DUBAI, July 11 (Xinhua) — Dubai Multi Commodities Centre (DMCC), the
biggest free trade zone in the United Arab Emirates (UAE), has signed a
Memorandum of Understanding (MoU) with China Council For the Promotion
Of International Trade (CCPIT), DMCC said on Wednesday.
The agreement with CCPIT, China’s national foreign trade and
investment promotion agency, was reached during DMCC’s latest Made for
Trade Live roadshow in the Chinese central city of Wuhan, the capital of
Hubei Province.
The roadshow is scheduled to also go to other Chinese big cities
including Beijing, the capital of China, and Shanghai, China’s most
populous city.
The MoU “highlights Dubai’s position as a global gateway and the
ideal partner for leading Chinese enterprises to access some of the
fastest-growing markets in Central, South and Southeast Asia, Europe,
the Middle East, Africa and beyond,” DMCC said in an e-mailed statement.
More than 15,000 companies from a wide range of industries and
sectors, including energy, financial services, agricultural products,
diamonds, gold and base metals, have set up branches through DMCC.
“Signing this agreement represents a significant step forward in
DMCC’s relationship with the Wuhan business community, and will only
serve to strengthen the strong and longstanding economic ties between
Dubai and China,” said Ahmed Bin Sulayem, executive chairman of DMCC.
For Zhang Aiming, deputy chairman of CCPIT Hubei Branch, the MoU with
DMCC will “promote the significant commercial opportunities available
to Chinese companies in Dubai.”
“We look forward to working alongside the world’s leading free zone
and connecting the Wuhan business community to exciting growth markets
through the global hub of Dubai,” Zhang said.
Last year, DMCC’s Dubai Gold and Commodities Exchange became the
first foreign exchange to list Shanghai Gold Futures outside China.
About 300,000 Chinese nationals live in the UAE, while over 4,000 Chinese businesses operate in the Gulf state.
Africa Free Zone
Association (AFZA) is a non-governmental and non-profit organisation. It is an
association of all the Free Trade Zones, Special Economic Zones, Export
Processing Zones, Multi-Facility Zone, Industrial Development Zones and Single
Factory Zones in Africa. It is an association formed by its members in Cape
Town, South Africa in 2004.
The Association
was formed to create a change in the way we perceive and operate Free Zones in
this part of the world. It is also meant to increase members knowledge, skill wages and capital. This is a
job that requires all hands being on deck with contributory ideas, coordinated
by the Secretariat of the Association.
It is obvious
that more and more countries, developed and developing, are recognising a new
paradigm of free zone development and management.
The new paradigm
is more dynamic, investment intensive, management driven, and enabling and
integrated economic development tool as opposed to the old.
This new
paradigm requires concerted efforts, not only on the individual zone level but
collective improvement of ideas to enable us all move progressively, especially
in this world of Global Value Chain (GVC) and the desiring ecosystem that
progresses a scheme of this nature.
As opposed to
international trade of the 20th century, today’s trade in
intermediate goods and services are greater than that of final goods. The under
listed bullet points serve as compelling fortress for the present day trade
dynamics.
·
Importance
in intra-industry trade is rapidly growing;
·
International
production trade and investment are now organised within global value chain.
·
Different
stages of production processes are located across different countries.
·
The
whole process from raw materials to finished products is increasingly carried
out wherever the necessary skills/materials are available or competitive cost
and quantity.
·
These
activities includes: design, production of components, assembling, marketing,
and customer services, Research &Development, etc.
The message here
is that export production no longer represents a 100 per cent value-added
contribution to the economy.
The above
analysis is presented to show why our togetherness would have been serving us
better through knowledge sharing and networking.
We need to give
ourselves the skills we need for jobs of the future and not for free zones of
yesterday.
Though AFZA is a
non-profit organisation but has responsibility to its members.
Members should
run AFZA as a business if they plan to benefit from the association. In the
light of this, members should ensure the association is positioned in a manner
that yield enduring dividend. The following should also be adopted.
ü The association
should build credible data bank for networking opportunities.
