fDi Global Free Zones of the Year 2015 – Winners
fDi’s Global Free zones of the Year celebrates those zones that are best in class, be it within their respective regions, at providing for a particular size of client, or improving their offering through reinvestments, expansions or upgrades. Cathy Mullan reports.
Winner – DMCC Free Zone, United Arab Emirates
Featured in fDi’s Global Free Zones of the Year awards in 2014, DMCC Free Zone has been crowned this year’s global winner, and also the winner in the Middle East region. Located in the most populous city in the United Arab Emirates, the free zone is home to nearly 10,000 companies and more than 85,000 employees. Over 94% of new members are new to Dubai, welcomed to the zone with state-of-the-art offices and a wide range of assistance to help them set up quickly and start trading. The DMCC service centre offers an array of services, including licence registration, visa application, banking and insurance services. The zone is in the process of a major expansion of its Burj 2020 District, which is home to the world’s tallest commercial building – Burj 2020. The expansion will add approximately 1.3 million square metres of capacity to the zone – a mix of commercial, retail and hotel facilities – all of which contributed towards DMCC winning a bespoke award for its facilities upgrades. DMCC was also named as the winner for SME tenants in the Middle East, with 70% of its tenants falling into this bracket.
Highly Commended – Katowice Special Economic Zone, Poland
Well prepared investment areas and a high quality labour market make Silesia surely one of the best places to invest in this part of Europe – Piotr Wojaczek, Katowice Special Economic Zone
Katowice Special Economic Zone, located in southern Poland, has finished the runner-up of all global zones in this year’s awards. The winner in the Europe and central and eastern Europe regions, Katowice Special Economic Zone boasted more than 230 tenants in 2014, with SME tenancy rates rising by 16% and large tenants by just over 5%. The zone, also commended for its skills and training, has several initiatives in place to increase tenant numbers and attract new investors. Among these, the ‘K2’ project allows companies to manage their human resources, helping companies find appropriate graduates for jobs on offer, as well as helping improve technical education in the local region. The past year has seen an additional 2.8 million square metres of space incorporated into the zone, which has been equipped with road, gas, water, sewage and electricity infrastructure, gaining the zone a bespoke award for infrastructure developments.
Winner – Tanger Free Zone, Morocco
Tanger Free Zone appeared just once in 2014’s awards, winning a bespoke award for its facility upgrades. Those upgrades appear to have paid off, as the zone has gone on to be named the winning zone for Africa and north Africa, as well as picking up awards as best zone for SMEs in Africa and runner-up for large tenants in the region. The zone increased its SME tenancy rates by 36.4% between 2013 and 2014, while large tenant occupancy rates increased by more than 19%, resulting in the creation of 12,000 jobs in the zone. Export turnover in the zone increased from €2.6bn to €4bn, with the main target markets for companies being the US, Europe and Africa. The recently opened 150-hectare TetouanPark is dedicated to SME investment. The zone was also commended for its skills and training, following the opening of two new training centres, ensuring the provision of a skilled labour force in the zone, with a particular focus on automotive and offshoring industries.
Highly commended – Ladol Free Zone, Nigeria
Ladol Free Zone has finished runner-up for the Africa region, as well as winning the sub-Saharan Africa region. The zone offers round-the-clock operating hours for its tenants with full services. Its close proximity to deep offshore fields has increased its attractiveness, particularly to large tenants, helping the zone to secure the award for large tenants in Africa – occupancy rates for which have increased 37.5% between 2013 and 2014. Samsung Heavy Industries recently partnered with Ladol to deliver a floating production storage and offloading vessel which, combined with docking and repair services available at the zone, now allow oil and gas companies access to services previously only available in Cape Town in South Africa. In addition, Ladol was given a bespoke award in honour of its self-sufficient policies. The final months of 2015 will see the opening of a $50m power plant, which will allow Ladol to offer a dependable electricity supply to clients, independent of the national grid.
Winner – Subic Bay Freeport Zone, Philippines
Subic Bay Freeport has been crowned winner of the Asia region, as well as picking up the award for best zone in south Asia and south-east Asia. The zone has a vast and supportive infrastructure, including an international airport and seaport. Subic Bay Freeport has encouraged many of its companies to reinvest, leading the zone to be commended in this year’s awards for its reinvestment. Companies such as HHIC PHIL (increasing its workforce from 25,000 to 27,000) and Sanyo Denki (building a second manufacturing plant and increasing production capacity of cooling fans) have made major strides in increasing their operations in the zone in the last year. Subic Bay, also commended for its infrastructure developments, has invested in two major projects, including the construction of two additional berths with a total capacity of 600,000 TEUs and the construction of a bypass road to a container terminal in Bataan province, allowing for easier export and import for clients.
