Free zones in the UAE are making energetic efforts to draw foreign direct investment and local capital into their hubs encouraged by past outreaches that met with notable success.

The country’s premier business enclave, Jebel Ali Free Zone (Jafza), the flagship operation of Economic Zones World (EZW), held an extensive road show in recent weeks in Buenos Aires to attract new Argentinian companies.

Mindful that Argentina is one of the world’s leading food producers, Adil Al Zarooni, senior vice president for sales, Jafza, highlighted the free zone’s move to develop Dubai as a global hub for halal products.

Jafza, meanwhile, signed an MoU with the Arab Brazilian Chamber of Commerce to strengthen business ties as part of a 10-day road show and seminar programme in Sao Paulo and Rio de Janeiro.

“The UAE is a major importer of Brazilian agricultural products in the region but huge growth possibilities still remain untapped,” said Al Zarooni.

Jafza is not the only UAE free zone encouraging investments from South America. Khalifa Industrial Zone Abu Dhabi (Kizad) has struck deals with Brazil’s BRF SA, the world’s largest chicken exporter, for a $150 million processing plant, which is expected to open this year.

KIZAD PROGRESSING

Kizad is going all out to impress global investors and last month it was announced that the European Foundation for Quality Management (EFQM) had granted it the 4-star excellence rating. “We are very proud to have been recognised by such a prestigious foundation as the EFQM, whose sustainability model has been the backbone for government excellence awards around the world,” Salmeen stated.

Continuing its dive for foreign investments, Kizad has asked German businessmen to set up shop in Abu Dhabi and help diversify it away from oil. It would like Germans to consider projects entailing knowledge transfer and manufacture of high-quality goods.

The Abu Dhabi hub has recorded investments of $739 million in the first quarter of this year, up from just over $205 million committed in the whole of 2013. Overall, 54 tenants have ploughed in $13 billion in Kizad so far.

One of them was WR Grace who is in a joint venture with Abu Dhabi partner Al Dhahra Agriculture. They officially broke ground on Phase 1 of their enterprise to support the first fluid catalytic cracking (FCC) catalyst manufacturing operation in the Middle East.

Grace is the global leader for FCC catalyst and additives. 

Good news to companies at Kizad is the completion of Phase 1 of the Kizad Logistics Park and handing over of warehouses to national and international tenants has begun. Kuwait-headquartered Agility has commenced operating out of its new 11,133 sq m facility in the logistics park.

GREEN INITIATIVE

Kizad and other free zones in the UAE and the Gulf, can emulate Jafza, which is an old and successful hand in the game. Never to lose an opportunity to attract tenants, Jafza has completed the first phase of the Energy Consumption Reduction Programme. It was conducted through Etihad Energy Service Company (Etihad Esco) and Economic Zones World.

The headquarters of the RAK Free Trade Zone

“The completion of the first phase by Etihad Esco marks an important milestone in our strategy to make Jafza’s buildings greener and more efficient,” said Salma Hareb, CEO of Economic Zones World.

“We are pleased to see that that more significant savings can be made and we are looking forward to further collaborating with Ertihad Esco to realise these savings. The strategic partnership with Etihad Esco will further drive collaboration that enhances Dubai leadership and global competitiveness,” she added.

Jebel Ali Free Zone accounts for more than a half of Dubai’s non-oil exports and 21 per cent of the emirate’s GDP. It is currently home to more than 7,300 companies including over 120 Global Fortune 500 enterprises.

Last year alone, 613 companies joined the free zone with 30 per cent coming from Asia, 29 per cent from Europe and the Americas and the remainder from the GCC area and the wider Middle East.

FAST DEVELOPING RAK

One of the fastest growing hubs in the Gulf is the Ras Al Khaimah Free Trade Zone, home to about 7,500 companies across four parks. The FTZ accounts for a sizeable chunk of the emirate’s overall GDP and registered growth of close to 30 per cent in new clients last year.

Peter Fort, chief executive of Ras Al Khaimah FTZ, said the emirate was ramping up its warehouse and office space in response to rapidly rising demand from new clients.

“A lot of companies are squeezed and the easiest way to deal with that is the bifurcation of the front and back office,” he said. “So what we’re seeing is a lot of interest for companies to relocate to a lower cost location.” The FTZ claims the cost of living is 25 to 50 per cent lower than the UAE average across property, recreation and entertainment, consumer items and education. Rent in the free zone is also generally cheaper than its competitors.

RAK FTZ’s management is focusing more on attracting medium and large companies and is casting its net farther, sending delegations to talk to business people in South Korea and Malaysia in recent months.

“We are focusing on quality over quantity,” Fort said. “We are being more specific in enforcing the need for our clients to be active in our facility, not dormant.”

HAMRIYAH FREE ZONE

Sharjah, once the UAE’s most industrialised emirate, has not lost its charm. The Hamriyah Free Zone continues to be a prime choice for setting up businesses and the management’s pro-active stance has seen it emerge as a 5,700 strong business community with 140 nationalities that have brought in more than $20 billion in foreign direct investment.

The free zone boasts seven custom-designed SME clusters named as the Oil and Gas Zone, Timber Land, Maritime City, Petrochemical Zone, Construction World, Perfume World, and Steel City and which are attracting hundreds of new and small businessmen from across the globe.

The latest project, Hamriyah Logistic Village, is aimed at providing an all-in-one logistics and distribution centre for companies operating in the hub.

AJMAN ON THE MOVE

One of the free zones keen to make a mark is Ajman Free Zone. It has put in a formal request with the emirate’s government to have additional land allocated to it. An expansion is warranted, it says, to attract light manufacturing units and to create conditions to encourage the creation of a re-export hub for global businesses.

It has vowed not to raise lease rates in 2014 and wants to be competitive.