5G Readiness

The Lódź Special Economic Zone in Poland launched a 5G Technology Accelerator combining start-ups and businesses to develop 5G industrial use cases and create smart factories together with industrial partners Miele, Wielton, Indigo Nails and Polish Energetic Group. So far, each partner received a dedicated technology transfer on the 5G potential provided by the zone and Ericsson. The programme received 150 applications from start-ups from Poland, Hungary, the UK, the US, India, Russia and African countries ready to develop their products with the use of 5G. 

The Innopolis Special Economic Zone in Russia has launched a 5G network in test mode to boost its activities in the digital economy. 

Academic Collaboration

The Zona Franca Santander in Colombia signed three agreements with the region’s academic sector (SENA, Universidad Santo Tomás and Universidad Pontificia Bolivariana) with the aim of facilitating access to high-quality education and thus contributing to the skills and competencies of the human talent of established companies and their family nucleus.

Coyol Free Zone in Costa Rica has strengthened its alliance with the Technological University of Costa Rica. This alliance has allowed hundreds of students to be trained in the areas of productivity, quality, logistics, innovation, technology and English, and to opt for technical and master’s degrees. 

Access to raw materials

The Special Economic Zone ‘Pavlodar’ in Kazakhstan is located in the Pavlodar region, which is a large industrial centre of Kazakhstan with a diversified industrial complex. The total value of the reserves of solid minerals in the region is estimated at $460bn.

Cluster development

The Special Economic Zone Technopolis Moscow, Russia, is considering expanding its cluster territory by 92 hectares: 23 hectares of greenfield, 29 hectares of brownfield for the construction of offices and production facilities available for lease and 40 hectares for a new urban site.

Connectivity

Digital connectivity in the Lódź Special Economic Zone has been boosted by pilot projects in 5G connectivity and its industrial use cases. 

The construction of the Pan-European Corridor X which connects the city of Belgrade to Sofia and Istanbul will augment Free Zone Pirot’s strategic position in the Balkans and easy connection to Corridors IV and VIII, which offer the shortest traffic link to Italy, Turkey and Greece. 

Covid-19 support 

The Special Economic Zone Technopolis Moscow has halved rental rates for 100 tenants in order to enable stable business activity during the Covid-19 pandemic.

Free Zone Pirot launched the ‘Healthy Free Zones’ programme, in which the health and hygiene of workers and companies are taken care through restriction and termination of official travel of employees in order to reduce the spread of the virus; working from home for anyone who can; and additional security measures at logistics and customs terminals. 

Ras Al Khaimah Economic Zone in the UAE allocated 50m dirham ($13.6m) to ease the impact of the pandemic on its tenants. The zone also went full-on digital on set-up processes, allowing clients to apply without physical presence and original documents.

CSR initiatives 

The Manisa Industrial Park in Turkey built two libraries and an innovation laboratory for two suburban schools going through financial difficulties as part of its corporate social responsibility project ‘Little Stars’.

Data protection

The Cayman Enterprise City in the Cayman Islands began looking more closely at its processes and procedures through the exercise of complying with the Data Privacy Laws that the country passed in September 2019.

Deployment of technology

Improvements were made to the Ceará Free Trade Zone’s Integrated Customs Control System (SICA), such as the lifting of gates with a mobile APP function, simplified scheduling for the Customs Clearance Area, a paperless project that almost ended the use of paper in all gates procedures, automatic parameterisation of the Merchandise Transfer Report that made possible the optimisation of every logistics procedure in the zone.

Diversity initiatives

In 2019, the Free Economic Zone Gomel-Raton in Belarus organised a forum for women of three neighboring regions: Gomel oblast (Belarus), Smolensk oblast (Russia) and Dnipro oblast (Ukraine). The forum’s topic, “Economics and culture as the drivers of regional development”, allowed businesswomen of three countries to learn new skills and gain business knowledge, discuss current events, share success stories and tools to improve their careers, and build goodwill despite the adversities of recent years.

