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Fujairah plans to build logistics park

Fujairah Free Zone Authority is creating its own logistics park to capitalise on the Middle East's distribution boom.

The Fujairah Free Zone Authority (FFZA) is planning to create its own logistics park to capitalise on the current distribution boom in the Middle East. The ambitious project will compete with projects such as Dubai Logistics City by offering companies cheaper terms and conditions, plus standard tax exemptions.

The logistics park represents an expansion strategy for the free zone, which has recorded 25% growth in 2005 compared to the previous year. FFZA is hoping to tempt companies to the project by offering a one-stop selection of warehousing and distribution facilities. It has already reserved a 100,000m2 plot of warehousing near its head office for the first phase of the project, which will accommodate 200 business units once it’s operational by the end of the year.

“Fujairah’s logistics city will encompass the complete range of logistics activities at affordable prices. The project is being constructed close to Fujairah’s air and sea ports, which makes it a prime location for distribution activities,” commented Sharief Habib Al Awadhi, director general, FFZA. “Besides we anticipate that the contribution of DP World to the Port of Fujairah will further boost the local logistics industry.”

Companies based in the logistics park will benefit from the exemption of customs duties on imports of all commodities and finished products for the purpose of re-export outside the UAE. Any factory machinery or raw material used in production is also exempt from duties.

“In addition to the long term cost savings, companies will also benefit from FFZA’s customer friendly policies, simplified procedures and various investment options,” added Al Awadhi.

According to Awadhi, the new logistics centre will be the springboard for a large logistics cluster to be created in the free zone. “In order to encash on the upcoming Fujairah-Dubai highway, the free zone authority is planning to develop another zone in the Al Thouban area, which is 50 Km closer to Dubai,” he added. “This compliments the logistics park and provides an added advantage for the logistics companies based here”.

Although the proposed logistics city has already created some buzz in the Middle East, a leading logistics expert has predicted some teething problems for the project.

“Sharief Habib Al Awadhi is a very capable leader and the idea of a logistics park in Fujairah has plenty of potential. However the free zone authority will benefit from addressing a couple of different issues,” commented Professor Philbert Suresh, chief knowledge officer, TransLogistique Canada. “FFZA needs to improve the level of unity with other important stakeholders, such as the Port of Fujairah and Fujairah Airport. To make the logistics park a success, these parties need to work together. If they are pulling in different directions, the project will be negatively affected.”

Fujairah Airport and the Port of Fujairah are located close to the free zone, but representatives from both ventures are yet to comment on the proposed logistics park. Their support will provide a vital aid to the free zone authorities in terms of attracting companies and skilled logistics professionals.

“There is also a shortage of logistics professionals in this country, which represents another problem,” continued Suresh. “Even Dubai is facing a skills shortage, despite its ability to attract talented people from around the world. Companies in Fujairah may face a tougher time finding the right personnel to drive their businesses forward.”

Despite the hurdles, Suresh feels Fujairah Logistics Park could become a success story if these issues are addressed. “This emirate has tremendous potential as a logistics hub,” he said. “The upcoming Fujairah-Dubai highway is definitely an asset for the project and the logistics boom currently taking place in the region could bring lots of business its way. Hopefully, once the concerns are addressed, the region will benefit from another successful logistics hub.”

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