Established 30 years ago, Dubai-based Jebel Ali Free Zone (Jafza), the UAE’s flagship trade and logistics hub for the wider Middle East region and Africa, has played a significant role in the UAE’s economy.
The free zone, which accounts for almost 32 per cent of total foreign direct investment (FDI) flow into the country, contributes 21 per cent of Dubai’s gross domestic product (GDP) on a yearly basis and sustains the employment of more than 144,000 people in the UAE. Last year the free zone’s total trade amounted to more than Dh321 billion ($87.39 billion).
According to Jebel Ali Free Zone Authority (Jafza), its licensed companies contribute over 21 per cent of Dubai’s GDP and enable a quarter of non-oil trade by volume. Last year the free zone’s total trade amounted to more than Dh321 billion and attracted 32 per cent of total FDI into the UAE.
According to a recent report, in the first-half (H1) 2016, Jafza’s profit rose 14 per cent as operational performance improved and costs were reduced on the back of an early bank repayment last year.
Net income increased to Dh588 million in the first six months of 2016 compared to Dh518 million in the same period last year. Revenue increased by 6 per cent to Dh978 million versus Dh924 million in the same period last year, it said.
At the same time, 242 new customers were added during the period compared to 313 new customers added during the same period last year.
Meanwhile, according to the latest data from CBRE, the free zone remains the exception in what continues to be a subdued market for industrial real estate locations in Dubai over the first half of 2016.
Warehousing properties there are recording year-on-year gains of around 3 per cent and have occupancy levels of less than 5 per cent.
“Jafza also has a very active secondary market, with an increase in properties available for sublease and sales,” the consultancy reports. “This has in part been led by declining capital values, which have fallen close to 15 per cent year-on-year class 1 industrial assets,” it adds.
INVESTMENTS
The free zone has invested Dh279 million to boost capacity, an ongoing development operation. During the first six months 59 warehouse units and 580 units of onsite residences were completed and over the next six to 12 months, the free zone is expected to complete the second office tower of Jafza One which comprises 55,000 sq m of leasable space and 51 warehouse units.
In order to attract more companies and investments into the free zone, Jafza organises roadshows all over the world, which according to Sultan Ahmed bin Sulayem, group chairman and chief executive officer of DP World and chairman of Ports, Customs and Free Zone Corporation, aims to attract companies that add value to the local economy and the region while increasing their revenues through the re-export of their products to various regional markets.
At a recent roadshow in Seattle, US, Ibrahim Mohammed Al Janahi, deputy CEO and chief commercial officer at Jafza said: “Dubai’s state-of-the-art infrastructure and integrated business community caters to trade and logistics in the entire Middle Eastern region. Jafza is a prominent logistical and manufacturing hub attracting multinationals from around the world, including the US.”
SUSTAINABILITY
Meanwhile, Jafza showcased its latest initiatives and sustainability projects that have been implemented throughout the free zone at the Water Technology, Energy and Environment Exhibition (Wetex), held in Dubai last month.
Bin Sulayem said: “Sustainable development and environment preservation are two of the mainstays in Jafza’s annual strategy. In our efforts to establish ourselves as a ‘Green Free Zone’, we have been incorporating environmentally friendly practices in our facilities. Our free zone regulations are also sustainability-oriented, that customers from different sectors have welcomed; especially in our bid to reduce energy consumption, conserve natural resources and reduce carbon emissions. We aim to optimise the use of energy to minimise the adverse effects on our environment and reduce carbon footprint in the free zone.
During the event, the free zone authorities met with several key players from China, South Korea, the US, India, Italy and Germany, offering benefits and incentives to set-up their business in Jafza. Under the Dubai Integrated Energy Strategy 2030 initiative, the government aims to reduce energy consumption by 30 per cent by 2030 that too, will reflect in the opportunities available for businesses, locally, according to Al Janahi.
He stressed that the free zone has recently, installed three charging points for electric vehicles at the parking lots to encourage companies and individuals to purchase environment-friendly electric cars. Selected street lights in the free zone are solar-powered with panels; thus increasing green areas in Jafza.
He pointed out that over 60 companies in Jafza have been awarded the Leed certification from the US Green Building Council for their sustainable and energy efficient facilities.
To further reduce energy consumption, Dubai Electricity and Water Authority’s Energy Services Company (Esco) is retrofitting 157 staff accommodation buildings in Jafza, replacing 5,000 old air conditioners with highly efficient split units; 85,000 old light fixtures with high efficiency LEDs and 31,000 old water fixtures with new efficient water units.
Jafza will save energy worth AED132 million over the next six years, in addition to, 158 GW/hours of electricity and 1.2 billion gallons of water.
Home to over 7,000 businesses including more than 100 Global Fortune 500 enterprises, Jafza is one of the world’s leading free trade zones. A DP World-owned company, the free zone was created in 1985 to promote trade and support container throughput at the Jebel Ali Port.
Today it is one of the largest free zones globally and the region’s most efficient logistics hub. Located in Dubai, UAE, between the world’s most productive container terminal, Jebel Ali Port, and Al Maktoum International Airport, Jafza provides the best in multi-modal connectivity.