Ahead of the Game Today’s Dubai

Dubai has always been a city determined to create its own future through forward-looking investments in “hard” and “soft” infrastructure that attract businesses from across the globe. From dredging the Dubai Creek in the 1960s to the $17.2 billion it is now spending on upgrading and developing its two international airports, Dubai knows how to leverage its location and comparative advantages to create opportunities for all.

This ability to take advantage of new global and regional opportunities as they arise — particularly in travel, tourism, transport, logistics and trade — has defined the Dubai story. Today Dubai is adding new strategic sectors to this list, including banking, finance and other professional services.

The photograph above shows the new Emirates Terminal 3. With the opening of the state-of-the-art Emirates Terminal 3 at Dubai International Airport in October 2008, overall capacity was increased to 60 million passengers per year.

Dubai: Visionary Investments in Infrastructure
Describe Its Past and Define Its Future

Dubai’s rulers and business leaders have always had a special ability to do two things exceptionally well: make the best use of the emirate’s geographical location and plan for future business needs. Most dramatically, this is exemplified in its commitment to trade and transportation infrastructure, as seen in projects like the 1970s construction of Jebel Ali Port, now the sixth-largest in the world. Another current example can be seen in the $17.2 billion development of the emirate’s airport infrastructure, including Dubai International Airport and the new 140-square-kilometer Dubai World Central. This green field aerotropolis is being developed around the new Al Maktoum International Airport, which is set to open its first phase in June 2010.

Like other international centers of finance, trade and commerce, Dubai has been affected by the global downturn. However, unlike most other cities, it continues to defy the crisis by registering positive GDP growth, with sectors such as trade, tourism, health care and education still strong, and indicators such as airport traffic pointing upward. Passenger traffic increased 2.1% in the first quarter of 2009, 6.5% in April and 7.1% in May, compared with the same periods a year earlier.

Promoting Dubai

Under the leadership of His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman and Chief Executive Officer of Emirates Airline Group, the aviation sector has helped provide the infrastructure for Dubai’s growth.

Not only does Emirates Airline provide the airplane capacity supporting Dubai’s remarkable rise as an international city, but it champions the city as well. As Sheikh Ahmed said in a recent statement: “Emirates has always been Dubai’s ambassador to the world. Since the inception of Emirates in 1985, we have invested millions of dollars promoting the destination.”

This includes support for the recently concluded “Keep Discovering Dubai” campaign that was Dubai’s largest-ever familiarization initiative. Emirates Airline Group is following this up with a new “Meet Dubai” global advertising campaign.

Infrastructure as a Strategic Focus

In the current environment, the Dubai Government has made clear the strategic importance of its key infrastructure projects, including the Dubai Metro project, Dubai World Central, Al Maktoum International and the expansion of Dubai International Airport, which in October 2008 increased its overall capacity to 60 million passengers per year. When its Concourse 3 construction is finished at the end of 2011, total passenger capacity will rise to 75 million. The focus on aviation is driven in part by the new geography of air transportation, which places Dubai at the heart of most international travel routes connecting Asia, Africa, Europe and the Americas.

Preparing for Growth
Just as similar initiatives in the past prepared Dubai to take advantage of new global opportunities and regional economic expansion, today’s transportation and logistics investments will reinforce Dubai’s comparative advantage in travel, tourism, transport, logistics and trade, as well as in other strategic areas of the economy, such as banking, finance and professional services.

With so much hard and soft infrastructure development under way, it’s clear that Dubai will be among the first to catch the next wave of growth, providing enormous opportunities for UAE nationals and the expatriates from 160 nationalities who have made Dubai one of the most cosmopolitan and multicultural business centers in the world.

Dubai World Central

Dubai World Central: A New Global Hub Rises From the Desert

Rising 91 meters into the blue desert sky, the completed air traffic control tower at Al Maktoum International Airport has a commanding view — not only of the 4.5-km runway, capable of handling the largest superjumbo jets — but also of the recently finished 600,000-ton-a-year cargo terminal, the largely completed Phase 1 passenger terminal, and five massive warehouses and freight-forwarder buildings.

Everything is being readied for the June 2010 opening of the airport, a date recently announced by His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of the Dubai Aviation City Corporation, the Dubai government-owned entity that incorporates both Dubai World Central and Dubai Airports Company, the operator of the existing Dubai International Airport and the new Al Maktoum International Airport.

