DAFZ achieves exceptional financial performance during 2015

As a gateway connecting the emerging markets in Middle East and Africa, the Freezone grew its number of registered companies by 22 %, with multinational companies in particular rising 9 % as reflected by the growth of new sales revenue by 18 %. The share of GCC and Middle Eastern companies in DAFZ reached 40 %, followed by American and European companies at 36 % and Asian companies at 18 %. The share of companies from other parts of the world collectively reached 6 %.

Reflecting the resurgence of Dubai’s business environment, DAFZ witnessed higher demand for its office packages due to various factors, such as sustained economic growth and eager anticipation over global prospects related to the upcoming 2020 Dubai World Expo. According to official 2015 statistics, leasable office spaces across the Freezone increased by 11 % over 2014.

H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DAFZ, said: “DAFZ is taking steady steps towards positioning itself as a main player and major driver for economic development and trade growth in Dubai, posting a strong performance and achieving significant growth at the operational level and among the focal sectors in the freezone. Last year’s buoyant financial results are testaments to DAFZ’s high potentials and competitive advantages which reflect its pivotal role in attracting foreign investments in the coming months.”

“Our successive achievements drive us to intensify our efforts to implement our ambitious initiatives that we launched in 2015, such as the DAFZ Innovation Strategy that comes in line with the directives of H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai. We are looking forward to support economic diversification policies which complement the ‘UAE Beyond Oil Strategy.’ We will focus on creating integrated solutions and innovative initiatives that contribute to the achievement of these ambitious objectives and national priorities. We aim to make a positive impact on smart transformation through investments in innovative ideas and projects’ expansion in the Freezone. We will pay great attention towards strengthening the bridges of communication with the international business community, maintaining our status as one of the most premium free zones in the world, and effectively contributing to the economic development in Dubai and the UAE,” H.H. added.

Dr. Mohammed Al Zarooni, Director General of DAFZ, added: “The past year was a successful journey for us as we were able to maintain industry leadership despite the many local, regional and global challenges. It was a particularly successful period for us in terms of further streamlining our finances and operations, expanding our global presence, and supporting the national economic diversification policy to build a future beyond oil by encouraging major global names from various industries to do business at DAFZ. In 2016, innovation will be a strategic focus for us to accelerate our growth and support our efforts to explore the future in line with the wise vision of the UAE’s leadership. Our strong financial results will pave the way for us to reach higher levels of excellence and leadership, especially with the buoyant economic outlook for Dubai which is positioning itself as one of the top investment destinations in the world.”

Ambitious Strategic Initiatives for Sustainable Growth in the Future
DAFZ’s strategy is to accelerate growth based on the solid foundations of innovations and excellence, in order to achieve its vision of positioning itself as the world’s ultimate free zone destination. It is developing its Strategic Plan 2017-2021 which will bring added value to DAFZ’s accomplishments that have placed it amongst the most innovative and competitive free zones in the world. In line with its endeavors to develop a strategy that helps meet future requirements and supports economic diversification policies, DAFZ is currently studying macroeconomic and environmental factors to arrive at a dynamic yet sustainable strategy for 2017 – 2021 aligned with the Dubai 2021 Plan aiming at making Dubai “A Pivotal Hub in the Global Economy.”

DAFZ plans to add new sectors in order to attract leading companies from the Islamic economic sectors in support of the ‘Dubai – Capital of Islamic Economy’ initiative. This also comes in line with DAFZ’s efforts to contribute to the ‘UAE Beyond Oil Strategy’ and the positive impact in building a knowledge-based economy driven by technology and innovations.

As part of its activities to develop its Strategic Plan 2017-2021, DAFZ is conducting extensive Sales Forecasting and Market Intelligence Studies to ensure it sustains and even exceeds the growth it has achieved over the past five years.

DAFZ continues to maintain the momentum of its remarkable accomplishments in 2015 in terms of achieving the Key Performance Indicators (KPIs) of the Balanced Scorecard, especially those related to enhancing employee performance as well as management processes and operations. Based on its ambitious strategic plan, DAFZ looks forward to adding value to the UAE economy by contributing to the GDP of Dubai and boosting economic growth at the local and regional levels. This will be done through its world-class infrastructure, investment incentives, tax exemptions, and exceptional facilitates. These are all main pillars for creating an ideal environment for investments and innovations that can attract global companies and foreign capital, generate new jobs, support economic diversification, and promote openness to international markets.

