Fujairah rising

As the rest of the UAE’s free zones squabble over Dubai and Abu Dhabi’s scraps, one emirate dares to take a different path.

As the UAE real estate market went into free fall as the fallout from Dubai spread, one emirate saw the benefits of a prudent approach begin to pay off. Sometimes, slow and steady really does win the race.

As head of one of the oldest free zones in the UAE, Sharief Habib Al Awadhi has been in pole position to oversee Fujairah’s growth from a sleepy backwater to a burgeoning maritime and petrochemical hub on the UAE’s other coastline.

However, Al Awadhi has been fiercely critical of the manner in which the UAE’s free zones have been conducting their business in the wake of the economic downturn.

“What we have failed at in the last few years, with respect to all the zones, including Fujairah Free Zone, is that we did not develop our [zone’s] brands,” the director general tells Arabian Business.

“People nowadays know the available facilities, you don’t need to go anywhere in the world and say, ‘Come to the UAE.’ You need to say, ‘why should you come to the UAE in particular? What can we provide your industry?’” he says.

A particular bugbear is that free zones from the smaller emirates tend to take their lead from Abu Dhabi and Dubai, rather than be innovative and create their own niche industries which would sustain them through tough economic times.

“For example, in Dubai, they’ve developed industries, they’ve developed tourism, free zones, real estate, but in many of these zones, it was a matter of copy and paste, everybody was doing similar business and of course, it flooded the market. We know about the international crisis, but it’s not only that, we’ve overdone many things,” Al Awadhi says. “You have a country with a limited population, a limited geographical space, too many shopping centres, too many hotels, too many resorts, it’s too many. Most of these zones have been doing the same thing, selling the same ideas.”

He also slammed incentives that were used previously, such as offering cash and government partnerships to companies establishing offices in free zones, which he said had no place in the new climate.

“Though some companies talk about offering some kind of direct support or some kind of finance, it seems, to be frank, dishonest,” he says.

“To offer finance you have to have a lot of securities, a lot of support… it’s not easy, and in the current scenario, I don’t see any zones wanting to indulge [in it].”

On the other hand, Fujairah largely ignored the real estate market, a factor that helped prevent rents in the emirate sliding as far as other northern emirates. Instead, the focus has been on developing its ties with the oil and gas industries, with the development of a $3.3bn, 350km pipeline from Abu Dhabi to Fujairah expected to bring in large amounts of revenue.

The emirate’s location on the East Coast has definitely been a factor in its recent success, Al Awadhi said. Abu Dhabi seems to agree, with the UAE capital investing heavily in the emirate, building the country’s biggest power and water treatment plants and a facility to store imported grain. Being on the other side of the Strait of Hormuz gives Fujairah direct access to the Indian Ocean and the Indian Subcontinent, which gives it a unique advantage over other free zone rivals in the emirates, Al Awadhi said.

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Posted by: Saeid

We relocated to Ajman from Dubai about 9 years ago, when a traffic jam in Ajman involved around 10 cars. Now Ajman is another crowded city.

Maybe it's time to make the move to Fujeirah then. It is a beautiful place anyway.

Posted by: Mach

Great article! Well written & informative! Fujairah soon on the world map.
Hope the traffic never gets as bad as Dubai though..........

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