Published studies focus on potential areas of cooperation for UAE and Hamburg companies to benefit from each other's expertise
Dubai air freight sector is forecast to grow at CAGR of about 5.85% from 2015 to 2017.
Cooperation opportunities exist in the areas of waste and water management, recycling, energy efficiency, green building and clean urban transport
Dubai, UAE: On the occasion of the 4th Dubai Hamburg Business Forum held in the Hanseatic German city earlier this month, the Dubai Chamber of Commerce and Industry-released studies focused on opportunities for joint cooperation for Dubai and Hamburg in the areas of logistics, tourism, maritime and green cities.
The studies, which were part of a panel discussion led by Dubai and Hamburg business leaders, weighed areas of mutual interest for businesses in logistics which is one of the leading drivers of Dubai's economic growth, as well as tourism, maritime and green cities which are other important sectors holding ample investment potential for both the cities.
Logistics
According to the study on logistics, Dubai's strong investment in multimodal logistics transport infrastructure has put the emirate in the leading position as a global logistics hub while in light of Hamburg's strong position as an aviation hub, there is strong potential for cooperation in areas such as building of an aviation cluster in Dubai, Maintenance, Repair and Overhaul (MRO) facilities and technical and vocational training. Hamburg can also benefit from Dubai's strategic position in the trade between Asia and Africa and Asia and Europe.
Dubai's logistics sector has shown robust growth from 2012 to 2014, growing at a Compound Annual Growth Rate (CAGR) of about 7.15% from 2012-2014. Dubai International Airport passenger and cargo movement have grown at robust pace from 2010 to 2012. Passenger arrivals show a strong CAGR of 11.21%, while quantity of discharged goods has increased at a CAGR of about 3.07%. The robust growth of these categories shows how Dubai's aviation sub-sector has been able to consolidate its position as a global hub for passenger and cargo movement and indicates potentially strong prospects for future growth.
The UAE in general and Dubai in particular are thought to be highly competitive when compared to the rest of the world in infrastructure, quality of logistics facilities including port, roads and air transport as the UAE ranks 4th out of 148 countries in global rankings for the World Economic Forum Global Competitiveness Report 2013-2014 for quality of overall infrastructure, 3rd in quality of air transport infrastructure and 1st in quality of roads.
The future prospects for Dubai's logistics sector appears to be bright especially with the Dubai air freight sector which is forecast to grow at CAGR of about 5.85% from 2015 to 2017. Also, the development of strong aviation infrastructure like Al Maktoum Airport means there is strong possibility of cooperation between Dubai and Hamburg in the development of an aviation cluster in Dubai.
With the expected increase in trade between Europe and Asia, Dubai World Central's Aviation district and MRO facilities could be vital in the maintenance, repair and overhaul of passenger and cargo planes using these growing trade routes. By partnering with Dubai businesses in MRO, Hamburg businesses could profit from the growing opportunity in aviation in key growing markets.
There is also scope for increased cooperation in the area of technical skills and vocational training. Such training can be offered in the area of aircraft maintenance and repair, supply chain management and freight forwarding. Vocational training can be dual training, combining class room with on the job training.
Maritime
The maritime sector is another area of cooperation for Dubai and Hamburg as the emirate enjoys a high rate of shipping movement, shipbuilding and repair facilities and expertise in ports management as the study revealed that in 2012, about 20,000 vessels called at Dubai ports, mainly at Jebel Ali Port and Port Rashid.
Hamburg is a world leader in shipbuilding and ship suppliers marine engineering, in particular for the offshore engineering and offshore wind energy industries, state-specific integration of shipping companies, shipping, ports and harbours, education and academia and maritime services.
On the other hand, Dubai is world renowned in port management and ship repair, and is the region's leader in maritime activities. However, the educational system and academia of the emirate and of the UAE remain to be lagging behind in terms of technological and manpower support to the maritime industry. In addition to the establishment of strong research support, this is an area that Hamburg expertise would be very much needed.
The study pointed out that Germany has a well-developed shipbuilding industry, building not only large modern ships but also mega-yachts that are in demand in the region while presently there are several companies in Dubai that are into provision of maritime services and production of parts. These are areas that cooperation between Hamburg companies and Dubai companies could develop and strengthen, not only for the domestic maritime industry, but for global operations, as well. Other areas of cooperation would be ship efficiency, emissions and safety, offshore wind energy and deep sea engineering.
Tourism
According to this study, Dubai has become one of the fastest growing destinations for traditional tourism activities such as shopping, leisure and business tourism in the region and the world. In recent years, Dubai tourism market expanded to include other segments of tourism sub-sector such as sport, eco, healthcare and cruise tourism.
