This is the first time in its 12- year history that the Dubai MultiCommodities Centre (DMCC) has exhibited at Cityscape, but it is unlikely to be the last. The DMCC can lay fair claim to be one of Dubai's most ambitious and dynamic property developers.
“We are a master planner and developer, and we have delivered an entire community of 66 towers and 85,000 people living and working there, with all the retail, leisure and commercial facilities that requires,” says the DMCC chief executive Gautam Sashittal.
As its name suggests, DMCC was primarily designed as a free zone trading and commercial hub, buying and selling everything from gold and diamonds, through financial and commodity futures, right down to tea and rice.
But along the way the free zone took off to such an extent that it spawned its own urban hub at the Jumeirah Lakes Towers development. It is now on the verge of taking that to a whole new level with the Burj2020 District, a development centred around one of the tallest commercial buildings in the world.
Mr Sashittal, speaking amid the melee of Cityscape, is blunt about this, and about the speculation that has surrounded the planned new addition to Duabi’s high-rise skyline. “No, I’m not going to tell you how tall it will be. It will be ‘super-tall’, that’s all, but we are not fixated on the height. We want something that is sustainable and functional, that adds to the existing community,” he insists.
The tower, for which staged financing is currently being discussed, will certainly do that. It will become the signature building of the JLT development, extending it to the borders of the new Dubai South area and setting the seal on the JLT area. When it is completed, DMCC will have arrived, well and truly.
Mr Sashittal joined DMCC in 2010 after a “lifetime” in oil finance at Royal Dutch Shell, and has been in the chief executive post under the chairman Ahmed bin Sulayem since the beginning of 2014. He says that the purpose behind Burj 2020, and the recently completed One JLT development further north, is to make DMCC a natural home for global companies looking for somewhere to locate their Middle East or global headquarters.
“We already have a number of big western multinational conglomerates here, like Harley-Davidson, Colgate Palmolive, LVMH and British American Tobacco, as well as Asian corporates such as Tata, Reliance and Sinopec. But the new developments will enable us to give global companies the kind of facilities they need. These are our targets,” he says.
“But the purpose of the DMCC is to bring in trade and increase its contribution to Dubai’s GPD. Real estate is just a means to that end,” he adds.
The DMCC strategy, he explains, is in line with the idea of “aerotropolis” that has recently become the new Dubai buzzword. “We are almost exactly halfway between Dubai’s two airports, and not that far from Abu Dhabi airport. And we are also close to Jebel Ali, one of the biggest ports in the world.”
That location has already helped DMCC to become one of the region’s biggest trading centres. It is home to 11,000 companies, adding new members at the rate of 170 per month.
It has become home to 700 companies in the diamond business, the third-biggest global centre for the gem trade; it houses 300 oil and gas service companies; and it is increasingly a hub for gold bullion trading. Just last week DMCC signed a deal with Borsa Istanbul to facilitate trade in bullion between Turkey and Dubai.
There are also rather less glamorous commodities, such as tea. “Dubai is the largest re-exporter of tea in the world. About 60 per cent of all tea is exported through Dubai, and we are the centre for warehousing, financing, blending and packaging that trade. We will be doubling capacity in that in the next 18 months,” says Mr Sashittal.
The regional commodity trade could be set for a further boost if western sanctions on Iran – a big commodity producer – are finally lifted. “It’s very early to talk about that, but we are open to trade coming in and whenever we can create an opportunity we will take it. The potential for business in Iran is vast,” he says.
The financial business remains an important and growing part of DMCC’s offering. It has the Tradeflow system, which enables businesses to effectively securitise the assets they hold in DMCC accounts via a system of certified warranties, which facilitates trade in those commodities.
The financial instruments of murabaha are also used by banks for retail and corporate lending, and increasingly treasury functions, says Mr Sashittal.
Simultaneously, DMCC is expanding its business in gold, oil and currency futures via the Dubai Gold & Commodities Exchange, its derivatives market. “The Indian financial community is showing a lot of interest, and we may aim for Chinese business in future. I’m sure the Chinese will come,” he says.
Some observers believe there are two main risks attached to DMCC’s breakneck dynamism: that it might step on the toes of other free zones in Dubai, such as the Dubai International Financial Centre embarking on its own ambitious 10 year growth strategy; and that it might outstrip the regulatory and compliance mechanisms necessary to ensure the highest of standards.
Mr Sashittal is sanguine on both counts.
“Competition is good isn’t it? And anyway, it’s all towards the same end of making Dubai a global financial centre for trade and finance,” he says. “And we take regulation and compliance very seriously. Our ‘transformation’ strategy brought most of the compliance functions online in a very advanced system, backed up by regular physical surveillance of member firms. We have no worries on that count.”
fkane@thenational.ae
Follow The National's Business section on Twitter