The airport itself is the hub around which revolves the Dubai World Central project, a 140-square-kilometer greenfield aerotropolis that is the Dubai Government’s single-largest urban land development project, designed to be at the heart of the global supply chain. The aerotropolis is made up of six distinct districts. By the time Dubai World Central is completed, it will be home to 900,000 people, serve 160 million passengers, handle 12 million tons of cargo and provide a uniquely integrated logistics platform that incorporates air, land and sea transportation in a single custom-bonded zone.

The global economic slowdown has had little impact on planning, development and construction
activities at Dubai World Central because of “the importance of this project to Dubai and the region.”

- Khalifa Al Zaffin, Executive Chairman, Dubai Aviation City Corporation

Dubai World Central includes two of the three components of the bonded zone, which is a free-zone environment adjacent to the airport. The free zone is divided into two districts: Dubai Logistics City and Aviation City. Dubai Logistics City will serve the needs of the global logistics industry with state of-the-art cargo terminals, agents buildings, warehouses and seamless transport links. Aviation City, on the other hand, is set to become the regional center for aviation manufacturing; maintenance, repair and overhaul (MRO); aviation support services and consultancy; research and development; training; aviation products and parts; and high-tech industries. The third component of the bonded zone is Jebel Ali Port, the world’s sixth-largest seaport, which started development in the late 1970s under the vision and foresight of the late Sheikh Rashid Bin Saeed Al Maktoum, who also envisioned the importance of the sea-air transportation connection and reserved a piece of land opposite the port for the development of a new airport. Jebel Ali Port also has its own free zone and is physically connected with the Dubai World Central free zone via a dedicated road link.

This unparalleled transport and logistics infrastructure means it takes less than four hours for a piece of cargo to travel from the time it lands at Jebel Ali Port to the time it takes off from Al Maktoum Airport. The infrastructure is complemented by an equally major investment in the information, communication and technology (ICT) infrastructure, in recognition of ICT’s importance to the logistics industry. “We are creating one of the best environments for logistics companies — one that cannot be matched anywhere else in the world,” says Dubai Aviation City Corporation Executive Chairman Khalifa Al Zaffin.

Pushing Ahead With Development

The global economic slowdown has had little impact on planning, development and construction activities at Dubai World Central because of “the importance of this project to Dubai and the region,” says Al Zaffin.

“I believe that a few years from now we will look back and the economic crisis will seem like no more than a glitch in our growth curve. We would have regretted not doing work during this time. Understanding that, we have pushed ahead with development — firstly, because we need it, and secondly because we can’t afford to delay the future expansion of Dubai,” he adds.

When Sheikh Ahmed announced the June 2010 opening date for Al Maktoum International, he described Dubai World Central as “Dubai’s most strategically important infrastructure development, which is designed to support Dubai’s aviation, tourism, commercial and logistics requirements until 2050 and beyond.”

Rashed Buqara’a, Chief Operating Officer of Dubai Aviation City Corporation, emphasizes this point: “The government is committed to supporting this major infrastructure project that is one of the most strategic projects the government has ever embarked upon. This is a 30-to- 40-year project which is critical to Dubai’s growth and development.

“But Dubai World Central does not rely on government funds alone. It has developed other revenue streams, including income from real estate sales of its freehold residential district, leasing commercial spaces within free zones, and income from subsidiary companies that generate revenue from providing various related services,” Buqara’a adds.

Additional Facilities Opening Soon

By September 2009, the first of 11 low-rise office buildings in the Logistics City Office Park will be ready for occupation. It will house the Dubai World Central headquarters, its showroom and its customer service offices. The rest of the complex, designed to accommodate companies operating in the logistics sector, will be ready for occupation soon after. By the end of the year, three freight-forwarder agents’ buildings also will be ready.

Enormous Opportunities Ahead

Some of the biggest names in the logistics business have already made investments and completed construction of their facilities in Dubai Logistics City.

Kuehne + Nagel has built a 17,000-square-meter warehouse that is expandable to 30,000 square meters; RSA Logistics, a Dubai-based logistics company, has completed the construction of its 25,000-square-meter distribution center; and global transport and logistics group Panalpina has built a 10,000-square-meter warehouse and a 2,600-square-meter logistics center, with room left over to expand. In all, nearly 40 companies have been issued licenses for logistics services in the free zone, according to Buqara’a.

