Dubai: It will take at least seven more months before Dubai Textile City, which is already more than three years behind schedule, becomes fully functioning, the industry group involved in the project said.
The Dh300-million commercial zone is being developed 22 km from the textile trade's bustling centre in Bur Dubai. It has modern warehouses, offices and showrooms, and most big merchants are expected to relocate their businesses to the new venue close to International City.
"We have had a lot of hiccups and challenges for various reasons," Ashok Sawlani, chairman of the textile merchants group Texmas told Gulf News when asked why the zone is still not ready after years of planning and work.
There was an initial delay of 18 months in starting the project and then there was a similar delay in construction, Sawlani said.
The zone should have been operational in 2006, he added.
Some 80 per cent of 284 warehouses are already occupied and 130 companies have registered to operate from the zone.
Texmas received 6.2 million square feet of land on lease for an initial 30 years.
Textile merchants have invested in construction, creating a built up area of 2.2 million square feet.
"By the time everything is occupied, we will have more than 220 companies," Sawlani said.
"Between now and December we will see dozens of merchants having their showrooms furnished and ready to receive customers," he added. These will include "the biggest market movers."
Dubai Textile City was originally conceived as a free trade zone, but the idea found little support among traders who feared they would have to divulge too many "trade secrets" to customs officials in order to enjoy their duty-free status.
Suresh Vasandani, a leading textile trader, said companies were asked to install a system that would enable officials to have detailed information of goods suppliers, customers and transactions.
"We do not want to disclose our trade secrets," he added.
Also, many visiting foreign customers buy goods from a number of traders and handling customs paperwork in a free trade zone was seen as time-consuming.
"Sometimes customers take their goods with them or have their trucks waiting for the goods, so we cannot go to the customs to get clearance (in time). We found it much easier to go for a duty-paid zone," Sawlani said.
Exports
Dubai's textile exports go to more than 50 countries in Africa, the Middle East, South Asia and Europe. Major exporters to Dubai are China, South Korea, Japan and Indonesia.
Growth in the textile business has been sluggish in the last two years due to "external and internal reasons," Sawlani said.
Many large buyers from countries like Russia and Poland have started going to source markets such as China, while smaller buyers are deterred by the huge increase in the cost of travel and hotel stay in the city.
"I won't be surprised if the re-export trade is declining between 10 and 15 per cent (per year)," Sawlani said.
He said Texmas members, who number about 800, are also feeling the pressure of rising cost of doing business, with property rents being the main concern.