The Ras Al Khaimah Economic Zone in the UAE launched the Rakez BusinessWomen Package designed to support female entrepreneurs with at least 6200 dirham ($1688) per year. It comes with a licence, eligibility for a UAE visa as well as a zero-balance bank account. 

Economic impact

The Queen Alia International Airport Free Zone in Jordan is promising to drive change in the region as it positions itself as hub for the reconstruction of the nearby countries which have been affected by conflict.

The Manisa Industrial Park in Turkey generated $7.2bn in foreign trade in 2019 and about 55,000 jobs. Across 10 million square metres, the park hosts more than 223 manufacturing companies, of which around 42 are foreign direct and foreign shared investors from a total of 15 different countrie-s.

Efforts to improve transparency

North Macedonia ranked 10th globally in the World Bank’s 2019 Ease of Doing Business report, and the North Macedonia Free Zone believes the government’s new economic plan has  created a favorable atmosphere and conditions allowing the country to position itself as a viable choice for multinationals, with transparent terms for all investors.

Employee wellness

The Montego Bay Free Zone in Jamaica has organised events to support employee wellness and wellbeing such as an open day, mini expos and health fairs, in a push to attract top-level talent.

Events organised

Cayman Enterprise City has organised in 2019 a series of events called Tech Talks specifically designed for its growing community of technology professionals. Since July 2019, it has produced 11 such events and topics have included blockchain, data protection and community roundtable discussions. They have welcomed a significant number of recent graduates and local talent to participate in community roundtable discussions. Moreover, the monthly series of events provides regular opportunities for industry professionals to network, find new talent and engage with global experts. 

The Pomeranian Special Economic Zone in Poland enabled networking by organising several events including BioTech Daily AI Games – Hackathon AI, Hackerspace Game Jam, Pomeranian 3D Print Days Industry 4.0, eco-ON Molanote Laboratories: B&R base for enterprises, Marine Industry Security Forum, regular meetings with investors and a unique project entitled ‘Zone in every commune’.

Expansions

Liepaja Special Economic Zone, Latvia: JM Properties invested Ä7m in a new production facility of 11,000 square metres and technical equipment. 

Zona Franca del Pacifico, Colombia: Rodriguez Lopez (Spain), one of the top three largest ambulance assemblers in Europe, began operations in the zone in 2018, and in 2019 expanded its warehouse by 100%, which will enable it to serve the Latin-American market in a cost-efficient way.  

Export boosters

The choice of the Port of Rotterdam to become a shareholder in the Ceará Free Trade Zone boosts the strategic profile of the zone in the global markets. The Port of Rotterdam gives the zone a global standard for its management, logistics and technology.

The Pirot Free Zone developed a software platform called ‘Team Sharing’ for digitalisation, integration and automation of export/import processes in the zone.

Facilities upgrades

Cayman Enterprise City is midway through a $67m expansion plan aimed at developing a purpose-built hub for digital businesses. Works valued at $36m are underway to upgrade the zone’s facilities. 

Ajman Free Zone in the UAE has launched several new facilities in 2019, including two new modern business centers, a freelancer and pioneers hub and furnished and unfurnished offices. 

Flexible space

The Innopolis Special Economic Zone in Russia set up a coworking facility for start-ups and SMEs at the technology park named after AS Popov, with 124 workplaces.

Freezone 4.0

The Lódź Special Economic Zone has launched an Internet of Everything (IoE) hub located in the centre of Warsaw, the capital of Poland. It is part of Cambridge Innovation Centre, a US ecosystem of innovation, entrepreneurship and impact. CIC opened in Poland (the second in Europe, after Rotterdam) and co-created four hubs in co-peration with different institutions (cosmic, proptech, trusttech and IoE). IoE means connection of people, processes, data and devices focusing on Industry 4.0, gathering different strategic and founding partners operating within IoT, 5G, smart manufacturing and working together on boosting innovation for the zone’s investors. 

Future mobility

Major car producers are developing their their offer of hybrid and electric cars within the Lódź Special Economic Zone, which in turn is stimulating the creation of a supply base able to provide state-of-the-art products. 