DAFZ is keen to manage its operations in accordance with Dubai’s vision in several areas such as sustainability, innovation, smart transformation, business excellence, happiness, and ease of doing business. In line with its vision of ‘Raising Standards’, DAFZ sets high targets that align with the ambitious vision of placing Dubai among the top leading business hubs in the world.

Awards & Recognitions
DAFZ received a number of awards and recognitions last year, including:
• “Free Zone Authorities Customer Care Excellence Award” – Middle East Excellence Award Institution
• “Emirates Energy Award” – Supreme Council of Energy
• “Finance Team of the Year” Excellence Award – Middle East CFO Alliance
• “IMA Finance Team of the Year 2015” – IMA, The Association of Accountants and Financial Professionals in Business
• Hamdan Bin Mohammed for Smart Government’s “Best Innovation Team” and “Best Innovation Leader” Awards – shortlisted by Executive Council
• Superbrands award for the advertising campaign 2015

Innovation … Main Focus in 2015
DAFZ launched its ambitious Innovation strategy during the inaugural UAE Innovation Week held in November 2015, in line with H.H. Sheikh Khalifa bin Zayed Al Nahyan, UAE President’s declaration of 2015 as the ‘Year of Innovation’ for the UAE. It draws inspiration from the National Innovation Strategy directed by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, which upholds innovation as a primary means to achieve UAE Vision 2021’s goals.

This compelling innovation strategy has three distinct goals: the delivery of value-added best-in-class innovative solutions, the adoption of working styles that inspire creative behaviors across the organization, and alignment with and active contribution to the UAE’s National Agenda through innovation. It is an important step towards strengthening DAFZ’s position as one of the most innovative free zones in the world, through its three key roles within the National Innovation Ecosystem as an Innovator, a Capital Provider and a Promoter of the UAE’s national innovation efforts in line with UAE Vision 2021.

The strategy focuses on the six key executable Innovation Enablers of Process, Technologies, Governance, Skills, Capabilities and the Culture. As part of the strategy, the Freezone will set up a dedicated DAFZ Innovation Unit (DIU), embedding and stimulating an innovative work style to adopt ambitious development and implementation plans that ensure the provision of creative services, achieve the objectives of expansion plans, and cultivate a culture of innovation within DAFZ’s operations.

In line with its efforts to instill a culture of innovation and support creative ideas, DAFZ has launched leading initiatives such as Innovation Challenge as part of EXPO Milan 2015. The Freezone prepared a real-life case study related to innovation within the food industry value chain in line with its goal of adding value to its expansion project in Al Qusais. Talented and innovative developers, designers and entrepreneurs from around the world discussed the case study. The winning team developed an effective solution to create innovative, smart and interactive designs that improve warehouse management and efficiency.

DAFZ also organized an Accelerated Innovation for Global Growth (AIGG) seminar in collaboration with IBM and Microsoft. The event aimed to expand the strategic, operational and innovative capacity of small and medium enterprises (SMEs) in DAFZ and Dubai. The program featured skill sessions focused on increasing productivity, advancing leadership skills, enhancing creativity, and creating innovation and growth within the SME sector.

On the sidelines of Dubai Airshow 2015, DAFZ collaborated with Booz Allen Hamilton (BAH) on a workshop for SMEs in the aviation sector. It also organized an innovation forum in cooperation with Injaz-UAE, a member of Junior Achievement (JA) Worldwide, which included the launching of a series of awareness and education activities aimed at stimulating creative thinking among secondary school children and enhancing their creative skills to enable them to have a positive impact on the aviation industry.

Islamic Economy … Strong partnerships and Promising Initiatives
DAFZ has focused its efforts on establishing strong strategic partnerships as part of its commitment to supporting the ‘Dubai The Capital of Islamic Economy’ initiative launched by H.H. Sheikh Mohammed bin Rashid Al Maktoum. DAFZ recognizes the significance of innovation as an effective tool for developing high-level services and products that meet the requirements of the Islamic economy which has emerged as one of the key drivers of the global economy. The Freezone signed a strategic Memorandum of Understanding to be the headquarters of the International Centre of Islamic Economy. The MoU aims to strengthen mutual cooperation and make valuable contributions in support of the global Islamic economy as well as the ambitious objectives of the ‘Dubai The Capital of Islamic Economy’ initiative.
Through its partnership with the International Centre of Islamic Economy, DAFZ took the proactive step of launching ‘International Innovative Platform for Islamic Economy Products 2015’ (IIPIEP 2015) in conjunction with UAE Innovation Week 2015. The leading initiative attracted remarkable regional and international interest as it offered an ideal opportunity to introduce new creative ideas that will be key additions to the international Islamic economy.

