Dubai Special Advertising Section Welcome to Dubai, business capital of the Middle East. In the following pages, some of Dubai’s top business leaders talk about how they helped to transform a small pearl-fishing community into one of the fastest- growing cities on earth. Whether it is aviation, retail, leisure, technology, media, construction, industry or banking services, Dubai offers a world of opportunities. Enter Dubai, the small city that thinks big. DUBAI RISING DUBAI RISING
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CMYK
Dubai Special Advertising Section
Welcome to Dubai, business capital of the Middle East. In the following pages,some of Dubai’s top business leaders talk about how they helped to transform a small pearl-fishing community into one of the fastest-
growing cities on earth. Whether it is aviation, retail, leisure, technology, media, construction, industry or banking services,
Dubai offers a world of opportunities. Enter Dubai, the small city that thinks big.
DUBAIRISINGDUBAIRISING
FORBES Supp Cover (F) 5/21/04 7:16 PM Page 1
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IN A FEW MONTHS, I WILL BEreturning to Washington after three wonderful years as the United Statesambassador to the United Arab Emirates(UAE). I will leave this great country with asadness tempered by the knowledge that Iwill be able to board a plane in New Yorkand fly directly to Dubai, thanks to thelaunch this month of a direct service byEmirates. This direct air link by an award-winning airline that carries the UAEflag with such distinction can only help to consolidate and enhance the strong political and economic ties between theUnited States and the UAE.
Only last month, our embassy moved toa modern new building, our third movesince our two countries established diplomatic relations in the early 1970s. The architects who designed our newcomplex found inspiration in the beautifulrolling sand dunes that are a dominant feature of the desert around us. This samedesert is today being transformed by themost ambitious real-estate developmentsever undertaken. In Abu Dhabi and inDubai, land is being reclaimed from thesea to make way for a wider seafront or tobuild islands that will be visible from themoon. The United States hopes to be apart of this growth, and there is no doubtthat with the recent signing of the Tradeand Investment Framework Agreement,our trade and commercial relationship willexpand rapidly in coming years.
Thankfully, a strong, multifaceted relationship is more solid than the shiftingsands of the desert. It is perhaps a little-known fact that in the 1970s, theUnited States of America was the thirdcountry to formally recognize the UAE. Our new embassy in Abu Dhabi and our
consulate in Dubai will accommodate anexpanding staff and allow us to carry outthe wide range of diplomatic activities tosupport our strong and abiding relationship. Our commercial interests arestrong and our educational ties are broad.We are proud that many of the leaders ofthis country studied and lived in the UnitedStates and hope that young generations ofthe UAE will continue to study in America.The UAE ranks among our closest andmost important allies in the region, andunder the visionary leadership of HisHighness Sheikh Zayed bin Sultan Al Nahyan, President of the UAE, our partnership is today stronger than ever. ■
2 U.S. AmbassadorIntroduction
4 H.H. Sheikh Ahmed bin Saeed Al-MaktoumEmirates/Dubai Civil Aviation
8 Sultan Ahmed bin SulayemNakheel/Istithmar
12 Colm McLoughlinDubai Duty Free
13 Abdul Rahman Al MutaiweeDubai Chamber of Commerce and Industry
14 Tariq Ahmed BakerDutco
16 Ian FairserviceMotivate Publishing
17 Dr. Omar bin SulaimanDubai Internet City
18 Abdulhamid JumaDubai Media City
20 Rodney BoggDubai Golf
21 Mohamed Ali AlabbarEmaar Properties
22 Qassim SultanDubai Municipality
23 Jonathan Wride/Todd ThielCapital Partners
This supplement was produced by Intermedia, Dubai
Visit the Dubai Special Advertising Sectiononline at www.forbes.com/specialsections
Marcelle M. Wahba,U.S. Ambassador to the United Arab Emirates
INDEXConsolidating the Strong TiesBetween the United States andThe United Arab Emirates
ESTABLISHING ITSELF AS A TRULYglobal airline and proving that no turbulencein the skies or in the industry can clip itswings, Emirates has collected more than200 awards since it began operations in1985, and has just notched up threemore, including one for best economy-class airline.
But it is not only aircraft numbers, thevariety of destinations or the multinationalstaff and management that have putDubai-based Emirates in the big league,says Emirates Chairman Sheikh Ahmedbin Saeed Al-Maktoum. It is also thequality of service in the back of the plane.“Other airlines just talk about first-class orbusiness-class travel. Nobody everthought about people in the back of theaircraft. Those are the people who travelall the time, regardless of whether thereis a war or an economic crisis,” he says.
