative growth in FDI inflows in the past year, with 18 new businesses bringing in more than double the capital that was invested by 20 projects in 2016. These figures testify that Sharjah’s commitment to reinforcing positive perceptions of the emirate’s competitiveness as one of the top investment locations in the UAE and the larger Arab region by continually enhancing its infrastructure, services and regulations increase ease of doing business are headed in the right direction, and reaping fantastic results for us as well as our investors.”

He added: “Sharjah’s trade practices and FDI policies have had a positive effect on productivity growth and job creation. In 2017, Sharjah attracted $819 million, a staggering increase in comparison to $803 million in 2016.”

Invest in Sharjah identified top international investors in the emirate in 2017 as India, the UK, the US, China, and Saudi Arabia and reported that a total of $10.5 billion (approx. Dh 39 billion) was invested in different businesses last year, in a total of 35 new ventures characterised by domestic projects from the other emirates in the UAE and FDIs.

The UAE Federal Competitiveness Authority has revealed that as of December 2016, the total FDI stocks in Sharjah stood at Dh30 billion. This reflects the growing investments Sharjah has been servicing across numerous sectors, most prominently its real-estate and property sector.

 

5PC GROWTH IN GDP

According to Mariam Nasser Al Suwaidi, deputy director of the Department of Industrial Affairs, Sharjah’s GDP increased by 5 per cent in 2017, with key manufacturing industries such as construction, wholesale and retail, restaurants and hotels, real estate, and business services ranging between 6 and 9 per cent in net growth.

Al Suwaidi continued by unveiling that a total of 73,000 trade licenses were issued in Sharjah during 2017, with an average growth of 2 per cent in comparison to that volume in 2016, as well as a growth of 27 per cent in total number of industrial licenses issued.

 

INCREASE IN MEMBERSHIP

Abdullah Sultan Al Owais, chairman of the Sharjah Chamber of Commerce and Industry (SCCI), said: “Last year has been an important year for Sharjah’s economic growth, while its FDI index is focused towards a positive and sustainable outlook, we also witnessed a visible growth in membership numbers, growing up to 7 per cent reaching a total of 69,000 members, conducting businesses across multiple industries with local and international benefits.”

He added: “Trade has been a key driver in Sharjah’s FDI growth, where we issued a total of 105,061 certificate of origin across all our four branches, boosting investors’ trade activities both locally and internationally. These figures enable us the opportunity to move forward with more strategic initiatives and services that continue in catering to investors’ demands, and position us at the forefront of promoting their businesses from Sharjah to the rest of the world.”

The value of foreign investments in the UAE exceeded Dh1 trillion for the first time, reaching Dh 1.049 trillion at the end of 2016 compared to Dh 836.49 billion in 2015, a growth of 25.4 per cent. The figures announced by the Federal Authority exceed the objectives of the UAE Vision 2021, which aims to achieve an annual growth of 5 per cent in domestic FDI flows and is in line with the nation’s efforts to achieve 5 per cent annual growth in non-oil GDP.

 

GAINING NEW TENANTS

Meanwhile, the emirate’s two free zones are intensifying efforts to gain new tenants and new investments, the Hamriyah hub and Saif Zone reaching out to potential investors in India and other countries.

In one of the latest initiatives, Hamriyah   Free Zone, the second largest and one  of the fastest growing free zones in the UAE and Middle East signed an investment agreement with India’s Gandhar Oil Refinery to establish an integrated project to produce white oil, liquid paraffin, hydraulic liquid, transformer oil, rubber processing oil, motor oil and industrial oil.

Saud Salem Al Mazrouei, director of the Hamriyah Free Zone Authority (HFZA) and the Sharjah International Airport Free Zone Authority, signed the agreement with Ramesh Parekh, chairman of Gandhar Oil Refinery, India. The agreement was signed to meet the increasing demand for oil products used in cosmetics, medical products, rubber processing, transformers, vehicles and other industries, such as iron and steel.

Al Mazrouei said that the zone is the preferred investment destination of heavy industries and petrochemicals, due to its key strategic location and its connection to Hamriyah port, which supports the import and export operations of investors. The decision of Gandhar Oil Refinery India to establish its new factory confirms that the zone complies with international standards and has an attractive investment environment, he added.