Gateway award

The Mauritius Freeport is a gateway for trade between Asia, Europe and Africa with particular focus on agreements such as, among others, the Common Market for Eastern and Southern Africa and the Southern African Development Community. The location of Mauritius has attracted major shipping lines, express courier services and freight-forwarding companies to the freeport’s logistics platform. Through these players, Mauritius has developed competitive logistics at the seaport and airport.

Incentives 

Some of the incentives offered by the Mahindra World City Jaipur in India include an investment subsidy of 75% of state tax due and deposited for seven years; exemption from payment of 100% of electricity duty and land tax for seven years; exemption from inspections under state laws for three years; and exemption from payment of 100% of stamp duty. 

In the  Aegean Free Zone (ESBAS) in Izmir, Turkey, manufacturing companies are exempt from corporate tax. This exemption has now been extended to the following services: maintenance, repair, assembly, disassembly, handling, sorting, packaging, testing, labeling and warehousing services that are provided to customers who export services abroad.

The Ajman Free Zone introduced new incentives to cope with the global crisis triggered by the Covid-19 pandemic, which include, among others, exemptions from licensing fees and late renewal fines; for licence cancellation, 50% discount on accumulated fines; and 40% discount on labour accommodation rent.

Industry 4.0

The Lódź Special Economic Zone attracted new investment projects in automotive, household appliances, pharmaceuticals and packaging in 2019. With a highly technological component, these investments highlight the role of the zone in bringing central Poland’s economy into the fourth industrial revolution. The zone is also offering the Spark 2.0 acceleration programme and the 5G technology accelerator to foster local talent to connect with industry partners and develop Industry 4.0 applications.

The Industrial Robots Programming Centre at the Pomeranian Special Economic Zone in Poland is one of the first centres in Poland which enables employees to improve their skills and helps students of vocational schools choose a career related to automatic control and robotics. The training centre is an element of a project whose aim is to revive and activate the area of the former shipyard.

Infrastructure upgrades

Mauritius Freeport has undergone major infrastructure upgrade, which includes a new fully-fledged cargo terminal and extension of the cargo and freeport area at the airport to accommodate light industries. New investments have been allocated to the port in order to expand its capacity, boost productivity and competitiveness. The Mauritius Ports Authority, with the participation of the private sector, will invest more than $300m to construct a breakwater to reduce downtime at the port during bad weather conditions. 

The Zona Franca del Pacífico in Colombia initiated the development of a new expansion project of 15 hectares, representing a 27% growth in available area for tenants. Besides, the zone built 11,000 square metres of warehouse space available for industrial and logistics projects. For the second half of 2020, a project of four modular warehouses of 640 square metres will be developed to attract new companies.

The Katowice Special Economic Zone in Poland has increased its offer by more than 400 hectares in 14 locations. The offer of production and warehouse space has increased by 50 hectares in 16 locations. The zone also plans to include another 200 hectares of greenfield areas in eight locations, and expand the offer of production and warehouse space by several dozen hectares. 

The Foreign Trade Zone No. 68 in El Paso, Texas, expects to reap benefits from the I-10 Connect Project that is completely modifying the entrance from the Bridge of the Americas Port of Entry to Interstate 10 and US Highway 54. This is a $96m project to move cargo, passengers and pedestrians easier through the Port of Entry. Also, the Montana Expressway Project is connecting the 375 Loop to Global Reach and Spur 601. This $370m project will allow cargo shipments to move from the Ysleta Port of Entry to the Butterfield Trail Industrial Park and the airport without stopping for traffic signals.  

Local transport

The Klaipeda Free Economic Zone in Lithuania has been taking further steps to increase its connectivity with the city and the rest of the country by preparing free land plots for new developments to facilitate sustainable urban mobility. Over the past 12 months, the zone has completed and launched additional 4 km bicycle and pedestrian paths within and beyond its territory. Two new car parks were also added.

Marketing slogan

Free Zone Pirot, Serbia

“Build and work free.”

