Where does the Dubai Multi Commodities Centre (DMCC) stand today?
BIN SULAYEM: The Dubai Multi Commodities Centre is known in this region as the largest and fastest growing free zone. It has over 9,500 members. A lot of them are multinationals, international businesses within the commodities and the gold sector and the energy sector. We're also very popular with the SME markets and the start-ups as well. We have captured a number of strategic businesses, even a traffic control agency has moved in, which has been set up in the early 1960s. AstroLabs, which is in partnership with Google, have set up in DMCC. These are all positive signs that the area has not only become a reality, it's become a magnet for all kinds of businesses to flourish and attract more and more businesses.
What new initiatives is the DMCC involved in?
BIN SULAYEM: We are looking at a number of businesses where if you look at the Dubai Gold and Commodities Exchange, we're looking at a few currency pairs. We have been looking at the Dubai Gold Spot Contracts, which should be launched in the next few months. We just need to make sure that the market makers are in place and the timing is right. We do not like to rush any listing of a contract on the exchange.
Coming to the Dubai Multi Commodities Centre, we're well on our way to constructing the One JLT tower which is a G+14 building, a glass box building tailor-made for the high-level corporations; it's a LEED Gold building.
The other initiative is the Burj 2020 and the expansion. The Burj 2020 is a commercial tower. We are aiming to build the tallest commercial tower in the world. We have named it Burj 2020 in honor of the Dubai's win of hosting the Expo 2020, and the target is likely in 2020, maybe earlier. We are very optimistic about that initiative. It will be surrounded by a few other commercial buildings, residential, and other facilities. We will likely use a similar process of financing and developing that expansion.
One of our first products was the DMCC Gold Sukuk, which was a Shariah-compliant gold bond, and we raised $200m, and paid those gold bonds on time. It was called the gold bonds because investors can remit their earnings, their monies from there, either in cash, dollars, or in gold. I believe it was the first one to be rated in Dubai, and we paid those debts on time. So we had a nice, successful, story there.
How has the market reacted to the One JLT Tower and the Burj 2020 Tower?
BIN SULAYEM: The One JLT is tailor-made for the multinationals that want to have their own address, maybe with another company, but do not necessarily want to be in a big tower. There's a big market for that here actually, there's a shortage of that; you can't find it in a lot of these buildings. I believe that's pretty much why Standard Chartered had their own glass box building in Downtown, and not in the usual free zones. We pay attention to what the market needs are; we listen more than we preach to the market.
Going to the Burj 2020 and the surrounding buildings, the JLT is going to have to expand, and we've had that expansion area. So there's an aspect of the market requirement and us running out of office space, very likely in the short-term more than the long-term. There's the need of businesses having 5 to 10 to 15 floors; this will be one of the few opportunities where they would have it at one of the top two addresses in Dubai, if not maybe the best one for office space.
This is their only opportunity because if you look at the regionâ€™s market, not many are bullish on building a high-rise office building. They actually stray away from that and hotels and apartments are much easier for them to get finance and all that. We on the other hand have an edge and advantage over others where we have the track record, we have the confidence, and we're known to actually see through projects and actually maybe move into it. In this case, we did move into Al Mas Tower. It's not just your regular property developer selling and all that. We're actually the regulator, we're always engaged with our members, and I believe that pays a huge role in the success of DMCC.
What makes Dubai a competitive location as a commodity trading hub?
BIN SULAYEM: Dubai has proven itself a strong magnet for new businesses and we have also focused on retaining the members and companies we have attracted early on. There's a lot of trust, that we value a lot, from the international businesses and the international communities that come here, whether it's touristic or whether it's business, and there's a lot of consistency.
In Dubai's case, we are the establishment for the rest of the Middle East and actually, we serve the MENA region, the MENASA region, and we compliment centers like Singapore and Hong Kong.
The Dubai gold business was about $6m, in the early years, in 2002, and we have reached over $75bn. With diamonds, it was around $3m, and that has grown to $40bn, making Dubai one of the top three diamond centers. The tea has been growing and today, in the tea industry, Dubai captures around 60% of market share for tea re-exports.
The day we put barriers around and try to be a protectionist business community, that's our downfall, and Dubai understands that very well. When the leaders and rulers of Dubai look back in history, what made Dubai a competitive business environment is when they dropped the taxes for the merchants in the early history of Dubai; and likely, that's the first free zone.
With DMCC's case, when it was announced, a number of businesses did not make sense. People didn't believe that Dubai had any business being a gold center, a diamond center, and when we announced a tea center, you know, there were even comments from within Dubai, what's the reason for that?
But people may not understand this about His Highness Sheikh Mohammed Bin Rashid Al Maktoum, is that you have to start somewhere. You have to explore. You don't just form a view or listen to the negativity and then not give a chance to explore.
So I refer to this quote to look into the positives of the opportunity and the challenges, not the challenges within the opportunities first, so that brings in progress.
In DMCC's case, the Dubai gold business was about $6m, in the early years, in 2002, and we have reached over $75bn. With diamonds, it was around $3m, and that has grown to $40bn, making Dubai one of the top three diamond centers. The tea has been growing and today, in the tea industry, Dubai captures around 60% of market share for tea re-exports. So it's making its strides, but at the same time, it's not the end-game. We're looking to capitalize on what we've achieved, whether it's the awards, whether it's the amount of business, whether it's being the largest free zone in the UAE, or maybe the most successful one; we will not sit on that, we will actually use that to prove our case for the expansion and other opportunities.
DMCC was recently named as the â€˜Global Free Zone of the Year for SMEsâ€™ by fDi magazine. What makes DMCC so accessible to SMEs?
BIN SULAYEM: I believe it took two parties to make this happen. The SMEs, it was their time over the last couple of years. With the dip in the property rates, as challenging as that might be for the developers, and we sold this tower to end users before that time, but for the rest of Dubai, the cost of living, the cost of setting up an office has all gone down, which attracted the opportunity to bring in SMEs. In our view, these SMEs, these start-ups, can be the next Facebook, can be the next multi-billion multinational companies.
Business has to start at some point, and it's very important for us to add diversity. They've taken advantage of the opportunity that was exposed, and if it wasn't for the correction in the property, doing business in Dubai would be very expensive. We see a little bit of that now come creeping back up with more traffic and property prices going up, but at least those SMEs that have come in in the last year or three years or four years have secured their residence, their contracts, and their costs, and they have a running business. Some of them have even covered their costs within four or five months of starting; that's how attractive doing business here was.
What are your future goals for DMCC?
BIN SULAYEM: Not to take the tools we have today for granted, not to get complacent. You know, as much as we've gained awards, experiences, and it's great to be likely the most successful free zone established by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, for the expansion to be a success, we have to leave no stone unturned, we have to leave nothing to chance. So I'd like to approach the expansion and the future of this free zone with the same hunger that I had and I still have when I joined DMCC over twelve years ago. So I believe that a lot of the successes that would come has to do with our attitude towards the business.