Logistics city

Al-Maktoum International has already persuaded world-leading logistics providers to set up facilities, offices and, in some cases, regional headquarters at Dubai Logistics City (DLC). Operating as a free zone, the city forms a single customs zone with the airport and Jebel Ali Port and Free Zone to ensure multi-modal transfer of cargo can be done as quickly as possible.

The new logistics city also provides its tenants with shared warehouses and dedicated plots for freight forwarders, offices and light manufacturing facilities. To date, a number of local and international firms have established operations at the city, including the UAE’s Aramex, INL and RSA Logistics, German firms Ehrhardt & Partner Solutions, Kuehne & Nagel, Hellmann Caplier, and Schaefer Systems International, and Switzerland’s Panalpina.

Ehrhardt & Partner Solutions specialises in warehouse logistics and was the first company to register for DLC back in 2006. In April 2010, it opened its logistics solutions centre to demonstrate its warehousing management software. “Clients can see how goods are brought inside and entered into the system, and how the system then maps the facilities and decides the optimum place to put the item received, keeping in mind that some are fast-moving items and some are slow-moving,” says Muthanna Muckatira, general manager at Ehrhardt & Partner Solutions Middle East.

He says enquiries have increased rapidly. “We are seeing the difference now, with economic conditions improving. People who have come to see us over the past two years had to arrange their capital expenditures. Now that the market is on an upswing, they are keen to invest.”

The company’s next step is to establish a team of 20-25 software engineers to undertake research and development at the Dubai centre.

Logistics provider Kuehne & Nagel, which began operations in 2009 with 17,000 square metres of warehouse space, has also been expanding. In early 2012, approximately 14,000 sq m of space was added to the warehouse and mezzanine, bringing the total area to 31,000 sq m. The firm also operates a logistics terminal in the Jebel Ali Free Zone and has offices in Abu Dhabi and Sharjah.

Another important tenant for Dubai World Central (DWC) is food giant Nestle, which announced the launch of a 175,000-sq-m plot in June 2012. The new facility will be used to manufacture nutrition, culinary and coffee products and is expected to create 800 jobs.

Local production

“The construction of a new facility at DWC strengthens our local manufacturing capabilities, giving us more flexibility in adapting our products to local consumer preferences and using local and regional raw materials,” says Hans Juergen Jung, technical director at Nestle. “This second production facility in Dubai will also open opportunities to gain synergies in our warehousing and logistics to serve the whole Middle East region.”

The most recent logistics company to join DLC is UAE-based Mohebi Logistics, which in February 2012 announced it would construct a new $95m state-of-the-art corporate headquarters and logistics facility over a 138,000-sq-m plot.

Building on the already thriving logistics industry at Jebel Ali is another part of the proposition for DWC and is one of the reasons that Al-Maktoum International has made cargo an early priority. The 36 airlines operating from the airport are mainly cargo carriers with some business aviation. For now, this is where attention will be focused.

Aviation District

The $1.4bn Aviation District is an important part of Dubai World Central’s (DWC’s) plans to become an ‘aerotropolis’. It is intended the 6,700-sq-m-site will eventually become a regional headquarters for leading aviation firms. Utilising its airside and landside facilities, the area is being planned as an industrial and manufacturing centre with a strong fixed-base operator (FBO) network providing support services to airlines, as well as being fully set up for maintenance, repair and overhaul (MRO) operations.

Financing of $272m for the first phase of construction was secured for the site in November 2011. In late 2012, the local Al-Naboodah won the main infrastructure contract, beating bids from Khansaheb Civil Engineering and Joannou & Paraskevaides of Cyprus.

In order to ensure that the site provides companies with the best possible infrastructure for repair and maintenance of their planes, DWC has joined forces with Australia’s Aircraft Support Industries (ASI). ASI has designed and built more than 80 hangar facilities around the world, recently delivering Hangar 6 for Abu Dhabi Aircraft Technologies.

Under the memorandum of understanding signed in February 2013, DWC will provide plots for aircraft maintenance facilities and ASI will provide design and construction services. A joint-venture agreement will set out the details and define the respective roles and responsibilities of DWC and ASI. The announcement followed news in December 2012 that a joint venture between local Al-Habtoor Trading and Altran Group, named The Wings Valley of Dubai, would be opening an MRO facility for business jets and helicopters at the airport.

Progress has also been made in attracting FBOs to the airport, with the first launching its services in December 2012. Switzerland’s Jet Aviation now provides 24-hour handling services, such as immigration and customs support, crew transportation, hotel reservations and catering coordination. Aircraft services include taxiing, luggage handling, lavatory drainage, aircraft refuelling and two new customer lounges.

“Aircraft are not subject to any parking or slot restrictions and business aviation traffic is increasingly being diverted there,” says Michael Rucker, vice-president and general manager at Jet Aviation Dubai. “With the opening of this FBO facility, we can now better meet the needs of our customers in the region, whether at DWC or Dubai International airport.”

The Aviation District is also set to become the new home of the Dubai Airshow from 2013.