Taking Charge

Jebel Ali Free Zone is one of Dubai’s biggest success stories. However, the free zone is facing strong competition from DLC and other projects. Could the glory days be over?

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By  Robeel Haq Published  September 3, 2006

|~|salma_hareb2.jpg|~|Salma Hareb, chief executive officer, Jebel Ali Free Zone Authority (Jafza)|~|Salma Hareb, the chief executive officer at Jebel Ali Free Zone Authority (Jafza), is a busy woman. Between running one of the world’s most successful free zones, to mingling with prominent members of the Middle East’s logistics industry, Hareb’s diary is unsurprisingly choc-a-bloc. What is surprising, however, is her relaxed and unassuming demeanour. Hareb might be handling a million different tasks at once, but she appears calm, collected and stress-free. After my arrival at the Jebel Ali Free Zone with an entourage of people (including a photographer and designer), Hareb quickly welcomes everybody into her office and starts handing out a supply of luxury chocolates to each person. Although selective about media interviews, she comfortably settles into her chair and discusses the instrumental role she has played in Jafza’s international success. Jafza was created around the Jebel Ali Port in Dubai, to help boost the port’s business. Within three years, the free zone had transformed 25 acres of desert into a world-class business environment, initially encompassing 70,000m² of warehousing and 850,000m² of covered areas. “After creating the port during the late 1970s, it became apparent the operations needed an industrial area to boost business,” says Hareb. “As a result, the free zone was created in 1985. It successfully increased business at the port, but the port also boosted the free zone operations. It’s definitely a win-win situation.” Through the years, Jafza has benefited from major investments in its infrastructure and the free zone’s growth has exceeded expectations. The organisation offers simple administration procedures, zero duties on import and export goods within the free zone, and excellent support services. Such incentives have successfully attracted a string of international clients. Over 5500 companies are currently operating in Jafza, including big brand names Black & Decker, Procter & Gamble, DaimlerChrysler and Xerox. “It has developed in a fast way,” says Hareb. “Over the past three years in particular, the growth in occupancy in the free zone has been extremely steep. I would refer that to the changing economy around the world. Dubai in general has started to attract investors in a large way too, which has proved beneficial to Jafza.” Jafza is constantly revamping its business model to remain innovative. The logistics industry itself has changed considerably over the past five years and Jafza has successfully kept pace with alterations in customer demands. “We are doing something right,” Hareb states with a smile. “There are many free zones around the world, and several of them have failed. Sometimes it becomes difficult to pinpoint the exact reasons for Jafza’s success. However, our comprehensive business model has played a major part in attracting companies. The more we develop the business model, the better it becomes as a package for investors.” It seems the free zone’s customers fully reinforce the views expressed by Hareb. The business incentives and quality of service has resulted in positive word-of-mouth around the world, which has proved invaluable in attracting companies. “We regularly interact with customers, which has developed our knowledge of market demands. We know what customers want and we know what to avoid. It’s all about creating a good investment environment, and of course with the support of the government, that is exactly what we are achieving.” Within the past three years, the revised business model has resulted in simplified set-up processes in the free zone, supported by changes in the organisational structure, including Hareb’s promotion to the CEO position. “We restructured the whole organisation last year. I was officially appointed as CEO in June, so it’s been over a year now,” says Hareb. Hareb joined the organisation in 1997 as planning officer, later promoted to chief planning officer. “I love business development. The whole process of creating strategic and business plans is very enjoyable,” she says. “From strategic planner to CEO is actually a good step, because you have previous knowledge about the different aspects of the organisation and know the bigger picture.” However, it was Hareb’s promotion to CEO that truly made headline news around the Middle East, and indeed the world. Despite being the first female CEO of a free zone in the region, and possible the world, Hareb remains unfazed about working in a male-dominated industry. However, she acknowledges her pioneering management technique is probably different, compared to her male counterparts. “I have learnt there are different sensitivities between a woman handling this job and a man handling this job,” she says. “I believe men are very much attached to their work, whilst women are more attached to family and home. I am competing with people who would die for their jobs and it starts getting hard eventually. But, once you acknowledge the situation, its