This is Economic Impact, conversations from Emirates Development Bank, the key financial engine for economic development and industrial advancement of the UAE. In each instalment CEO Ahmed Al Naqbi speaks to change-makers and thought-leaders in the UAE to learn how they’re contributing to the nation’s economy and realising the UAE’s economic ambitions.
For episode two we're very pleased to welcome Mr. Saud Abu Alshawareb, Executive Vice President – Industrial Leasing, TECOM Group. Saud joins us to talk about what’s happening at one of the region’s largest industrial manufacturing and logistics hubs – Dubai Industrial City.
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Speaker 1: HOST
Speaker 2: GUEST
00:00:00 INTRO V/O
'This is Economic Impact...Conversations from Emirates Development Bank'.
00:00:05 Speaker 1
A’Salaam A’laikoom. This is Economic Impact, Conversations by Emirates Development Bank. I'm happy to welcome with me today, Mr. Saud Abu Shawareb, the executive Vice President of Industrial leasing of Tecom Group. Thank you very much for joining us here today, Saud.
00:00:21 Speaker 2
Thank you for hosting us, Ahmed and it's my pleasure also to be part of those economic discussions. Er, actually, I'm Saud. I'm a civil engineer and as a background, as a profession with a master's degree of engineering management, I've been working with Dubai Industrial City and Tecom Group for the past 17 years, so it was a nice journey and hopefully we within the interview we'll talk about, er, more about it and where have we reached today.
So, it's my pleasure to be part of this discussion.
00:01:06 Speaker 1
Pleasure to have you. That's fantastic. 17 years with the same organization that says a lot about Tecom, could you talk maybe a bit about where, where did you get today with the Dubai Industrial City and what is the Dubai Industrial City and how is Saud involved in the Dubai Industrial City from the perspective of where you've reached after 17 years of being with Tecom?
00:01:28 Speaker 2
So, Dubai Industrial City is part of Tecom group. Tecom Group is a public listed company. We've celebrated earlier this month one year of being public, we are part of Dubai Holding and Dubai Industrial City is one of 10 business parks operating within Tecom Group. So, we are one of the leading manufacturing and industrial hubs in the region.
It was launched in 2004. In 2005, we finalized our masterplan and I can proudly say till today we have the same masterplan that was launched in 2005. In terms of zoning, in terms of planning.
My role with Dubai Industrial City, I've graduated from Sharjah University in 2006 and joined them immediately in August 2006, so my role was mainly in the engineering part of the Media City where I was managing the master plan of the project, uh, managed Infrastructure works, grading works and even was involved in facility management, HSE and the permitting part of the Dubai Industrial City.
Then I've moved to the business side of Dubai Industrial City where I always say that to run the by Industrial City, you need to have an industrial background/engineering background because this really helps you understand the technical requirement of each and every business partners that we have and normally half of our discussion is mainly technical and this really helps me to guide our business partners to move forward with their projects with their expansion plans in Dubai Industrial City.
So, I can proudly say that I've learned a lot from the organization and it's my role to give what I've learned back to the organization and our business partners.
So zooming in on Dubai Industrial City we are 55 square kilometers in size, in land size, we have more than 800 business partners operating with us.
I can proudly say end of last year we have more than 300 operational factories in Dubai Industrial City, we really focus on having a full turnkey solution to our business partners, so we have different products from Musataha agreements, industrial land leases, we have more than 1,000 ready units of warehousing facility with a total leasable area of 8.3 million square feet, we have more than 42,000 available work or accommodation bids that covers the need of the accommodation part of those factories and most of them are Expo standard and approved by the municipality and the Ministry of Labor.
So, we really focus on giving the welfare, lifestyle for the workers to have a peaceful, mindful accommodation close to their factory where they save a lot on transportation duration, they save a lot and and even costing for companies that they reduce number of buses moving from accommodation to their work to their factories.
So we provide the full solution, turnkey solution for our business partners and this is what really gives us the advantage that whatever you need in terms of industrial requirements, you can only shake hands with Dubai Industrial City and we fulfill your requirements from A to Z.
00:05:32 Speaker 1
This is fantastic, and I've personally seen it myself. It's a quite a large area. It's a, it's a mini city on its own.
You mentioned that the master plan had started in 2005 and so now we're about 18 years later, Mash’Allah, you've reached a certain point right now where it's up and running.
As you had mentioned, several 100 companies, factories that have all been set up there. I'm curious over that span of time, what were some of the main challenges that DIC specifically overcame faced and overcame in order to come to this point because it's super important for us to understand that these kind of things don't just happen overnight and there's a lot of hard work and effort that goes in behind them.
So, what are some of the main challenges that the IC had to go through and overcome?