In the corporate sector, companiescurb executive travel at the first hint of aneconomic downturn or political risk, hesays, noting that Emirates was the first toput individual entertainment systems ineconomy seats. “The people in the backtravel all the time regardless of what happens,” says Sheikh Ahmedwith a smile.
Although a relative newcomer to the aviation industry, Emirateshas made use of its strategic base in Dubai to climb swiftly to the topfive in terms of profitability. Net profits and revenue for both Emiratesand the Emirates Group soared to record levels in 2004, bucking thegeneral downward trend elsewhere in the industry.
“The reason we saw record profits for Emirates was obviouslybecause of the growth that has taken place within the airline, especially in the last couple of years,” says Sheikh Ahmed, referring
to the buying spree that the airlineembarked on two years ago. “We madeit clear then that we were going aheadwith our plans regardless of what hadhappened around the world, whether itwas September 11, the Afghanistan waror the Iraq war.” While other airlinesfolded or cancelled aircraft orders,Emirates went ahead to place thebiggest single order in aviation historyfor 45 Airbus A380s. Over the nextdecade, Emirates will be receiving onenew plane a month, and it will havedoubled its fleet to more than 130planes by 2012, in time to cope with theanticipated rise in passenger traffic to29 million from 10 million in 2003. Thestart of the U.S. route, originally sched-uled for April, will contribute to growthas more U.S. destinations are added.
Sheikh Ahmed says security fears hadnothing to do with the delay to the start ofU.S. operations but rather the late arrivalof the A340-500 long-range aircraft andthe need to spend time designing a newseat configuration.
“It was something new that we weredeveloping in the last three years which needed to be certified and approved by the authorities. That took more time than weanticipated.” Among the unique features installed are individualsuites in First Class, special lighting designed to beat jet lag and500 entertainment channels in all classes.
“I think there will be a lot of business traffic on this route . . .We also have freight and this will enhance cargo operations on passenger aircraft,” says Sheikh Ahmed. Leisure travel would followas a promotional program kicks in and more routes are added.“Within the U.S., we are looking at other routes on the West Coastand other cities. We have an excellent bilateral agreement betweenthe two governments, so that will give us a more flexible way of putting on more flights.”
Emirates, which introduced flights to Shanghai last year, is lookingfor further growth in the Chinese mass market. Sheikh Ahmed notesthat only 0.01% of Chinese fly these days, but more will follow astravel restrictions are eased further. Emirates now serves more than70 destinations in over 50 countries, and by 2006, it will have its ownterminal with a concourse dedicated to the 600-seat A380.
H.H. Sheikh Ahmed bin Saeed Al-Maktoum holds a bachelor’s degree from the University of Denver, Colorado. He is the president of the Department of Civil Aviation, chairman of the Emirates Group and deputy chairman of the Dubai Executive Council.In addition, he is the chairman of DNATA and chairman of DAFZA, among others.
H.H. Sheikh Ahmed bin Saeed Al-Maktoum
“We have achieved the numbers we targeted,in terms of passenger and traffic growth,and we believe this is how the airline willcontinue in the next few years.”
Emirates: A Class ActEmirates airline has achieved another milestone in its award-packed historywith the launch of nonstop flights to New York.
“We have achieved the numbers we targeted, in terms of passenger and traffic growth, and we believe this is how the airline will continue in the next few years,” says the Emirates bosswith confidence.
IT IS EASY TO FORGET WHEN STEPPING INTO THISaward-winning airport that only four decades ago, the city wasserved by a single desert landing strip used by Britain’s Royal AirForce as a refueling stop en route to India.
As air traffic from West to East grew in the early part of the 20thcentury, Dubai’s strategic location came into play, with more and moreaircraft making stops in the emirate. Dubai eventually built a proper airport in 1965, in time to welcome the Comet, the first jet aircraft.
The oil boom of the 1960s and the 1970s transformed the nationof seafaring traders, and traffic through Dubai International Airportincreased to such an extent that a new terminal was needed. In1967, the airport handled 81,000 passengers.
As the government has shifted its economic focus from oil totourism, real estate and services, Dubai’s passenger traffic has ballooned. The airport’s two existing terminals are equipped tohandle more than 20 million passengers. Growth of 25% in passenger numbers in the first quarter of this year has confirmedDubai’s position as the second-fastest-growing airport in the worldin terms of passenger movement after South Korea’s Incheon.