New investments

The Zona Franca Santander in Colombia attracted two major BPO companies in 2019: Majorel, a benchmark in the BPO industry with more than 50,000 employees in 29 countries, and Accedo Technologies, a Nicaraguan company with extensive experience in BPO and 100% bilingual operation in the zone. It also announced the investment of Cecropia Solutions, a US company active in software development. 

Liepaja Special Economic Zone attracted new investment in manufacturing with companies like, among others, LSEZ SIA Caljan (telescopic belt conveyors), Interspiro (respiratory protection and equipment for diving, firefighting and rescue operations), Expedit (interior solutions in the Nordics), UPB Group (design, production, logistics, construction and offers integrated solutions for glass, steel, concrete structures, and in energy and mechanical engineering), Tinby (polyurethane solutions) and Baltic Lingerie Group (lace and fabrics) deciding to locate in the zone. 

New investments attracted by the Katowice Special Economic Zone in Poland feature Weber-Stephen Products (a manufacturer of grills), MonoSol Poland (a manufacturer of water-soluble films for packaging), Cobex Polska (a manufacturer of electrodes and cathodes) and Otokumpu Distribution Polska  (a stainless steel processing factory). 

In 2019, Swiss-Swedish producer of electrical equipment ABB opened an engineering center in the Kaliningrad Special Economic Zone. Yandex, the biggest Russian IT company, also planned to undergo the process of redomiciliation, changing its registration address from the Netherlands to the Kaliningrad Special Economic Zone. 

Belt and Road Initiative 

The Great Stone Industrial Park in Belarus is at the core of the country’s participation in China’s Belt and Road initiative, which has prompted Chinese companies including China Merchants Group to set up shop in the zone. 

Ones to watch

Alaro City is a new integrated, mixed-use city planned of more than 2000 hectares in the Lekki Free Zone, Nigeria. Developed by Africa’s new city builder Rendeavour, Alaro City offers tenants plug-and-play infrastructure in a strategic location with easy access to capital Lagos’s airport and seaport. Some 20 companies are moving or expanding their presence in Alaro, the company says. The new city aims to create 200,000 new jobs. 

Special Economic Zone Stupino Quadrat in Russia is developing industrial coworking space for SMEs and manufacturing start-ups for contract production. The zone has also built a private railway connecting its facilities with the national railway system. The zone authority plans to make it a good platform for effective investments, but also territory of happiness, “a place where everyone has an opportunity to develop and implement their best personal and business qualities”, the authority says. 

Overcoming adversity

Although it lacks the investment appeal of other zones in South Korea due to its location and low regional recognition, the Daegu Gyeongbuk Free Economic Zone in South Korea has been developing selected IT convergence, cutting-edge medical care, hi-tech materials and energy as the four major growth industries to boost the local economy. According to the results of the performance evaluation of the Free Economic Zone Authority organized by the South Korean ministry of trade, industry and energy in July 2019, the zone stood out for its performance in development strategy, leadership, and development project strategy. 

PPP

Special Economic Zone Technopolis Moscow in Russia pioneered the implementation of the PPP offset agreement in Russian healthcare between Russian BIOCAD and the Moscow city government. This agreement will facilitate the national strategy to fight cancer and reduce production costs of treatments. A third offset agreement between Germany’s GEMAMED and the Moscow government in December 2019 launched the production of medical devices for stoma patients. 

Real estate flexibility 

Special Economic Zone Technopolis Moscow applies a flexible approach to prospective and current tenants, as they can choose cleanroom facilities, brownfield production sites, engineering and laboratory buildings or rent a plot of land. 

Recruitment assistance

Coyol Free Zone in Costa Rica supports tenants in their hiring processes through exclusive services designed to seek, pre-select, train and evaluate potential candidates. These programmes introduce potential job applicants to the basics of medical device manufacturing. During Covid-19 all programmes were adapted to operate successfully under a virtual mode. The zone also offers evaluation and personnel selection services to streamline recruitment processes and keeps an online database with more than 90,000 users who aspire to find a job opportunity in the industry. It also organises job fairs, either face-to-face or virtually. 

