In an exclusive interview with Gulf Africa Review, Ahmed bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC), discusses the outlook of the UAE’s largest free zone and its steadily growing relationship with Sub-Saharan Africa.
What distinguishes the DMCC among the free zones in its business case for African companies?
“For African companies and the rest of the world, DMCC listens first. We have built up our relationships by always doing our best to be the most efficient and rapidly growing free zone – which it still is, as well as now the largest. When it comes to African companies we welcome them, and they readily adapt to our culture of business and diversity. When it comes to commodity and resource holders, the key advantages are clustering and networking, as we have perhaps the largest concentration of international commodity traders.
“All of these companies have to be in Dubai or London or New York or a city like that, but when I look at the progress of DMCC, I compare two centres with the most similar environments to Dubai – Singapore and Hong Kong – and I either benchmark these or work to beat them. There are similarities of course: Dubai is to the GCC and India what Hong Kong is to mainland China.
“DMCC is a point of transaction for Africa, because it is a very favourable and user-friendly place. In the story of Africa, Dubai was always the best place for trade with countries such as India, and we now see this with Russia and China and their involvement with the continent. Africa has always been important to Dubai, and there are now numerous ties to Africa, from DP World’s ports to Emirates Airline’s routes to countries like Zimbabwe, Angola and South Africa, and the Emaar Group’s development of property projects across other parts of Africa.
“Things have changed: it’s no longer the eighties, where foreign companies are simply taking the minerals. Nationals are now heading the companies and are looking to expand, and just as much as we’re working to market DMCC and trying to access more untapped African markets and opportunities, they are looking to locate in the Middle East. And of course Dubai is always the favoured place, and when it comes to free zones, DMCC is the most favourable place.”
How has Dubai’s successful bid for Expo 2020 affected the prospective outlook of DMCC?
“Whether we want to or not, we were going to progress anyway, but the Expo 2020 gives us a nice feather in our cap and actually helped me in naming the tallest commercial tower in the world, because we were struggling with what to name it. The plan had been to crowd source a name from the twitter community. In the end our former CEO came up with ‘Burj 2020’, and I said I’d like to play devil’s advocate, argue and come up a better name, but I couldn’t – this was the best name ever: we just need to win the hosting of Expo 2020. Now everybody is looking at that tower – it came ahead of the curve when others had the jitters.
“Two years ago I said I would never touch construction – the toughest part of building DMCC was the infrastructure – but the demand is so good that I could not ignore it. After the announcement DMCC, all of the land around became prime land because of Burj 2020, and both the tower and the business park became more feasible than before. It was a big positive, but it was also an unintended consequence, and it wasn’t my target – that has always been to capture a lot of business, provide for the multinationals, and when all is said and done, have it so that no one can say that we didn’t provide enough office space.”
What proven partnerships has DMCC succeeded in establishing with African parties?
“Talking about competition in Africa, the tea centre in Africa has always historically been Mombasa. When we met with the Tea Board of Kenya trading authority, they too thought we were competition at first, but then they realised that they could redistribute and access more markets through Dubai – and that was back before the airport tripled in size and before the announcement of Al Maktoum Airport. Now Kenya’s tea board has an office in the DMCC tea centre, because they saw the value of redistributing from Dubai. And they’re still there because they got that value – so we also have a track record that we just didn’t have before.
“I also met with the President of another tea-producing nation bordering on Kenya when we’d just started the tea centre, and he informed me that he would like to use us directly and not go through Mombasa. When I asked him why, he explained that he would like to maintain the identity of his tea, and I told him, ‘Well don’t worry, we won’t brand it as Dubai tea. Nobody would believe us anyway.’ And I see more of this coming. Dubai will be a huge logistics centre as business moves forward, and the only way it will stop is if we are full.”
Is Dubai’s prevalence in the African diamond industry shifting sales away from Antwerp?
“Years ago we came to the conclusion that to grow the diamond industry we would have to secure the roughs, because if you have the roughs, then the polished diamonds come in, the other diamantaires and other companies follow. And as most of the rough – 60% or so – comes from Africa, it was clear from our side that we had to build up these relationships.
