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Jafza Says Dh5 Billion of Projects on Track

DUBAI - Jebel Ali Free Zone or Jafza, operator of Dubai’s logistics and industrial special economic zone, said on Monday that it has seen an increase in interest from American and European businesses keen to expand 
in the region.

Talala Al Hashimi, Managing Director of Economic Zone World, the parent company of Jafza, said that he was surprised by the level of interest shown by Western manufacturers to set-up their operations in Dubai. “What we did not expect is the level of interest shown by them. They have shown tremendous interest to come and establish here,” he told Khaleej Times on the sidelines of a media briefing by the company to update on its expansion projects.

Al Hashimi reckons that the low overhead costs in Dubai, along with its other strengths such as location, connectivity and infrastructure as the main attractions for these companies. “The downsizing that is happening in US and Europe is good opportunity for us. You cannot produce without employees…the overheads are much cheaper here. It is not necessary to have the whole production here but you can have a part of your production here,” he said.

He acknowledged that the global economic crisis has impacted Jafza “but not at that level we are suffering”. Al Hashimi said that the Jafza is confident of achieving a “reasonable” occupancy rate of 60-70 per cent by the year end. He said that about 6,400 companies operate in Jafza and another 1,000 companies are on the waiting list.

Help for Clients

Speaking on the occasion, Ibrahim Aljanahi, Chief Commercial Officer of Jafza, said the majority of the companies affected by the global economic crisis are the ones which had planned construction of their headquarters or warehouses. “As you all know, the banks stopped financing these (activities) and they were counting on banks to give financing. They have postponed their projects waiting for banks to open funding,” he said.

Al Hashimi said that the company has given extension to those clients who have not met the agreed construction deadlines. “As per the rules we have, (a client) has to start (construction) within six months since we sign the agreement. We have suspended that rule. We have given extension.”

No Projects on Hold

The company said that all its Dh5 billion expansion projects are on schedule expect for one. The completion of Dh2.5 billion Convention Centre Complex – a mixed commercial development which includes offices and a hotel – has been delayed by a year. It is now expected to be completed by the end of 2011.

The company said that its logistics research and development focused office development, TechnoPark, will be ready by August of this year. It plans to handover 43 new warehouses close to the port by September 2009.

The company also said that it has completed a staff accommodation that can house about 20,000 people and a mall at a combined cost of about Dh650 million.

aruna@khaleejtimes.com