DAFZA contribution to Dubai’s foreign trade jumps to AED 164 billion
Dubai Airport Freezone Authority (DAFZA) played a key role in boosting Dubai's economic growth, with a 12% contribution to the emirate’s foreign trade in 2019, compared to 11.2% in 2018, out of a total trade value of AED 1.37 trillion recorded last year. This came as a direct result of the incentives and business facilitation services provided by DAFZA that have enhanced the attractiveness of the free zone to foreign investors.
DAFZA's foreign trade exceeded AED164 billion in 2019, compared to AED146 billion in 2018, with a 12.6% growth. This was driven by more than 15.8% growth in imports worth AED 72.4 billion. There was AED 91.8 billion in total exports and re-exports with 10.2% growth, allowing DAFZA to achieve an AED 19.4 billion trade surplus in 2019.
India was DAFZA's biggest trade partner in 2019 with 18.3% valued at AED 30 billion, followed by China with 17.3% at AED 28.4 billion. Switzerland was third with 16.3% at AED 26.8 billion. In terms of imports, India ranked first with 40.7% at AED 29.4 billion, followed by China with 39.2% at AED 28.4 billion. Switzerland ranked first in exports and re-exports and accounted for 27.4% at AED 25.1 billion, followed by Iraq with 12.3% valued at AED 11.3 billion.
In terms of goods, machinery and electrical and electronics equipment ranked first with 55% of the total foreign trade in 2019, with a value of AED 37.4 billion for imports and AED 53 billion for exports and re-exports. This was an increase of 14.3% or AED 11.3 billion in DAFZA’s total trade. This was followed by precious stones and metals with 38% of the total import value at AED 29.6 billion and AED 32 billion in terms of exports and re-exports. This meant an increase of 10.4% worth AED 5.8 billion. Both sectors represent 92.6% of DAFZA's total trade.
DAFZA witnessed an impressive growth in operations of its hosted multinational companies, cementing its position as an attractive destination for companies, looking to benefit from DAFZA's portfolio of exceptional services, incentives and business facilities. In 2019, DAFZA's total revenues of multinational companies increased by 36.6% compared to the same period in 2018. The total space occupied by multinational companies increased by more than 135%.
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DAFZA highlighted that DAFZA’s foreign trade was valued at more than 164 billion AED. This was a result of DAFZA's leading position as a hub for international companies and investors, connecting key commercial hubs worldwide. The results show its vital role in accelerating access to global and regional markets, including Dubai's market. He added that this is positively reflected in Dubai's economy as DAFZA has been actively contributing to its sustainable growth over the past twenty years.
His Highness explain that DAFZA's integrated system is one of the main reasons for the great achievements accomplished so far. It has enhanced Dubai's reputation as an attractive destination for global investors. DAFZA will continue working in line with these frameworks in order to build a flourishing future that is based on technology and innovation, concentrating on achieving its goals which include attracting more international investment he added.
H.E. Dr. Mohammed Al Zarooni, Director General of DAFZA, said: “DAFZA is one of the most attractive destinations for global companies of all sizes and sectors looking to work within a safe and flexible investment environment that can keep pace with different economic trends and fluctuations. DAFZA succeeded due to its well-designed plans that ensure ease of business and better-controlled operations that match the requirements of various business sectors,” he added.
“We will continue with our approach to ensure our leading global position worldwide and set an example in leading operations, innovation, services, incentives and facilities. We utilize our national competencies to ensure DAFZA's role in supporting Dubai's economy through attracting foreign direct investments,” he added.
Expansion for international companies
In 2019, a number of international companies opened their regional headquarters in DAFZA or expanded their facilities to serve customers across the region. This includes Airbus expanding its business with the opening of its first Africa and Middle East Cabin Electronics Service Centre. The facility will serve local and regional carriers as well as customers in India and Turkey, which includes repair and spare part services for cabin components and systems as well as customer onsite technical services such as cabin system training. The Centre will provide greater flexibility for Airbus customers with spare parts being maintained closer to airlines’ operations, taking the advantage of the strategic location of DAFZA.
TNA, a leading global supplier of integrated food processing and packaging solutions, has opened its new regional headquarters in DAFZA. The new facility will allow TNA MENA to offer a range of after-market services to customers in the region, including enhanced technical support, a new training and demo centre and easier access to spare parts.
Michelin, the world leader in tyre design, manufacturing and distribution, has also opened its regional headquarters in the free zone to manage its operations in Africa, India and the Middle East. Managing 87 offices across the regions, the HQ will allow the leading international tyre company to further develop and expand its regional operations. The opening was a result of the confidence of one of the largest international companies in the services provided by the free zone that best fit its business model.
DAFZA has also implemented a number of initiatives in 2019 to facilitate business for all types of companies. Initiatives include, waiving registration fees, reducing business setup cost by up to 65%, staff visa fees by 20%, Establishment card issuance fees by 17%, while fees for Board Resolution and MOA issuance have been waived. DAFZA restructured licenses to cover over 2,000 economic activities, and launched Premium and Premium Plus packages, this is in addition to the 6 types of licenses that DAFZA offers which are, trade license, service license, industrial license, e-commerce license, general trading license and the dual license with DED.
The customer satisfaction index rose by 3.8% from 78.6% at the end of 2018 to 82.4% at the end of 2019. This highlights DAFZA’s commitment to placing customer satisfaction as a top priority and ensuring continuous support of their services and operations.
As part of its expansion plans to provide additional leasing space and facilities to the increasing number of companies, DAFZA developed a new building compound which is due to open in the first half of the year. The new buildings will have a leasing space of 21,580 square meters, of which DAFZA leased almost half of before the expected opening. DAFZA is currently working on developing a new multi-story car park, which is expected to open next year.
