DRIVING ECONOMIC DEVELOPMENT IN ABU DHABI Economic Indicator by mikeholy

VIEWS: 16 PAGES: 25

									                         Presentation to the TWN Members
                       The Workplace Network: 21 –26 May 2006




                                       DRIVING ECONOMIC
                                           DEVELOPMENT
                                           IN ABU DHABI


Investment, Partnership, Success Opportunities

                                                          Norman Johnston
                                                          CEO, Zones Corp
                                                                 24th May 2006
                                                                Helsinki, FINLAND
    ZONES CORP ROLE



     s
   It’ the Third Engine of Abu Dhabi Gov after ADNOC & ADIA



   s            s
It’ Abu Dhabi’ Key-Vehicle for diversifying the Economic Growth of
  the Capital & making Manufacturing & Service Industry as a prime
                      component of the GDP.



        s
      It’ committed to effectively implement the Government’    s
         vision, through the creation of Partnerships with the
     Private Sector, & Joint-Ventures that will contribute directly
           to the expansion & diversification of Abu Dhabi’ s
                               Economy.




                                                                      1
OUR GOVERNMENT COMMITMENT
   His Highness Sheikh Khalifa Bin Zayed Al Nahyan
   President of the United Arab Emirate

   “ The current phase of our development calls for an increased role of
     the private sector, particularly in view of the rapid global changes.
     That explains why we issued a series of Emiri decrees, notably the
     establishment of the Higher Corporation for Specialized Economic
     Zones ”



   His Highness Sheikh Mohammed Bin Zayed Al Nahyan
   Crown Prince of Abu Dhabi,
   Deputy Supreme Commander of the UAE Armed Forces


   † Forward Thinking
   † Whole-hearted collaboration with the right partners
   † Belief in partnership by global Joint-Ventures
   † Benchmark for business excellence


                                                                             2
                                              MACRO-ECONOMIC DATA
                                        COMPARISON between GERMANY, US & UAE
                                                                  GERMANY                                  USA                                       UAE

                                                           Economic Indicator                      Economic Indicator                        Economic Indicator

 CURRENCY                                       Euro = 4.674 AED                         US = 3.657 AED                             AED = 0.2139 Euro/
 AREA (sq km )                                  357,021                                  9,631,420                                  82,880
 POPULATION                                     82,422,299                               298,444,215                                2,602,713
 POPULATION Growth Rate                         -0.02%                                   0.91%                                      1.52%
                                                                                         Coal, copper, lead, molybdenum,
                                                Coal, lignite, natural gas, iron ore,    phosphates, uranium, bauxite, gold,
 Natural Resources                              copper, nickel, uranium, potash, salt,   iron, mercury, nickel, potash, silver,
                                                construction materials, timber, arable   tungsten, zinc, petroleum, natural gas,
                                                land                                     timber                                     Petroleum, Natural gas
 GDP
 GDP - purchasing power parity                  $2.454 trillion                          $12.41 trillion                            $74.67 billion
 GDP - real growth rate                         0.90%                                    3.50%                                      6.70%
 GDP - per capita (PPP)                         $29,800                                  $42,000                                    $29,100
 GDP - composition by
                          Industry              28.60%                                   20.70%                                     58.50%
                          Services              70.30%                                   78.30%                                     37.50%
 Inflation Rate (consumer prices)               2.00%                                    3.20%                                      4.50%
 Investment (gross fixed) of GDP                17.10%                                   16.80%                                     20.70%
 Budget: revenues                               $1.249 trillion                          $2.119 trillion                            $34.93 billion
 Public Debt of GDP                             68.10%                                   64.70%                                     17.50%
 INDUSTRY
                                                                                         Leading industrial power in the world,
                                                The world's largest & most
                                                                                         highly diversified and technologically     Petroleum and petrochemicals; fishing,
                                                technologically advanced producers of
                                                                                         advanced; petroleum, steel, motor          aluminum, cement, fertilizers,
                                                iron, steel, coal, cement, chemicals,
 Industries                                                                              vehicles, aerospace,                       commercial ship repair, construction
                                                machinery, vehicles, machine tools,
                                                                                         telecommunications, chemicals,             materials, some boat building,
                                                electronics, food and beverages,
                                                                                         electronics, food processing, consumer     handicrafts, textiles
                                                shipbuilding, textiles
                                                                                         goods, lumber, mining
 Industrial production growth rate              1.70%                                    3%                                         4%
 EXPORTS