00:06:14 Speaker 2
I, I totally agree with you, Ahmed. We've went through tough times and for us our key motto is customers comes first, so business partners comes first. We need to make sure that everything is available for us for them to operate smoothly. So, one of the challenges during the early days of Dubai Industrial City is building the substations so today, as we speak, we proudly can say we have more than 800 megawatts, energized, ready to tap in any customer needs, which is 4 substations, 132 KVA each.
During those years, we've built the infrastructure in phases, so, as we speak today, we have more than 127 kilometer length of roads and infrastructure that is developed by Dubai Industrial City in the past years.
So, in the early days this was a challenge because we got a bare land where I remember till today we started grading the land, and before starting grading the land, we brought specialized people to make sure that we relocate the life habitat and animals that were staying in the one necessity before operating.
00:07:38 Speaker 1
OK.
00:07:43 Speaker 2
So, this was something really personal for me that I've seen with my eyes that those animals were moved to Al Ain and Dubai Zoo. OK, so, so this really...
00:07:55 Speaker 1
What kind of animals were they? Sorry I'm just curious...
00:07:57 Speaker 2
So, in phase one, you know the ‘Dhub’, yes, we relocated more than 800.
00:08:05 Speaker 1
So ‘Dhub’ is essentially a. It's a large lizard that lives in in our desert environment, yes.
00:08:07 Speaker 2
Yes, it's a large lizard yes. Hundreds of deers and gazelles, rabbits, foxes…deers and gazelles that were there in the wild - in the wild.
00:08:17 Speaker 1
Wow, fantastic, OK
00:08:19 Speaker 2
For Mash’Allah, we were really focusing on relocating those habitats and species to a suitable place before starting even grading demand necessity.
So, those are some of the challenges that we faced but we need to focus on consistency and avoid changing plans and this is what we're really focused on and the past 15 years. We had a stable management from 2010 till today, we really focused on one direction.
And the six zones that were announced in 2005 are the same six zones we have today, which is the food and beverage zone, the base metal, machinery equipment, mineral zone, chemical and transport.
So those zones are the core offering of Dubai Industrial City to our business partners and the reason behind having those zone dedication and we were one of the first in the region to apply such zoning system as to avoid business interruption between food and beverage zone with chemical factories.
So, the food zone is seven kilometers away from the chemical zone, which really gives a peace of mind for the food companies to work in a very environmental friendly neighboring similar neighbors having the full supply chain of packaging and logistics services within the food zone that complement the food zone factory requirements.
So, all these things were kept in mind and were part of the planning, and I can proudly say in 2006 I was part of those discussions that we are gaining the fruits today of the patience that we had and the stability of the management that were managing Dubai Industrial City in the past years.
00:10:20 Speaker 1
That's fantastic. It's definitely very visible, especially from our perspective in Emirates Development Bank with a number of projects that we work with DIC on supporting through financing.
Just to touch back on the environmental piece and it's so good to hear that the Dubai Industrial City is so heavily focused on being responsible when it comes to the environment. We do know that this year is the Year of Sustainability for the United Arab Emirates.
It's very high on the minds of all of us as different entities within the economic development ecosystem of the country.
00:10:57 Speaker 1
And we have Cop 28 coming up at the end of the year, so maybe if I can ask you other than you know, what you've gone through over the past 15 years with regards to all the different, let's say, responsible actions you've taken towards the environment, what is Dubai Industrial City doing in order to be in line with the sustainability goals of the country. What are some of the objectives that you might be having as Dubai Industrial City?
00:11:24 Speaker 2
Again, I'll take you back to history. When we were designing the master plan, we've appointed Jurong from Singapore to do the environmental impact assessment of the project, so we've kept the environmental/sustainability topic since 2005 in mind.
Today, as we speak, I can say end of 2022 we were proudly saying that we generate more than 40 megawatts power from solar renewable energy through our factories, so this is the factories of the band, the city that generates that sustainable power and this really opened the door for those factories to export their products to any country around the world.
And, you know, decarbonizing the industrial sector is a very hot topic as we speak today.
And we at Dubai Industrial City, we have implemented this maybe four years or five years ago. So, this really was part of our agenda by having renewable energy as part of the product-making in those factories in addition, because of the unique master plan that we have and having your supply chain next door really reduces transportation and the emissions that comes up, of course.
And the emissions that comes automatically with reducing transportation.
So, within our masterplan, we do have factories that generate brick and mortar, steel, aluminum up to packaging and logistics services that are next door to you so you can order whatever you need through the factories that are operational within the band society.
In addition, in the past years we added recycling factories that are operational within the city. So, we are an approved location for recycling companies to have the recycling facilities next to the industrial companies that we have.
00:13:36 Speaker 2
And I can proudly say we have Enviroserve were the largest electronic recycling facility that is operational and demanded city where after they complete their recycling process, they generate material that goes as raw material to other businesses, such as rubber, plastic, gold, copper, steel and silver...