ü Increase the
visibility for activities of member zones in the continent;
ü Offer members
education, information and news so as to be abreast with the current idea and
tenets of free zones with the required creativity, innovation and entrepreneurship.
Unfortunately,
member’s zones and supervising authorities would not want to cooperate in
submitting to the secretariat’s details of zones in their country for data bank
and would not also want to pay annual dues to enable the secretariat function and
carry out benign activities. It must be remembered that you cannot prepare
omelette without breaking eggs.
It is a candid declaration that if this
laudable effort in trying to convert the collective initiative into business
must be sustained, then sacrifice should serve as the compass.
A Free Zone blog
was established to help educate members and pass news, recognising that Africa
has all it takes to attract the establishment of viable Free Trade Zone to
speed up development in the continent.
Free Zones is
bound to attract positive business variables to the development of Africa: Be
it rail, ports, highways and aviation. As a reminder, November 7 and November
9, Africa Business Community will converge on South Africa, for Africa
investment forum. Stakeholders must take advantage of this stage to exchange
ideas and share workability of policies around the industry. We all must
remember that Free Trade Zone is both a development and wealth creation driver.
A cursory look
at the economic indices of Africa shows a drastic shrink on inflow of funds
from oil and gas with a conversely increases in capital from service industry
and manufacturing, especially in the food and agricultural industry.
This has
incontrovertibly shown that investment built around production and
manufacturing of food related products for export remains the future of our
continent.
We must change the game and close the
investment gap in the continent especially with the continental Free Trade
Association (CFTA) initiative which, as far as I am concern, remains pivotal to
actualising the vision of CFTA initiative.
We
cannot stand alone and get to where we want to be. An annual conference of the
over 600 free zones in the continent is imperative. This will be padded with
training that will assist Free Zone operatives and Free Zone developing
companies with requisite knowledge.
With Africa’s
population set to be two billion by 2050, we have the market and should set the
pace. We must take Africa’s growth story further.
Unfortunately the
African Union (AU) has been lukewarm toward the happenings around the Free
Zones in Africa. Rather than stay aloof, the union should galvanize the
activities of free zones through their department of Trade and industry. With
their support, we can stage the fourth industrial revelation.
KAMPALA,
Uganda–Uganda Free Zones Authority (UFZA) Board of Director were inaugurated
for a new term by the Minister of Finance Planning and Economic Development
Matia Kas aija.
The Board
consists of 2 representatives from the Private Sector and include; the
Chairperson Frederick Kiwanuka and the Vice Chairperson, Grace Achire Labong,
Stephen Kasangaki from Ministry of Finance Planning and Economic Development
(MoFPED), Cleopas Ndorweire from the Ministry of Trade Industries and
Cooperatives (MTIC), Robert. V. Nyombi from Uganda Land Commission (ULC),
Lawrence Byensi from Uganda Investment Authority (UIA) and Stella Nyapendi Chombo
an ex-officio member from Uganda Revenue Authority (URA).
While
presiding over the inauguration ceremony, Kasaija, reiterated that the
authority is mandate to establish, develop, manage, market, maintain, supervise
and control Free Zones in Uganda under the Free Zones Act of 2014.
He
reminded the Board stick to and work towards achieving government’s main policy
objectives of establishing Free Zones which is to promote investment in the
manufacturing and processing sector in order to boost industrialization and
exports
The
Minister tasked the Board of Directors to ensure that the Authority’s
objectives are aligned to Government’s aspirations as enshrined in the National
Development Plan II and Vision 2040.
He
further urged the Board to spearhead the implementation of the Authority’s
Strategic Plan, whose goal is to foster industrialisation, export-oriented
investment and employment through establishment of strong and competitive Free
Zones Schemes.
Kasaija
commended UFZA for the achievements attained so far and urged the Authority to
work even harder on improving the impact of the Free Zones Schemes in Uganda.
The Egina floating production, storage and
offloading vessel docked at the Ladol Free Trade Zone Port in Lagos. Photographer: George Osodi/Bloomberg
By Paul Wallace, Tope Alake,
and Anthony Sguazzin
Company May Raise Capital Within Two
Years, MD Jadesimi say
Ladol hosting Total’s Egina rig
completion-works by Samsung
Ladol,
a logistics hub for the offshore oil industry in Lagos, Nigeria, is mulling a
stock-market listing and corporate bonds to expand its facilities and attract
more business from major production companies.