It is estimated that Dubai holds a 66% share of the UAE tourism economy. According to the World Bank, the UAE's total international tourism receipt was about USD8.7 billion in 2012. While the total number of passenger arrivals to Dubai was about 2.6 million in November 2013, registering 10% year on year growth rate for the period November 2012-2013.
Dubai hotel rooms' occupancy rate has increased considerably during the past three years following the slowdown post the global financial crisis and economic downturn, registering an average 80% occupancy rate during 2013.
Dubai Cruise tourism is rapidly growing with 135 cruises and 375,000 tourists visiting Dubai in 2011. By the end of 2012, Dubai was expected to host 150 cruises with 475,000 passengers. By 2015, these numbers are projected to grow by 30% and 35% respectively.
Now Dubai is a major destination of choice to many global cruise lines, such as Costa Cruises which made Dubai its regional cruise hub in 2007, which is the largest Italian travel group and Europe's No.1 cruise line. On 23rd February 2010, the latest jewel of the Costa Cruises fleet, Costa Deliziosa, has been inaugurated in Dubai, during her grand maiden cruise.
This was the first time an Arabian city has hosted a cruise ship's christening ceremony. Another major cruise liner, the US Royal Caribbean International (RCI) has become the second major cruise liner to base a ship in Dubai.
Meanwhile, in 2012, it was estimated that UAE healthcare expenditure represented about 3.8% of UAE GDP, equivalent to USD 14.2 billion or USD 1,752 per capita which is among the top 30 highest rates in the world. Private sector funding represented 25.4% of total spending in 2012.
The government plans to improve its healthcare infrastructure to ensure that adequate medical services are provided in the emirate. While many UAE residents have traditionally sought medical care overseas, the UAE government hopes to ultimately reverse this flow, turning the UAE into a medical tourism destination. Imports of medical devices reached a new high of USD 779.4 million in 2012.
Medical tourism in Dubai is regarded as an integral aspect of the healthcare sector and Dubai is looking to strengthen its position on the global healthcare tourism map. To achieve that objective, Dubai Healthcare Authority (DHA) is exerting huge efforts to put in place policies and regulations that can help streamline the functioning of the sector.
Private sector has always been considered as a key stakeholder in developing Dubai healthcare sector and thus has been encouraged by the concerned local health authorities to develop state-of-the-art healthcare facilitates in the emirate of Dubai.
Ease of access, high quality standards and the relatively low medical cost has made Dubai an attractive destination for what is called medical tourism. In addition to the openness of Dubai health authorities to regional and global private sector participation in healthcare sector, Dubai medical tourism holds a huge potential for private investment and rewarding returns.
Dubai's tourism sector is expected to see double-digit growth rates. The winning of Expo 2020, along with other planned projects to develop the tourism sector in Dubai, provides a number of opportunities for foreign companies, especially from Hamburg, seeking to enter the Dubai market with their sustainable architecture, design, engineering and construction expertise.
Green cities
Dubai Chamber study on green cities pointed towards the existence of opportunities for businesses in the environmental and sustainability sectors of Dubai and Hamburg to collaborate on green technologies, especially in the areas of renewable energy, waste and water management and green building standards.
The study highlights areas of cooperation in the solar and renewable energy sphere stating that a smart grid system based on the governments intended feed-in tariff system presents a substantial supplier opportunity on a residential-to-grid level. Also, given the conditions of rising population of Dubai and the emerging scarcity of water, the effective re-use of water and therefore water treatment technologies are clearly a choice for cooperation potential in Dubai.
The drive for the development of renewable energy in the UAE has until recently been relatively low in spite of the large geographical potential for the use of these solutions. Current uses for solar are in micro-scale applications (telecommunications, on oil rigs, parking meters, traffic light signals, public toilets, and in monitoring systems such as water flow).
According to the study, the renewable market has been stifled by a combination of constraints such as the absence of relative legal and policy framework, the high initial capital costs, and the lack of commercial skills and information.
The Dubai government is currently looking to put financial incentives in place to assist the transition to solar as it plans to create financial incentives, such as subsidies for companies to build solar arrays or for residents to install rooftop panels.
By 2030, Dubai hopes to draw 70% of its power from natural gas and 30% from renewable, nuclear energy and clean coal. Demand growth is projected to grow by 5% a year. Abu Dhabi is ahead in this regard, aiming to produce 7% of its energy requirements by 2020 through the Masdar city project.
The study also highlighted opportunities for cooperation between Dubai and Hamburg businesses in the areas of waste and water management, recycling, energy efficiency, green building and clean urban transport.
Established in 1965, the Dubai Chamber of Commerce and Industry is a non-profit public entity, whose mission is to represent, support and protect the interests of the business community in Dubai by creating a favourable business environment, supporting the development of business, and by promoting Dubai as an international business hub.
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© Press Release 2014
