Profile: Dubai Industrial City
By: Sara Anabtawi
Ten kilometres long and five kilometres wide; this truly is a city within a city.
Occupying the entire space from Jebel Ali International Airport to the Abu Dhabi border, one of Dubai’s fastest-growing economic zones covers 560 million square feet. But these are not the dimensions of a smaller emirate. Rather, these numbers relate to Dubai Industrial City (DIC).
As a small-to-medium-sized industrial complex, DIC is designed to help grow the many manufacturing companies that have chosen to set up shop in the United Arab Emirates. In a nutshell, it provides the essential support that ensures that all industries are able to operate at maximum capacity.
While the cluster might appear to be a complicated concept, it is, in reality, quite simple: DIC’s major mode of support is to provide manufacturers and logistics firms in the UAE with connectivity through road, air and sea, to all major markets in the MENA region — with, of course, the added benefit of customs exemption for GCC sales.
As managing director of the city, Abdulla BelHoul knows how to break it all down. “We have six clusters in DIC: Food and Beverage (F&B), transport equipment, base metals, machinery, chemicals and mineral products,” he says, adding that each of these various factories is situated at set points within the area.
“For example, chemicals are positioned at the rear of the site, while F&B are at the front. You try to separate them for health and safety reasons,” says BelHoul. “Chemicals are highly flammable, while F&B is for consumption. You do not place insect repellent next to food in supermarkets.”
Factories aside, DIC is home to 7 million square feet of warehouses, featuring 122 different showrooms. It also has 3 million square feet of open storage and 36,000 beds for labour accommodation, as well as 200,000 square feet of commercial space.
Such wide-ranging facilities have helped to meet the growing demand in the industrial sector, further strengthening Dubai’s title as the logistics hub of not only the UAE but also the rest of the Gulf. In fact, dedicated efforts by DIC have maintained the positive growth in the industrial sector, which contributes to twelve percent of the UAE’s GDP, making it the second largest contributor to the country’s economy after hydrocarbons.
“We are targeting a growth of ten percent every year. We are aiming to be first in class in terms of industrial development to support Dubai’s economic growth,” says BelHoul.
Indeed, it is titled a city for obvious reasons, and is a major advantage for BelHoul — especially when compared with other sites in the Gulf.
“We provide the whole industrial solution under one roof… all under one management,” he says.
The zone, for instance, is fully equipped with industrial land for self-building, pre-built warehouses, retail showrooms, labour villages and office space, as well as commercial land, onsite assistance with construction, facility start-up and operations.
“So, if you plan to have a factory in DIC…the land is there with full state-of-the-art infrastructure… you do not need to worry about building your own staff accommodation, warehousing, or having your own office. We will support you through all the steps,” he explains, adding: “Just focus on your core business Leave the rest to us.”
Recently, the industrial complex has set up a research and development zone which holds a geosciences technical laboratory.
“They do ground testing, land testing, water testing, air testing, stress for materials,” says BelHoul, adding: “They are here to support the six industrial clusters.”
Because DIC is not categorised as a free zone, it does not compete with global players. One of their major competitors, though, is oil-rich Saudi Arabia.
“Maybe one of our major players in the region is the kingdom, especially with the support of the hydrocarbon resources that they have, as well as their resources of cost in terms of power,” he explains.
“Competition is healthy. We believe in it, because with it, we can find more attractive offers. I think we are there, we are focused into the market, we hear our customers’ voices and we try to be next to them from the beginning to the end. So, competition supports the industry itself,” he says.
Another factor that has supported DIC’s members is the Arab Spring. With Dubai’s promising infrastructure, many companies have been attracted to investing in the region, with a substantial number signing up in the last six months.
According to BelHoul, as many as seven companies have moved out of unrest-hit countries into the UAE, covering areas as diverse as chemical manufacturing, fast-moving consumer goods (FMCG) and F&B.
“They are mostly from Egypt and Syria,” he says.
Even though competition does not appear to qualify as a challenge for BelHoul, other factors make his list.
“There are a few challenges we can mention, like intellectual property. The local laws are not mature enough to protect the interest of the companies. Secondly, even though we are a petrochemical country and we have enough resources of oil, power is still a challenge to factories,” he says.
“We work closely with governments to maintain the power cost, to make it more attractive for manufacturers to move into the UAE. But then again, we are impacted by oil prices worldwide,” he adds.
“As we speak today, the commodity price is reasonable for the purchase strength that we have in the UAE, or the region, but going forward, if these prices escalate again, then it will be a big challenge,” he explains.
But, BelHoul quickly brushes these challenges aside and points out that the infrastructure of Dubai is by far the biggest saving grace: “The connectivity between the three means of transportation [land, airport and seaport] is available,” he says.
And, the UAE is taking big steps to move forward; the Etihad Rail Network is just the latest of a number of projects that will help improve connectivity even further.
Upon completion, the project, which will cater to both freight and passengers, will span a total of 1,200km across the country. It will connect remote communities, and, potentially, facilitate trade, opening up communication channels and advancing economic development.
The network will be part of the GCC Rail Network, linking the UAE to Saudi Arabia via Ghweifat in the west and Oman via Al Ain in the east.
“The impact will be huge. The Etihad Rail will give the connectivity between all the developments in the UAE, connecting all seaports and airports together in one network. Plus, it will overcome the existing challenges in terms of land transportation and connect the GCC all together,” says BelHoul.
Aside from the rail link, which is still in the planning stage, DIC also benefits by virtue of the colossal neighbour that lies just north-east. Jebel Ali International Airport — or Al Maktoum International — lies at the heart of the Dubai World Central (DWC) mega-project, a development that is worth around $33bn. While original plans stated that the DWC project would be fully up and running in the early years of this decade, the global economic slowdown has resulted in a slight realignment in terms of construction time lines.
However, the airport is fully functioning for cargo airlines, and the presence of nearby Jebel Ali port - one of the world’s biggest - means that DIC has access to one of the most integrated transport hubs on the planet.
At present, DIC is busy with a range of different projects, all in a move to cater to market demand. In fact, BelHoul has already signed several projects this year to further expand the industrial complex’s already diverse umbrella, some of which include finalised deals with the manufacturer of construction and mining equipment Caterpillar and Byrne equipment rental.
More specifically, DIC is trying to put the focus on developing small to medium enterprises within the UAE.
“This is a new initiative that we came up with. We attracted five SMEs, some in banking, others in engineering and other fields. So, we are trying to facilitate [these businesses]. We have already signed a memorandum of understanding with Sheikh Mohammed Establishment for SME Development,” says BelHoul.
“We will provide SMEs with subsidies. We are supporting this because it is a promising sector; we need to attract more entrepreneurs,” he adds.
BelHoul points out that the government has invested $1bn in DIC so far, covering villages and infrastructure to roads and offices. Their partners, though, have invested a little more than $544m to set up their factories.
“I am an engineer, I try to see opportunities for collaboration between all these factories, get them to network, and see how they can complement each other,” he says.
After its impressive start, BelHoul’s mission now is to expand on the city’s already-strong foundations.