Family-owned Ladol, where Samsung Heavy
Industries Co. Ltd is completing the construction of one of the world’s
largest floating rigs for Total SA, will look to raise capital over the
next two years, according to its managing director.
“We are very open” to tapping public equity
and debt markets, Amy Jadesimi said in an interview on May 22, without
disclosing how much she wanted to issue. “The Nigerian Stock Exchange has done
a lot to restructure in the last few years to make themselves attractive to a
company like ours, so we will definitely consider that. We will consider
listing on the bond market too.”
Ladol aims to build
more infrastructure on its roughly 100-hectare (247-acre) free trade zone on an
island across Apapa, Lagos’s main port. That includes roads, quay walls and
fabrication equipment, according to Jadesimi, a trained doctor and Stanford
graduate who used to work on mergers and acquisitions at Goldman Sachs Group
Inc.
High-Value Project
Total’s $4 billion
Egina floating production, storage and offloading vessel is docked at Ladol.
Construction of the FPSO, which is designed to hold 2.3 million barrels of oil,
began in South Korea, before it was shipped to Ladol in January for the final
stages. It is scheduled to set sail in July for the Egina deepwater field,
which is about 80 miles off the Niger River delta coastline and will produce
200,000 barrels a day.
The project is seen
as a test of the Nigerian government’s drive to build an oil-services industry
and get more international companies to use local support-firms.
Previously, Samsung
and other shipbuilders would have done all the work outside of Nigeria,
Jadesimi said from her Lagos office.
“This is a massive
industrial project,” she said. “The impact this has in terms of Nigeria being
seen as a place where you can carry out challenging, high-value projects is
really important. It’s critical to show we can do it.”
Jadesimi, whose family and other
investors have put about $500 million into Ladol in the past decade, said the
firm would probably seek to work on two more upcoming FPSO projects: those for
the Bonga South West and Zabazaba-Etan fields, both off the coast of
Nigeria. Royal Dutch Shell is set to make a final investment decision on
the former this year, while Eni SpA will develop the latter. Each FPSO
will pump about 150,000 barrels daily, almost one-tenth of Nigeria’s current
crude production of 1.8 million barrels a day.
“We are waiting and
hoping in the next month or two to have a clearer indication of what is going
to happen with those,” Jadesimi said. “If they are delayed, we can look for
smaller projects. If not, we will probably be tied up with them straight away.”
Liam Fox had recently spoken of
‘reinvigorating’ the Commonwealth partnership with a host of trade deals after
Brexit. Photograph: Hagen Hopkins/Getty Images
The EU has leapt ahead of
the UK in the pursuit of free trade deals with Australia and New Zealand after
member states gave the green light for talks to start within weeks.
With Theresa May
insistent that leaving the EU will involve exiting the customs union and
the bloc’s external commercial policy, the announcement from Brussels opens up
the possibility that the EU could enjoy better terms with the two Commonwealth
nations after Brexit than the UK will.
New Zealand’s trade
minister, David Parker, said the UK’s withdrawal did not diminish the huge
potential gains for his country that would come from breaking down trade
barriers with the remaining 27 member states.
He said: “The EU is our
third-largest trading partner, with two-way trade worth more than $20bn
[£10.3bn]. Even excluding the UK, our trade with the EU is worth about $16bn
annually.”
The international trade
secretary, Liam Fox, had recently spoken of “reinvigorating” the Commonwealth
partnership with a host of trade deals after Brexit, labelled “empire 2.0” by
sceptical Whitehall officials.
But the UK will not be
able to start its negotiations over future trade with New Zealand and Australia
until 30 March 2019. The European commission president, Jean-Claude Juncker,
has vowed to complete the EU’s talks with the two countries by 31 October of
that year, when his time in office expires.