“I also met with the head of the HRD in Antwerp, and he said he often gets the question about whether Dubai is competing with Antwerp, and that this is actually somewhat misleading. His response was to say: ‘There is no competition. They do what they do around their European neighbours and Africa, and we do what we do. Both have their own pros and cons, but the reality is that there are only two diamond centres: Antwerp and Dubai.’ But it also has a lot to do with markets trends, and for Dubai to survive, we also need to have a strong anchor in finance.
“Coming back to Africa – when Zimbabwe held a diamond conference in 2012 people were circumspect, but a lot of traders came and it was a huge success and the EU lifted its sanctions within months and Zimbabwe held a tender in Antwerp. I then received a lot of phone calls asking me why Zimbabwe’s first tender had not been in Dubai, given my support for its industry, and I simply replied: ‘We still have that relationship.’ Because the Antwerp tender was a way of telling the world that Zimbabwe is open for business, but more tenders are going to be in Dubai, and at the first tender hosted by us the managers of the event were overwhelmed by the volume of diamonds, and it sent a strong, positive message to all African countries.”
In your opinion, what opportunities and countries are currently being overlooked in Africa ?
“A lot of countries are mining for minerals that are very scarce, and rare earths fall into that category. But coming from Africa, the things that I would see in the field right now is really gold, diamonds, agro, tea, pulses and flowers as well, because there is a very big chance that we will launch a warehouse to store and redistribute perishables.
“The amazing thing about almost all of Africa is its potential. They are rich underground and they are rich on the ground in terms of agriculture, because the land is virgin arable land. I noticed recently that the big Indian tea farms are getting old and the quality is declining, so the Indian tea families have bought huge amounts of land in Africa and are using the same strains of tea to produce tea there too – so now you have the same Indian tea, but in Africa.
“But in terms of countries, the fastest growing one is Angola, and the most overlooked is probably Namibia – which people underestimate because it used to be part of South Africa.
“I also went to Angola, and gave three interviews for Portuguese TV channels, and one was from Portugal and another was from Brazil, and I find that triangle of trade is very interesting. They have their own connections, as do Spanish speakers, and for twelve years we haven’t really tapped into these Latin communities. But I want to make sure that I have at least spoken to them, because they are diverse communities – the vice president of Brazil is of Lebanese origin – like many in Western Africa.
“I’m very bullish promoting DMCC to the big Arab and Indian communities in both Latin and African countries. On the subject of Lebanon, there are an estimated 14 million Lebanese outside ofthe country, and when the late Rafic Hariri was asked, ‘Why is that? Why are most Lebanese people living and working outside of Lebanon rather than in Lebanon?’ He said, ‘Oh, well that is easy to answer – because the ambitions of the Lebanese community are bigger than Lebanon’.”
What message do you have for Africa, the wider commodities community and Dubai?
“When I attended the Zimbabwe Diamond Conference at Victoria Falls in 2012, I was not popular doing that, but as Mohamed Alabbar said in his interview on Africa, ‘I know that there are issues, but they will be resolved, and I do not want to stand in line; I want to be ahead of the curve’ – we choose to build relationships. As for my thoughts on Zimbabwe’s tender and Mugabe’s visit, I’m not over our meeting in 2012 and I have yet to digest what just happened here, but I’m ecstatic about the fact that it’s going to encourage African countries to utilise the Dubai Diamond Exchange or whichever part of DMCC can help grow their business.
“Africa is hungry. Dubai just went ahead made what it did, and the countries that have resources are watching and saying, ‘Why can’t we do the same?’ Africa has the most mobile online users in the world, and Africans are growing up with these tools and using to rapidly dismantle impediments to business. They are also looking to the idea of one Africa, with one voice – even though its 54 nations – and it will happen fast. Africa want its own cosmopolitan cities, and why can’t they have them?
“Dubai was also a dream – the economic capital of the UAE used to be Sharjah, but now Dubai is hands down the economic capital of the Middle East. When His Highness Sheikh Mohammed bin Rashid Al Maktoum launched the DMCC and announced that it would attract 50% of the gold trade in the coming years, people thought it was impossible, but as of today, we capture 40% of the trade. What people didn’t understand when they heard in the speech were all of the other plans for aviation and business, but His Highness knows all of these plans –he’s just not sharing them all at once. I was once asked what his two favourite commodities were, and I said there were two: time and timing.
“Awareness is all important, and it has been sorely underrated how valuable understanding DMCC is to Africa’s relevant industries. And if they don’t know, they could lose out on an opportunity.”