Insight: How Jafza is Powering the Growth of Trade and Logistics in Dubai

Due to its lack of oil reserves the Emirate of Dubai has traditionally relied on trade and commerce. It is little wonder then that Dubai has been a pioneer in the setting up of free zones in the Middle East region.

The first and most successful of these free zones has been the Jebel Ali Free Zone (Jafza).

Set up by DP World in 1985, Jafza has created massive opportunities in a variety of sectors by providing end-to-end logistics solutions, digital trade platforms, ease of doing business and access to DP World’s global portfolio of services to facilitate customers at every step of their businesses and supply chains.

In 2022 DP World's Jafza witnessed the highest customer registrations in a decade, marking a 30% year-on-year growth, and taking the total number of companies to over 9,500.

This is the result of Jafza being a true global trade enabler who even during the pandemic announced a number of incentives to help customers bounce back their businesses.

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Despite challenges during the past decade Jafza has seen a 13-fold increase in logistics customers, while the vehicle and transport segment saw a compound annual growth rate of 26%.

Below, we take a look at some key developments across Jafza that are driving successful developments for Dubai many areas with logistics being just one of them.

Logistics

Jafza's proximity to Jebel Ali Port, Al Maktoum International Airport and Etihad Rail’s Jebel Ali station, when combined with 92,100 sqm of warehouse space and 2,300 sqm of office space, make it the obvious logistics hub of choice for Dubai and the wider Middle East.

Expanding the free zone's logistics footprint further by 46,000 sqm this year, Jafza Logistics Park will help accommodate the growing demand for warehousing, processing and logistics capacity in Dubai.

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During the ground-breaking ceremony of the park Abdulla Bin Damithan, CEO & Managing Director, DP World UAE & Jafza said: "We recognise the critical role the logistics sector plays in enabling the growth of various industries around the globe.

"Jafza is aligned with key government initiatives, such as the Dubai Silk Road strategy, to boost economic growth. As the UAE continues to grow into a global processing and re-distribution gateway, we have experienced a significant spike in demand for the logistics and warehousing space.”

Global Trade

Following the signing of the Comprehensive Economic Partnership Agreement between India and UAE, Jafza is playing a central role in strengthening economic ties between India and the UAE and promoting greater trade and investment between the two nations.

In October last year The India-UAE Bridge was launched with the aim of boosting non-oil trade between the UAE and India to $100 billion over the next five years.

Meanwhile, DP World and China Commodity City Group have last year partnered to set up the $153 million Yiwu Market which will be the first stage of a larger Dubai Traders Market located in the Jebel Ali Free Zone.

It is proactive initiatives like these by Jafza that continue to expand and enhance Dubai's capacities and capabilities for global trade.

Food Security

Jafza is playing a major role in securing the food supply chain by facilitating over 20% of Dubai’s food and beverage trade value as of today.

Jafza’s integrated F&B cluster caters to a diverse array of segments in food manufacturing and distribution. It is home to some of the world’s leading brands, including Unilever, Nestle, Heinz, McCain, Hunter Foods, Alokozay Group of Companies, Al Khaleej Sugar, Bayara, to name a few.

Abdulla Al Hashmi, the Chief Operations Officer for Parks & Zones at DP World UAE said: "“Jafza has always been a significant contributor to the UAE’s food sector and plays a vital role in supporting its long-term objectives; the free zone is home to over 600 food and agri-commodity companies from 68 countries.

"Our role as a regional logistics hub is to ensure availability and access to F&B resources for the entire region."

Construction

Jafza has been a powerful engine that over the years has significantly driven the growth of Dubai's construction sector. Between 2011 and 2021, the Jebel Ali port handled combined volumes in containers and breakbulk of up to one billion metric tonnes of iron & steel and construction material.

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In recent years the free zone has gained the confidence of key regional and global names in the construction sector due to its solid industrial ecosystem. This has encouraged many local and global players to set up manufacturing facilities in the free zone boosting the Dubai's GDP.

e-Commerce and Digital Logistics

Jafza and digital trade and logistics platform Dubai Trade have formed a key partnership to offer the ideal environment for e-commerce businesses to thrive in the Middle East, with Dubai as their hub.

Over the years, Jafza has witnessed rapid growth in its e-commerce cluster, owing to Dubai Trade’s robust infrastructure, including last-mile delivery logistics.

Additionally, Dubai Trade’s technologically advanced solutions give e-commerce companies a competitive advantage over other players in the market. Jafza’s data Data-Lake Zone deploys the latest digital technologies to benefit over 1,700 e-commerce companies by helping them stay ahead of the curve.

The use of IoT, digital systems, automation and trade integration platforms has helped Jafza's e-commerce companies to simplify their logistics journey through optimal data analytics and state-of-the-art automated warehouses. 

Healthcare

Jafza is proving to be an ideal hub for healthcare manufacturing and distribution as well. In the last four years the trade value of companies in Jafza's healthcare and pharmaceuticals hub has grown seven-fold.

As a one-stop-destination for all the needs of the healthcare sector, Jafza currently hosts 412 leading healthcare and pharmaceutical companies from 60 countries of which more than 120 provide logistics and freight services for the healthcare sector.

The Jafza advantage

Since the establishment of the first modern economic zone in 1959 at Shannon, Ireland, free or economic zones have been a high-risk, high-reward ventures that require heavy investment, government vision and coordination, along with a strong infrastructure capacity to follow through and implement services on the ground.

On all the above accounts Jafza has made all the right moves over the past four decades and today has emerged as one of the leading free zones of the world.

The number of industry verticals that Jafza caters to by offering world-class facilities and infrastructure, continues to grow with each passing year and the free zone has proven to be a true gamechanger for the economy of Dubai and the wider Middle East.

Read More: DP World Logistics Launches New High-End Warehouse at Jafza CFS 2