Brussels is eyeing up
export opportunities for motor equipment, machinery, chemicals, processed foods
and services. In recent months, the EU has struck deals with Canada, Japan,
Singapore, Vietnam and Mexico.
Last week May privately
proposed to Ireland and to Donald Tusk, the European council president, her
government’s concept of a “backstop” to avoid a hard border on the island of
Ireland, which would involve the UK temporarily staying in the customs union
beyond the transition period.
It would come into force
should a satisfactory free trade deal or bespoke technological solution fail to
emerge that can solve the border problem. Formal negotiations in Brussels
restarted on Tuesday and are scheduled to last until Thursday.
However, in a sign that
the Brexiters in the cabinet are no closer to accepting the idea of staying in
a customs union, the environment secretary, Michael Gove, was insistent on
Tuesday morning that it could only be a temporary solution.
He told BBC Radio 4’s
Today programme: “It means what it says on the tin. That temporary means not
permanent. It means for a short period of time.
“I’m not going to
pre-empt the eventual position that we take after we have negotiated with the
European Union and with Ireland … In the same way as when you move
house, a bridging loan is meant to be temporary, but whether that’s weeks or
months, we don’t know precisely.”
The EU has made it clear
before its negotiations with Australia and New Zealand that the size of its
market offers bountiful opportunities, without the need for the bloc to expose
its agricultural sector to cheap imports.
The mandate given to the
commission for the talks, due to be formally launched in Wellington and
Canberra next month, envisages special treatment for agricultural goods in
order to protect European producers.
In contrast, there are
some voices in the Brexiter wing of the Conservative party who would like to
radically liberalise the farming sector in the UK, and open it up to challenge
from highly efficient antipodean agricultural exporters.
Responding after EU
foreign ministers announced the talks, Cecilia Malmström, the European
commissioner for trade, said: “Together, we will now negotiate win-win trade
deals that create new opportunities for our businesses, as well as safeguard
high standards in key areas such as sustainable development.
“Starting these talks
between likeminded partners sends a strong signal at a time where many are
taking the easy road of protectionism.”
EU approves free trade
negotiations with Australia and NZ
The European Union has
beaten Britain to the punch, formally approving
free trade negotiations with Australia. SBS News spoke exclusively with the
EU’s trade commissioner.
The
European Union will begin drafting a free trade agreement (FTA) with Australia
and New Zealand in July, the EU trade commissioner has revealed.
In
an exclusive interview with SBS News, Cecilia Malmström said she will travel to
Australia in June to “politically launch” talks with Trade Minister
Steven Ciobo, and the “technical work” will kick off in July.
“We
will be working as quickly as possible, but I can’t tell you how long it will
take,” she said.
Ms Malmström told
SBS News the FTA will be mutually beneficial for Australia and the
EU.
“Australia
will have access to the EU single market and 500 million people,” she
said.
“We
will be looking at facilitating trade in all areas – in goods and services,
public procurement.
We
will also be talking about sustainable development, about energy, about
regulatory cooperation. So getting away with most hindrances that are between
us today.”
The
trade commissioner added that the FTA will ensure the EU has a presence in the
Asia-Pacific region.
“Australia,
like many other countries, have gone into this renewed TPP (Trade-Pacific
Partnership). It is important for us to show that we are present in the region.
So it is a strategic decision as well,” she said.
“We prepared
these negotiations long ago and there is a moment now when we are sort of
appearing to be a circle of friends who do believe in multilateralism, in good
trade agreements,” she said.
“And of course,
the EU and Australia share so many values and have so many things in common:
history, language, and you’re even in Eurovision now. So it’s high time
that we also have a trade agreement between us.”
The European
Commission on Tuesday confirmed news of the FTA negotiations, first revealed by
SBS News.
“The Commission
welcomes today’s adoption by the Council of the negotiating directives for free
trade agreements with Australia and New Zealand. The preparations – which
included an impact assessment for both agreements – are now complete and formal
negotiations can begin,” the commission said in a statement.
Plans for
“fast-tracked” FTA negotiations were announced by European Commission president
Jean-Claude Juncker during his annual state of the union address to the
European Parliament in Strasbourg in September.
