Global ports operator DP World and a Chinese commodities trading company are partnering to develop a "smart" wholesale and retail traders' market in Dubai's Jebel Ali free zone.
DP World will own 70 per cent of the joint venture with Zhejiang China Commodity City Group Company (CCC) controlling a 30 per cent stake in the Traders Market project, DP World said in a statement to Nasdaq Dubai on Monday, where its shares are traded. Construction on the project will begin in the fourth quarter of 2019 and is expected to be completed within 24 months.
"This investment showcases our trade-enabling strategy as we look to catalyse trade and the movement of goods through removing inefficiencies and lowering supply chain costs," Sultan Bin Sulayem, DP World's chairman and chief executive, said.
China and the UAE are increasingly strengthening bilateral economic ties. The Middle East is a major part of the Belt and Road Initiative, Beijing's program to re-create the old Silk Road trading route that joins China with the rest of Asia and Europe. China is one of the UAE’s largest trading partners, with trade between the two countries expected to reach up to Dh257 billion by 2020, rising from Dh139bn in 2018.
The Traders Market in Dubai will span 800,000 square metres once complete, with the first phase of development covering about 220,000 square metres and an estimated capital expenditure of $150 million (Dh550m).
“The Middle-East/Africa region is critical for the Belt and Road Initiative, and we aim to serve this high-growth market through the Traders Market in Jebel Ali, Dubai," Zhao Wenge, group chairman of CCC Group, said. "We have chosen Jebel Ali for its efficient infrastructure, business-friendly environment and significant trade with China."
DP World has touted the Traders Market as the first smart free zone marketplace in the Middle East for retail and wholesale industries.
The project aims to serve the wider Middle East region with a population base of more than two billion. The market will allow traders to benefit from lower supply chain costs by using the infrastructure available in Jebel Ali and Dubai, DP World said.
International traders will be able to purchase bulk products in Dubai at wholesale prices with the shortest delivery times and meet demand more efficiently, it said.
Zheijiang-based CCC is a developer and operator of merchandise trading platforms. Its marketplaces serve approximately 75,000 traders and tenants, have a footfall of more than 200,000 visitors per day and attract over 500,000 international traders per year.