TBY talks to Salma Ali Saif Saeed Bin Hareb, CEO of Jebel Ali Free Zone (Jafza), on the development of the free zone, growth trends, and the strength of the maritime industry.
THE BUSINESS YEAR Jafza was established in 1985 and is one of the world’s fastest-growing free zones. What is the background of its development over the last quarter of a century?
SALMA ALI SAIF BIN SAEED HAREB The vision behind the creation of Jafza, the brainchild of the Dubai government, was to develop a leading industrial, warehousing, and distribution hub in the Middle East. The initiative was aimed at boosting Dubai’s plan for economic diversification and improving the traffic of associated ports and airports. The free zone was created to be all embracing, and was designed to cater to all types of industries and business sectors. As an economy, we have always recognized the immense value of trade. Jafza officially opened in 1985 with land and standard size warehouses to provide ready-built facilities to customers, who were mostly engaged in trading activities. We started functioning in that year with 19 companies. By the 1990s, we expanded our facilities to cover industrial activities. The light industrial units (LIUs) were developed to cater to the manufacturing sector. In 2003, growing demand for industrial space from the chemical and food industry led to the development of the South Zone and hybrid clusters for these two industrial sectors. In the meantime, Jafza successfully developed and implemented a customer-focused service infrastructure and culture that concentrates on customer needs and requirements. Jafza’s deep commitment to service excellence led to ISO 9001 certification in 1996, making it the world’s first ISO-accredited free zone. We also pioneered the concept of a “one-stop shop” in the region. Today, Jafza offers a host of infrastructure facilities to new companies, ready-built warehouses, and LIUs on developed plots, all well supported with amenities such as food courts, pharmacies, hospitals, banks, on-site residential facilities, and much more. Through Economic Zones World, Jafza’s parent company, clients have access to build-to-suit solutions (BTS), which are essentially custom-built logistics facilities that are also sustainable. We have taken the excellent infrastructure that Dubai has to offer—the port, air, and road network—and added significant value attracting thousands of global companies. Today we host over 6,700 world’s finest companies, including 120 of the Global Fortune 500 enterprises.
In 2011, Jafza won the Dubai Quality Award for Excellence. What have been the key factors leading to your success?
Winning the prestigious Dubai Quality Award (DQA) for excellence demonstrates Jafza’s commitment to best practices, something we have prioritized from the start. We received the DQA in 2003 as well, and we have undertaken a business process re-engineering exercise. Overall, our strong commitment to customer-oriented solutions, innovation, and the speed at which we execute new ideas are some of the reasons why we are one of the most favored investment destinations for companies interested in the region. Jafza has focused on two aspects that have worked as the free zone’s biggest growth drivers, which are ease and cost of doing business.
What contribution is Jafza currently making to Dubai’s GDP? What growth do you forecast over the next year?
Jafza has demonstrated consistency in its role as an important driver of the nation’s economy. In 2010, companies based in Jafza generated trade amounting to AED233 billion, 25% of Dubai’s total non-oil trade in the same year, which was AED902 billion. Over the past five years, Jafza has contributed to Dubai’s GDP at over 20% on a year-to-year basis, accounted for more than 50% of Dubai’s total exports and 40% of net FDI flow into the UAE, and sustained more than 135,000 jobs through its companies.
Dubai is consistently applauded for its excellent infrastructure. How has Jafza enhanced technical capabilities through technological innovation and development?
We have continuously been enhancing our IT infrastructure and introducing a host of value-added services. Today Jafza is one of the most e-friendly free zones with one of the highest customer e-adoption rates in the UAE. By 2012 we want the e-adoption rates to hit above 90%. Jafza has introduced a number of initiatives, including support services such as the e-license and e-lease programs as well as an online service for the payment of customer invoices, all geared to offer greater convenience. Our customer service facility is also one of the finest in the country. It underwent re-engineering a few years ago, designed after analyzing the services we offered and the customer experience of our clients. The facility includes an intelligent, custom-built queuing system, which, over almost a year of operation, has reduced the processing time of transactions by as much as 70%.
What trends have you witnessed in terms of new companies coming to operate within Jafza over the last year?
In 2011, approximately 400 new companies joined Jafza, which included 40 leading multinationals such as ACE Hardware, AO Smith, Apollo Tyres, Baumer, Caterpillar, David Brown, Ford, Oracle, Pelican, MAN, and Stemcor Special Steels. Sector-wise, the largest chunk of new companies came from the machinery and equipment segment, followed by electronics, chemicals, building materials, and food. Region-wise, the largest number of new companies came from Europe, followed by the Asia Pacific, Middle East, and the Americas. The trend shows a growing focus on infrastructure development in the region and economic growth that has eventually driven demand for consumer goods.
In what ways do you work with business councils around the world to enhance competitiveness and trade relations?
We are proud to be supporting continued bilateral co-operation between the UAE and the world. Jafza has representatives, partners, and dedicated teams based in the UAE and overseas to target companies in developed as well as emerging economies across the world that are looking to expand their horizons. We continuously work closely with business councils and government institutions in different international markets, as well as Dubai-based organizations, on joint projects, road shows, and seminars to target various sectors to stimulate investments.
What key projects do you currently have in the pipeline?
The development of the Jafza South Zone has been dramatic since 2003, with its world-class warehouses and other amenities. We are still working on expanding and adding more facilities to provide a better value proposition for our customers. Under construction is the ambitious $600 million convention center complex, which will be equipped with exhibition halls, an auditorium, banquet hall, meeting and conference rooms, a hotel, world-class recreational and retail provisions, and many other business-friendly facilities.
The Dubai government has announced a commitment to the development of sustainable business operations. How is Jafza contributing to sustainable development?
We are certainly seeing a shift toward sustainability across industries and businesses in the UAE. Jafza on is increasingly focused on sustainability. It is now mandatory for all developments to follow Trakhees’ green building standards in the free zone, and Trakhees’ EHS rules are part of Jafza’s standard contract documents. With regards to its new customer projects, Jafza is fully committed to incorporate sustainability features that fully comply with the US Green Building Council (USGBC) LEED rating system. Our subsidiary is Gazeley, a global provider of sustainable logistics space. The company has recently delivered a 65,000 sqm state-of-the-art and environmentally efficient logistics facility to CEVA Logistics, one of the world’s leading supply chain management companies in Jafza. The facility has achieved LEED Gold certification, and is the first project in the UAE to gain this recognition. Jafza actively manages utility usage to ensure a minimal impact on the environment. It is also mandatory for the service providers to ensure that waste (paper, plastics, cans, etc) is reduced and recycled. We have introduced a CSR policy manual in Jafza that ties in with the company’s policy of integrating CSR into its overall business model and honoring its social and environmental obligations.
What was your experience like during the global liquidity crisis, and what lessons were learned during that period?
There were definitely lessons learned during the crisis. Customers sought more value during the crisis for their investment, and we continued to build on our customer-centric model to deliver that—whether through infrastructure, more commercial options, flexible terms for building, value-added products, or services. Our agility and customer focus during the downturn has been the key reason that has kept Jafza growing since 2009, in both customer base and revenues. I believe that investor confidence in the UAE is returning. Dubai is a reliable business hub and despite everything, the Emirate has maintained its popularity as a business destination. The UAE economy has bounced back from a slowdown and is on track to grow 4.5% in 2012, driven by the oil and non-oil sectors.
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© The Business Year - August 2012