Highly commended – Waigaoqiao Free Trade Zone, China
Employing 264,400 people in its zone in 2014, Waigaoqiao Free Trade Zone is home to many multinational companies, including Total and Shell Group. Runner-up in the Asia region and winner of the east Asia region in this year’s awards, Waigaoqiao Free Trade Zone is home to more than 20,000 SME tenants, up nearly 40% between 2013 and 2014. A financial innovation system has been introduced to the zone, set to open up the financial service sector and attract foreign capital and help domestic companies 'go global'.
fDi’s Global Free Zones of the Year Awards 2015 acknowledge the most promising free zones across the world. For this year’s awards, fDi invited free zones, government entities and investment promotion bodies to complete a short survey detailing their zone’s attractiveness, facilities and incentives offered to investors.
In total, 76 entries were received from free zones across the world. A panel of judges from fDi’s editorial and research teams studied each location. Judges nominated their winning and runner-up locations in each region, as well as their top zones for the SMEs and large tenant categories.
In addition, some locations that were particularly outstanding have been acknowledged with honourable mentions and bespoke awards. Judges’ votes were combined with data received from the entry forms to create final results, based on a weightings system.
Winner – Katowice Special Economic Zone, Poland
Highly Commended – Walbrzych Special Economic Zone, Poland
Located in southern Poland, close to the border with the Czech Republic, Walbrzych Special Economic Zone is the runner-up in this year’s Global Free Zone of the Year awards for Europe. Employee numbers in the zone soared past 40,000 in 2014, a 10% increase on 2013’s figures. Reinvestment projects also increased – from 17 reinvestment projects in 2013 to 33 in 2014, including reinvestments from major companies such as 3M, Colgate, Electrolux and Bosch. The zone offers a wide range of services for investors, including the construction of production floors for SMEs, coordination with local authorities and assistance in dealing with administration and utilities providers. Walbrzych Special Economic Zone was also recognised for its infrastructure developments and facilities upgrades, thanks in part to the construction of two new industrial storage facilities, and plans to construct two more (much larger) facilities.
Latin America and Caribbean
Winner – Zona Franca Santiago, Dominican Republic
Zona Franca Santiago has been named winning zone for the Latin America and Caribbean region, as well as the winning zone for the Caribbean sub-region. Located in the third most populous Caribbean country of Dominican Republic, nearly 20,000 people were employed in 2014 with the zone home to 57 SMEs and 20 large tenants. A specialised training centre is offered to clients, as well as an innovation and professional development centre, developing training programmes and tailoring employee specialisms specific to clients’ needs. The zone was also recognised for its infrastructure developments, following the addition of a new park measuring 230,000 square metres, which included a further 20 buildings. A housing development project is also under way, which will provide homes for 1500 employees in the zone.
Highly commended – Zona Franca Santander, Colombia
Zona Franca Santander has come runner-up in the Latin America region for this year’s awards, also winning the award for best zone in the South America sub-region. Employee numbers in the zone increased by more than 85% in 2014, corresponding to an 84% increase in SME tenants in the same year. Zona Franca Santander was also commended for its skills and training efforts, having introduced two universities with training departments, with training programmes tailored to suit the requirements of the zone’s clients. Zona Franca Santander was also in receipt of a specialism award, for its BPO and outsourcing investments. Zona Franca Santander Offshoring and Outsourcing Park, a new business park measuring 32 hectares, is the first of its kind in Colombia, dedicated solely to the global services industry.
Winner – DMCC Free Zone, UAE
Highly commended – Jebel Ali Free Zone, UAE
No stranger to fDi’s Global Free Zones of the Year awards, Jebel Ali Free Zone has finished runner-up for the Middle East region in this year’s awards, as well as taking the runner-up spot in the region for large tenants. The zone is home to more than 2800 large tenants and some 4800 SME tenants, in total employing more than 160,000 people in 2014. The zone has attracted investments from major multinational companies, including Sony, Toshiba and Unilever. In total, 511 companies reinvested and expanded their existing presence in 2014, leading to a commendation for Jebel Ali Free Zone for its reinvestments. Judges were also impressed with the infrastructure developments the zone has undertaken in the past year, including a major road redevelopment programme, an entry gate project facilitating 16 lanes of entry traffic, and a major convention centre complex. Jebel Ali Free Zone was also commended for its start-up support programme, having established an incubation centre for SME companies from Japan, in addition to existing centres set up for companies from China, South Korea, Ukraine and Brazil.