President Juncker
expressed a desire to complete negotiations and secure a deal before the next
European elections, which will take place in May, two months after Brexit.
In the early part of this blog , we posted the definition of Free Zone to enable us be on the same page with our numerous readers, including those who are just beginning to hear and know about the Free Zone concept.
In Africa, there are many successful enterprises built around free zones. I was impressed with what I saw with the development of such enterprises in Mombasa – Kenya, Tema – Ghana and combination industries in Calabar, Nigeria. Also the enterprises in the IDZs of South Africa are legendary.
The key factors in an enterprise operation are basically the same all over the globe and some of them include:
– Applying the best cost strategy
– Adapting to change in the global Economy
– Persevering in the obstacles
1. APPLYING/MAINTAINING THE BEST COST STRATEGY: this is one of the first among the many elements that drives a company into looking for a free zone. It is also one of the conditions that drive the incentives of host government. The whole idea is working towards being able to compete at the international markets as well dominating the market, where possible.
Many multinational enterprises have sought relocation to a Free Trade Zone or Special Economic Zone when they cannot maintain low cost competitive edge of their products with the many zones world over and about 700 in Africa, a company selects a zone based on some reasons that will at the end enable it achieve its objective of competing favourably at the international market.
Some of the conditions are:
– Proximity to the customers targeted
– Low cost labour and availability of a good labour pool
– Competitive duty rate structure
– Well managed Free Zone offering specific services to support start-up companies – availability of ‘shelter plan’. A country in Southern Africa once paid for the relocation of a plant from where they were coming from and took up the labour cost of the employed locals for two years to enable the company adjust.
– Security: this has posed a lot of problems to companies especially in the developing world and has to be a fundamental factor in any enterprises decisions – making process. Enterprises must heighten their security; reviewing their long-term; and evaluating other alternatives. In my consultancy services, I have recommended this to zone manager/developers. The levels of security in zone rub off on the companies in the zone.
2. ADAPTING TO CHANGE IN THE GLOBAL ECONOMY: The new environment may not be easy especially at the speed at which the world is moving.
Countries and companies strategies change overtime in response to progressive business developments. Therefore the decision of companies to locate into a Free Zone is driven by the conditions that were lacking where they were.
Some of the considerations that should be top most in the mind of any company looking into a Zone, among many, are:
– Stable and corrupt free government
– Outstanding economic bureau (EDB) staffed with competent professionals. Supports from EDBs are always helpful.
– Availability of training scheme for new employee of foreign enterprise;
– Special conditions/incentives
– Excellent infrastructure along with one of the world’s best communication networks and sea ports
– Educated labour pool: skilled, experienced management and technical people.
– Living conditions for expatriate in terms of housing schools, medicals, food etc.
Another aspect of adaptability is changing objectives based on the experience overtime. A company can start with the objective of being a “LOW-COST PRODUCER” and overtime maybe modified to become the “BEST-COST PRODUCER”.
Having the lowest labour cost is only a small aspect of the challenges. Coming to terms with the costs of the Free Zone operations requires quantifying the following:
– Total Labour Cost – including productivity
– Total cost of quality
– Total cost of expatriates
– Recruitment expenses
– Training expenses
The ability to understand and manage the business of the enterprise around these elements will lead to “Best-cost producer” enterprises.
Another area of adaptability is, as host government move into new economic development scheme, so should the companies inside the zone change to adapt. Government changes will involve incentives, policies, training and Research & Development, investment programmes to support the rapid global changes in technology-telecommunications, electronics, aerospace, and high tech research parks which are the priority of today.
Adaptability is one of the most underestimated factors in the management of the enterprises in a zone. It has immensely posed difficulty in transferring know-how and technology for start-up business. Transfer of technology and knowledge fail because of these primary reasons:
– Languages and cultural differences.
– Expatriates not knowing how to work effectively in the foreign environment.
– New employees lacked any industrial experience.
