Dubai Airport Freezone Authority Releases its 2017 Results and Announces Key Achievements
Increase of 25% in registered companies at DAFZA with multinational companies making up 36% of total number of companies in the freezone
- His Highness Sheikh Ahmed Bin Saeed Al Maktoum: “Results confirm DAFZA’s position as one of the world’s most advanced and developed freezones”
- His Excellency Dr. Mohammed Al Zarooni: “A successful journey over the past two decades has positioned DAFZA among the best in the industry regionally and globally”
- DAFZA contributed 7% to Dubai’s non-oil trade and 18% of total free zones trade in Dubai according to 2016 statistics
- 16% increase in licensing revenues and 2% increase in total assets
- Dubai Blink, a unique virtual market place and Free Zone Exchange selected within the Dubai 10x initiatives to be implemented within 24 months
Dubai, United Arab Emirates, March 5, 2018: Dubai Airport Freezone Authority (DAFZA) has announced its key 2017 achievements, namely its 7% contribution to Dubai’s non-oil trade represenitng 18% of total free zones trade within Dubai according to 2016 official statistics. The freezone’s success is largely due to its strategic role in driving continuous economic development and high operational efficiency, as well as the creation of attractive investment opportunities and the adoption of a clear investment approach aimed at contributing effectively to the overall output of Dubai.
According to the official results, DAFZA has increased its leasable area by 6% compared to the same period of the previous year. This was due to the increasing demand of the freezone’s business solutions and its product line up which were adapted to the requirements of the global markets to expand their businesses in the Middle East, Africa and Central Asia and explore their investment opportunities in Dubai.
DAFZA achieved a 25% growth in its registered companies compared to the same period last year. This reflects the success of its strategic initiatives which focused on increasing foreign direct investment flows to the freezone and providing an exceptional and seamless experience for regional and international companies. The New tenant’s revenue contributed 8% of the total rental revenue for 2017, which was the result of highly relevant offers and packages provided by DAFZA.
There was a 34% increase in the registered companies within the office package segment offered by DAFZA compared to same period last year. This was launched by DAFZA following a comprehensive study and research that identified the needs of customers in order to ensure the strategic growth plans of the freezone.
Financial results showed an increase in total assets by 2% and an increase in licensing revenues by 16%. DAFZA’s services, which include licenses, government services and other value-added services to customers, accounted for 18% of 2017 total revenues.
2017 witnessed a 13% growth in the number of registered multinational companies (MNCs). With this increase, MNCs now make up 36% of the total number of companies in the Freezone. This reflects the growing confidence of foreign investors and major international companies in DAFZA as one of the most important freezones in the UAE and the world. The freezone has become the leading destination for investment activities in Dubai as many international brands have selected DAFZA as their of choice for their regional operations over the past two decades.
As part of DAFZA’s commitment to supporting the growth of small and medium enterprises (SMEs), 2017 witnessed a 27% increase in the number of registered SMEs compared to the same period the year before. This confirms the success of DAFZA’s efforts to provide integrated solutions and services to ensure that such companies achieve growth and increase their productivity. This was achieved through specialized programs and qualitative initiatives in cooperation with several government and private entities. This comes in line with the vision of the UAE and Dubai to develop the freezone sector and to contribute to the growth of the national economy.
In 2017, DAFZA officially launched its first industrial expansion project outside its current location. DAFZA Industrial Park is located in Al Qusais Industrial Area and features modern industrial units supported by unique customs experience. DAFZA cooperated with Dubai Customs to make this industrial park the first zone with smart security and customs services. These services are delivered in an innovative and integrated center that automates processes, without the need for human intervention.
Both DAFZA and DAFZA Industrial Park were among the 20 freezones selected by the Cabinet Decision No. (59) of 2017, to be considered as a designated zone. Now, goods may be transferred among these areas tax-free, which has increased its attractiveness to new companies and foreign investors.
