Dafza expo innovation challenge

1. Dafza Expo 2015
Innovation Challenge
Case study
Prepared by DAFZA
Sept 2015

2. Presentation Outline
① Introduction
② Brief presentation of Free Trade Zones and their essential role in the
Global Economy
③ Why innovation is critical and important within this area.
④ Presentation of DAFZA (basic details to give participants an
overview)
⑤ Presentation of the Challenge (a description of the area (location),
target, and the focus area of the challenge)
⑥ Market overview/ fact sheet
⑦ Challenges related to food distribution regionally & locally
⑧Q&A

3. • Established in 1996, wholly owned by the
Government of Dubai, located right next
to Dubai airport, in the heart of Dubai.
• 169,000 sqm office space – 13 office
buildings in total
• 90,396 sqm warehouse space – 256
warehouses in total. Excl al Qusais.
• Lists over 1,600 companies
• 15,000+ investor employees
• Last two year employment growth:
Aviation 18%; Logistics 14 % ; Electrical and
electronic materials 13%
Free Zones & DAFZA Background
Free Trade Zones and their
essential role in the Global
Economy
Dubai Airport Freezone
A Snapshot
• Minimize int’l trade barriers eg tariffs, import duties, etc.
• Enhance global market presence by attracting new
business and foreign investments – FDI’s.
• Promote employment
• Encourage free trade
• Contribute to GDP growth
• Facilitate exchange of goods & services.
• 100% corporate & personal income tax exemption
• 100% repatriation of capital and profits
• No customs duty
• No currency restrictions
• Business conducive environment.

4. • Help produce innovative ideas for DAFZAs new free zone park in al Qusais,
within the food industry value chain concerning Al Qusais Light Industrial
Units - LIU’s.
• Ideas must be achievable, usable and implementable for real world use.
• Ideas must be substantiated enough and supported by research, not by
“personal” thoughts.
• Ideas should not require long development time by DAFZA post event.
• Ideas must have a clear benefit to DAFZA, be it monetary or process
benefits
Context

5. • The Dubai Airport Freezone Authority (DAFZA) is the governing body for
trade licenses and visas to international companies that are willing to
conduct business within DAFZA free-zone areas in Dubai. DAFZA offers
companies a modern environment (offices and warehouses also known as
LIU – Light Industrial Units), enabling services, tax & duty exemptions,
complete business ownership and full repatriation of earnings. (Read more:
http://www.dafz.ae/en)
• In summary, DAFZA plays a crucial role in enabling companies to expand
into MENA region by providing the necessary infrastructure, services and
access. In this context, DAFZA is seeking to explore innovative ideas to
serve its customers more effectively and efficiently within its new free-zone
plot at Al Qusais.
Background to the innovation challenge

6. About DAFZA’s new free-zone at Al Qusais
• DAFZA’s new plot is located in Al Qusais Industrial Area
and focuses on the in-bound logistics, warehousing and
distribution needs of food industry and other industries
including electronics, luxury goods & fashion industry.
• The total size of the plot is approximately 16,000m2 in
which DAFZA will provide its future tenants with light
industrial units (exterior already designed) . 30% of the
available area will be allocated to companies operating
in the food industry, while the remaining area will be
allocated to companies operating across other industries
.
Centrally located between 7
Emirates & near airport
terminals makes transport of
goods easy & fast to reach
destinations & reduces carbon
footprint in transporting goods

7. • In order to promote sustainability and energy-efficiency whilst increasing DAFZA’s
contribution to feeding the planet and creating energy for life in addition to
increasing DAFZAs’ impact on the UAE economy, remaining profitable and boosting
its competitiveness, the participants are expected to formulate innovative solutions
that will:
1) Focus on one of the Food industries:
2) Address one or more of the following key questions:
- How can DAFZA optimize the use of available space in Al Qusais?
- What type of innovative warehousing internal designs should be explored ?
- Which warehouse related technologies would foster DAFZA’s position as a
leading, differentiated and value add free-zone services provider?
The Al Qusais Innovation challenge

8. Ideas will be evaluated based on the following criteria:
• Novelty of the solution
• Financial, economic and environmental impact
• Feasibility, achievability and usability
• Required time for development, quick-wins are encouraged
• Justification (Solutions must be substantiated in detail and supported by research.
Personal beliefs lacking objective justification are highly discouraged)
The Al Qusais Innovation challenge
Key Assessment Criteria