So, the full supply chain is completed, is operational next door to your factory.
The other, the other commitment from our side is during our make brilliance event in early May, we've signed with the Ministry of Climate Change and Environment, MOCCE, two partnership agreements.
One of them was in relation to sustainability, so sustainability, we are committed with the government's goal of achieving Net Zero 2050. So, we work closely with the ministry to gradually implement the strategies that are related to NET 02050.
In addition, and another topic that is also related to sustainability, which is food security. So, food security also we are committed, with the ministry to achieve the food Security Agenda 2051, so we have 223.5 million square feet of industrial land dedicated for food zone, where we proudly can say we have the best of the best food companies that are operating with us...
We have the largest date factory privately owned in the world, which is the El Barraca dates. We have the largest seafood factory in the MENA region, which is Asmak.
We inaugurated earlier this year, Thrive, which is part of Eco Group. That is one of the largest plant-based protein factories in the UAE…
00:16:01 Speaker 1
Can I ask you a question there?
You know, such fantastic names and companies that are coming and setting up at the IDC, especially as you mentioned in the food security space. Now other than the fantastic infrastructure, the different benefits that I'm sure that Dubai Industrial City provides these companies to come set up.
Why do you think they're coming and setting up in the UAE?
Why do you think they're coming and setting up here? What is it about the country that is so attractive again as Emirates Development Bank, we see companies with foreign direct investment coming from all over the world to use the UAE as a hub. And I'm curious from your perspective hy do you think it is that they're coming to the Emirates?
00:16:41 Speaker 2
UM. I think there are a lot of reasons.
And first of all, I need to salute our leadership on how agile they were in during COVID pandemic. The government, we have a very young government that really work in a very fast time pace to reflect and react on any situation we have.
And I think there are a lot of components that help.
Day by day, more companies being convinced to move to the UAE and specifically Dubai. First of all, the UAE and Dubai is the gateway for the region.
We are a multinational country with more than 200 nationalities working and living in the UAE and addition availability of natural resources. So, in terms of power, water, in terms of infrastructure, it really gives more confidence for companies to move into a very cost-efficient operations within the UAE.
Also the approval process, so in terms of establishing your company, previously in mainland you want you require to have a local partner today a local sponsor. Today you can have 100% ownership on the mainland this really helped multinational companies to open their operations.
00:18:21 Speaker 1
Right.
00:18:22 Speaker 2
Opening in mainland gives you ‘Made in UAE’ advantages. Today the UAE has signed free trade and CEPA agreements with a lot of countries and His Excellency mentioned in ‘Make it in the Emirates’, Doctor Sultan, that those CEPA agreements opens the ‘Made in UAE’ product to reach to market, with the population close to 2.5 billion dollar, 2.5 billion people. Yes, without paying any custom taxes…
00:18:55 Speaker 1
And the ambition there is huge, by the way, on the CEPA agreement, specifically, the time and how quickly they've executed against it. I believe they've already signed with about six or seven countries and in less than a year they have another 20 that they're targeting today.
And those are consistently being, you know churned out in order to open up those markets exactly as you said for ‘Make it in the UAE’ products...
00:19:20 Speaker 2
It gives, it gives a major advantage today when I meet customers, I always hear 80/20 or 70/30. So, whomever wants to invest today and buy in the way, their aim is exporting and I think from the day where the Ministry of Industry and Advanced Technology, MOIAT, was introduced in 2021.
00:19:43 Speaker 1
Right.
00:19:53 Speaker 2
This really opened the door to position the UAE as one of the most desired countries to open factories, in and we have the infrastructure.
If I'll talk about Dubai Industrial City, we do have the substations.
00:20:01 Speaker 1
How's the connectivity? Since you're talking about the infrastructure, how's the connectivity with the ports?
00:20:07 Speaker 2
I wanted to mention this actually. Today Dubai Industrial City is offering four modes of transport.
So, we have the land, we are bounded by Mohammed Bin Zayed Road 311 and Emirates Road 611, which is the truck road of the UAE that connects you to Saudi, Abu Dhabi and from the other side Oman and Northern Emirates. We are 15 minutes away from Jebel Ali port, which is the 5th busiest port in the world.
We are 10 minutes away from Al Maktoum Airport that really helps for very niche products...
00:20:42 Speaker 1
All the all the cargo shipping.
00:20:44 Speaker 2
...through air. And we work closely with our partners Etihad Railway where we will have the second largest station is going to be placed there - Dubai Industrial City railway station in UAE, in Dubai Industrial City.
It's a 27,000,000 square feet of station. That phase one will be operating soon and other phases will be operating in the coming few years.
00:21:11 Speaker 1
So you guys are connected by land, sea and air, and multiple ways on land and by trucks by train...