Commitment to long term success
Commenting on the achievements, His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DAFZA, said: “The achievements of DAFZA in 2017 underscore its outstanding position as one of the most advanced and progressive freezones in the world. The results highlight DAFZA’s role in supporting the UAE’s economic diversification strategy and enhancing the investment and trade movement in Dubai and the nation as a whole. This strategy falls in line with the Dubai 2021 Plan and the Government’s plans to move into the post-oil phase, backed by the support of commercial diversification policies led by the vision of the UAE’s wise leadership.”
His Highness Sheikh Ahmed recognized these achievements as a testament to DAFZA’s success in its operational approach and its high level of quality in management over the past decades. His Highness praised its ideal environment for attracting more foreign investors as well as the world-class infrastructure, service and logistics facilities DAFZA provides. He also highlighted its strategic location next to one of the largest international airports, which provides easy access to various local, regional and global markets.
Dr. Mohammed Al Zarooni, Director General of DAFZA, said: “The achievements of last year join a two-decade journey of success that have made the freezone one of the best in the region and in the world. This is due to the pursuit of all our employees and stakeholders in providing the highest levels of services to meet our customers’ requirements across international markets, economic policies and developments affecting the global economy.”
Al Zarooni stressed DAFZA’s commitment to strengthening the growth of the national economy, explaining how this is being achieved through attracting more international investors and foreign capital by providing a wide range of investment opportunities and smart solutions. DAFZA provides a role model for freezones that aim to support the growth of their national economy.
Al Zarooni also pointed out that the strategic plan “2017-2021” launched last year paved the way towards fulfilling this commitment. This plan helps the UAE to maintain a leading position in all fields, especially focusing on developing and strengthening economy and trade.
Dubai CommerCity foresees the future of global trade
In the third quarter of 2017, His Highness Sheikh Ahmed bin Saeed Al Maktoum, announced the launch of Dubai CommerCity, a AED 2.7-billion, 2.1 million square feet joint venture between DAFZA and the Wasl Asset Management Group, to capitalize on the growing ecommerce sector and the future of global trade. The project is strategically important for its ambitious vision that consolidates Dubai’s presence as a leading platform for international e-commerce and lays out the foundation to support economic diversification and smart transformation strategies. Located in the Umm Ramool area, Dubai CommerCity spans a total area of 427,000 square meters inclusive of office spaces and logistics units covering 207,000 square meters; a total leasable area of 176,000 square meters. The project is serviced by 4,000 parking spaces stretching over 220 thousand square meters.
Cooperation agreements on sustainable investment
2017 witnessed the establishment of a number of strategic relationships aimed at supporting sustainable investments and the prosperity of Dubai. DAFZA signed a memorandum of understanding (MoU) with the Saudi Economic Cities Authority (ECA) to develop joint investment opportunities in both locations. This is aimed at attracting more foreign investments to the Gulf region through the UAE and Saudi Arabia.
During the 2017 Dubai Airshow DAFZA signed a Memorandum of Understanding (MoU) with The Dubai Civil Aviation Authority (DCAA) to enhance cooperation in the aviation sector through the implementation of the Block Chain project. The project will positively impact the experience of foreign investors in the Freezone. The MoU also provides a framework for collaboration on matters related to safety, environment and flight controls.
DAFZA also signed an MoU with the Arab Union for Electronic Commerce (EFTU), one of the unions within the Council of Arab Economic Unity in the League of Arab States. The agreement aims to increase knowledge exchange and expertise in the digital economy and e-commerce through the preparation of joint studies and reports related to the market in the Arab world.
According to the MoU, both parties will cooperate with Arab governments to develop and harmonize legislation and laws to facilitate the practice of electronic commerce, especially through freezones. The two parties will develop a comprehensive framework for the establishment of conferences and workshops related to e-commerce, as well as promoting it in the Arab world for investors.