Winner – FTZ No 74 Baltimore, Maryland US
Located close to the port in Baltimore, Maryland, FTZ No 74 has been crowned winner of the North America region, as well as best zone in North America for large tenants. Connectivity is key in the zone, with direct access to Baltimore port, one of the top 25 ports worldwide, and access to major rail and road lines of transportation. Importing and exporting to and from the zone thus becomes much easier, helping to attract tenants. A new auto berth at the port is longer and wider than its predecessor, and is also equipped to handle rail transport. The zone operators have undertaken a programme of awareness and education for potential investors, which has resulted in five new companies pledging to invest there.
Highly commended – FTZ No 21 and No 38 South Carolina, US
With more than 20,000 employees, FTZ No 21 and No 38 are runners-up in this year’s Global Free Zones of the Year awards for North America. Multinational companies such as BMW, Fujifilm and Boeing have all located in the zone. Clients can benefit from the state of South Carolina’s permanent foreign offices in Shanghai, Tokyo and Munich, as well as training and apprenticeship programmes customised for clients in the zone. There are plans to construct a dual intermodal rail yard, as well as a large budget which has been set aside to dredge the harbour, making it the deepest such facility on the east coast of the US.
Winner – North Africa: Tanger Free Zone, Morocco
Winner – Sub-Saharan Africa: Ladol Free Zone, Nigeria
Winner – Central Asia: Astana – New City, Kazakhstan
Winner of the central Asia sub-region award, and gaining an honourable mention in the Asia region, the Astana – New City special economic zone, in the capital of Kazakhstan, boasts more than 2.1 million square metres of occupied space and is home to over 2500 employees. Judges were impressed by the incentives offered by Astana, which has a focus on 18 'priorities', compared with the average of three elsewhere in Kazakhstan. These priorities include furniture production, aircraft and space craft, and railway locomotives and rolling stock. Among the multinationals located in the zone, France-based Alstom (a rail infrastructure company) and Talgo (a Spain-based rolling stock company) are planning to develop a manufacturing cluster in a public-private partnership with local company Kazakhstan Temir Zholy, earning Astana – New City a commendation for new investment.
Winner – South and south-east Asia: Subic Bay Freeport Zone, Philippines
Winner – East Asia: Waigaoqiao Free Trade Zone, China
Winner – Western Europe: Shannon Free Zone, Ireland
Shannon Free Zone, a newcomer to fDi’s Global Free Zones of the Year awards, has been crowned winner of the western Europe sub-region. Located close to Shannon Airport, the zone has the highest concentration of FDI in Ireland outside of Dublin, according to its submission for this year’s awards. Companies located in the zone, including Emerson, GE Capital and Intel, account for more than €3bn in trade annually. Shannon Free Zone has successfully tailored its incentives and offerings towards the aviation sector, resulting in a specialism award for this sector. Shannon Free Zone is also a globally recognised centre of excellence for aerospace and aviation services. Its International Aviation Services Centre was established in 2014, aiming to support a community of start-up businesses in the aviation sector, as well as providing other services such as R&D, education and training services in the sector. This helped the zone to win a commendation for its start-up support.
Winner – South-eastern Europe: Free Zone Pirot, Serbia
In 2014, Free Zone Pirot’s 113 tenants enjoyed a range of benefits. The zone offers excellent infrastructure conditions for its investors, with a logistics centre completed there last year, enabling companies to move goods via road and rail, and also leading to a commendation in this year’s Global Free Zone awards for infrastructure developments. The construction of the Pan European Corridor X, which will connect Belgrade to Istanbul, is a mere 300 metres from Free Zone Pirot. The zone also recently expanded its free zone area by up to 400 hectares, an expansion that also enjoys links to highway infrastructure. Its tenants benefit from tax holidays of 10 years when investments exceed €8.5m and job creation surpasses 100.