                                                                                         Agricultural products (soybeans, fruit,
                                                                                         corn) 9.2%, industrial supplies (organic
                                                                                         chemicals) 26.8%, capital goods
                                                Machinery, vehicles, chemicals, metals                                              Crude oil 45%, natural gas, reexports,
 Exports - commodities:                                                                  (transistors, aircraft, motor vehicle
                                                and manufactures, foodstuffs, textiles                                              dried fish, dates
                                                                                         parts, computers, telecommunications
                                                                                         equipment) 49.0%, consumer goods
                                                                                         (automobiles, medicines) 15.0% (2003)

 IMPORTS
                                                                                         Agricultural products 4.9%, industrial
                                                                                         supplies 32.9% (crude oil 8.2%),
                                                                                         capital goods 30.4% (computers,
                                                Machinery, vehicles, chemicals,          telecommunications equipment, motor        Machinery and transport equipment,
 Imports – commodities:
                                                foodstuffs, textiles, metals             vehicle parts, office machines, electric   chemicals, food
                                                                                         power machinery), consumer goods
                                                                                         31.8% (automobiles, clothing,
                                                                                         medicines, furniture, toys)                                                     3
Source: www.cia.gov/cia/publications/factbook
           ABU DHABI
               OUR GOAL FOR THE FUTURE ECONOMY


                        Abu Dhabi Economic Base
            Today                                        Future


† Fragmented industry               † Export oriented

† Local demand driven               † World-class industrial, services and logistics hub

† Relatively low value products
                                    † Based on high value strategic clusters
† Little synergy between sectors
                                    † Sector diversified and synergistic economy
† Highly dependent on oil exports
                          ABU DHABI NON-OIL FOREIGN TRADE 2004




                 35,000                                              33,115

                 30,000
  AED Millions




                 25,000

                 20,000
                                                        12.5 Times
                 15,000                                 Difference
                 10,000
                  5,000                    2,653

                     0
                                          Exports                    Imports




Source: Customs Department and Department of Planning
                                                                               5
       ABU DHABI FACTS

In summary . . . .

 Abu Dhabi possesses a:
  Ü   Politically Stable Environment
  Ü   Multinational Labor Force
  Ü   Establishing World Class Infrastructure and
  Ü   Abundant Energy and Capital.
      . . . . and these features, coupled with:
        Ü     Business-Friendly Legislation Frameworks
        Ü     Low Business Input Cost
        Ü     Low Tax Environment, as well as
        Ü     Safe and Pleasant Standard of Living… .

               enable Abu Dhabi to offer a highly competitive business environment
               for productive activities in this rapidly expanding region.
                                 ABU DHABI DIVERSIFICATION INITIATIVES

Industrial Development
                                                      s
                  Cost advantages will drive Abu Dhabi’ economic development;
Comments                                                                                                         Power tariffs— US$ per kilowatt hour (kWh)
Comments                                                                                                         Power tariffs— US$ per kilowatt hour (kWh)

 è Abu Dhabi is one of the lowest taxed countries in                                                             0.20
      the world (no corporate or income taxes)                                                                   0.15
                                                                                                                 0.10
 è Foreign companies that invest in Abu Dhabi will be
      able to enjoy cost efficiencies                                                                            0.05
                                                                                                                 0.00




                                                                                                                                    Abu Dhabi




                                                                                                                                                                                                                         Netherland
                                                                                                                                                             Vietnam




                                                                                                                                                                                                                                       France
                                                                                                                                                                                                                U.K.
                                                                                                                                                                               Turkey
                                                                                                                        Canada



                                                                                                                                                  Malaysia




                                                                                                                                                                                                       USA
                                                                                                                                                                                             Spain




                                                                                                                                                                                                                                                Singapore
Water tariffs— US$ per cubic metre (m3 )
Water tariffs— US$ per cubic metre (m3 )                                                                         Gas tariffs— US$ per cubic metre (m3 )
                                                                                                                 Gas tariffs— US$ per cubic metre (m3 )

2.0                                                                                                              0.30
1.5
                                                                                                                 0.20
1.0
                                                                                                                 0.10
0.5
0.0                                                                                                              0.00

                                                                                                                        Abu Dhabi




                                                                                                                                                                  Netherland
                                                                   Netherland
                  Vietnam




                                              Abu Dhabi




                                                                                                                                                                                                                                      France
                                                                                        U.K.




