| 19 Aug 2006 |
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Dubai eyes global BPO industry
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19 August 2006
Dubai: More than 70 international and regional companies, including ABN Amro BankABN Amro Bank
and AXA InsuranceAXA Insurance, have registered to operate in Dubai's new outsourcing free zone that opens in December, a top official said.Esmail Al Naqi, a director at Dubai Outsource ZoneDubai Outsource Zone, told Gulf News some 55 firms are likely to begin operating before the end of the year in the park located close to the Academic City in South Dubai. Another 20 will join up by June 2007.
The companies will offer business process outsourcing (BPO) services mainly in banking and financial services, information technology, insurance and the healthcare industries.
Nearly 40 per cent of these are from Europe, 20 per cent from the US and the remaining from the Middle East.
"We have been surprised by the response," Al Naqi said. "The outsourcing business is booming worldwide and we want to position Dubai as the leading outsourcing destination in the region." Naqi estimates there would be some 7,000-8,000 people working in the zone by the end of 2007 and another 5,000 will join each year thereafter.
Infrastructure
Zone companies, which include Arab BankArab Bank
and MashreqbankMashreqbank, will offer services like credit card and insurance claims processing, medical transcription, diagnostics and even online legal and medical consulting. The project, unveiled in June 2004 as part of a plan to boost knowledge industries in Dubai, hopes to grab a share of the $350 billion a year global BPO industry with facilities like a zero-tax environment.
Al Naqi estimates European companies could save up to 40 per cent in costs and American companies, 20 per cent, by moving business processes to Dubai.
The Zone hopes to exploit the weaknesses of regional BPO powerhouses like India, South Africa and the Philippines by reducing employee attrition, providing high quality infrastructure, an expatriate-friendly environment and less-interfaring bureaucracy.
Employees will not be allowed to move jobs within a year of joining a company. Some 60 per cent of the workers in the zone are expected to come from India, 20 per cent from East Europe and the remaining from the Philippines and the Middle East.
Agencies
Al Naqi said the zone has tie-ups with top recruitment agencies in countries like India, Jordan and Turkey that will allow businesses to hire from these countries. Work visas will be approved in 24 hours.
The zone's location close to a university will also help it access a ready talent pool and it has taken several other steps to keep costs in check, the principal threat to the BPO industry.
Office space will be available at Dh75 per square foot a year, about a third of the Dh250 per square foot it costs on Shaikh Zayed Road.
The park is 10 minutes from the International City, an enclave offering affordable housing, and 20 minutes from Sharjah. It is also building 2,500 studio apartments that will be available on a fixed five-year rent of Dh25,000 a year. An increase in rent will be allowed up to a maximum of 30 per cent once every five years.
Salaries in the zone will start at $1,000 a month and then scale up with the complexity and the sophistication of the outsourcing operations.
The Outsource Zone has a budget to spend up to $200 million in building infrastructure until the end of 2007 and will create some five million square feet of office space in the first phase. It expects to recover investments in 12 years.
By Arif Sharif
© Gulf News 2006
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