Parekh stated that his company’s projects in India are working at full capacity. Therefore, they aim to implement expansionary projects outside India, to meet the increasing demand for their products, he added while noting that the UAE is their first choice, due to its stable investment environment.

Hamriyah Free Zone was chosen for many strategic and logistic reasons based on feasibility studies, and his company will launch a new industrial line, under the trademark, “Texol,” as part of their marketing strategy, he said.

Hailed as one of the cornerstones of the UAE’s industrial development, Hamriyah Free Zone currently houses over 6,700 business enterprises from 165 nations in key sectors such as oil and gas, petrochemicals, maritime, steel, construction and food.

Global investors choose HFZA for their regional base owing to its strategic location that serves as a vital link to the major trade routes intersecting Asia, Europe and Africa with direct access to a growing market of more than two billion people. The Free Zone also has well-developed infrastructural facilities and boasts an investor-friendly environment suited for growth.

Meanwhile, the World Confederation of Businesses awarded Hamriyah Free Zone with The Bizz Awards 2018. This award is Meanwhile, in yet another testimonial to HFZA’s continued progress and distinguished achievement, HFZA was recently awarded ‘The Bizz Awards 2018’ by the World Confederation of Businesses (WORLDCOB), in a ceremony in Prague. HFZA has been awarded The Bizz Trophy, medal and certificates for its commitment to business excellence, leadership, developing best practices and innovative strategies, product and service quality, management systems, innovation and creativity.

Al Mazrouei commented: “Receiving the acclaimed BIZZ awards is indeed an honour, and it will serve as motivation for Hamriyah Free Zone to not just maintain the outstanding standards set by the authority, but to raise the bar further and achieve greater excellence locally, regional and globally. Hamriyah Free Zone has received various prestigious awards and accolades as testament to its customer centricity and service excellence standards. This award is yet another testimonial to HFZA’s continued progress and distinguished achievement.”

 

SAIF EYES NORTH ANDHRA

Sharjah Airport International Free (SAIF) Zone, which houses over 8,500 establishments from 165 countries, has set its eye on investments from North Andhra in India, according to a report.

At a programme conducted by Federation of Indian Exporters’ Organisation (FIEO), top officials from SAIF Zone asked prospective investors to start business by getting the licence within 24 hours of submitting an application. Highlighting the advantages of investing in SAIF Zone, the delegation from Sharjah said they would give complete autonomy on recruitment of workers, charge a nominal amount for providing accommodation with a 24x7 working environment.

‘Easy entry and exit’ is the hallmark of the zone, the investors were told. India is the third largest business partner of UAE with the bilateral business reaching $53 billion last year.

SAIF Zone director, Raed Bukhatir said the Sharjah government had committed to complete free trade at the zone located adjacent to Sharjah International Airport and close to Dubai and major UAE ports on the Arabian Gulf. It has access to East and West Coast as it is just 120 km from Port Khorfakkan on the Indian Ocean. He said they were keen on attracting SME entrepreneurs from India.

The zone is  a hub for all categories of businesses with a hassle-free environment and state-of-the-art facilities with AC and furnished executive suites, pre-built warehouses in the vicinity of office space and leased land for unrestricted private development, bunkers and container parking area.

It provides space for manufacturing, assembling, package, import, re-export, trade and value-added services with minimal procedures. Transportation, courier, high speed broadband, courier and other facilities are available.

“We provide tax and duty exemptions, multiple licence facilities and easy access to billions of customers,” Bukhatir said.

AP Chambers of Commerce and Industry Federation vice-president Mulagada Sudhir, an agro product exporter, said the SAIF Zone offers several investment opportunities for businessmen from North Andhra.

SAIF Zone set up in 1995 is the premier business destination situated in the Emirate of Sharjah - the ‹industrial powerhouse’ of the UAE with a modern infrastructure and an emphasis on cost effectiveness.

“SAIF Zone offers many opportunities for entrepreneurs and investors from India and the increase pace of trade between UAE and India is a positive sign of rapid growth at all levels,” said Bukhatir.

He said SAIF Zone had state of the art facilities in addition to tax and duty exemptions, multiple facilities and easy access to billions of consumers. India is the third largest trading partner of UAE and the two-way trade reached $53 billion in 2017.




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