Winner – Central and Eastern Europe: Katowice Special Economic Zone, Poland
Winner – South America: Zona Franca Santander, Colombia
Winner – Central America: ZIP Porvenir, Honduras
Gaining an honourable mention for the Latin America and Caribbean region, ZIP Porvenir has also been crowned winner of the central America sub-region. More than 5500 people were employed in the zone in 2014, by its solely large tenants. Aiming to improve its attractiveness for SME tenants, ZIP Porvenir is undertaking a programme of modifications on existing facilities to accommodate smaller companies. Rental units, due to be completed in 2015, will measure 56 square metres at most, and tenants will have access to all the zone’s benefits. ZIP Porvenir’s marketing department is also on hand to offer its services to smaller tenants. These initiatives helped the zone become the most attractive zone for SMEs in Latin America and the Caribbean in this year’s awards. The free zone was also commended for reinvestment, following an expansion of Myron Corporation’s call centre, including the physical expansion of its facilities as well as an expansion of its target markets. The zone prides itself on Myron’s investment, which was the first call centre to be installed in Honduras, and led to a specialism award for the zone in BPO/outsourcing.
Winner – Caribbean: Zona Franca Santiago, Dominican Republic
SME and Large Tenant Winners
Winner: Tanger Free Zone, Morocco
Between 2013 and 2014, the number of SME tenants in Tanger Free Zone increased by more than 36%, to 341 in 2014. A new park – TetouanPark – was opened in 2014, dedicated to SMEs. Since opening, 50 new industrial projects have taken place there.
Highly Commended: Lekki Free Zone, Nigeria
Lekki Free Zone is keen to attract more SME tenants to its zone. In 2014, management at the zone began a programme of site clearing – clearing and levelling sites for prospective SME tenants, so preliminary site work would be completed for them, saving time and cost for clients.
Winner: Lodz SEZ, Poland
While Lodz SEZ also attracts a large number of large tenants, the zone impressed judges with its efforts to accommodate and attract more SMEs, whose tenancy rates increased by 13% between 2013 and 2014. The zone has begun to develop office space, dedicated to SMEs and the BPO sector. There are also plans for the zone to develop production space specifically for SME tenants.
Highly Commended: Katowice SEZ, Poland
This year’s global runner-up, the Katowice SEZ proved attractive to SMEs with tenancy rates increasing 16% between 2013 and 2014, rising to 139 companies. The zone recently developed its '4S' (‘For Silesia’) strategy, designed to attract developers and SMEs to underdeveloped parts of the region, to boost economic prosperity and employment.
Latin America and Caribbean
Winner: ZIP Porvenir, Honduras
SME tenants have not always flocked to ZIP Porvenir, and the zone is making moves to rectify this. An existing facility in ZIP Porvenir is currently being modified to accommodate smaller companies. Due to be completed in the coming year, the facility will provide smaller units with all the free zone benefits. In addition, the marketing department at the zone is in place to fully support SME tenants with marketing strategies to improve their business.
Highly Commended: Zona Franca de Iquique, Chile
Zona Franca de Iquique is home to a huge number of SME tenants, more than 2100 in 2014 – which accounts for 99.7% of all its tenants. The government provides subsidies to SME companies hiring local workers in the zone, in amounts of up to 17% of the minimum income.
Winner: DMCC Free Zone, UAE
This year’s global winner, DMCC’s SME tenancy rates increased nearly 30% between 2013 and 2014, with a total of 6720 SME companies resident in the zone in 2014. In total, 70% of all DMCC’s tenants are SME companies, and the zone was named the Global Free Zone of the Year for SMEs in last year’s awards. Companies are drawn to the zone by the service centre on site, which quickly and efficiently processes companies so they can start operations.
Highly commended: TwoFour54, UAE
As a media zone, tenant’s units tend to be for SME companies with offices in TwoFour54. The zone is home to nearly 300 SME companies, making up over 91% of all its tenants. It offers flexible pricing options, as well as providing venture capital to select start-up companies.
Winner: Keystone Opportunity Zone, US
By 2014, Keystone Opportunity Zone had 130 SME companies in operation, up nearly 7% from 2013. Several programmes are in place to encourage and assist SMEs and start-ups, and these are backed by Philadelphia City. The zone also has a programme in place to assist SME companies whose growth has accelerated quickly. If these companies outgrow their original facility, they can move to a larger space with no financial penalties.
Large Tenants awards
Winner: Ladol Free Zone, Nigeria
Large tenants in Ladol Free Zone increased some 37.5% between 2013 and 2014, due in part to the zone’s close proximity to deep offshore oil fields. These attract large industrial companies, such as Samsung Heavy Industries, who typically require larger facilities for their operations. Ladol’s target sectors include oil and gas, maritime and engineering. The zone has also taken steps to increase support services for oil and gas companies, in particular.
