Regional Winners — Africa

Winner: Mauritius Freeport, Mauritius

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Mauritius Freeport caught the judges’ attention once more to retain its status as the best free zone in Africa – they assessed 10 entries representing eight countries across Africa from Benin to Botswana. 

Despite the impact of the pandemic, the zone welcomed a range of foreign investors over the last 12 months. Overall investment has reached nearly $250m through 2025, with projects for the year 2022-23 expected to reach $50m. The zone also grants a tax holiday to a new freeport operator or private developer investing at least $1.1m. 

With a long history of using free zones to boost industrial development dating back to the 1970s, Mauritius’s logistics-based freeport is now pivoting its attention to servicing exports in the Indian Ocean and sub-Saharan Africa. The judges were impressed by its plans for infrastructural development to develop the freeport into a regional transshipment and air cargo hub, and to pave the way for new segments such as commodity centres for sugar, wheat, rice and maize.

Also noteworthy are the freeport’s environmental, social and governance (ESG) practices: it is working on a carbon credit trading framework, issuing a sustainable bond and developing an ESG framework. During 2021, national promotion agency EDB also improved its procedures for issuing freeport certificates for international best practices and ease of doing business. 

Recent major tenants include Japanese food manufacturing company Sakurafresh, French sports retailer Decathlon (which chose Mauritius Freeport as its logistics trading hub in the region in 2020), and Netherlands-based logistics company C. Steinweg Group. 

Highly commended: Gabon Special Economic Zone, Gabon

Gabon Special Economic Zone (GSEZ) has been highly commended among African zones. Launched in 2010, the zone is a multi-sector park, comprising an industrial, commercial and residential zone, located in Nkok, some 27km from the capital Libreville.  

The zone impressed the judges specifically for combining the country’s industrial ambition with sustainable forestry practices and carbon neutrality. Already the first carbon-neutral SEZ in Africa, its stated ambition is to build on this by developing solar farms, increasing wood conversion from 40% to 70% and developing low-carbon transport solutions. 

GSEZ’s main focus is on wood manufacturing, and it has shifted its focus on plywood and veneer exports from south-east Asia to new markets such as Europe and the US. 

As an indication of investor confidence, two Chinese investors expanded their operations there in 2021. Chinese plywood manufacturer Chanta Group has decided to set up a mega-plywood unit covering more than 100,000 square metres, and is expected to produce 120,000 cubic metres of plywood a year, starting mid-2023. In parallel, investors from Jin Shan Gabon SARL and Shuang Sheng SARL have teamed up to establish an additional large plywood unit, spread over 65,000 square metres.  

The judges were also impressed by the diversity of investor attraction offerings. Though the zone has a particular focus on the environment and furniture, it has also prioritised investments in satellites and fibre optic cables and attracted investments in batteries. Metanoia invested in the first battery manufacturing unit in Gabon as well as the Central African economic bloc, or CEMAC. 

The relative success of the zone has meant that it has been replicated elsewhere both nationally, in the Lambaréné and Franceville zones, and regionally – for example, in Togo and Benin. GSEZ is also developing zones, through public-private partnerships (PPPs) with governments in countries including Togo, Benin, Côte d’Ivoire, Chad and Senegal.

Regional Winners — Asia-Pacific

Winner: Dalian Free Trade Zone, China

Dalian Free Trade Zone (DFTZ) has emerged as the frontrunner among Asia-Pacific’s free zones.

The mixture of entries in fDi’s Global Free Zones did little to knock the Chinese heavyweights – Dalian Free Trade Zone and Waigaoqiao Free Trade Zone – from first and second position respectively in the Asia-Pacific chapter of the awards. Having pioneered the SEZ model for other Asian countries, China’s zones are evolving with the changing policy directives in Beijing, such as its ‘dual circulation’ policy, under which China is looking to strengthen high-tech sectors and become more self-reliant.

With small and medium-sized enterprises at its core, DFTZ has successfully created an agglomeration effect, with clusters in the automotive sector and now in the batteries sector.

