Dubai: Direct and immediate intervention helped minimise supply chain issues for companies – especially those dealing in building materials – based in the free zone, according to Jebel Ali Free Zone Authority.
The port and free zone operator DP World - UAE Region came up with an “additional movement” of 10,300 plus containers solely for the construction sector, via Jebel Ali Port between April and October 2020. “Business continuity was given top priority and actions were taken to ensure the continuation of business operations for every customer in the free zone,” said a statement from JAFZA.
“During the peak of COVID-19 in 2020, border closures and enforced protocols on entry of truck drivers to the neighbouring countries, heavily impacted road movements in the region, especially Saudi Arabia. Immediate implementation of safety measures such as no outside visitors in the premises, temperature checks, limited workforce working in shifts and optimum level of sanitisation safeguarded each company’s functionality.
“Day-to-day activities of steel and construction related companies were particularly addressed. The tough challenges created due to COVID-19 were recognised and easier rental terms including flexible and deferred rental payments were offered to the free zone customers.”
The rating agency Fitch estimates the construction market contracted by a 10.4 per cent last year “due to hindrances such as supply chain issues, project delays, financing constraints and weak investment capacity of companies”.
Price spiral
The UAE and Gulf construction sector is still counting the cost of the unprecedented increase in material prices, especially those where they have to rely almost exclusively on imports. “Putting the steel and construction industry back on the path of growth and sustainable development will require more than a global recovery,” JAFZA added. “Strong partnerships, impactful leadership and fostering a culture of disruption is the key to unlocking the much-needed boost to the now disrupted sector.”
Incidentally, the UAE’s steel and metal demand has made it the largest consumer in the region.
Expanded road networks
There was also much work done on the infrastructure side, to keep movement of goods flowing. In Dubai, the Road and Transport Authority was awarded a contract for three internal roads - with a combined length of 34.4 kilometres - in the emirate and likely to be completed in the second half of 2022.
Aldar Projects granted a project management contract to Hill International to provide project management services associated with two road projects in Abu Dhabi. The Dh252 million modernisation works on E15 highway in Abu Dhabi is is likely to be finished in November.
A support system
JAFZA currently provides services to over 3,300 construction-related companies, enabling trade worth Dh17 billion in 2020. This represents 29 per cent of total construction-related trade in Dubai last year. “A company associated with the free zone has access to over 3.5 billion consumers giving them wider access to GCC and beyond,” the JAFZA report said.
“The massive trade generated by the free zone in the previous year resulted in substantial growth of the segment. Through this sector, it becomes a key driver for economic prosperity in Dubai.”