Red tape reduction

Special Economic Zone Technopolis Moscow in Russia has also been promoting digitisation through the development of Agile Centre, a single information window that aggregates city-wide opportunities with the public sector, from property auctions to procurement. 

In the Aegean Free Zone (Esbas) in Izmir, Turkey, investors can find a one-stop shop that eliminates bureaucracy and delays. The zone offers streamline set-up procedures for both foreign companies and joint ventures. 

The Ajman Free Zone in the UAE has fully automated its processes to support ease of doing business, integrated its systems with other government entities for faster transactions, and provided companies with extra convenient payment channels such as Ajman e-pay and Al Ansari Exchange.  

Relocation services

The government of the Kaliningrad region compensates moving costs for qualified staff coming to the Kaliningrad Special Economic Zone from other parts of Russia. Compensation amounts to $7500 and can be used both to cover the relocation costs and to make a downpayment on the mortgage loan. 

Research hub 

In May 2019, a new innovation and technology centre came to fruition in the Dubna Special Economic Zone. Premises designed for assembly and knowledge-intensive production will be rented out to different companies. The new resident companies are going to invest more than $14m in their projects and create almost 1000 jobs.

Site conversion

Alongside its typical operations in oil and gas and petrochemicals, Arvand Free Zone in Iran is converting more than 100 hectares of unused land into arable and agricultural lands for the optimal use of its water and soil resources.

Montego Bay Free Zone in Jamaica converted older factory buildings to new, comfortable office spaces to accommodate its tenants from business process outsourcing and other industries. 

Skills development

Next to the Ceará Free Trade Zone in Brazil is located the Federal Institute of Education, the largest vocational and training center in Latin America. In 2019, 435 students graduated from the institute, representing more than 8000 hours of training classes, meeting the demand of companies located in Ceará State.

Katowice Special Economic Zone has continued and implemented new programmes as part of its Professional Hub in 2019. They include the Leader’s Academy developing managerial competencies together with the Silesian University of Technology and entrepreneurs and a dual education project in the mining and metal industry. 

Special Economic Zone Alabuga in Russia opened a STEM centre for the training of highly qualified personnel in September 2019. The centre aims to train 100 students every year in the four important areas: laboratory chemical analysis, mechatronics, electrical engineering and automated control systems.

Smart strategies

Zona Franca Santander in Colombia has adopted policies for the prevention of money-laundering, which are framed within the integrated management system of the organisation. They apply to all activities carried out by the zone.

Free Port of Ventspils in Latvia has been participating in the Baltic Loop initiative to identify and prevent bottlenecks of passenger and freight transport in the east-west corridor of the Baltic Sea and to deal with issues related to interlinking of different transport hubs by reducing travel time and decreasing carbon dioxide emission levels. It also did proactive work on a previously signed co-operation agreement with the China-Belarus Industrial Park Great Stone, thus creating a co-operation platform between the two zones. 

Katowice Special Economic Zone, together with the city government of Zabrze and other partners, started working on the redevelopment of 48 hectares of brownfield areas of closed local mine and coking plants to create an attractive investment space.

Start-up support

Special Economic Zone ‘Pavlodar’ in Kazakhstan has developed strong partnerships with some of the country’s financial institutions such as the DAMU Entrepreneurship Development Fund, the Development Bank of Kazakhstan, JSC “National Agency for Technological Development”, National Welfare Fund “Samruk-Kazyna”, National managing holding “Baiterek” to become fertile ground for start-ups and SMEs. 

The Gdansk Science and Technology Park managed by the Pomeranian Special Economic Zone in Poland is supporting the development of SMEs and start-ups from the ICT, life sciences and power industry. In 2019, it supported 67 SMEs, including those involved in research and development.

Alaro City FZC in the Lekki Free Zone in Nigeria has been developing an SME enclave where a shared facilities strategy will be strongly adopted to optimise the operations of companies within the enclave. The enclave will focus on developing smaller-sized industrial and logistics plots.