9. The Al Qusais Innovation challenge
Market Overview / Fact Sheet
DAFZA Stats
Food companies represent a mere 6% of the total number of companies within DAFZA park in 2014.
Opportunity for growth is thus high since Al Qusais is a new site & we expect to fill 30% of the space
allotted to it quite quickly.
Some of our current food company clients are Heinz foods, Hershey’s, Red Bull to name a few. They set
up their operations within DAFZA park to be closer to and serve their regional clients in MENA.
Most companies import from Europe /US and re-export regionally to ME, Africa & Asia. Within
DAFZA 55% of firms come from GCC, 22% come from Europe, 16% from Asia Pacific & 7% from
US/ CDA..
The site warehouse facilities at Al Qusais are already designed from the exterior. The challenge is for the inside
areas. Challenge ought to focus on the process improvements & technologies inside the warehouses.
There is no heavy manufacturing within DAFZA. Business models relate mainly to import and
ship straight to their on-shore distributors , others import, store, print/package or re-package
and re-export.

10. The Al Qusais Innovation challenge
Do food product firms face any challenges? Any challenges
related to food distribution regionally or locally?
Source: World Bank, Food Code - Government of Dubai, Colorado State University, MWPVL Logistics
 Choice of food categories (eg: canned, meat, wheat, cereals,
fresh,etc)
 Formulation of value proposition to customers
 Allocation of space (frozen, chilled, dry, open yard)
 Cooperation with other supply chain players ( eg: dhl, freight co’s)
 Demand forecasting and planning
 Delays in border clearance
 Food resilience (not contaminated, no undesired human intervention
 Economic, environmental and social sustainability
 Energy consumption
 Identification systems (e.g. RFID, barcodes)
 Accurate inventory quantity & location
 Pick & pack efficiency
 Proper rotation (First-In-First-Out)
 Handling over capacity
 Warehouse design for risk reduction (environmental damage)
 Waste reduction and disposal
 Food quality assurance
 Warehouse sanitation and cleaning
 Employee hygiene
 Heating, ventilation and air conditioning
 Temperature, humidity, moisture controls
 Sunlight exposure
 Pest control
 Contamination control
Strategic
Challenges
Warehouse
Efficiency
Challenges
Control
Challenges
Categories Challenges
 Combined logistics cost of importing goods to the region is
higher than other geographies
 Average cost of importing wheat into Arab countries is
nearly twice as much as that of importing wheat into
Netherlands
Regional Considerations
High
Logistics
Costs
Reliance on
Imports
Food Security
 The MENA population and food consumption per capita are
increasing in the region
 Food is of strategic importance for the countries in the
region
 Some countries introduced food security programs to
mitigate the risks of food shortages
 The mix of food consumption in the region is shifting to
high-calorie food categories as result of demographic trends
and urbanization
 Countries in the region import a significant amount of their
food consumption
 GCC countries import >90%, while MENA countries import
>50%
Consumer
Preference
Increasing
Volume
Factors
Warehousing Challenges Regional Challenges

11. The Al Qusais Innovation challenge
Why it is really important to develop innovative solutions
within the Free Trade Zones, the "case", and fact overview
Reason Description
One of the recent challenges in the free zone industry is the
continuous increase in competition
Competition
DAFZA will capitalize on its strong brand and promote its position to provide top
of the line food distribution services governed by international standards and
excellence criteria in a hassle free business environment
Action Plan
Adding value to UAE economy by providing integrated business
solutions, to attract regional and international investors looking for
a unique business platform, through service excellence in a
customer centric business environment, by dedicated, competent
and loyal people
DAFZA’s
Mission
Statement
In alignment with DAFZA mission statement, DAFZA will provide innovative
solutions to resolve the food distribution challenges in the region. To create a
win-win for DAFZA, its tenants and the final consumers, DAFZA will formulate
innovative solutions to position itself as a key player in the food distribution
domain
Dubai government’s transformation towards the smart government
sets a clear path for DAFZA to excel in providing innovative
services and facilities
Government
Directives
In line with the Dubai’s government strategic direction, DAFZA will continue to
contribute to the welfare and betterment of the community with innovative
solutions in the food distribution domain
Land limitation is another challenge that shall guide DAFZA to
creatively enhance its profitability
Land Limitations
DAFZA will identify new value added products & services in addition to
innovative opportunities for diversification into food distribution domain
Source: DAFZA Strategic Plan 2014-2016
The reasons for Developing Innovative Solutions within DAFZA

12. Q & A
Thankyou