“By 2010, the airport will be handling 60 million passengers,”says Sheikh Ahmed, who is also president of the Department of
Civil Aviation (DCA). U.S. airports like Chicago’s O’Hare may handlemore traffic, but the majority is domestic. “What we have here ismainly international traffic,” he says from his office just above thecavernous arrivals hall.
The installation of electronic gates that use fingerprint recognitionallow arriving Dubai residents to glide through with the flick of a
thumb, just one of the features that have made Dubai one of theworld’s favorite airports.
The adoption by the UAE of an open-skies policy has broughtwith it increased aviation traffic through Dubai International Airport.A total of 154 destinations in Europe, the Middle East, Africa, theAsian subcontinent, Southeast Asia, the Far East and Australia
The adoption by the UAE of an open-skiespolicy has brought with it increased aviation traffic through Dubai InternationalAirport. A total of 154 destinations inEurope, the Middle East, Africa, the Asiansubcontinent, Southeast Asia, the Far Eastand Australia are served by 105 airlinesoperating out of Dubai.
Dubai International Airport expansion plans include construction of Terminal 3 and Concourses 2 and 3, all dedicated to the exclusive use of Emirates.
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were served by 105 airlines operating out of Dubai in 2004.Emirates, which accounts for roughly half of all the traffic throughDubai International Airport, has just added one more with the startof a direct service to New York.
With passenger numbers set to treble at the end of the currentdecade, the DCA has embarked on a US$4 billion expansion program that includes building a state-of-the-art third terminal withone of two concourses dedicated to the new fleet of Airbus A380super jumbos that Emirates has ordered. Also included are plans toupgrade Terminal 2, currently used for short-haul flights.
The expansion plan includes construction of Terminal 3 and concourses 2 and 3, all dedicated to the exclusive use of Emirates.With a mega-cargo terminal being built alongside, Concourse 3 willcater to the 45 double-decker A380s. Construction has begun andcompletion is scheduled for 2006.
“This will be the hub for the A380, and you will see the biggestnumber of A380s anywhere in the world,” says Sheikh Ahmed withpride. The new terminal will be more than just a home for the newaircraft, although its sheer size could probably accommodate a fewinside. Ten soccer pitches could fit inside the new multistory build-ing. Much of the futuristic structure will be underground, beneaththe airport apron and taxiways, and will be largely invisible, muchlike an iceberg. It will have 180 check-in counters, 42 gates, twohotels, sports clubs and 10,000 square meters of commercialspace to include Dubai Duty Free and restaurants.
SHEIKH AHMED IS NOT concerned that the fast growth in passenger numbers will cause a security headache, saying theanswer is to hire more staff. “It is just like other businesses. As youhave more business, you have to increase your support, your manpower, everything. It goes hand in hand . . . I don’t see if youhave this number or if you have a bigger number that your securitymust deteriorate,” he says.
Not only are passenger numbers set to grow, but the new expansion is making way for an anticipated quadrupling of cargotonnage by 2018. The new mega-cargo terminal will include aflower center where flowers will be kept in a controlled climate before being shipped around the world.
“We created the flower center because we think demand forflowers in this region is going up; with more hotels and moreoffices, their requirement for flowers is actually going up and up,”says Sheikh Ahmed.
But the energetic royal is not yet ready to rest on his laurels. “With thehelp of the government of Dubai, we aim to build the most advancedaviation hub, not just in the region, but in the world,” says SheikhAhmed. He embarked on his journey in the aviation industry in 1985when he was appointed president of the Department of Civil Aviation(DCA). At the same time Emirates was launched and he was appointedchairman. In his endeavor to accomplish his mission, Sheikh Ahmedwent beyond managing the already instituted organization to building anaviation hub. DCA is today the governing body that oversees the activi-ties of Dubai International Airport, Dubai Cargo Village, Dubai Duty Free,Dubai International Hotel and Dubai Aviation Club. The fact that Dubai isnow firmly established as a desirable leisure destination is due in nosmall measure to the efforts of Sheikh Ahmed.
Sheikh Ahmed is deputy chairman of the Dubai Executive
Council. Headed by H.H. General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and minister of defense UAE,the Dubai Executive Council is responsible for formulating policiesand strategies for the emirate of Dubai. Sheikh Ahmed is alsochairman of Dubai National Air Travel Agency (DNATA), which ispart of the Emirates Group and the sole ground handling agency atDubai International Airport. He is also chairman of the Dubai AirportFreezone Authority, director of Emirates Golf Club, Dubai CreekGolf and Yacht Club and chairman of Alliance Insurance Co.