In parallel with its tech ambitions outlined above, DFTZ has a five-year plan for the development of the hydrogen sector, including a 350,000 square metre hydrogen park. Toyota’s hydrogen fuel cell vehicles, which were tested and cleared at the zone, were the first such vehicles imported into China.

The zone has also launched a green finance plan, which aims to promote the flow of capital and innovation between green finance and green industries. 

Highly commended: Waigaoqiao Free Trade Zone

Shanghai’s Waigaoqiao Free Trade Zone was highly commended among Asian free zones. It demonstrated to the judging panel that not only was it a pro-business enclave for large multinationals but also that it could help out its small and medium-sized enterprises (SMEs) during the pandemic.

Large tenants that moved into the zone in 2021 include US electric vehicle giant Tesla, South Korean chip manufacturer SK Hynix and Swiss building materials manufacturer Holcim. As of March 2022, more than 130 multinational corporations have registered their regional headquarters in Waigaoqiao Free Trade Zone — more than anywhere else in mainland China. The zone says it serves as a stronghold for foreign-invested companies to strengthen their offshore presence.

In light of global supply chain problems, the FTZ first reduced rent, property tax and urban land use tax for eligible SMEs, and granted subsidies for water, electricity and natural gas fees. It also coordinated with banks and regulators to help out cash-strapped investors with special bail-out loans with preferential rates.

Though the zone was the first of its kind to be established in China in 1990, its allure has not faded. In 2021, it added some 215 foreign-funded and 1056 domestically funded new companies, attracting nearly $6bn in contracted foreign investment. In total, the zone boasts 25,000 enterprises with 274,000 employees.

It offers targeted services to help foreign companies invest in the local Chinese ecosystem, reflecting Beijing’s dual circulation policy, and services to help facilitate offshore trade to expand global business. The Offshore Trade Service Centre was set up as an information sharing and exchange mechanism among trading companies, foreign exchange regulators and financial institutions.

Targeted sectors in the Waigaoqiao Free Trade Zone include life sciences, data centres, smart manufacturing, e-commerce, electronic information and high-end consumption. 

Regional Winners — Europe  

Winner: Katowice Special Economic Zone, Poland

Building on its regional win last year, Katowice Special Economic Zone has been named the best SEZ in Europe. Judges were impressed by its capacity to help companies, big and small, at every stage of their growth. 

The zone stood out for its collaboration with universities and investment funds to support start-ups, and its BraSilesia accelerator project, which supports high-tech Polish and Brazilian start-ups.

In 2021, Katowice Special Economic Zone began implementing new projects concentrating on support for small and medium-sized enterprises (SMEs) in digital and green transformation. Its digital innovation hub, Silesia Smart Systems, which has recently joined the network of European digital innovation hubs, prepares entrepreneurs for digital transformation at every stage of the process.

Another standout element was the Silesia Automotive & Advanced Manufacturing (SA&AM) Cluster, designed to help companies specifically with supply chain problems and to maintain good practices. The cluster is part of the European Automotive Cluster Network (EACN). The zone also has a Covid-19 Support Zone platform designed to help entrepreneurs.

Elsewhere, it counts German ZF Automotive Systems, Swiss MUBEA Automotive, Chinese Nexteer and German Hager Production among its investors in 2021. 

The zone spans construction, metal, automotive, food, engineering and plastics, with particular attention on automotive, metals and business processing outsourcing (BPO). In 2021, the KSEZ attracted 54 large investment projects, 27 of which were new investors. Overall in the past 12 months, companies have invested Ä1.93bn and created 4800 new jobs; many projects involved implementing new technologies and expanding existing plants.

Highly Commended: Pomeranian Special Economic Zone, Poland

Also in Poland, Pomeranian Special Economic Zone was highly commended for its dedication to small and medium-sized enterprises (SMEs) and the development of new tech sectors such as health tech, green tech and smart city.

The zone’s Gdańsk Science and Technology Park (GSTP) offers a broad range of services, including office space, testing facilities and a technology incubator. Its new Urban Tech project, financed by the Horizon 2020 programme, seeks to develop and grow the competitiveness of European start-ups and SMEs in health tech, green tech and smart cities. 

