TBY talks to Abdulla Bel Houl, Managing Director of Dubai Industrial City, on the history of the industrial zone and the advantages of investing and operating in Dubai.
TBY Dubai Industrial City has more than 150 companies operating in the zone, including some of the biggest names in industry. What strategies have you initiated to attract such large players?
ABDULLA BEL HOUL Dubai Industrial City ranks very high when it comes to responding to the supply-chain needs of our business partners. Within its 55 square kilometer precincts, the city has leading industrial names such as BASF, IKEA, and Al Marai, which is a regional dairy manufacturer from Saudi Arabia. We are the second largest non-real estate project in Dubai, which consists of six zones dedicated to key industries: food and beverage (F&B), heavy machinery, mineral products, chemicals, and base metals. Organizing industries into their own zones brings obvious, inherent benefits of symmetry, specialization, and safety. There is strong synergy between the chemicals and minerals industries, since companies working in the mineral sector and producing building material such as cement rely on chemical-based products. Some other factories recycle water and the excess is passed to construction firms. These zones are further complemented by other services such as 10 million square feet of state-of-the-art warehouses, labor accommodation, dedicated power substations, modern office buildings, and viable commercial area, in addition to a number of municipal amenities. To date, Dubai Industrial City has invested more than $1 billion to create this infrastructure. Dubai Industrial City is adjacent to the Al Maktoum International Airport and within a short drive from the Jebel Ali Sea Port. Both factors have been pivotal to the growing popularity that the zone enjoys, among companies that are looking to expand their industrial operations out of Dubai.
In which sectors are you seeing increased interest and growth?
We are experiencing good growth across all six industrial zones, but I would particularly mention that our F&B, base metals, heavy machinery, and chemical zones are receiving considerable attention. The F&B zone lends itself very well to the unique set of infrastructure and logistic requirements that go into the manufacturing, packaging, and movement of food products across the region. Our business partners in the other zones support activities in the construction sector, including the mechanical, electrical, plumbing and air conditioning industries. Our warehouses are also registering significant interest. In January 2012, we launched our second phase of state-of-the-art warehouses across 3.5 million square feet of land. These include facilities for cold storage, which are especially suited for F&B and the pharmaceutical industry. We also have warehouses for general use, others for light industrial activity, and retail showrooms equipped with back storage. Already, 30% of the new phase of warehouses is booked.
What makes Dubai such an attractive logistic hub, and what is the growth potential for the re-export sector here?
Historically, Dubai has enjoyed prominence as a harbor for international trade between East and West. The pivotal part played by Dubai Creek is also of special interest: this natural waterway is where Dubai began trading with the world—and the world with Dubai—more than a century ago. Personally, I find it fascinating that even with the appearance of mega ports like Jebel Ali, the Creek has retained its commercial appeal, in particular with regional traders. Besides the ports, the government of the UAE has put priority on the development of world-class urban infrastructure, streamlining various procedures that make the UAE the top country in the Middle East in terms of ease of doing business. Additionally, the government has made sizeable infrastructure developments; the Emirate is located within few flight hours from the large markets in South and East Asia and the modern European markets. Dubai also enjoys excellent sea and port facilities, as well as a modern road network that facilitate the land transport of goods across the GCC.
Would you say there is any need for further regulatory change in the industrial sector to help the market open up further?
Generally speaking, industrial projects are by nature very capital intensive. The government of the UAE has taken stringent steps to boost the nation’s industrial sector. The industrial sector grew to 16% of national GDP in 2011, becoming the second most valuable sector in the UAE after the hydrocarbon industry, and there are plans to further increase the contribution of this sector to reach 25% in the future. The creation of Emirates Development in 2011, with its mandate of supporting short- and long-term development requirements, is an excellent step forward as it will help fuel the local industry further. Commercial banks are also realizing that industry offers significant long-term returns and are now more willing than before to support worthy industrial
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