Sheikh Ahmed has been named one of the top tourism personalitiesin 2003 by Focus, a German business magazine, and the Middle EastPerson of the Year in 2001 by Travel Agent magazine, and has alsoreceived the “Honor of the Order of Merit Republic” along with the titleCommendatore from the President of Italy for his collaboration in thefields of arts and economy with the people of Italy. ■
When the panel slides open inside the futuristic offices of property-developmentgroup Nakheel on the 47th floor of the glass-fronted Emirates Towers, you cansee The World, a collection of 300 man-made islands clustered in the shape of a world map and covering 60 million square feet, or at least catch a first glimpseof it in the blue-green waters below.
Dubai Special Advertising Section June 2004
Nakheel: Offering a World Of Investment Opportunities
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GAZE A LITTLE TO YOUR LEFT AND YOUcan see a palm-shaped structure extendingout into the Arabian Gulf, one of two man-made island projects billed as “the eighthwonder of the world.”
Ambitious as these may sound, they are afraction of the galaxy of property-developmentprojects under construction that are set tochange the topography of Dubai and, itsdevelopers hope, complete this city-state’stransformation from a tiny fishing and pearlingvillage to a residential wonderland.
Overseeing these projects is leading Dubaibusinessman Sultan Ahmed bin Sulayem,who believes that economic activity, like theislands taking shape below, can be created.
“If you look at what we’re building, it’s a lot.What’s happening? Dubai is a busy city withmany business activities and initiatives. Thecity doesn’t have oil so it has to rely on manyprojects that will make the economy grow,”he says. “There are many traditional initiativesadding to the business activity in Dubai: theport is one, the dry dock another. Thenthere’s Emirates airline through its pilots,planes and accommodation and all it buys in the market; all this creates activity, which brings in more people who want to come, who want to live here.”
It is worth mentioning that the dry dock and the ports authority, aswell as the Jebel Ali Free Zone, fall within U.S.-educated binSulayem’s brief. The Corporate Office, as it is known, groups togetherNakheel; investment holding company Istithmar; the Ports, Customsand Free Zone Corporation; the Dubai Metals and CommoditiesCenter; and e-commerce portal Tejari. Within Nakheel’s portfolio arethe two Palm islands, Jumeirah Islands, The World, Jumeirah Lake
Towers, the Gardens Shopping Mall, GardenView Villas, Garden Apartments andInternational City with its catchy sales pitch: “A journey of a thousand miles begins with asingle step.”
When bin Sulayem walks into his office, heis totally absorbed in the task at hand. Fromthe specially designed carpet with its palmmotif to the space pod of a conference room,Nakheel and its complementary investmentarm Istithmar are ready to take off. BinSulayem’s assistant jokes that from thepanoramic office, his boss can actually keeptrack of the development projects and checkif they are on schedule. It’s said that the twoPalm islands will be visible from the moon.But for now, bin Sulayem has his feet firmlyon the ground, even if a lot of it these days isman-made.
Listing other Dubai success stories, binSulayem says a vibrant economy is the bestinsurance against crime and instability. “DubaiMedia City, Dubai Internet City, DubaiHealthcare City, Maritime City: all these activities actually create demand; and at the
same time, there is tourism, which began around 15 years ago with afew foreign visitors. Now we have over 5 million tourists every year. So Dubai gets more tourists than Egypt and the number is increasingby almost 20% every year,” he says.
Nakheel’s developments alone will provide more than 80,000 new housing units. Is he concerned that allowing foreigners to buyfreeholds or long leases will change the nation’s demographics andbring crime and other ills associated with population growth? “We’vemanaged to create economic activity, and residents of Dubai haveenjoyed the benefits; people have been provided with jobs andincome, adding to a sense of security. When people can earn a living,they never think of creating problems. It’s only when they cannotafford to bring bread to the table that they resort to other means. It’s a question of economics,” bin Sulayem adds.
He refers to Dubai Port as an example of how even a busy maritime hub can be secured against criminal activity with some forward thinking and the right investment. “Dubai Port is the only hub
Sultan Ahmed bin Sulayem,Chairman of Nakheel
“Now we have over 5 million tourists everyyear. So Dubai gets more tourists thanEgypt and the number is increasing byalmost 20% every year.”
between Europe and the Far East, and maritime industry cargomoves via Dubai. Dubai Port is therefore subject to many things thathave to be transferred,” he says. But anticipating trouble following thecollapse of the Soviet Union, the Ports Authority invested in new technology allowing it to scan 20 containers an hour rather than carrying out a much slower physical inspection of containers. “Wehave achieved our levels of security because we worked very hard for it. We earned it because we took the issue very seriously. Why do you think tourists come here? Because they are secure.