Working across sectors and driving new marketing campaigns
In line with the economic changes and growth drivers, DAFZA has launched a series of new licenses, including the e-commerce license, a sector which is witnessing high global growth and is expected to reach USD 20 billion in Gulf countries by 2020. DAFZA also launched an industrial license to accommodate larger industrial sectors especially within the DAFZA Industrial Park. During 2017, DAFZA also concluded an agreement with Department of Economic Development in Dubai to grant its companies dual licenses to operate throughout Dubai.
Companies operating in the ICT sector accounted for 28% of the total number of companies operating within DAFZA. 10% were in the consumer products sector; 9% in the investment and business development sectors and engineering and building materials sector; shipping, logistics, aerospace and related services were at 8%; 7% of companies in the food and beverage sector and 5% of medical equipment and pharmaceuticals.
The Middle East and Gulf companies accounted for 43% of the total number of companies, whilst 34% were European and American, where as 17% were from Asia and 3% from Africa. These balanced results represent DAFZA’s ability to attract investments from around the world. This is attributed to the various marketing and promotional campaigns organized in countries including South Korea, India, Singapore, China, Japan, Canada, Britain, Germany and Spain, through which DAFZA highlighted its wide-ranging strategic services, facilities and smart applications it provides.
DAFZA also sponsored a number of international events and exhibitions during 2017, including the sponsorship of Seamless Middle East 2017, a global platform that brings together e-commerce and e-payment giants and retail leaders. DAFZA was also involved in Automechanika Dubai as the leading freezone partner for the region’s first ever automotive aftermarket trade show. The freezone also sponsored the 19th Barcelona International Logistics and Transport Fair. It organized a seminar on Dubai’s attractiveness to foreign investments under the theme Boost your Business from Dubai to the World. The seminar included a presentation on the extraordinary economic performance of the UAE and the existing prosperity opportunities in conjunction with the preparations to launch Expo 2020. DAFZA also sponsored the Free Trade and Special Economic Zone Summit in Shanghai and the Annual Investment Meeting (AIM 2017) where it reviewed its role in the development of Dubai through economic diversification.
Home to the world’s leading companies
In 2017, a number of major brands joined DAFZA, including an operation center for Richemont, a Swiss luxury goods group, which encompasses several of the most prestigious names in the luxury industry including Cartier, Piaget, Van Cleef & Arpels and others. The new center is strategically important as it is the newest and most advanced in the freezone and emphasizes Dubai’s attractiveness as a regional hub for the world’s top luxury brands. DAFZA built a unique facility with modern design and operational efficiency to meet the Center’s needs and its high level of activity in the Middle East, North Africa and India.
The list of new multinational companies in DAFZA includes Samsung SDS, Epson Europe BV, Aerogen, Blue Star, Struky, Daewoo Metal, TNA MENA, E-Lab among others. Currently, more than 1600 companiesoperate in DAFZA’s dynamic sectors as they established their regional headquarters in the freezone such as Airbus, Boeing, GE Aviation, Rolls Royce, Panasonic Avionics, Bentley, Audi, Volkswagen, Estee Lauder, Abbott, Johnson & Johnson, Natura Bessé. This is in addition to other major brands such as Richard Mill Roche, Nike, Yamaha, Live Life, Red Bull, Heinz, Hershey and others
In early 2017, DAFZA announced the results of the Developing Innovation Systems for Government Services initiative. The initiative was organized in a strategic partnership with Smart Dubai Office and a number of government agencies in Dubai, namely Dubai Police General Command, Dubai Health Authority (DHA), Dubai Chamber of Commerce and Industry, Dubai Economy, Dubai Customs, General Directorate of Residency and Foreigners Affairs in Dubai and the Dubai Civil Aviation Authority. This initiative aimed to promote innovation and strengthen cooperation between the government sector and freezones to enhance the experience of foreign investors in Dubai.