Highly commended: Tanger Free Zone, Morocco
In total, 465 large tenants were operational in Tanger Free Zone in 2014 – an increase of nearly 20% from 2013. The zone aims to develop main industrial sectors in the zone, including automotive, aeronautics, electronics and textiles. Investment incentives are available to companies in the automotive and textile sectors, with companies eligible for funding of up to 30% of total set-up costs. Trade events are also becoming popular in Tanger Free Zone, with Automotive Meeting Tanger Med being held in September 2014.
Winner: Waigaoqiao Free Trade Zone, China
Waigaoqiao Free Trade Zone had 649 large tenants operating by the end of 2014, an increase of nearly 5% from 2013. Some large multinational companies are present in the zone, including Microsoft, Fiat, Shell, Sony, Total and Amazon. There is also an interest in companies establishing regional headquarters, and with more than 60 companies’ regional Asia headquarters in Shanghai (more than any other city on the Chinese mainland), Waigaoqiao Free Trade Zone is in a strong position to welcome these projects.
Highly Commended: ModernCikande Industrial Estate, Indonesia
At the end of 2014, all 232 tenants in ModernCikande Industrial Estate were large tenants, employing 50,000 people. This represented an increase in overall tenancy rates of nearly 19% between 2013 and 2014. 'Built to meet your industrial needs' reads the marketing slogan, with a clear focus on industry, usually attracting large tenants. The zone is home to some big investors, including Cargill Indonesia, Mitsuba Indonesia and Indonesia Nippon Seiki.
Winner: Alabuga SEZ, Russia
Of Alabuga SEZ’s 47 companies in 2014, nearly 90% of these were large tenants – with tenancy rates increasing nearly 24% from 2013 to 2014. The zone caters for production facilities, and is home to investors such as Ford and Air Liquide. Indeed, in 2014, Ford invested $100m in a new production line for its Transit commercial vehicle model. Two industrial parks are operational in the zone, and have equipped facilities ready to receive investors.
Highly Commended: Katowice SEZ, Poland
In 2014, more than 62% of the companies operating in Katowice SEZ were large tenants. Major investments in 2014 came from companies opening larger industrial operations, including European Packaging Solutions, which opened in the Gliwice sub-zone; Tenneco Automotive group, which made plans to establish a production facility, creating 700 jobs; and General Motors Manufacturing, which begun to construct its new engine plant in the Tychy sub-zone.
Latin America and the Caribbean
Winner: Manaus Free Trade Zone, Brazil
Manaus Free Trade Zone attracts a slew of international investors, including big name companies such as Samsung, Honda, Procter & Gamble and Coca-Cola. The majority of investment in the zone is in production, and close negotiations with companies surround facility expansions. These expansion projects are approved in conjunction with the development of new projects, for example, Semp Toshiba was approved to expand to allow for the production of tablet computers.
Highly commended: Zona Franca Romana, Dominican Republic
More than 6600 people are employed in Zona Franca Romana’s 10 companies, nine of which are large tenants. In 2014, two major expansions occurred in the zone, adding 9000 square metres to each facility. Tabacalera de Garcia, which manufactures cigars, and Brideshore, which develops art materials, both expanded their presence in the zone in the past year.
Winner: Dubai Industrial City, UAE
Large tenant occupancy rates in Dubai Industrial City increased nearly 39% between 2013 and 2014, with 244 large tenants operational in the zone by the end of 2014. Dubai Industrial City’s well-integrated and comprehensive infrastructure is a bonus to large manufacturing and logistics operations. The zone will also be home to a halal cluster – dedicated to manufacturing and logistics operations, and in line with Dubai’s goal of becoming a centre of the Islamic economy. The cluster will serve companies in the food and beverage, cosmetics and personal care sectors.
Highly commended: Jebel Ali Free Zone, UAE
Jebel Ali Free Zone was home to more than 2800 large tenants in 2014. Major multinationals are among investing companies, including Panasonic, LG, ExxonMobil and Unilever. Many multinationals have gone on to establish regional headquarters in the zone, in order to serve key markets in the Middle East, as well as African and Indian markets. In 2014, the development of a halal zone was also announced, and is intended to increase the opportunities for investors, attracting new clients in the growing Islamic market.
Winner: FTZ No 74 Baltimore, Maryland, US
Large tenants increased 10% between 2013 and 2014 in FTZ No 74 Baltimore. The zone attracts a number of companies from the automotive sector, including Michelin, Mercedes Benz and BMW. Well connected, with close proximity and access to the Port of Baltimore and inter-modal infrastructure within the zone, goods can easily be imported and exported, attracting large companies in production and logistics.
The fDi Report 2016
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