Interview: Mohammed Al Zarooni
What were DAFZA’s target markets for 2017?
MOHAMMED AL ZAROONI: In 2017 we directed more attention towards markets where we need to increase our visibility, as well as markets where Dubai is already known as a business and investment destination that has access to neighbouring MENA markets. Based on the previously mentioned figures, we want to boost ties with firms from Asia and attract more players from the miscellaneous 7% of our international representation. To achieve this, we have forged new partnerships with investors from South Korea, India, Germany, Japan, Italy, China, Singapore and Spain, in order to pursue mutual growth opportunities. Of the companies that set up in DAFZA in 2016, 40% were from the Gulf and the Middle East, 35% from the US and Europe, 18% from Asia and 7% from other territories. DAFZA was very successful in gaining exposure and strengthening links with new markets in East Asia and Europe in this year.
In your opinion, which sectors will be the most important in contributing to DAFZA’s growth?
AL ZAROONI: We expect several sectors will be key to DAFZA’s growth in the coming years, such as IT solutions and services. For instance, e-commerce is driving major changes for businesses in the UAE; its value is estimated to hit Dh36.7bn ($10bn) in 2018, rising from Dh9.2bn ($2.5) in 2017. With the introduction of e-commerce licences in DAFZA and Dubai CommerCity, we are seeking to lead the region’s e-commerce development.
In 2016 logistics and cargo companies represented 8% of DAFZA companies, while air freight volumes at Dubai International Airport are expected to grow by 5% in 2017 and increase at a compound annual growth rate of 3.2% in the years to 2022. DAFZA recorded newly registered firms from a variety of sectors in the first quarter of 2017: 32% were in electronics, telecommunications and IT; followed by consultancy, financial services and business development at a combined 13%; consumer products, and logistics and freight accounted for 8% each; and food and beverages, aerospace, and engines and machines represented 6% each. These sectors are likely to remain important for DAFZA.
How can Dubai’s free zones attract higher levels of foreign direct investment (FDI)?
AL ZAROONI: One of our main strategies is the building of the MENA region’s first freezone that is dedicated to e-commerce. The 2.1m-sq-foot Dubai CommerCity in the Umm Ramool area – a joint venture with Wasl Asset Management Group – is intended to tap into the GCC’s rapidly growing e-commerce market, which is expected to be worth some $20bn by 2020. This development is strategically placed, linking to major local and national roadways. Its cargo and logistics services, as well as its infrastructure to support both land and sea trade, will help to draw in new e-commerce players from the MENA and South Asia markets.
Even before launching Dubai CommerCity, we have already prepared an integrated portfolio of products and services designed to attract high levels of FDI. The freezone’s development will be aligned with directives to reduce the UAE’s carbon footprint by 25% by 2030, so we expect that many sustainability-focused investors will be interested in this development as well.
What opportunities does the rapid growth of the Islamic economy present for free zones?
AL ZAROONI: The 2016 “State of the Global Islamic Economy Report” forecast this portion of the economy to grow by 8% annually to reach $3trn by 2021. For this reason, DAFZA is developing strategies geared towards this thriving sector. As the halal segment is expected to drive an estimated spend of $1.6trn, the freezone has issued an exhaustive halal-dedicated guide titled “Dubai: The Global Gateway to Halal Industries” to help investors explore various components of the market, ranging from food and beverages, pharmaceuticals and cosmetics, to tourism, fashion and design, and retail.
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