The international platform witnessed the launch of new innovative products and services and leading initiatives, including the ‘Oasis of Innovation in Islamic Economy’ – the first global oasis dedicated to incubating creative ideas and entrepreneurial projects in support of the international Islamic economy. The Innovation Oasis features a modern and developed environment based on an interactive methodology that stimulates creativity and innovation. It provides the necessary advisory services to ensure the transformation of creative ideas into practical products according to Sharia and technical requirements and in cooperation and coordination with economic establishments.

The international platform also unveiled the concept of the ‘Endowment Bank,’ which is of great importance as it is a new creative concept that proposes the establishment of a financial institution through the investment of cash and in-kind endowments which represent the majority share of the bank’s capital. This will be done according to contemporary formats and generally accepted bank guarantees, to achieve Sharia, social and collaborative purposes.

‘Cash-Financing Through Telecom Services’ was among the top ideas raised during the IIPIEP 2015, embodying Islamic financing’s role of integrating financial activities with the real economy. This new concept is based on a creative mechanism that ensures the provision of cash payments in exchange for a limited amount of call minutes delivered to the financier under the framework of joint relationships among banks, telecommunications companies, and individuals.

Marketing Plans
DAFZ adopted ambitious marketing and promotional plans in 2015, focusing on an interactive method for building strong relations with the world’s leading trade hubs and global chambers of commerce. It also organized a series of international seminars in India, Singapore, Italy and Japan and one-on-one meetings in India and South Korea. It actively participated in trade missions organized by the UAE Ministry of Economy to the UK, China and South Africa as well.

Striving to promote Dubai’s competitiveness as a major player on the global economic map, DAFZ paid great attention to expanding its strategic partnership network. It had successful participations in high-profile international events such as Gulfood 2015, Index 2015, UAE Careers and GITEX during which the Freezone provided new and potential clients with a chance to take a virtual tour of DAFZ and its office spaces. DAFZ’s participation at Dubai Airshow 2015 was a milestone, as it attracted wide interest in its activities especially designed to meet the requirements of existing and potential clients. During Airshow, DAFZ also hosted the first Advisory Meeting of the Global Aerospace Summit at its stand. In addition, it highlighted its attractive investment incentives during its successful participation at the China International Fair for Investment and Trade (CIFIT).

DAFZ the perfect destination for world’s elite companies
During 2015, DAFZ attracted a number of prominent international and multinational companies that showed interest in benefitting from the competitive advantages available at the Freezone, especially its strategic location, tax exemptions, advanced infrastructure, investment incentives, and integrated portfolio of logistic services, sophisticated facilities and smart solutions. DAFZ’s customer satisfaction level rose to 77.6 %.

Electronics & Electrical emerged as DAFZ’s top sector by presence in 2015, accounting for 16 % of hosted companies. Consumer Products followed next at 11%, with Engineering and Building Materials and Aerospace, Aviation and Related Services tied at third at 9% and Telecommunication, Food and Beverages and Logistics and Freight placing fourth at 8 %

Moreover, most licenses issued by DAFZ were commercial licenses which represented 67 % cent of the total, while service licenses reached 32 % and industrial licenses 1 % compared to 2014.

DAFZ incubated major international companies last year. GE Aviation, one of the major manufacturers of aircraft engines in the world, took the proactive step of launching ‘Middle East Aviation Technology Center’ under DAFZ to enhance its contribution to meeting growing demand within the aviation sector which is witnessing significant growth in the Middle East.

Joining the portfolio of companies operating under DAFZ, Abbott Laboratories opened a regional office to provide administrative and operational support to its business units involved in the areas of nutrition, medicine, devices and diagnostics within in the markets of the Middle East, Africa and Pakistan. This is an important addition to DAFZ’s portfolio of customers from world-leading companies specializing in healthcare sector, especially that Abbott Laboratories is considered as one of the major healthcare companies with a strong international presence.

Furthering its central role as one of the favorite business and trade centers in the Middle East, DAFZ was chosen to incubate the new facility and storage branch of SDV-UAE LLC, the latest addition to the portfolio of logistics companies operating under the Freezone which already hosts major players such as TNT, FedEx and DHL. Upon completion, the new premises will include offices occupying 750 square meters and a warehouse with area of 2,220 square meters equipped with the latest advanced technologies related to storage, security and surveillance.