Another element to catch the judges’ attention is the Pomeranian Special Economic Zone’s green credentials. In 2021, it created the cross-border green technologies cluster, together with partners from elsewhere in Poland, as well as Sweden and Lithuania, as part of the collaborative RBR – Reviving Baltic Resilience project. As of 2021, it has also begun preparing for three solar parks to power the zone.

Regional Winners — Americas

Winner: Coyol Free Zone, Costa Rica

Coyol Free Zone (CFZ) has once again won fDi’s Global Free Zones of the Year award for the Americas region. An inherent part of Costa Rica’s success in the life sciences sector, the zone has launched initiatives to build on its strengths in facilitating multinationals’ moves to shorten their supply chains. 

German pharmaceutical company Bayer invested $200m in a new plant in CFZ, acquiring 12 hectares of land to develop the new facility with a first phase of more than 301,000 square feet. In 2021, more square feet were built than at any other point in the zone’s history.

The zone won favour with the judging panel for the way it set up new initiatives to boost the local ecosystem and reduce paper waste. In 2021, it launched Coyol Impulsa, an award designed to identify and promote national suppliers in the life sciences sector, and the first edition saw 24 companies enrol. Next year’s edition of Coyol Impulsa will allow local companies to develop their innovation processes and join the life sciences heavyweights operating in the zone. CFZ also implemented Ride Coyol, an electronic bus fare collection system for workers in the zone. 

According to CFZ statistics, out of some 18,000 direct jobs, 72% are held by young people (18 to 35 years old) and 54% of the workforce are women. 

Highly commended: Zona Franca de Bogotá, Colombia

Zona Franca de Bogotá was highly commended among free zones in the Americas, thanks in no small part to its digitisation initiatives.

The zone has equal focus on both small and medium-sized enterprises and large tenants, with 63% in the former category. Roughly 50% of its investors are in the logistics sector and the rest in industries such as pharmaceuticals, food, e-commerce, telecommunications and BPO.

A standout element is accelerated digitisation. Through various initiatives the zone has streamlined ​​paperwork and logistics procedures using cloud computing, robots and data analytics, among others. It boasts that its logistics times have improved by 25%. It has also implemented Industry 4.0 measures such as additive manufacturing (3D) and Internet of Things for companies in the city of Bogotá’s industrial sector. 

Elsewhere, it has made progress on digital infrastructure for its tenants. The first phase of construction of its $20m ZETTA Data Centrer Complex, slated to be one of the biggest in Colombia, was completed last year.

Over the course of 2021, through the companies operating in the zone, Zona Franca de Bogotá generated nearly 20,000 direct and 25,000 indirect jobs.

Regional Winners — Middle East

Winner: DMCC, UAE

See above.

Highly commended: Hamriyah Free Zone Authority, UAE

Sharjah’s Hamriyah Free Zone Authority has been highly commended in fDi’s Global Free Zones 2022, owing to investor confidence and its support for small and medium-sized enterprises (SMEs).

As in the DMCC, large tenants in Hamriyah Free Zone Authority have been expanding. The biggest of these is ArcelorMittal, which continues to invest in the zone, adding 24,000 square metres in April 2021. Others include Japanese steel company Eversendai Engineering and Sharjah-headquartered Grankraft Industries.

Hamriyah Free Zone Authority also offers a range of financial support to SMEs, including capital expenditure financing for greenfield projects or expansions and the integration of Industry 4.0 or the clean energy transition. It has also launched a special package for women entrepreneurs.  

With the signing of the UAE’s comprehensive economic partnership agreement (CEPA) with India, HFZA is very optimistic about, and focused on, the industrial manufacturing, food and pharmaceutical sectors.

The judges were also impressed by its implementation of specific green and circular economy practices, such as the reduction of gas emissions and waste, water efficiency and environment, and safety through various training targeting employees, investors and other stakeholders.  

The zone also promotes “industrial symbiosis”, whereby the waste from one industry becomes the raw material for another in the zone. All the sewage generated from the industrial and accommodation areas is collected and treated through the Sewage Treatment Plant (STP) in HFZA, and the treated water from the STP is then used for gardening purposes within the zone.

This article first appeared in the October/November 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.