UAE – The Dubai Airport Freezone Authority (DAFZA) performed strongly in 2016, achieving 16 per cent net profit growth and posting a 2 per cent growth in its total revenue and a 28 per cent increase in its total assets and a 3% rise in EBID. According to official reports, the total leasable area of multinational companies occupying the Freezone rose by 44 per cent, while total leased office space increased by 13 per cent. The leased light industrial units grew as well by 25 per cent, due mainly to growing confidence among international companies in DAFZA’s capabilities as well as the numerous business and investment opportunities available in Dubai. DAFZA accounted for AED 109.82 billion of Dubai’s non-oil foreign trade for 2015, representing 9 per cent of the emirate’s total trade and 20 per cent of total free zones trade for the same period.
H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DAFZA, said: “DAFZA continues to move forward in terms of leadership and excellence, driven by its strong operational performance and positive financial results which have proven once again that it is one of the world’s top free zones. The uninterrupted success of the Freezone affirms its exceptional ability to address challenges and maximize opportunities for supporting nationwide efforts to usher in a post-oil economy and turning Dubai into a major pillar of the global economy. We are inspired by the vision of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, who taught us not be afraid of difficulties as we strive to become a world leader.”
H.H. added: “DAFZA proved its instrumental role in enhancing the overall performance of Dubai’s free zones last year. It demonstrated the highest levels of competitiveness, excellence and efficiency in overcoming a challenging global economic climate. Supported by an integrated portfolio of effective economic and investment solutions, DAFZA drew in significant foreign direct foreign investments from vital sectors. The Freezone played an economic and strategic role in promoting the attractiveness of the local investment environment, which has further strengthened Dubai’s position as the top of global investment destinations. We are confident of even more promising prospects as we prepare to launch our Strategic Plan for 2017-2021 which will implement ambitious initiatives in line with the strategies and directives of the wise leadership of the UAE.”
For his part, H.E. Dr. Mohammed Al Zarooni, Director General, Dubai Airport Freezone Authority, said: “DAFZA’s strong performance in 2016 was not surprising and adds to already numerous achievements that have propelled DAFZA among the ranks of the most innovative and competitive free zones in the world. Our series of successes affirms our outstanding competitiveness and our ability to overcome emerging challenges within the regional and international markets. We have further strengthened the UAE economy and helped increase Dubai’s GDP by capitalizing on investment prospects to build a strong, competitive and diversified economy which can achieve more prosperity in the future.”
H.E. Dr. Al Zarooni concluded: “We are committed to providing an ideal business environment for attracting international companies and foreign capital as well as supporting economic diversification and promoting trade openness with the global markets. We shall achieve this by focusing on providing world-class infrastructure, unique investment incentives and innovative solutions in line with our vision of a ‘Freezone that goes beyond’ that supports the national and global economic systems. Our positive performance in 2016 drives us to further enhance the experiences of regional and international investors in Dubai and in DAFZA in particular in all vital sectors, taking advantage of our pivotal role in advancing economic diversification strategies and achieving the goal of Dubai Plan 2021 to make the emirate one of the most important business centers in the world.”
Continuous growth … The major accomplishments of 2016
DAFZA registered an impressive growth in the number of its hosted multinational companies, which currently account for 32 per cent of all companies operating within the Freezone. The Information Technology, Electronics and Electrical and Telecommunications sectors accounted for the largest share at 27 percent of the total number of companies that operated within the Freezone last year. The Consumer Products sector placed second at 10 per cent, followed by the Engineering and Building Materials and Aerospace, Aviation and Related Services sectors which shared third place at 9 per cent, and then the Food and Beverage and Logistics and Freight sectors which shared fourth place at 8 per cent.
DAFZA has witnessed unprecedented growth in Foreign Direct Investments (FDI) from major global markets, especially those from the UK, USA, Germany, India, France, Japan, Switzerland, Italy and Singapore—affirming its leadership and serving as an effective addition to the national economy. The growth is also attributed to DAFZA’s continuing commitment towards utilizing an innovative approach in the provision of smart solutions that can attract international investors looking to establish a strong presence in the markets of the Middle East, North Africa and South Asian (MENASA) regions. DAFZA’s percentage of companies from the Gulf region and the Middle East was the highest in 2016, with 40 per cent. The share of American and European companies in DAFZA was pegged at 35 per cent, followed by Asian companies at 18 per cent, while the share of companies coming from other countries in the world were posted at 7 per cent.
Economic diversification and attracting investments are top priority
DAFZA continues to stand out as a key player in the move to support the country’s economic diversification policies, which is made even stronger because of its being a multi-sectoral Freezone covering more than 20 vital economic sectors. Along these lines, DAFZA has adopted and implemented an integrated strategy aimed at increasing the flow of FDI, which are based on new standards and guidelines covering the development of a system of policies and the inclusion of innovative products and services. The strategy will allow regional and international investors to realize their visions to create a strong presence across key growth markets in the MENASA regions. DAFZA has also taken key steps in further encouraging major international and multinational companies to take part in the efforts to enhance the economic diversification efforts via the creation of a series of procedures directed at promoting the flexibility of licensing options, which includes the extension of trade licenses for a period of three years.