DAFZA celebrated the graduation of the first batch of Innovation Champions last year, which included 22 employees from various departments and administrative levels, in line with the innovation strategy of promoting the culture of internal innovation. The program, developed by DAFZA’s strategic partner Shift IN Partners, embarked on a detailed evaluation of the capabilities and skills of the organization’s work teams through a series of sessions and advanced analysis. Its successful completion culminated today with the development of innovative employees and qualified human resources who play a key role in putting DAFZA at the forefront of the most innovative freezone.
The Program also resulted in the launch of the Synapse program, which is the first of its kind in the region, to manage the digital transaction system (blockchain) and to be one of the innovative and pioneering projects to connect the digital free zone ecosystem in an aim to provide customers with a single transaction window across the government.
Two projects were selected for the freezone, one was by the Innovation Champions team and the other by ‘The Big Conversation’, as part of the Dubai 10X Initiative launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, that sees government authorities apply today what will be applied by other global cities after 10 years. During the World Government Summit 2018, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council announced the approved projects that included Dubai Blink and the Free Zone Exchange Project to be implemented over the next 24 months.
DAFZA in Islamic Economy
In addition to the above, DAFZA also supported the Islamic economy through the introduction of the DAFZA Strategy for Islamic Economy, which includes three main orientations and 20 strategic initiatives aimed at attracting more foreign direct investment to Islamic economy and foreseeing investment opportunities.
In partnership with the International Center of Islamic Economics (ICIE), DAFZA participated in the launch of the Halal Supply Chain on blockchain, which is the first blockchain network to specialize in the Halal industry in the world. In addition, the Goodforce Labs, the first Islamic incubator to support emerging companies in the Islamic sector and Halal industries, working to boost the Islamic market and promote economic growth.
DAFZA continued its efforts in 2017 to ensure sustainable development while preserving the environment by activating a number of plans and methodologies. It succeeded in saving consumption by 3.60% per square meter in 2017 compared to last year. It also succeeded in reducing its electricity consumption by 9%, water consumption by 25% and 9% in carbon footprint, thereby reducing electricity and water costs by 2% over the same period last year.
2017 Transformation in Customer Experience
DAFZA’s initiatives were positively reflected in the overall customers and strategic partners’ satisfaction rates for DAFZA’s services. Overall satisfaction levels reached 78.5%, a 2.5% increase in comparison to last year, an 85% satisfaction level with safety and security, 82% for transparency, which confirms the freezone’s continued efforts in this context based on the belief that customer satisfaction is the only way to develop companies and attract more customers and strategic partners.
DAFZA committed itself to digital transformation as a strategic priority in 2017 by launching its new Digital Intelligence Initiative, which aims to establish an integrated and sustainable digital system based on three main axes. These include the operational model of ICT management, the modernization of the IT platform, and ICT services. A number of initiatives were adopted to support these themes, which will be implemented over the next two years.
Employee Happiness Sustainability Plan
Among the strategic plans launched by the freezone last year was the launch of a special strategic plan for happiness after the introduction of its 2017-2021 plan, in which it stressed the importance of employee happiness and prosperity for the UAE society. This follows the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum. The DAFZA Happiness Plan of 2017 included an innovative set of initiatives aimed at enhancing employee loyalty, increasing productivity and employee satisfaction by creating a happy and positive work environment and increasing communication and harmony among departments.
A Healthy and Happy Business Community
DAFZA inaugurated several complementary facilities to benefit its customers and ensure their continued success and prosperity. A number of conference halls and multi-use facilities equipped with state-of-the-art technologies and designs, including the DAFZA Square Business Center, which includes three meeting rooms with a total capacity of 65 individuals and a multi-use hall for more than 200. In addition to a modern theater that can accommodate more than 200 individuals.
National Corporate Responsibility
As part of its commitment to enriching its national corporate responsibility, DAFZA participated in sponsoring the official Flag Day ceremony held at Union House (Dar Al Ittihad). It also participated in sponsoring the Dubai 30×30 Challenge and its Golden Sponsorship of the Dubai International Holy Quran Award and the 1st Dubai Health Forum.