TBY talks to Mohammed Al Zarooni, Director General of the Dubai Airport Freezone (DAFZ) Authority, on the history of the zone, taking the model abroad, and recent trends.
TBY What is the history of the Dubai Airport Free Zone (DAFZ)?
MOHAMMED AL ZAROONI The government established DAFZ 15 years ago within the boundaries of the airport. The nature of many businesses operating within Dubai called for an airport free zone, and the success of Jebel Ali, the first free zone in the region, prompted the establishment of DAFZ. The free zone was essentially an economic project that was designed to attract companies that add value to the market. Our focus has been on the contribution of the free zone to GDP, as well as supporting the export and re-export process from Dubai to the region and the world. Today, DAFZ contributes around 2.2% to GDP, which is almost $1.6 billion. We have nearly 1,500 companies and 12,000 employees operating within the free zone. Although we naturally aim to increase the number of businesses operating in DAFZ, our main focus is on quality, and in terms of industrial classifications, most of our companies are in Category A. Some examples of our luxury retailers include Cartier, Clarins, Mont Blanc, and Chanel. In the aviation industry we have Airbus, Boeing, and Rolls-Royce. Logistics giants UPS and FedEx also operate from here.
How has the free zone developed over recent years?
Originally, the Dubai Civil Aviation controlled the free zone, until the government issued a decree stating that DAFZ would be independent. After the decree, business began to grow rapidly, and we started to see approximately 100 new companies join annually. According to a study conducted in 2010 by FDI Magazine, we are ranked as the second largest free zone in the world, in terms of success. In 2012 we aim to reach number one. Achieving success drives us to improve and maintain our position at the top, and we intend to rise to the challenge of being one of the world’s leading free zones. Our marketing team makes a great effort to attract companies to DAFZ, but the real challenge is to retain those companies. We foster retention by providing excellent services and facilities. Listening to feedback, really taking on board requests, and communicating bilaterally are essential to customer satisfaction. Naturally we cannot implement every suggestion, but many of our developments over the years have directly resulted from feedback we have been given, and that is a testament to our commitment to our customers. We meet with a selection of company representatives on a monthly basis to discuss concerns and encourage open dialogue to enable us to provide the best service. Dealing successfully with foreign investors is of paramount importance because they are essential to our operations, and we constantly work to improve FDI regulations.
Do you plan to replicate the DAFZ model globally?
With 15 years of experience, I strongly believe that we have the expertise to replicate our success in other locations. The free zone authority has been approached to launch free zones abroad, but as a policy we have decided not to invest in free zones outside of Dubai. However, that is not to say that we will not operate external free zones from a management perspective. In that instance, we will examine the political situation in the proposed countries, as well as the economy, culture, and facilities. We are striving toward being an exemplar free zone and are happy to share our experience with our contemporaries around the world. Enquires come regularly from Africa, Asia, and Europe, and there is certainly a chance that we will begin operations abroad.
What trends have you witnessed in terms of the companies that are attracted to DAFZ as an operational hub?
We have companies from all over the world operating here, but the majority historically have come from the US and Europe. Recently, we have been excited to see that the number of companies from Asia—Japan in particular—have started increasing. Our focus has been on attracting big global brands; however, there are also many valuable companies from the Middle East, and we wish to attract those also. In terms of core operations, many different stages of product development, including distribution, consultancy, marketing, R&D, packing, and assembly are represented within the free zone. We accept all categories of business.
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