possible to find a balance between personal and professional life.” Although the logistics industry is desperately lacking female talent, Hareb feels the situation should start changing in the future. “We have so many women working in the free zone now,” she says. “They are constantly progressing higher up the ranks. However, I don’t want to create a sense of gender discrimination. If the individual is capable, they will certainly progress in the organisation, regardless of being a male or a female.” More recently, Jafza is also working in close coordination with several leading companies within the free zone to maximise employment opportunities for UAE nationals. By actively supporting Emiratisation, the organisation is promoting the benefits to customers, including lower costs with no visa requirements, in addition to complete government support. “Jafza has undertaken several measures to support the Emiratisation drive,” says Hareb. “UAE nationals have proven that they have the required skills to work in various positions of responsibility, making them a real asset to the organisation.” Whilst touring the Jafza building and meeting various employees from the organisation, it becomes apparent Hareb is highly regarded by personnel. However, she admittedly shares a closer bond with the senior management team. “I have a great relationship with my staff, I feel quite loved,” she says. “A big group of the senior management are friends of mine, because we have worked together so long. This creates a positive environment, without any conflict, which makes me feel very comfortable.” Despite her approachable attitude, the rapid expansion of Jafza and growing staff numbers has left Hareb somewhat distanced from lower management. “As the organisation is expanding, the opportunity to meet lower management starts disappearing. However, I am keen to dedicate some time to visit different employees in different offices. It is important to create a relationship with them,” she says. The lower management are encouraged to communicate openly with Hareb and discuss the positive and negative aspects of working in the organisation. To create a relaxed atmosphere, Hareb normally requests private time with the employees, without senior management present. “I want them to feel comfortable,” she says. “The dialogue is more open without the individual’s manager around. If the time was available, I would love to meet all the employees, but unfortunately this is no longer possible. But, I have a competent and reliable team, so I know the projects are being handled correctly.” The massive development witnessed by Jafza shows no signs of slowing down. In particular, Jafza’s south zone is being expanded to meet high levels of demand. The project aims to develop specific industry sectors through different clusters, with an estimated cost of more than Dhs 2 billion. The south zone development has created enormous buzz within the Middle East’s logistics industry. However, Jafza faces increasingly strong competition throughout the region, as more countries attempt to gain a share of the market. As such, its biggest competitor is a little closer to home. Dubai Logistics City (DLC), part of the world’s first integrated logistics and multi-modal transport platform, is also being created in Jebel Ali. The project, which will begin operating in 2007, has already received commitments for over two million square metres of land, which equates to approximately one million square metres of warehousing. “Competition is always a healthy thing and Dubai Logistics City is definitely competition,” says Hareb. “However, demand is quite high in Dubai and we have thousands of companies waiting for space. Also, demand for free zones such as Dubai Logistics City, and others, are normally different. For example, Dubai Logistics City caters more for aircargo, whereas we cater more through the port operations. In Abu Dhabi, the demand comes from truck logistics and big industries. They have huge land in Abu Dhabi and we don’t have the space here for huge industries that consume energy and pollute the environment.” Rather than treating Jafza as competition, many of the forthcoming free zones in the region have approached the authority to discuss its successful business model. “Over the past year, we have been pushing for international business,” says Hareb. “However, the situation has changed now and several governments are chasing us to run their free zones. We are practically being chased.” Most recently, Jafza has signed a memorandum of understanding with Salalah Free Zone Corporation to assist in the development of the Omani facility. It is expected to take over the management of the Salalah zone in the near future. The deal highlights the continuing growth potential of Jafza, despite some negative predictions made by doomsayers. “Some people think the weight is shifting to the Far East,” says Hareb. “Amazingly, its actually the other way around. The Far East companies are shifting the weight to the Middle East and this region will continue to get the attention over the next few years. Things go up and down, but there is a huge opportunity in the Middle East and that’s why we are grasping these opportunities. The future looks very bright.”||**||

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