|
Page 1 of 4
A mission to Jevel Ali reveals much about Orangeburg's future.
By Dan McCue
SCBIZ Staff Writer
Few similarities are found between the wind-swept desert surrounding the city-state of Dubai and the lush farmland surrounding the city of Orangeburg. The exception, however, is the availability of land.
It was land in Dubai from which arose an 81-square-mile free trade zone known as Jebel Ali that houses a port, warehouses and manufacturing facilities. And it is 1,300 acres of land from which will arise a similar, albeit smaller, version outside of Orangeburg.
With the recent purchase of the Orangeburg land, the two diametrically opposed worlds are forever linked.
Jebel Ali, which is owned and operated by the Jebel Ali Free Zone Authority, or Jafza, has transformed this 1,500-square-mile city-state into a trade and commerce metropolis where on nearly every street corner a new high-rise is under construction.
Orangeburg is bracing for the impact of Jafza’s $600 million investment that could more than double the area’s employment and could see new homes and buildings going up throughout Orangeburg County.
“When we started (Jebel Ali) with just two cranes and 60,000 containers coming through the port annually, I never dreamed that I would see Jebel Ali like this in my lifetime,” said Chuck Heath, the American who serves as managing director of the company’s global arm, Jafza International.
“It was just desert then. Now, as we near our 24th anniversary, we’re looking at ways to grow vertically now that our ability to grow horizontally is almost entirely maxed out.”
Jebel Ali
Words to describe the size of Jebel Ali would all be considered understatements. It is a place that employs nearly one-tenth of the city-state’s population of 1.6 million people.
There are more than 6,500 companies with facilities in Jebel Ali, including 149 Fortune 500 firms. What’s more, in 2007, 9.9 million 20-foot cargo containers passed through the free zone’s port. And more than 40,000 vehicles a day pass through the facility’s secured gates.
Approximately 75% of the companies located within the free zone are engaged in warehousing and distribution, while 23% are in manufacturing and 2% are service-based companies, such as insurance providers and freight forwarders.
The free zone, which is the equivalent of a free trade zone in the United States, was the vision of Sheikh Mohammed Bin Rashid Al Maktoum. Although Dubai is one of the Middle East’s oil-producing states, Sheikh Mohammed realized that his country’s petroleum reserves were actually quite small, and that in order to sustain his nation’s prosperity, he had to diversify its economy before the oil ran out.
By creating a series of free zones, Sheikh Mohammed found he could promote growth of specific industry clusters without diminishing the property rights of native citizens. He found that he could use the free zone to entice businesses.
In the Jebel Ali free zone, Heath explained, businesses are guaranteed not to pay any taxes for 50 years, and can renew that guarantee for an additional 50 years. In addition, companies in the free zone can be 100% foreign owned, doing business outside the zone requires foreign businesses to have a local partner, a native Emirati, who owns at least 51%. Also, there are no currency restrictions in the free zone.
“When we started the free zone at Jebel Ali, we spent two years analyzing what would make companies want to locate in a facility like ours, and came up with 12 criteria people looked at,” Heath said.
“Originally, tax savings was the No. 1 factor; today, however, it’s No. 7. Why? Because the incentives governments are offering to businesses today, and things like bilateral trade agreements and free trade agreements, have really minimized the impact of taxes when you’re looking at doing business from the global perspective.”
In 2008, Heath said, the No. 1 criterion cited by businesses that have come to the Jebel Ali free zone is quality of facilities, followed by connectivity, an ease of doing business, and a reduction of red tape and bureaucracy.
“What it comes down to is a businessman or woman looking at a site and saying, ‘Can I conduct business here the way that I need to do business to stay competitive in the global marketplace?’ ” he said. “Our goal is to constantly facilitate that.
In that sense, this isn’t about developing real estate; it’s about being a service provider.”
<< Start < Prev 1 2 3 4 Next > End >>
|
