DMCC still has a full agenda

David Rutledge, the chief executive of the Dubai Multi Commodities Centre, believes the emirates are well equipped to weather the global economic storm.

If ever there were an example of a Jack of all trades, it is exemplified in the Dubai Multi Commodities Centre (DMCC). It is a business consultant, a trading, manufacturing and refining platform, a Shariah investment fund broker, a skills instructor and a business promoter. In the six years since it was launched, the DMCC has helped to jump-start a number of the emirate's businesses by establishing a commodity marketplace in Dubai, providing industry-specific market infrastructure and a full range of facilities for the gold and precious metals, diamonds and coloured stones, energy and other commodities industries. Under the auspice of the Dubai World Group, an entity of the Dubai Government, the DMCC has dedicated its efforts to establishing Dubai as a global trade hub. However, in a difficult business environment that is spreading around the world, the centre's chief executive David Rutledge believes it is in the best interests of the DMCC and its affiliated businesses to proceed with their ears to the ground. "Many [of our projects] are facilitation projects, and if the general level of economic activity is slowing down, then there isn't as much to facilitate obviously," says Dr Rutledge. "Given the general economic condition and the fact that the market is generally slowing down in some sectors, as it is in many sectors, the consideration has to be whether this is a good time to do new things." Like many in Dubai's business community, however, Dr Rutledge maintains that the economic fundamentals are strong and the emirate will weather the storm better than most other places around the globe. However, several recent trends are causing concern. Dubai's stock exchange is down 71 per cent this year and is among the 10 worst-performing indexes tracked globally by Bloomberg. The country's once booming property market is suffering. Property prices have fallen substantially and the government has already taken measures to secure personal savings. "It's certainly true that Dubai is not isolated from everything going on," says Dr Rutledge. "There are some projects internally that we've been working on that we've pulled back from and some others that we've deferred, but it remains the case that we've still got a full agenda." While Dr Rutledge would not elaborate on the projects facing setbacks, he was happy to expand on the full agenda the DMCC has in store. Describing it as a grassroots organisation, he expressed interest in helping new businesses tap into the global marketplace. "We need to spend a lot of time taking matters to the next stage and turning them into truly successful businesses," he says. A walk through the DMCC's new Jumeirah Lakes headquarters is testament to its workload. The centre's core staff fill the entire Almas high-rise and department plaques multiply with the passing days. The DMCC affiliates are constantly on the rise as officials look to broker business relationships not just in the region, but around the world. A list of just a few projects being commissioned by the DMCC speaks volumes about its diversity. It recently teamed up with Barclays Capital and Sharah Capital to launch a Shariah-compliant alternative investment fund to focus on the global commodities market. The fund, which will be managed by BlackRock, one of the largest investment managers in the world, is touted as a specialty hedge fund geared exclusively towards equities investments with a particular focus on commodities sectors, whether gold, oil or food. Last year, the DMCC launched the Dubai Gold and Commodities Exchange (DGCX), the region's first derivatives and commodities exchange. Dr Rutledge says that while he has high hopes for the DGCX, he points out that performance is not where it should be. "We have to recognise that DGCX is operating from a very low base, so while the growth numbers can look [good] there is still a lot to do. I think DGCX has a wonderful future, myself." Since its inception, the DMCC has specialised in gold and diamond-related businesses, but has since branched out to include a wide range of commodities. Still, the centre is working to stay true to its roots. For instance, a recent push by the Dubai Government, along with global experts in diamond grading, has led to the introduction of new technology that specialises in grading and certifying diamonds in a way the human eye can never match. In April, a landmark initiative with Damas Jewellery was unveiled, making Dubai the first government in the world to certify gem stone authenticity. It is hoped that the agreement between Damas and the new International Diamond Laboratory (IDL), a subsidiary of DMCC, will serve as a sales catalyst amid a global surge in gold and jewellery prices. A similar push to boost the profile of the local pearl industry is under way, since the DMCC last year launched the Dubai Pearl Exchange. This exclusive trading platform for the pearl industry facilitates cultured and natural pearls through a members-only service-orientated platform. Still the DMCC is working to address various logistical problems standing in the way of Dubai's emergence as a leading trade hub. Most recently, significant customs issues have been complicating efforts to do business with international players. Markets around the world have implemented the ATA Carnet System that permits tax exemptions for goods temporarily admitted into a country - for exhibitions and trade shows. Dubai has not implemented this system and officials admit it is one of the major challenges they face in building the local industry. Dr Rutledge believes these issues will be corrected with the implementation of a value-added tax in place of custom duties. However, he says the DMCC continues to address this and other issues that may somehow slow business in Dubai. "We are quite close to Dubai customs as an organisation, so we often engage with them in dialogue to iron out problems when they emerge." [e-mail]