“Nakheel is fulfilling a need in the market for beachfront properties,resorts and so on,” continues bin Sulayem. “The Palm Jumeirah wasthe first project in the sea, involving land reclamation and the creationof an island. It resulted in a small island that didn’t give us much beachfront, so His Highness Sheikh Mohammed said we needed to make the island bigger by enlarging it on both sides, which has resulted in The Palm Jumeirah we see today.”
But the addition of 70 km of beach wasn’t enough, so one islandbecame two, increasing the existing coastline by 116%.
As Nakheel kept a ceiling on profits, properties on The PalmJumeirah were sold within four days of being offered. Among the buyers were stars of the England football team who happened to bein Dubai at the time the properties were put on the market.
“NAKHEEL’S PHILOSOPHY is to add a lower markup or put a ceiling on our markup because we want to make it attractive to people to buy from us. We want them to make money so theycome and buy from us again,” says bin Sulayem. That’s the traditional way of doing business in Dubai; you lock in your customer so they stay loyal to you. There is a slightly higher markupon properties being sold on The Palm Jebel Ali, which are 10% moreexpensive than on Jumeirah, partly to preserve exclusivity, says binSulayem, putting to rest any talk that the absence of a law allowing foreign property ownership makes investing in Dubai a risky business.
“There is no law to prohibit people owning property,” he says. Yet although the two islands have been sold out completely,
Nakheel will have to wait some time before showing a profit, given theUS$4.5 billion cost of the project. “We believe we will make money,but prices have gone up, including those for steel and cement, sonaturally our expected profit is going to be much less than forecast,”he says, although he is convinced the projects will eventually provecommercially viable.
He also rejects talk of a risk to the environment from the island projects. “U.S. companies were chosen to conduct studies becausethey’re more conscious of liability and would not have put their stampof approval on any project not environmentally sound,” he adds.
So when does it all end? “Dubai is expanding based on demand,and as long as there’s demand for the services in Dubai, we have to expand.”
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A tribute to the enduring symbol of theMiddle East, the Palms are an extraordinarytestimonial to Dubai’s progress as a world-class tourist and investment destination and magnify its reputation as a
residential wonderland. Consisting of The Palm Jumeirah and The Palm Jebel Ali,these two enormous palm-shaped residential and resort islands are visible fromspace and add a further 120 km to Dubai’s
coastline. Spectacular homes, theme parks and luxury hotels are set to dot thelandscape of these monumental engineeringmarvels that will be the eighth wonder of the world.
Jumeirah IslandsA lifestyle waterfront residence in the desert is now a reality.Jumeirah Islands is a picturesque self-contained community of 50 islands, enhanced by crystal waterfalls, lush parks and walkway bridges. In this inspiring retreat, one can choose from four island themes and three home layouts. Marinas, boathousesand other dreamy waterfront fantasies come to life in this idyllic paradise.
The Palms
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Sultan Ahmed bin Sulayem is recognized as one of the leading businessmen in Dubai. He is the executive chairman of Dubai’s Ports,Customs and Free Zone Corporation (PCFZ); chairman of Tejari.com, a B2B marketplace; and chairman of Nakheel. When not working,he is passionate about the outdoors, and his interests include endurance racing and deep-sea diving.
Located 4 km inside the Arabian Gulf, The World is a collection of 300 man-madeislands destined to be the ultimate statements of privacy and exclusivity.Clustered in the shape of a world map and
covering 60 million square feet, the onlyaccess to this personal paradise will be bymarine transport, making it the most exclusive residential and tourist destinationin Dubai. Each island will have a distinct
country theme and will be completely organic in nature. The World is truly a one-of-a-kind haven for selective privateinvestors looking for exclusivity and world-class real estate.
The World
Istithmar: Committed to Delivering Exceptional ReturnsOfficially launched in April 2004, Istithmar, which means investment inArabic, was initially backed by the government of Dubai and is a private, incorporated investment company. It was founded in 2003with investment capital of US$2 billion. Investments to date includeTamweel, an Islamic-finance institution providing mortgage and financial services, which has proved to be a welcome introductiongiven the explosion in demand for mortgages from potential buyers in the UAE and abroad.
