DUBAI INDUSTRIAL CITY: DEVELOPING THE MANUFACTURING AND

UNCLAS SECTION 01 OF 02 DUBAI 000286

SENSITIVE
SIPDIS

NEA/ARP MASILKO

E.O. 12958: N/A
TAGS: ECON EINV ETRD BTIO PGOV ENRG AE
SUBJECT: DUBAI INDUSTRIAL CITY: DEVELOPING THE MANUFACTURING AND
INDUSTRIAL SECTORS OF DUBAI

REF: A) DUBAI 249. B) DUBAI 101

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Sensitive but Unclassified; please protect accordingly. Also
contains business proprietary information.


1. (U) Summary: A massive and ambitious Dubai Industrial City
(DIC) aims to expand an oft-forgotten (and growing) source of
Dubai's GDP: manufacturing and industry. Targeting the
"transport and logistic services" and "trade and storage"
building blocks of Sheikh Mohammed bin Rashid's 2015 Strategic
Plan, the 55 square kilometer complex will focus on a number of
complementary elements: A six-zone manufacturing sector; a
dedicated logistics component; a standards compliance body; a
centralized administrative facility; technical and vocational
training facilities; commercial and residential real estate,
including hotels, convention centers, schools, hospitals, and
other modern city essentials; and labor accommodation facilities
eventually able to house approximately 90,000 laborers. Though
distinct from the Dubai World Central (DWC) development (ref A),
the fact that DIC is located adjacent to DWC - particularly the
new Al Maktoum International Airport - positions DIC as a
powerful contributor to the industrial and manufacturing
components of Dubai's economic engine.


2. (U) Summary continued: A number of key infrastructure
developments at DIC are progressing, including partial roadway,
power, and sewage facilities. Full infrastructure completion is
scheduled for 2009. Currently, two factories are operating in
DIC, with a further nine under construction. When ultimately
finished in 2015, DIC is expected to house between 300,000 and
500,000 people. End summary.

DIC: A Component of Sheikh Mohammad's 2015 Vision

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3. (U) Under development by Tatweer, a subsidiary of the
parastatal conglomerate Dubai Holding, DIC is poised to
significantly enhance Dubai's contribution to the UAE's
industrial and manufacturing sectors and further diversify the
emirate's economy. Located adjacent to the Al Maktoum
International Airport now under development (part of the much
larger Dubai World Central concept designed to offer a broad
galaxy of services) and the expanding Jebel Ali Port and Free
Zone, DIC's manufacturing and supplementary service offerings
will complement the existing facilities and planned enhancements
of these projects.

Transforming Dubai's Manufacturing Sector

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4. (SBU) According to DIC CEO Rashid Al Ansari, the core nexus
of DIC will be six separate, yet interdependent manufacturing
zones, each chosen based on strong historical and prospective
growth:

-- 1) Machinery and Mechanical Equipment (turbines, electrical
generation, home appliances, etc.);

-- 2) Transportation Equipment and Parts, (equipment designed
for vehicles, aircraft, and vessels);

-- 3) Base Metals (aluminum, steel, precious metals, etc.);

-- 4) Chemicals (with a focus toward high-end industrial,
medical, and pharmaceutical products);

-- 5) Mineral Products; and

-- 6) Food and Beverage (mainly high value-added food and
beverage products for the GCC and MENA region).

The company has received commitments from a number of
international conglomerates including Porshe, BMW, DHL, Siemens,
and BASF, just to name a few.

Protecting the Dubai Brand: Ensuring Quality, Health, Safety,
and Environmental Standards (QHSE)

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5. (SBU) Developed by DIC as an oversight function to ensure
strict international QHSE compatibility, the 'Maqayees'
(translated as 'standards') Center will review and approve
prospective DIC tenant applications, monitor construction
progress throughout the facility, scrutinize each tenant's QHSE
practices, and manage the "Dubai Quality Mark," a DIC-developed

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trademark intended to establish and maintain international QHSE
standards. Al Ansari stressed that DIC was committed to
maintaining the highest levels of quality and noted that in
2007, 35 percent of DIC tenant applications were rejected
because the prospective companies failed to meet DIC's minimum
established standards.

Supplemental Services Allow Tenants to Focus on Core Business

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6. (U) In addition to the six targeted manufacturing zones, DIC
plans a range of complementary, value-added business services
for tenant companies and external clients, allowing customers to
concentrate on their core business functions. TransPark Dubai
(also trademarked by DIC) will offer a full range of logistics
services, such as specialized warehousing, packaging, and
freight forwarding. Equally important, the close proximity of
the new Al Maktoum Airport and the Jebel Ali Port (either within
approximately 10 minutes' drive) will significantly enhance the
comparative advantages of DIC's logistics offerings.


7. (U) DIC also features a centralized, "one stop shopping"
administrative facility that houses representatives from
relevant government authorities, as well as insurance, banking,
and associated hospitality services. Dubai Industrial Academy -
the first of its kind in Dubai - will provide on-site vocational
and academic instruction and certification in a number of
different fields, including manufacturing, in addition to oil,
gas and petro-chemical engineering.


8. (U) Despite its industrial focus, DIC will also incorporate
residential and commercial developments designed to complement
its tenant companies. Planned amenities include residential
housing, retail shopping, hotels, convention/business centers,
hospitals, civil defense facilities, and other community
amenities. Additionally, on-site labor accommodations spread
throughout the site will ultimately provide modern,
self-contained housing for an anticipated 87,500 laborers.
(Currently, there are approximately 10,000 laborers living in
DIC).

Can DEWA Step Up to the Challenge?

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9. (SBU) When asked about power and water supplies to support
DIC's ambitions, Al Ansari confirmed that Dubai Electrical and
Water Authority (DEWA) has agreed to supply all of the
facility's anticipated demands. Pressed about past and
projected future power shortages in Dubai and the other
emirates, he acknowledged the challenges faced by some companies
in obtaining sufficient power (ref B),but remained optimistic
that DEWA would/could ultimately meet its obligations. (During
a tour of the facility, Pol/Econ Officer noted several recently
or partially-completed DEWA substations throughout the complex).


Comment

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10. (SBU) Dubai is often thought of as a tourist and financial
hub, but manufacturing and industry are important diversifying
elements to the emirate's growing economy. The establishment
and completion of DIC would strengthen Dubai's standing as a
regional leader in manufacturing and industry, especially in the
six specialized focus areas. Moreover, the development of these
55 square kilometers adjacent to the 140 square kilometers
designated for DWC, as well as the ever-expanding Jebel Ali
Port, will facilitate Dubai's regional and international
exposure in these sectors. Whether or not DEWA can provide what
will no doubt be a massive demand for electricity and water
resources, however, is a crucial, yet unanswered question.
Should they fail to deliver as promised, the entire concept
could stall. End comment.
MAGLEBY