The economic downturn has enhanced the interest of companies in the Dubai Multi Commodities Centre (DMCC), said James Bernard an associate director (commodities) at the centre.
Bernard said energy and petrochemical companies from China, South Korea, Subcontinent and South East Asia have particularly expressed an interest in opening an office or a manufacturing unit in Dubai.
"The downturn has helped us attract more companies. We get 10 to 15 enquiries every week, most of which lead to concrete business proposals. Three companies from South East Asia have recently set up their office at DMCC," Bernard said.
Out of a total of 1,400 companies registered at DMCC, a total of 160 are involved in petrochemical and energy business. Bernard said he expects both these numbers to rise but there are no estimates of how much will it rise by.
Many of the companies who originally set up offices at DMCC later opened manufacturing units in Dubai's free zone, Bernard said.
"The trend is that companies originally begin with the setting up of a marketing office and then expand with a manufacturing unit."
The demand for office-space in Dubai, particularly by petrochemical companies, is expected to rise once plastics futures are launched at Dubai Gold and Securities Exchange (DGCX) a DMCC subsidiary, Bernard said.
"We have delayed the launch until the markets improve. Plastic futures have the potential of driving interests of petrochemical firms."
Several of these companies are interested in using Dubai-based warehouses where products could be stored and then be re-exported, Bernard said. "Demand for storage space has increased recently and Dubai with its centralised location perfectly meets the demand," he said.
PTT Polymer Marketing, Titan DMCC and SCG Plastics Company are three South East Asian companies that recently began operations at DMCC.
While PTT Polymer is the subsidiary of a company involved in marketing oil in Africa, Titan International a subsidiary of Thai company Titan Chemicals will be involved in Polyolefins and Olefins. SCG Plastics a subsidiary of Malaysian company SCG chemicals will deal in polythelene and polypropylene, Bernard said. "A 50-year tax-free status and a facility of full repatriation of money by companies has helped us attract companies," Bernard said.
Availability of cheap gas in Dubai from the Dolphin project has also made the companies with an office at DMCC think in terms of opening a manufacturing unit in Dubai, Bernard said.
"The Dolphin project supplies gas to Abu Dhabi. However, the excess of it can be transported to Dubai free zones. Gas is the preferred fuel for petrochemical companies and that has brought demand for companies."
According to recent market studies, Middle East plastic feedstock exports are expected to increase from 4.3 million tonnes in 2008 to 11.7 million tonnes in 2013, an increase of nearly 172 per cent. DMCC looks forward to a major share in this trade, Bernard said.
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