Free Zone Pirot in Serbia covers up to 70% of maximum eligible costs for the realisation of an investment project for SMEs and start-ups. 

Supplier development

North Macedonia Free Zone is leveraging a government programme to support the establishment of a local supply base and promote co-operation between local suppliers and foreign investors. 

The cluster-based approach developed by Khalifa Industrial Zone (Kizad) in Abu Dhabi, UAE, puts businesses in close proximity to their suppliers and customers, adding to the overall cost-effectiveness for the investors.

Supporting surrounding area

The Birmingham City Centre Enterprise Zone in the UK has been successful in enabling the accelerated transformation of Birmingham’s city centre. Since its establishment in 2011, the enterprise zone has attracted £800m of private sector investment, with £200m of this within 2019/20 and secured a range of occupiers such as BT, HMRC, PWC, DLA Piper, The Prince’s Trust, HSBC and HS2.

Sustainability

Zona Franca Metropolitana in Colombia is planning to develop solar energy to supply part of the park’s energy demand.

With a vision of sustainability and environmental awareness, Coyol Free Zone in Costa Rica changed 90% of irrigation sprinkler systems to drip systems, cutting water consumption by 40% during the past 12 months. Also, 96.16% of the electric power consumed by the zone during 2019 was from renewable sources, and 10 buses with a Euro 5 gas treatment system were incorporated into the transport fleet. 

Mahindra World City Chennai is developing one of the largest urban forest project in India in an area of 60.7 hectares with 400,000 tree saplings. This initiative when completed will ensure Mahindra World City Chennai is carbon-neutral.

The management of Klaipeda Free Economic Zone in Lithuania has become more outspoken when it comes to sustainability and the circular economy, educating society via events and the media. All these efforts are in line with the blue/bio economy ambitions that were enshrined in the Klaipeda 2030 strategy by the city municipality and supported by the local academic community.

The sustainable warehouse project at Ajman Free Zone in the UAE aims to reduce the use of electricity by, among other things, using photovoltaic panels to generate part of the needed energy; energy-efficient LED lights; raising the insulation coefficient of the surfaces and walls so that the heat exchange is reduced and thus the energy required for cooling is reduced; using smart water and electricity meters to monitor consumption, as well as monitor any water leakage; and using eco-friendly air conditioning system.

Together with Shell Development Oman, SOHAR Free Zone in Oman signed an agreement that will see the provision of clean energy solutions through the facilitation of solar photovoltaic projects. The development will focus on meeting the energy demands of industrial tenants within the zone.

Talent pool

Next to the Ceará Free Trade Zone in Brazil is located the Federal Institute of Education, the largest vocational and training centre in Latin America. In 2019, 435 students graduated from the institute, representing more than 8000 hours of training classes, meeting the demand of companies located in Ceará State.

Panamá Pacífico has been developing a Talent Hub focused on training the workforce based on the needs of companies, thus promoting the strengthening of logistics and service clusters and a strengthened commercial community (company, employee, retail, government and suppliers).

Katowice Special Economic Zone in Poland launched with its local institutional partners a project whose purpose is to improve the quality of vocational education for 1190 students from 18 schools in co-operation with employers, and to create an educational cluster. 

Thought leadership

With its focus on environmental harmony and sustainability, Mahindra World City Chennai believes it will ensure higher productivity and health benefits for the people working and living inside or nearby.

Trade facilitation

SOHAR Free Zone in Oman believes that the Secured Bonded Corridors initiative, launched by the Directorate General of Customs, will facilitate trade and ease of doing business and, eventually, bring new investment into the zone. 

Workforce amenities

Innopolis Special Economic Zone in Russia has developed unique living and work environment for company employees and their family members with first-class business, social, educational and engineering infrastructure 

In 2019, a new sports complex with a swimming pool, gym and innovative sensory diagnostics equipment was opened at Technopolis Special Economic Zone in Moscow. 

Follow the link for a video presentation of the awards. 

fDi's Global Free Zones of the Year 2020 first appeared in the October - November print edition of fDi Intelligence.