DAFZ also hosts some of the Fortune 1000 companies, including Airbus, VW Audi, Panasonic, Estee Lauder, La Liga, Nike, Richard Mille, MetLife ALICO, Isuzu Middle East, and Yamaha Motors. Other prominent tenants are Bentley and Robertet S.A., Safilo Middle East, Mitsubishi, and Middle East Roper.

Development and expansion projects

To meet the growing demand of regional, international and multinational companies, the Dubai Airport Freezone Authority has launched “DAFZ Square”, a project of over 33,000 m² that complies with Leadership in Energy and Environmental Design (LEED) requirements developed by the US Green Building Council. The project consists of two office towers with 41 stores, a food court, cafes, a supermarket, a pharmacy, exchange houses, a travel agency, a gym, a business center and branches of Emirates Post, Etisalat and Du. It also includes a multi-purpose auditorium that can accommodate around 250 persons and other additional services. DAFZ Square is of economic importance as a major contributor to the creation of an integrated work environment that meets the aspirations of regional and international investors and helps consolidate the leading position of Dubai on the global business and investment map.

As part of the expansion plan adopted by DAFZ to enhance its capabilities and keep pace with the growing demand for multiple services and solutions, the construction of an office building on an area of 10,000 m² was initiated right in the heart of the free zone. The building will house a group of strategic partners to provide a range of premium government services under one roof. The project is scheduled to be completed during the first quarter of 2017.

DAFZ has completed a package of projects to improve infrastructure and facilities with the goal of promoting the use of public transport and enhancing security, traffic safety and flow for the benefit of customers and visitors. Some internal roads have been expanded by adding lanes in each direction to ensure smooth traffic flow.

In the framework of cooperation with Dubai Customs, three inspection gates were set up to ensure a smooth and efficient inspection process. A dedicated building for Customs was also established in order to improve the quality of customs clearance and the entire inspection process, which will contribute effectively in supporting the GDP of the emirate in particular and of the UAE in general.

To consolidate the vital role that Dubai aspires to play in order to become the global capital of the Islamic Economy, light industrial units (LIUs) are being developed in the Al Qusais area as part of DAFZ’s ambitious plan to meet the growing demand for logistics facilities. The project will include typical cooled warehouses, along with 32 LIUs spread over 12,000 square meters, when completed in the first quarter of 2017.

Smart transformation is at the forefront of DAFZ’s accomplishments
Supported by a series of leading initiatives that have had a major impact on the adoption of relevant best ICT practices, DAFZ has succeeded in achieving smart transformation by 100 %. It now provides all services for local, international and multinational companies to customers via smart applications, actively participating in Dubai’s ongoing transformation into the smartest city in the world.
Among DAFZ’s ICT-related achievements in 2015 are:
• DAFZ App compatible with all leading mobile platforms providing access to more than 250 DAFZ services as part of the Freezone’s Smart Transformation
• Implementation of Happiness Meter in cooperation with Dubai Smart Government
• DAFZ Eye for high security level
• Online Payment System (Web & Mobile)
• Compliance with Dubai Smart Government’s Information Security Regulations
• Wi-Fi Expansion and Upgrade (Basements, Parking, New Buildings)

DAFZ continues making valuable contributions towards Dubai’s transformation into a smart city that can provide sophisticated solutions and high service levels in pace with 21st-century requirements. This transformation is backed by an integrated plan for developing an advanced technological and environment-friendly infrastructure, modern facilities and a comprehensive portfolio of smart services, all of which provide an attractive environment for the world’s major companies.

DAFZ intends to sustain its ICT accomplishments by closely monitoring service performance, security, and usability and continuously making related process enhancements. For the coming months the Freezone will launch additional initiatives aimed at transforming itself into a full-fledged ‘Smart City.’ In support of all these initiatives, DAFZ signed a Memorandum of Understanding (MoU) with Dubai Smart Government (DSG) to strengthen cooperation in providing support to government smart services in line with their mutual efforts to implement the directives of the UAE’s wise leadership aimed at transforming Dubai into a ‘smart’ city

Sustainable Development
For 2015, DAFZ sharpened its focus on minimizing its carbon footprint to meet its sustainable development goals of conserving energy for future generations and preserving natural resources to protect the environment. It was the first entity outside of the US to implement the innovative Demand Flow Management system for building cooling, a move that will save the Freezone AED 3 million in energy costs annually. Its ongoing use of a Treated Sewage Effluent (TSE) and Reverse Osmosis (RO) system has also enabled it to save on potable water and preserve natural recourses. The TSE/RO system reduces cooling tower water usage by 100 %, for annual savings worth AED 1.1 million.