– Constant turnover of employee. This places a huge cost in terms of productivity, quality, training and profitability. The associated management frustration to this is high. There are a number of external factors contributing to turnover problems, especially with regards to young ones and first time employed coming from neighbouring towns and cities:
– Inadequate and limiting housing
– Security for women
– Poor public transportation
– Availability of day care for children
– Culture of strong family ties which always resulted in an average of high percentage of new employees not returning after going home for Christmas.
All these can be taken care of by “shelter plan” of zones. Shelter plan is a valuable service zones can provide their foreign clients to cushion some of their problems.
3. PERSEVERANCE IN THE OBSTACLES: This is one key factor to be given consideration by both zone operators and enterprise managers. This has to do with languages, cultures, economic and political differences. Persevering in spite of the obstacles, opposition and discouragement is critical.
Example of these obstacles, opposition and discouragement could be:
– Release or clearing of goods arriving at the port of entry
– Constant inspection of warehouses and residences by the police and custom officers.
– Power and water disruptions at regular intervals
These factors could cause significant drain on management time and clearly impede the efficiencies of companies which are not to the best interests of the zones and host country. With steadfastness such as changing the mind-sets, sustaining the work expectations, dealing with the outside interference, which are very time consuming, a company can still achieve its goal in spite of these aforementioned challenges.
The above information articulated is aim to be a guide to both zone operators and investors, as well as consultants. Also can be used in evaluating the effectiveness of zones services and incentives in today’s rapidly changing global economy, more so, now that the scheme is moving to “Free Zone of the Future” initiative.
The problem with most human endeavour is the
problem of moving with the tide and effect changes when it is needed.
There have been profound changes in the Free Zone
concept and development approach, since the first modern zone was established
in Ireland in 1959, and even more fundamental changes are foreseen over the
next decade with full implementation of the WTO Agreement.
This can be consented to by the expansion in the
types of Zones in both developing and industrialised countries. Countries are
now facilitating the development of Zones to meet specific objectives and
target markets. Traditional Export Processing Zones (EPZs) are increasingly being augmented and most times supplanted by new, more flexible arrangements. Hybrid EPZs
are the preferred model in most Central and East European Countries and
increasingly among many Latin American countries. Commercial Free Zones have
been the traditional development norm among most Middle East and North African
Countries, but this is a recent innovation in Asia, where Zone development has
emphasized export manufacturing.
Free Zones were traditionally developed as isolated
enclaves both in terms of their underlying policy framework, and in terms of
geographic location. Access to a generous set of incentives and privileges were
rigidly controlled. Qualifying firms typically had to be 80-100 percent export
oriented, for firms engaged in manufacturing activities.
Zones were physically located in relatively remote
areas and near transport hubs, viewed primarily as “growth poles” for regional
development. Zones were exclusively developed and managed by government bodies.
The above rigid approach has changed fundamentally
over the past two decades and it will continue to change, one of the major
changes in thinking has been to permit Zones to develop country wide and not
restrict them to growth poles or other designated areas. This may be in
response to the growing desire of private Zones developers and the increasing
number of private property development groups.
This blog focuses on the activities and happenings
around the free zones in Africa and the world. The blog will be educating and
informing the free zone operators, managers, opinion leaders and other
stakeholders about the scheme in the continent.
You will be getting information from these segments;
Experts corner;
News;
CEO’s voice; coming from the office of
the Executive Secretary of African Free
Zone Association (AFZA) and the Chairman/CEO of Carlcon Group (the owners of
the blog).
Chris Ndibe at Tanger Med Free Zone, Morocco
For the purpose of enlightenment, Free Zone is
defined as a strategy for economic development usually characterized by a
special regulatory and incentive regime, often in an enclave clearly delineated
and administratively thought of as being outside a nation’s Customs and trade
regime to attract both local and foreign investment. The special regulatory and
fiscal regimes allows for freedom of operation at competitive costs.
The concept of Free Trade Zone is very powerful,
that is why more and more countries are recognizing the new paradigm of Free
Trade Zones. While the old Free Trade Zone was often described as a static,
labour- intensive, incentive driven, and an exploitative enclave. The new zone
paradigm is more dynamic, investment-intensive, and an integrated economic
tool.
This blog therefore will enable you understand the
concept and better manage free zone in your country.