DAFZA’s launch of the ‘Smart Office’ initiative in 2016 has reaped in positive results and has contributed highly in the move to attract FDI. ‘Smart Office ‘ serves as an interactive platform for international companies to explore the local and regional market and to study available investment opportunities driven in by Dubai’s leading position in the global economy. The initiative also complements the country’s ongoing preparations for Dubai Expo 2020 and the achievement of the Dubai Innovation Strategy and the Dubai: Global Capital of the Islamic Economy program.
Ambitious expansion plans
As part of its continuing efforts to enhance Dubai’s competitiveness in the global economic map, DAFZA has implemented a strategic expansion plan that has resulted in the 40 per cent completion of the ‘DAFZA Square’ initiative, which is expected to be fully complete by 2017.
In line with the move to promote its potential and capabilities and to be able to keep up with the growing demand for services and multiple solutions, DAFZA has started construction on two new buildings W14 and W18. The two new facilities are being constructed in compliance with US Green Building Council (USGBC) standards and in line with requirements of the Gold Rating Level of the Leadership in Energy and Environmental Design (LEED Gold) standard.
Strategic plans for the future
DAFZA has significantly pushed ahead its development plans with the formulation of Strategic Plan 2017-2021 to be launched this year. The plan sets to become the foundation for the transformation to one of the fastest growing, most developed and competitive free zones in the world. The plan outlines an ambitious objective that would highly contribute to Dubai’s GDP, meet future demands and support the economic diversification policies of the country. It adopts an approach that considers development at the macroeconomic level and environmental sustainability, in line with the ‘UAE post-oil’ strategy and the ‘Dubai Plan 2021’. These goals look to see Dubai as a major global economic hub and the preferred destination for businesses and investments.
Advanced steps towards innovation
To pursue the ‘Innovation Strategy’ which was initiated in 2015, DAFZA maintained its program during the last year to reinforce the culture of innovation and support innovative ideas as part of its plans to strengthen its position as one of the most innovative free zones in the world and as one of the most effective players in implementing the goals set in the ‘National Innovation Strategy’ endorsed by H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai to make the UAE among the most innovative countries in the world.
During 2016, DAFZA launched the ‘Big Conversation’ under the ‘Public Services Innovation for Growth’ initiative to serve as a major platform for creating new perspectives that will strengthen the successful cooperation between free zones and the government service sector. It aims to develop innovation systems in governmental services to ensure foreign investors in free zones will have the best experiences and meet their needs in such a way that would help attract more foreign investments and further increase the emirate’s GNP and GDP. This is the first-of-a-kind event to be launched in partnership with an elite of the government bodies affiliated to the Dubai Government, represented by Dubai Police Department, Dubai Health Authority, Dubai Chamber, Department of Economic Development, Dubai Customs, General Directorate of Residency and Foreign Affairs – Dubai, and Dubai Civil Aviation Authority and in strategic collaboration with Smart Dubai Government Establishment (Smart Dubai Office).
The Freezone has also made a great progress on the innovation path by launching (Double Up 3M), which is a dedicated program to identify the challenges and overcome the obstacles facing the companies operating in the Freezone. To this end, the program would handhold the companies to put an effective roadmap to accelerate the implementation devices in light of the core organizational components represented in the “mission”, “market” and “money”. The program is a real manifestation to the targets of the “DAFZA’s Innovation Strategy”, which has highlighted the key role that the Freezone plays in the national innovation system as being an innovative organization, besides being as well its tangible role in financing and incubating innovation. The graduation of the first batch of “Double Up 3M”, during the last year, has been the culmination of DAFZA’s efforts.
DAFZA has also launched an initiative to identify the innovation champions in the Freezone in order to encourage investing in the innovative ideas that serve as the driving force of the “DAFZA’s Innovation Strategy”. Innovation champions would be identified by selecting 20 innovation champions from amongst the managers, section heads, and employees in “DAFZA” after a comprehensive organizational evaluation.
Successive achievements on Islamic economy
DAFZA left no stones unturned during 2016 to move forward with accomplishing the objectives of the initiatives of H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai in turning Dubai to a destination of the world Islamic economy. In line with this direction, the Freezone has, in collaboration with the International Center of Islamic Economy, headquartered in DAFZA, hosted the ‘International Innovative Platform for Islamic Economy Products 2016’. The event was hailed by the international community as the leading force to develop innovative products and ideas supporting the Islamic economic system.
DAFZA also forged a strategic partnership with the Halal Industry Development Corporation, an agency under Malaysia’s Ministry of International Trade and Industry, for promoting Halal-related business and investment opportunities. DAFZA also signed an agreement with Al Wasl Real Estate Corporation to secure a land parcel in Al Qusais area for launching an initial project of Halal food manufacturing to benefit from the promising perspectives of the Halal foods industry, which has been witnessing an accelerating growth and greater demand in the world’s leading Halal markets. DAFZA is currently preparing an action plan on the Islamic economy, apart from its collaboration with the Dubai Islamic Economy Development Center as strategic partner of ‘Dubai: The Capital of Islamic Economy’ initiative for launching halal-related activities.