Some of the biggest names in the logistics business, including Kuehne + Nagel,
RSA Logistics and Panalpina, have already made investments and completed
construction of their facilities in Dubai Logistics City.

While the airport and Dubai Logistics City are the first to open, the broader master plan for Dubai World Central includes five districts: Dubai Logistics City; DWC Aviation City; DWC Commercial City, featuring high-rise office, residential and hotel towers; DWC Residential City, a district for middle-income, low-rise apartment buildings; and DWC Golf City, which will feature several golf courses, a boutique hotel and luxury villas.

All of Dubai World Central will be wired with the latest fiber optics and covered by metropolitan-wide wireless connectivity to allow voice, video, data and service delivery anywhere across the city. Full realization of the entire master plan will take about a decade.

Already Award-Winning

Although Dubai World Central has yet to begin full operations, it already has won awards, including Asia’s “Supply Chain Executive Excellence” Award in Singapore and “The Best International Logistics Project” category at Europe’s largest logistics meet at SIL Barcelona in 2007.

While driving down the center of the runway during a site visit to Dubai World Central, with the majestic control tower overhead and dozens of massive buildings all around, it is clear that these two awards are just the first of countless accolades that this ambitious aviation-logistics hub will be collecting for decades to come.

Dubai Duty Free

Dubai Duty Free: Promoting Dubai by Putting People First

Occupying nearly an entire city block, the new 27,000-square-meter Dubai Duty Free warehouse building and its 6,000-square-meter office space dwarf everything in the surrounding neighborhood, not far from Dubai International Airport. The technology inside is equally impressive. A $27 million German-made automated storage and retrieval system works at the touch of a computer screen to either store or retrieve thousands of different products from deep within the warehouse.

While numbers such as these are certainly impressive, Dubai Duty Free has another set of numbers it talks about with even greater pride. The organization began operations with 100 employees in 1983. Today it has more than 3,700, including 56 of the original team, a group referred to internally as “pioneers.” In addition, “many, many” others have been with Dubai Duty Free for 15 to 20 years, says Managing Director Colm McLoughlin, himself one of those pioneers.

McLoughlin expects to finish 2009 with sales of $1.1 billion, on par with 2008 results.
What’s more, he is not reducing his medium- and long-term sales targets and
still expects sales to double by 2012 and double again by 2016.

The company also has a longstanding policy of promotion from within, something that not only means the vast majority of managerial posts are filled internally, but also that there are tremendous opportunities for career growth and development.

This practice is certainly part of the appeal of Dubai Duty Free for its 3,700-plus employees, but it also reflects something more about the organization and helps explain its tremendous growth and success over the years. While many companies talk about the importance of their “human capital,” Dubai Duty Free actually lives by this creed.

As a result, its institutional knowledge, experience and expertise have earned the retailer one of the highest sales penetration rates of any duty free in the world. It has won more than 150 international and regional awards, including five honors in the first four months of this year. This year’s awards include the U.S.-based Global Traveler “Best Duty Free Shops” award, the DFNI Asia Pacific award for “Middle East Travel Retailer of the Year,” and the Business Traveller Middle East award for “Best Duty Free Shopping.”

In addition, over the past nine months, McLoughlin and his team have opened a new retail space at Dubai International Airport’s new Terminal 3, doubling Dubai Duty Free’s total retail space to more than 15,000 square meters, and hired and trained 1,500 new staff.

And just as the organization was accommodating all this, the global economic crisis began to bite into sales, which — after a record-breaking December — were down 4.5% for the first four months of 2009, versus the same period a year earlier.

McLoughlin expects to finish 2009 with sales of $1.1 billion, on par with 2008 results. What’s more, he is not reducing his medium - and long-term sales targets and still expects sales to double by 2012 and double again by 2016.

