Jafza International is on an ambitious drive to expand its operations. The company already manages free zones in Asia and Africa, while developing projects across the world. Its latest coup gives it a foothold in the highly lucrative market of North America.
Jafza International recently secured 1300 acres of land in the US state of South Carolina to set up a world-class logistics and business park. The free zone will be based on the model of the successful Jebel Ali Free Zone in Dubai, comprising light manufacturing, warehousing and distribution facilities.
The company is investing $600m to transform the area into a major logistical hub in the US, which will create up to 10,000 jobs in the coming decade. Jafza International is keen to attract private investment of $1.2bn in the business park after establishing financially successful free zone concepts across the globe.
Chuck Heath, managing director of Jafza International, says that increasing foreign investment and employment opportunities will stimulate economic activity in South Carolina. “We are experts at developing and creating a new economy,” he says. As a result, the investment has been widely welcomed by the local population and the government.
Jafza International is likely to reap economic rewards of its own from its recently announced tie-up with India’s Tata Realty and Infrastructure, part of the giant Tata Group. In a deal worth $2.45bn, Jafza International will develop 27 business and logistics parks across India in a 50-50 joint venture agreement with the Indian company. Jafza International is set to bring its specialised expertise and experience of best practice to the deal.
Jafza International was set up in 2000 to exclusively manage the global free zone operations of the Jebel Ali Free Zone Authority (Jafza). Fully owned by Economic Zones World, a subsidiary of the Dubai government’s holding company Dubai World, Jafza International is a pioneer in developing, operating and managing economic zones worldwide. It aims to cover the globe with strategically located, highly efficient and investor-friendly free zones by capitalising on its management experience of Jafza. It also provides consulting and advisory services to clients, such as overseas governments and private investors, which are keen to establish a free trade or special economic zone.
Djibouti Free Zone is a highlight of the Jafza International management portfolio. The 17-hectare free zone in the tiny African nation is the first of its kind on the continent. It offers global companies access to facilities and incentives on a par with Jebel Ali Free Zone in Dubai, the largest and fastest growing free zone in the world.
Today, Djibouti Free Zone has become one of the busiest in east Africa and is emerging as an important trade gateway into the continent (so much so that the country is even being dubbed the ‘Dubai of the Red Sea’). It is part of the government’s vigorous strategy to develop a diverse and self-sufficient economy.
Jafza International has also ventured into west Africa with the Tanger-Med project in Morocco. The global distribution free zone and port is under Jafza International’s management until 2015, during which time the company plans to position it as the benchmark multimodal logistics platform in the Mediterranean. This involves installing state-of-the-art telecommunications and offering a full range of facilities, such as serviced plots of land, pre-built warehouses and modern offices. The abundant supply of low-cost labour located only 14 kilometres from the European mainland makes it a strategic choice for European companies looking to base their operations abroad.
Jafza International’s long-term strategy is to build a worldwide presence of special economic zones, logistics hubs and business complexes that will facilitate global trade. The company is currently exporting its management or consulting expertise to countries such as Libya, Senegal, Mauritius and Malaysia, while pursuing more than a dozen projects on various continents.
Advisory services form a large part of the free zone development process as Jafza International generally consults before, during and post development. This involves feasibility studies, including assessment of the market and the project’s competitive advantages; master plan studies, including land use and infrastructure plans; implementation plans, detailing the projected development of the free zone over 10 to 15 years; and analysis of wider development issues that may affect the free zones such as budgeting, pricing and trade laws.
Capitalising on success
Jafza International has the advantage of its 22 years of experience managing the world’s leading free zone, Jebel Ali Free Zone in Dubai. The company can offer potential investors unique synergies with which other operators are unable to compete. More than 6000 world-class companies do business at Jebel Ali, including 154 of the Fortune Global 500.
Those looking to expand beyond the Gulf already have experience of high quality management systems at the Jebel Ali. By replicating the free zone’s impressive infrastructure, multimodal logistics platform, transportation links and lucrative incentives, Jafza International is able to capitalise on the reputation it has gained in Dubai. Businesses continue their relationship with the company as they know they will enjoy the same world-class facilities at its other projects.
As a result, Jafza International is able to offer governments and private investors wanting to establish a free zone immediate access to up to 6000 national and multinational companies from 110 countries. Since Jafza International has earned the trust and goodwill of these businesses at its Dubai site, any plans they have to expand into other markets may involve a decision to base their operations at another Jafza site.
This proved the crucial factor in Rwanda’s decision to employ Jafza International to assess the viability of a free zone in the capital, Kigali. Director general of the Rwanda Investment and Export Promotion Agency Williams Nkurunziza says the agency made an informed choice to take advantage of this goodwill, while benchmarking the free zone development agenda against the best in the world. “It gives us access to Jafza International’s rich experience in managing and operating free zones. We also hope to use the Jafza connection in our dialogue with over 5000 national and multinational companies from 120 countries that are operating in Dubai, particularly those eager to expand their economic space by using Rwanda as their launch pad into the emerging east and central African market,” he says.
Synergies extend further to IT and administration systems. Jebel Ali Free Zone recently employed Oracle to enhance its customer service experience and achieve greater operational efficiency. The IT firm’s E-Business Suite is due to be rolled out to Jafza International’s free zone projects to boost the number of online services available to clients.
“We needed a solution that could scale with our growth and be flexible in adapting to varied requirements of the different economic zones and industrial parks in our portfolio, while enabling a consistent business process model,” says Salma Hareb, chief executive of Jafza and Economic Zones World.
Achieving dynamic growth through the exporting of expertise is part of HH Sheikh Mohammed Bin Rashid Al Maktoum’s vision of Dubai as a knowledge-based economy. Jafza is internationally recognised as the leader in its field, so using the concept to drive the emirate’s export earnings and diversify its domestic economy makes economic sense.
At the same time, it makes political sense because Jafza International is fostering closer ties with the nations it works with by strengthening their economies and boosting their potential for long-term strategic growth.