Smart transformation …an ongoing process
Smart transformation is at the top of DAFZA’s strategic priorities for 2016 following its full commitment to the visionary directives of H.H. Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to make Dubai the smartest city in the world. To achieve the ambitious plan of turning DAFZA into a smart and integrated city that meets the needs of the international business community, a series of trailblazing initiatives and smart applications were launched with the end goal of increasing the adoption of best practices relating to information and communications technology, which comes through the following:
- Inauguration of new business center incorporating modern conference auditoriums equipped with the latest advanced technologies relating to the interactive smart projection and video conferences and individual touch screens
- Embarking on the implementation of the CRM solutions to accelerate the process of smart transformation
- Launching the Data Center infrastructure management project
- Launching the project of integration of the BMS network
- Participating in the Compliance with Legislations and Regulations Initiative relating to the information security, which is issued by the Dubai Smart Government.
- mSupplier portal
- DAFZA SharePoint
- DAFZA Eye application, which allows the customers to submit instant reports about any cases, concerns or complaints that should be investigated and acted upon immediately
- Electronic and smart payment features
DAFZA also won the ‘Best Technology Award’ for its Smart E-Gate Pass program during the 30th session of Ideas UK. The initiative, which was launched for the first time last year, is the newest addition to DAFZA’s electronic services. The Smart E-Gate Pass is an alternative option to facilitate the entrance procedures for visitors and customers while also aimed at reducing traffic congestion by facilitating paperless transactions. This system allows visitors to get immediate and direct approval to pass, which normally took 5 to 10 minutes to get approval.
Customer Satisfaction … A Top Priority
Customer satisfaction has been a key driver for DAFZA’s success ever since the organization was established 20 years ago. However, recent trends in globalization, social media and technology have altered customer behavior and with it expectations. To respond to such disruptive trends and to ensure that customer satisfaction remains a key differentiator for the organization, DAFZA has embarked on a transformation initiative which involves the implementation of customer relationship management (CRM) tools and technologies. Such tools aim to transform customer facing operations at DAFZA such as Marketing, Sales and Customer Relations and seek to reinforce DAFZA’s commitment to put customer experience at the heart of the organization’s business model.
Over the past 20 years, both regional and international customers have benefitted from the investment that DAFZA has made to modernize its physical infrastructure. In continuation with this policy, DAFZA is now investing in modernizing its digital infrastructure by adopting cutting edge technologies in cloud computing, mobility, big data analytics and CRM. A modern digital infrastructure will also allow DAFZA to collaborate seamlessly with other UAE government entities and international partners, thereby significantly improving key customer journeys such as company set-up and expansion. This combination of investment in both physical and digital infrastructure will help ensure DAFZA’s continuing commitment to provide world class customer service for another 20 years to come.
Health, security, safety and sustainability…strategic hubs
In keeping with its endeavors to balance corporate growth and environment conservation and preserve natural resources for the next generations, DAFZA adopted the latest sustainable technologies that contributed to reducing its electric power consumption rate by 7.96 per cent; equivalent to 3,506,442 kWh in 2016 as compared to 2015, while the water consumption rate dropped by 31per cent during the same year, which reinforced the role of the Freezone in supporting the Dubai Supreme Council of Energy’s strategy to reduce power consumption by 20 per cent by 2020. The Freezone also achieved remarkable accomplishments in reducing CO2 emissions by 1633 tons or by 7.92 per cent, in line with the ‘Carbon Emissions Mitigation Strategy’ as part of its contribution in minimizing carbon emissions by 16 per cent by 2020.
DAFZA’s efforts in sustainability has earned the Freezone a Platinum Certification from Leadership in Environmental and Energy Design (LEED) in the ‘Operations Maintenance of Existing Buildings’ for its Main Building. It has received the highest recorded points in the Middle East, apart from the Golden Certification from the Leadership in Environmental and Energy Design for the Project of Developing the Building 8W within ‘DAFZA Square’. The Freezone has also been conferred with the ‘Emirates Energy Award’ in the Golden Category from the Dubai Supreme Council of Energy and ‘The Best Smart Initiative Award 2016’ during the ‘Big 5’ awarding ceremony for its role in optimizing the efficiency in cooling stations.
DAFZA is currently housing more than 1,600 companies from more than 20 business sectors with some of the biggest and top-level companies belonging to the Fortune 500 list of international companies. Some of the most prominent brands in the business world having an office or branch in DAFZA are Airbus, Rolls Royce, Roche, GE Aviation, Channel, Estee Lauder companies, Toyota, Audi Volkswagen, Sennheiser, Red Bull, Thales, Richemont, Richard Mille, Johnson & Johnson, Panasonic, and TATA Motors among others.