                                                                                                                                                      U.K.
                                                          France




                                                                                               Canada




                                                                                                                                                                                                                       Turkey
                                                                                                                                                                                    Canada
                                                                                                        Turkey




                                                                                                                                       Malaysia




                                                                                                                                                                                                                                                Singapore
       Malaysia



                            Singapore

                                        USA




                                                                                                                                                                                                     USA
                                                                                Spain




                                                                                                                                                                                                             Spain
                                                                                                                                                                                                                                                            7
 ABU DHABI - FOCUS ON FIVE INDUSTRIES




                                  Mussafah
        Ruwais                                       Auto
                                                      zone

                                                          Oil and gas
                                                         services zone
                      Aluminium              Steel
Petrochemicals zone




                           Basic materials zone




                                                                         8
            ABU DHABI - INFRASTRUCTURE UPGRADE




                        Dredge Musafahport to 15— 18mm to        Expand Abu Dhabi airport to connect
Development need        allow Capesizevessel transport of bulk   Abu Dhabi better with the rest of the
                        material and develop it                  world


Capital                 US$1bn— 2bn                              US$3bn— 5bn


Investment source       Government                               Government


                        The port should be complete before the
Timing for investment   aluminiumand steel plants start          2005/06
                        operations(2007/08)

                                                                                                         9
          ZONES CORP… ABU DHABI THIRD ENGINE
                            FOR ECONOMIC DEVELOPMENT

                         Our Mission in Abu Dhabi


†   Transform Abu Dhabi into a manufacturing, services and logistics hub

†   Drive development & diversification through Specialized Economic Zones

†   Promote the creation of dedicated industry clusters

†   Develop 300+ Km2 of Specialized Economic Zones in the next 5-7 years




                                    s
            Make Abu Dhabi the World’ Premier Investment and
                      Business Friendly Environment
ZONES CORP…
              OVERALL LAND




                                                        ICAD I

                                          t
                                      Por
                                  d
                             o se             ICAD II
                           op
                      Pr


                                         ICAD III




                                                                 11
ZONES CORP… CURRENT INDUSTRIAL
             FOOTPRINT IN ABU DHABI
                         ICAD I & II
To Abu Dhabi City


            30 Km                    ZonesCorp Hqs




              15.4 km2




   10 km2
                                       ICAD I


                          ICAD II

                                    Zones Corp land
                ICAD I …         ALREADY CONTRIBUTING
                        SIGNIFICANTLY TO ECONOMIC DEVELOPMENT

Ü ICAD I is currently the only operational
   SEZ                                                         ICAD I has the
                                                            potential to generate
Ü Over AED 6 Billion invested to date                       over AED 20 Million /
                                                             day in non-oil GDP
Ü An additional AED 4 Billion already
   committed

Ü ICAD I is already over 90% leased
    †    48 companies operational
                                                               ICAD I
           Ì Occupying 20% of land
           Ì Generating AED 1.5 Billion
               per year in reported sales
                                                15.4 Km2
    †    42 additional companies under
         construction
                                                ICAD I is a showcase of how HCSEZ can
    †    82 more companies planning to        implement diversification policies to increase
         start construction in next 2 years                    non-oil GDP
            ZONES CORP…
                 WORKERS RESEDENTIAL CITIES

                                                (20) Workers Residential Cities across
                                                             Abu Dhabi




                      Workers Residential City (2)

                      Workers Residential City (3)
     Current
Workers Residential
     City (1)
              ZONES CORP…
                             WORKERS’ACCOMMODATIONS




