The Dubai Multi Commodities Centre (DMCC), one of the world’s biggest free zones in terms of concentration of businesses, is eyeing Latin American markets to further expand its reach and attract more multinational commodities players, according to its executive chairman.
The free zone, a centre for trading of everything from tea and diamonds to derivatives, wants to establish a presence in South America, perhaps in Sao Paulo, to better court and inform regional firms about the potential of doing business in the emirate, Ahmed bin Sulayem said.
“There is a lot to capture [in those markets]. At DMCC we don’t want to overlook any market,” Mr bin Sulayem said.
“We want to tap the ones [markets] that are looking to expand, the ones that have multinationals. It would grieve me to see a top commodities player [from that region] set up somewhere else in the
Middle East.”
Mr bin Sulayem said the potential of bringing new commodities firms, especially in the coffee-trading business, is immense because firms do expand beyond their borders but many do not expand to this part of the world.
Despite language barriers, the UAE’s improving transportation and visa arrangements with some of the countries in the region will help the expansion plans.
“One thing I’ve noticed about the Latin American community is that when they want to go international, they go to Spain. We would like to explore how we can make [Dubai] more attractive for them,” he said, adding that DMCC has plans to conduct a roadshow in Spain next year where it will interact with some of the companies that have already established a presence there.
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Last year, the free zone signed more than 20 memorandums of understanding, with particular focus on attracting new businesses from China and working together with organisations such as the Shanghai Gold Exchange, the China Silver Group and Mega Capital & Yunnan State Farms Province.
Beyond Latin America, Australia is next on Mr bin Sulayem’s radar.
The free zone, which grew rapidly in 2017, has added eight new companies every working day in the first nine months of this year.
The DMCC is registering new members at the same pace as it did in 2016 – a record year when 2,016 new members joined the trading hub.
More than 1,500 companies have already signed up to be part of DMCC in the first three quarters of this year, pushing the total number of firms operating out of the free zone to 14,178, a 12 per cent increase from the end-2016 level.
“To me that is even more extraordinary for 2017 because there is more uncertainty this year,” Mr bin Sulayem said. “We are at a very good position right now.”
DMCC, however, cannot lose the edge and “feel comfortable” if it wants to continue competing against older and more established trading centres such as Singapore and Hong Kong.
DMCC, which announced plans to establish a coffee centre last year, originally had expected its 4,500 square metres facility to be fully developed by March next year, but it will be finished in the third quarter of 2018. “September is the conservative delivery date,” Mr bin Sulayem said, adding that the centre’s green-bean logistics, handling and storage facility will be busy and may run out of capacity sooner than
anticipated.
“I have a feeling because of China and Africa we will have to get another coffee centre,” he said.
The centre, which is projected to handle up to 20,000 tonnes of green coffee bean per year, with estimated trade of US$100 million per year, is also expected to garner interest from Latin American countries such as Peru, Brazil, Panama, Columbia, Costa Rica and all the way up to Nicaragua, where there is a strong coffee culture.
Last year, DMCC’s Tea Centre handled more than 41.6 million kilograms of tea, while in the first half of this year, it has already traded more than 26.6 million kilograms,
according to DMCC data.
Ms Yang's top tips for parents new to the UAE
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
UAE currency: the story behind the money in your pockets
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The biog
Hometown: Cairo
Age: 37
Favourite TV series: The Handmaid’s Tale, Black Mirror
Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