Other innovative sustainability solutions being implemented by DAFZ are Fresh Air Optimization via CO2 sensors. The use of Outdoor LED lighting has reduced Kwh consumption by 66 %.
Such sustainability efforts have helped reduce DAFZ’s power consumption rate from 72 million to 37 million Kwh over the last five years. Water consumption rates registered a significant decline from 69 million gallons to 35 million gallons during the same period as well. Operating expenses related to water and electricity have decreased by 20 % from last year.

These and other key sustainability initiatives have lessened DAFZ’s CO2 emissions by 19 tons annually since 2010 and have resulted in an overall carbon footprint reduction of more than 48%.
For 2016 DAFZ will continue to monitor the performance of these sustainability and energy efficiency mechanisms and introduce even more related initiatives in alignment with the strategic direction of Dubai Integrated Energy Strategy 2030.

DAFZ culminated its sustainability efforts last year by receiving the Gold Award at Emirates Energy Award 2015. It also earned LEED gold certificate for its DAFZ Square project, marking the first in the Freezone’s history. This achievement rewards the efforts made in support of the goals of Dubai Integrated Energy Strategy 2030, which was approved by the Dubai Supreme Council of Energy to secure sustainable energy and improve the efficient response to demand for water and energy.

Health, Safety & Security
DAFZ considers the well-being and safety of all its personnel and hosted tenants a top priority. For the whole of 2015, the freezone further tightened its compliance with ISO 14001, 18001 and 28000 standards to achieve the highest levels of compliance, health and security at par with the best industry practices. It also put into place an Emergency Management System that heightens zone-wide Prevention, Preparedness, Response and Recovery capabilities. DAFZ’s management has set clear Key Performance Indicators/Operational Performance Indicators supported by Internal/External Audits to measure the level of sustainability, security and safety of the business environment and workplace.

Among the most prominent achievements of DAFZ related to security, safety and health:
• Reintegration for ISO 28000 (ISO 28000 Security Management System).
• Forming a permanent team to manage crisis and disasters.
• Applying a central system for managing parking for all companies working in DAFZ
• Achieving a 0 % accident and injury rate for DAFZ Square and West Building 8 which were recently completed after 3 million working hours.
• Introducing a guide on the use of CCTVs
• Smart Permit for DAFZ’s visitors
• DAFZ security measures booklet
• Smart vehicle for rapid intervention in emergency situations
• Signing a NOC agreement with Dubai Municipality for DAFZ’s food courts
• Compliance with food health requirements in accordance with Dubai Municipality food health standards

Human Capital
The human element has been integral to DAFZ’s sustained success and industry leadership. In order to bring even more of the best talents onboard, the Freezone continued its ‘Contractual Offers’ in 2015. It hired expatriates for time-bounded contracts on various projects or to support technical business needs. This initiative has helped maintain the Emiratisation percentage as well.

With regards to DAFZ’s Emiratization efforts, 71.6 % of the target level was hit as of December 2015. The internal Recruitment Team continued to seek talented and motivated UAE Nationals through participation in career fairs, organization of workshops, and signing of agreements with a number of universities and colleges to draw interest on promising careers at DAFZ. The Freezone also facilitated a summer program and student internships to enlighten UAE Nationals on the role of DAFZ in Dubai’s development plans and potential careers they can pursue with the Freezone.

Throughout 2015, DAFZ continued its march of excellence by investing in its female resources and activating the role of women as true partners in the leadership process. The Freezone’s Women’s Empowerment Team successfully promoted the presence of women employees who represented 57 % of DAFZ’s total workforce in 2015. This was a result of the tireless efforts of the team, whose duties are centered on studying and analyzing the needs and requirements of women cadres operating in DAFZ, as well as conducting standardized comparisons with national women leaders and other government entities that adopt the concept of female leadership.

DAFZ has made significant changes in consolidating innovation, excellence and positiveness in the corporate culture. This had a progressive effect in improving operational performance and enhancing employees’ satisfaction rates to 82.6 %.