Owned by the Dubai Government, Dubai Duty Free is mandated to promote Dubai as the sports, leisure and business capital of the Middle East. Toward this end, the retailer has worked to grow its involvement with major sporting events, including the Irish Derby, and it is now the title sponsor. While it sponsored one race on the card last year, it now is the sponsor of five races. In addition, Dubai Duty Free is enhancing the Barclays Dubai Tennis Championship, which it has owned and operated for 17 years, by commissioning new facilities that will more than double center-court seats to 12,500 in the new Dubai Duty Free Tennis Stadium in Dubai Sports City. The new stadium is expected to be ready by 2011.

Dubai Duty Free’s commitment to corporate social responsibility also continues unabated with the recent establishment of a Corporate Responsibility department headed by a departmental manager who is tasked with more formally structuring the operations of the DDF Foundation, which continues to disburse millions of dollars a year to various charities.

From its employees to its customers to those aided by its charity work, Dubai Duty Free’s main goal is to improve the lives of others.

Dubai Chamber

Dubai Chamber 2.0: Using Green Building, Podcasting and
Plentiful Research to Promote Dubai and Its Businesses

“Good afternoon,” reads the illuminated information panel over the door in the 18-story Dubai Chamber building, while a video screen recessed in the metal wall fl ashes videos promoting the organization. The building is dynamic, but something even more progressive is happening behind its walls, where engineers are retrofitting the structure to achieve LEED (Leadership in Energy and Environmental Design) Green Building silver certification.

Over the past decade, the Chamber has reduced energy consumption by 47% and water consumption by 77%, according to His Excellency Hamad Buamim, Director General of the Dubai Chamber. LEED certification is one way the 44-year-old Chamber is leading by example in bringing the concepts of business and environmental sustainability to its more than 100,000 members, 95% of whom are small- and medium-size enterprises (SMEs).

Sustainability is a priority for the Chamber: It launched its Centre for Responsible Business in 2004, has added a corporate social responsibility (CSR) category to its most prestigious annual business awards, and is preparing to launch a CSR labeling campaign that will certify UAE businesses that comply with sustainability criteria within the workplace, marketplace, community and environment.

The International Monetary Fund’s most recent economic outlook placed UAE growth
at 3.3% for 2009, much stronger than the 1.3% contraction predicted for the global economy.

Web 2.0

The Chamber has also upgraded its award-winning Web site to incorporate more Web 2.0 features, including quick access to an archive of video presentations and speeches. “Information is the most valuable commodity today, and in this region it’s often not there at all,” Buamim says. “We want to be the center of information for business about Dubai, and we want our Web site to be the channel for this.”

The updated Web site will provide podcasts and access to the large and growing number of economic newsletters, analytical reports and statistical studies the Chamber produces. The Chamber also has established a new and innovative business advisory service for SMEs that provides consulting in areas such as marketing, accounting, business expansion, restructuring and feasibility studies. The focus on SMEs is crucial given that they make up 95% of the Chamber’s members.

Dynamic and Flexible

The impact of the global downturn on Dubai is a subject of great familiarity to Buamim, who speaks regularly with the media and business communities regarding the many effective fiscal, monetary and policy actions that the Dubai and UAE governments have taken over the past nine months.

“Dubai is dynamic and flexible, which is key to staying competitive and sustainable and attracting investors,” Buamim says. “Dubai is mainly about trade and commerce, with its geographical location between East and West and position as the gateway to the emerging economies of the Middle East, the quite-rich oil economies around us, Africa and the Indian subcontinent.”

It’s in part to tell this story that the Dubai Chamber is competing to host the 2013 World Chambers Congress, which is held every two years in different regions. The event “provides an excellent opportunity to get people from diverse organizations to see this city and the future of Dubai. With Dubai surrounded by still-growing emerging economies, hosting the Congress here would promote interregional integration that would support businesses across the globe to recover faster,” Buamim says.

Attractive Place for Business

The International Monetary Fund’s most recent economic outlook placed UAE growth at 3.3% for 2009, much stronger than the 1.3% contraction predicted for the global economy.

“The worst is over, and most sectors have stabilized,” says Buamim. “Construction has stabilized, trade is still strong, tourism is still attractive, and health care and education are still growing over last year.” He also notes that inflation has slowed, and the Dubai Government recently announced reductions of up to 30% on business fees, which together have helped reduce the cost of doing business and made the emirate “a more attractive and competitive place to start a business for the future.”

All this makes you think: It’s not just the Dubai Chamber’s building that’s going the way of sustainability, but the Dubai economy, too.