Ü   Access to skilled and manual labor is a competitive advantage
Ü   Housing workers in large state-of-the-art regulated complexes ensures:
     † Safe and secure accommodations for workers                                 1st PILOT
     † Healthy and hygienic living conditions
     † Proper management of security, access & segregation
Ü   20 facilities have already been authorized
      † First pilot completed
      † Second pilot with full life cycle approach under review
      † 2 more facilities currently being tendered (accommodate 50,000 workers)
      † several others to be tendered by year end
Ü   Eventually Zones Corp will house over half a million workers in Abu Dhabi
     ZONES CORP…
         NEW LEGISLATION WILL PROVIDE …

Ü   Cluster development by industry, transport/ energy/ logistics

Ü   Contemporary free & investment zones legislation

Ü   No taxes nor capital restrictions

Ü   Swift issuance of government permits, licenses and customs exemptions
     †    One Stop Shop”- Absence of red tape and annoying restrictions
          “
     †    Relationship with the Ministry of Labour for the Foreign Labour Agency (FLA)
     †    Examples:
            ü     24 hour visas and work permits
            ü     Company registration and trade name reservation
            ü     Municipal licenses (ex. commercial licensing and building permits)

Ü 100% foreign ownership, no 49% - 51% sponsor split
Ü Ability to directly provide Municipality and utility functions
      ZONES CORP…
        NEW SPECIALIZED ECONOMIC ZONES IN ABU DHABI


                        Motor Logistics City

Æ   $ 19.4 Billion GDP contribution every year
Æ   Major Environmental initiatives to improve standards in the sector
Æ   Management of Oil, waste Materials, & poor practices
Æ   Certification of Workers
Æ   Logistics freight & truck terminal
Æ   World-Class vehicle supply & distribution centre
Æ   Setting a landscaped high-profile location with segregated road, freight &
    passenger vehicle access
ZONES CORP…
    NEW SPECIALIZED ECONOMIC ZONES IN ABU DHABI


               Oil & Gas Logistics City

Æ    $ 10 Billion GDP contribution per year
Æ    Centre for supporting the massive oil & gas demand in the region
Æ    Population 27,000 people with 18,000 car spaces
Æ    20,000 sq meter of office space
Æ    4,000 sq meter research & development
Æ    4,000 sq meter convention facilities
Æ    Marine & Leisure facilities connected to Abu Dhabi City by fast ferry
             ZONES CORP…
                        UNDERSTANDING LOGISTICS IN ABU DHABI

Ü   McKinsey London together with Zones Corp, ADIA, & our Key-Stakeholders are
    coordinating a significant study into key-logistic hubs & the current and future metrics, to
    manage our growth.
Ü   Logistics Strategy brings together
       †     Airports
       †     Seaports
       †     Freight & Rail transport
       †     Road networks & traffic volumes
       †     Trade implications
       †     Tourism & development

Ü   Key attributes of the Zones Corp approach:
       †     Combines and links different modes of transport: air / sea / road / rail
       †     Deals with actual volumes & projected demands
       †     Deals with the formation of the strategy which drives the efficient use of capital
       †     Acts as a catalyst for GDP diversification

Ü                                                           s
    Sound logistics is the infrastructure on which Abu Dhabi’ future is dependent
     ZONES CORP . . .


†   J.V with Macquarie Bank Global & ADCB

†        s
    World’ leading Infrastructure Management & Financing
    Group (25 funds)

†      s
    UAE’ Premier Banking Institution




Create Infrastructure Powerhouse for Abu Dhabi




                                                           21
          ZONES CORP INFRASTRUCTURE FUND



† Create AED 1 Billion Equity Fund

† Leverage capacity 5 times

† AED 5 Billion to invest in infrastructure

† Abu Dhabi people own 75% of equity through Zones Corp

† Future wealth increasing allowing Abu Dhabi to move away
  from Oil dependency
         ZONES CORP ACHIEVEMENTS FOR ABU DHABI




† First PFP in Global Procurement terms –ICAD II (April 06)

† First International Infrastructure Fund (April 06)

† Second PFP for Industrial City of Al Ain (May 06)

† Third PFP for ICAD III (July 06)

† Five Major new PFP to be launched next 12 months
ZONES CORP CONTACT INFO




    Norman W. Johnston
    CEO, Zones Corp
    P.O.Box: 36000, Abu Dhabi, U.A.E
    Tel: +971 2 5073333
    Fax: +971 2 5500354
    E-mail: norman.johnston@zonescorp.com




                                            Thank You

								
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