00:21:17 Speaker 2
Correct. So this really gives companies the flexibility to choose the mood of transport to export their goods to anywhere in the world, plus Dubai and the UAE. We are located in the heart of the world. When I mention Dubai is the gateway for the region. Within two hour flights. Sorry, within an eight hour flight, you cover 2/3 of the world population from the Dubai and the UAE. So, in terms of attracting talent in terms of exporting your goods in terms of having the time scale of doing business abroad, we are positioned in a very strategic geographic location that can allow anyone to do business from anywhere.
00:22:10 Speaker 1
Just to comment, because you had touched on COVID and basically the outcomes of COVID and the creation of the Ministry of Industry and Advanced Technology, who is really one of the key drivers and one of the key enablers and partners of Emirates Development Bank and the Industrial City and others in this economic development ecosystem
I believe from what I've seen, which is again a testament to the wisdom of the leadership in the direction, the silver lining of COVID, because there's challenges obviously that occurred during COVID, but it was handled in a fantastic way and the silver lining that came out was essentially what you're referring to, which is understanding that there's an opportunity for the United Arab Emirates to become the regional manufacturing hub
This whole concept of centralization of globalization with specific manufacturers was seen as a risk, and it's an inherent risk when you have all of your eggs in one basket, so to speak, and so the model going forward is really to decentralize and have regional hubs, such as the United Arab Emirates, which is perfectly positioned to be the regional hub for Mina in general.
But you know, talking about East Africa and South Asia as well. So definitely I see your point, and your comments on that.
You touched on the ‘Make it Brilliant’ campaign and I recall because we had launched or we had signed with Dubai Industrial City during the ‘Make it in the Emirates’ Conference which is a fantastic conference that's put on by our colleagues at the Ministry of Industry and Advanced Technology where we had an opportunity to sit with just about every stakeholder in the economic development ecosystem
Can you tell us a bit more about the ‘Make it in the Brilliance’ and how that campaign is going, what are the expectations that you have for the near future for this campaign?
00:23:57 Speaker 2
Look, ‘Make Brilliance’ is an outcome that is linked with ‘Make it in the Emirates’ so MOIAT have announced Operation 300 Billion.
00:24:04 Speaker 2
All right.
00:24:08 Speaker 2
Now, if you don't mind me mentioning this in in a bit, in details because the contribution of the industrial sector towards the GDP in 2021 was 133 billion dirhams. So, we work closely with the ministry to reach to 300 billion by 2031. I believe as Saud, I think we can achieve those figures because of how the industrial sector maturity have reached and the trust that we have from the business partners and investors towards the industrial sector in the UAE.
So, we, as a civil government entity are on the same boat with the ministry, and our role is merely to link the government with private sector.
So, we have the private sector, is always heard by the government towards their challenges, towards their suggestions, towards their growth plans. and we react immediately, so ‘Make Brilliance’ is our global campaign that we've launched on 3rd of May this year to promote and to position Dubai Industrial City after reaching to more than 300 operational factories that we've reached to, I can say Dubai in the city 2.0.
So, we've reached to the second level of maturity of where have Dubai Industrial City positioned itself as one of the leading manufacturing and industrial hubs in the region.
So, ‘Make Brilliance’ in that event, we've signed three main partnership agreements. One of them was with MOIAT to promote ‘Make it in the Emirates’ and Emirates Development Bank and I would like personally to thank you Ahmed and your team for your amazing support towards financing more than 515 million dirhams to Dubai Industrial City business partners in 2022.
So this really gives more pressure, more excitement, to sign more and more. So within ‘Make brilliance’, as you are aware, we've signed an allocation of one billion dirham from Emirates Development Bank towards Dubai Industrial City business partners.
The 2nd MOU that was signed was with MOCCE that I've previously mentioned and the third MOU that was signed was with Dubai Economic and Tourism that we are eligible also to promote Dubai economic agenda, which is D33, to promote attracting future industrial investments, FDI to Dubai and Dubai Industrial City. So, we are committed towards the industrial sector and I would like to thank you again for your continuous support and we look forward for more successful stories together.
00:27:28 Speaker 2
Thank you, Sir. It's a pleasure having this conversation with you. There's so much insights we could have kept going, probably for a much longer period of time. Insha’Allah, we will break that billion dirhams of financing between EDB and DIC companies.
00:27:42 Speaker 2
Insha’Allah.
00:27:45 Speaker 2
Thank you again for your time, Mr. Saud Abu Shawareb. And thank you for joining us here today. I'm sure that we'll have some other time as well to have some more conversations in the future.
00:27:55 Speaker 2
Thank you for hosting us and we wish everyone all the best.
00:27:59 Speaker 1
Thank you.
00:28:00 OUTRO V/O
This is Economic Impact, Conversations from Emirates Development Bank.