In 2019, DAFZA received several international delegations looking to know more about the unique investment environment it offers.
DAFZA recently received an official delegation from the Bank of China to discuss prospects of future collaboration. The Chinese delegation was briefed on key, DAFZA-led strategic projects and initiatives, and the free zone’s experience over the last two decades in attracting, increasing, and sustaining foreign direct investment. This played a vital role in the economic growth in Dubai, driving business across more than 20 key sectors. The delegation was also briefed about DAFZA’s latest services offered to international companies, particularly Chinese companies based in DAFZA.
DAFZA also welcomed a delegation from the Enterprise Europe Network (EEN) as part of the networks’ mission. The delegation comprised of representatives from 32 European companies on a multi-sector mission with a focus on EXPO 2020 Dubai. The delegation was briefed on market information from the UAE and the region, best ways to start a business and the incentives offered by DAFZA in this regard.
DAFZA organized a series of promotional and marketing campaigns in many countries and global markets to promote its services and facilities provided to foreign investors and diverse and different-sized international companies. These campaigns were organized within various markets, including China, India, Japan, France, USA, UK, Germany among others.
DAFZA also organized a promotional campaign in Korea in cooperation with the Korea Trade and Investment Promotion Agency, the Korean International Trade Association and the UAE embassy in South Korea. The campaign witnessed the attendance of around 100 investors and included more than 10 direct trade meetings. DAFZA organized another campaign in Japan in cooperation with the Chambers of Commerce of Tokyo, Nagoya and Osaka and the Japanese Foreign Trade Organization, which witnessed the presence of more than 250 investors from all over Japan.
Supporting the halal sector
As DAFZA supports the halal sector on local, regional and international levels, the free zone continued its efforts to provide companies with world class services that supports its business development and access to the regional markets. These services are provided by the Halal Trade and Marketing Center, which was launched as a joint initiative between DAFZA and the Dubai Islamic Economy
Development Centre (DIEDC).
The Center succeeded through the year in reaching several milestones including, signing a Memorandum of understanding with the Malaysian Penang International Halal Hub (PIHH). The MoU will provide HTMC with a range of world-class services, supporting companies and businessmen locally, regionally and globally. The MoU adds PIHH to HTMC’s list of partners, allowing PIHH to provide companies growth support services, in addition to linking them to ASEAN markets, namely the IMT-GT, and vice versa to the GCC region. The Centre received more than 20 international delegations which consisted of organizations and representatives and companies looking to benefit from its services.
Emiratization and employees’ happiness
DAFZA continues its efforts to provide the best working environment for its employees that positively contributes to their career advancement and ensures their important roles in achieving DAFZA's goals. DAFZA's employee satisfaction index recorded an increase reaching 82% in 2019 compared to 81% in 2018, which reflects DAFZA's success in this area. In recognition of DAFZA's efforts, the free zone has been awarded with the Best Talent Development Strategy Award during the 16th HR Summit & Expo 2019 in Dubai.
DAFZA exceeded the Emiratization rates across its divisions and departments to 70 percent and has achieved 100 percent Emiratization among its senior representatives. The increase in the number of UAE nationals within the workforce of the free zone highlights DAZFA’s ongoing efforts to create a suitable work environment that allows UAE nationals to meet their professional aspirations and ensures their progress. DAFZA succeeded in creating the optimal gender-balanced workforce with women making up 50% of the total number of employees. As for the senior management positions at the free zone, women make up 42% of the executive-level team. Young talent represent 33% of the workforce across DAFZA, 61% of whom are women and 39% are men. Of the young talent, 32% occupy positions at senior management level.
Sustainability as a business approach
DAFZA achieved a number of important sustainability milestones in 2019, including reducing electricity consumption by 2.7% and reducing water consumption by 5.4%. DAFZA also reduced carbon emissions by 25.5%, waste by 7.3%, and increased recycling by 1.7%. The results emphasize the success of DAFZA’s sustainability approach and its pursuit of the highest international standards in energy management.
Free Zone security
As part of its focus on accelerating the operations of shipping and customs clearance, the security team at DAFZA succeeded in launching and applying the "smart security clearance" system for all goods and shipments. Retailers and merchants can now conduct transactions in three easy stages, which contributed to reducing procedures by 70% and reduced time from 48 hours to 30 minutes only.
Recognitions and awards
As a recognition of DAFZA's safe work environment for companies and foreign investors, DAFZA obtained a completion certificate of the accredited “Safe Free Zones” program. This was issued by the World Free Zones Organization during the fifth World Free Zones Association's Annual International Conference and Exhibition held at Palau de Congresos Conference Center in Barcelona, Spain. This certificate is added to many other awards in 2019 for corporate performance and human resources. DAFZA also secured reaccreditation in ISO 28000 Specification for Security Management Systems for the Supply Chain.
National Corporate Responsibility
As part of DAFZA's efforts in supporting and organizing humanitarian, community and charitable initiatives, DAFZA signed a memorandum of understanding with the Faraj Fund. Together they will establish an effective framework for bilateral cooperation in exchanging experience and information related to voluntary initiatives and other public interest issues. The MOU will also include supporting and encouraging national fund-raising initiatives along with organizing meetings between the two parties.
During 2019, DAFZA organized several societal and charitable initiatives to support its efforts as part of its national corporate responsibility. This includes cooperation with Al Jalila Foundation for the distribution of a charitable fund. In addition to working with Volkswagen-Audi to organize a session to discuss the topic of happiness in the workplace and life. DAFZA collaborated with the Emirates Red Crescent to donate materials for a number of projects and organized a charitable Ramadan Iftar. The work done with Blue Star and UPS involved organizing blood donation campaigns, and with Mediclinic involved organizing an awareness session on breast cancer. In addition, DAFZA collaborated with Beit Al Khair to distribute financial aid.
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