“Istithmar is basically our investment arm that looks at investmentopportunities related to projects we are currently undertaking or projects we have already completed. So it’s a way of capitalizing on opportunities we feel are interesting . . . sometimes it’s also aninvestment that will probably attract other investments,” says bin Sulayem. “For example, we have a retail division because we build shopping centers, and in that way, we can own or become franchisees of certain agencies so that when we build these shoppingcenters, we already have several brands that can move immediately.So Istithmar in this sense helps the developer Nakheel in the projectswe have,” bin Sulayem adds, describing the integrated structure ofthe business. “We look at investments in fields we feel will enhanceour core business. For example, we are in the property business, soas finance is important to us, we have established a company calledTamweel. We as Istithmar own 50% and other groups own the rest.We also began securitization and once again, Istithmar plays its part.”
For now, Istithmar is focusing on investments within the group, butbin Sulayem says there’s nothing to prevent investments abroad inthe future. Tamweel differs from traditional mortgage lenders in thatno interest is added to the original loan. “There are people who
don’t want to borrow from banks, but are happy to borrow fromIslamic-finance houses. Islamic finance is basically similar to an investment bank,” he explains. “Islamic banks don’t believe youshould be guaranteed against loss, so in that way, Tamweel cameinto being, a way of ensuring that we lend people money. Naturallythere is a cost for that investment, but we do it the Islamic way.”
Other Istithmar investments to date are in Serco Gulf, formed toimprove the quality and efficiency of services at Jebel Ali Free ZoneAuthority, Dubai Ports Authority, Dubai Customs and the CorporateOffice throughout the UAE; Emirates National SecuritizationCorporation, a joint venture between Dubai Islamic Bank, Istithmarand the Island Capital Group; and in Clement Systems Gulf, a joint venture engaged in the design, construction and installation of floating concrete pontoon structures. ■
www.nakheel.com
Set in a sprawling 800-hectare development, International City isa one-of-a-kind, predesigned complex that will be a world-classhub for international investors, traders and retailers from aroundthe globe. It promises to be a virtual melting pot of world culture,commerce and lifestyle, able to provide excellent businessopportunities; superb tourist attractions, including a magnificentre-creation of Beijing’s Forbidden City; and a selection of residential options with varied country themes featuring theunique architectural styles of Italy, Greece, Persia, Morocco,China, Indonesia, England, Russia, France, Spain and Thailand.
Colm McLoughlin is running out of space for the more than 80 internationalawards Dubai Duty Free (DDF) has won in just over two decades under his management.
Players on the World Stage
“IT WAS ONE OF OUR IDEAS FROMthe very beginning that we would create ourbrand, which was Dubai Duty Free, and wesee that very much as over and above thebrands that we sell,” says Colm McLoughlin,who helped to set up the operation after hewas hired away from his job as head of the duty-free shop at Shannon Airport in Ireland,birthplace of the duty-free industry.
“We are probably the best-known operation there is. So yes, we are prettyhappy about our brand,” says the managingdirector of DDF.
McLoughlin came to Dubai in 1983 for fourmonths. He has been here for 21 years, during which period he and a staff of 100built DDF into the second-biggest operationafter London’s Heathrow. Of the originalemployees he calls the “pioneers,” 64 are stillwith DDF, which now employs 1,200 people.
“Based on our airport traffic, we should beranked about 16 or 17 in the world, but we’re ranked two or three,” saysMcLoughlin, who monitors operations in the adjacent terminal on anelectronic screen that beams back images taken by security camerasfrom the duty-free outlets and a 12,600-square-meter storage area below.
“Last year, we had sales of US$380 million. That ranks us as thesecond-biggest duty-free operation there is. The way our sales aregoing this year, it’s likely that we are going to exceed US$500 million,” he says. By 2007, when a third terminal will be completed,sales are expected to double. Around 7% of current sales were in thearrivals duty free, a project McLoughlin says was approved by hisboss, Sheikh Ahmed bin Saeed Al-Maktoum, with just one phone call.
McLoughlin attributes much of this success to the relationshipbetween staff and the government, which owns DDF. “One of the bigreasons we are successful is that everybody is kicking with the samefoot . . . we have a fantastic relationship with customs, with security,with immigration, the police and all the airport’s other interests.”
McLoughlin sees no reason for modesty. “Since the beginning, we decided that we would not be afraid to spend on marketing, promotion and sponsorship. We would not be afraid to talk and to
shout about ourselves,” he says, reeling off a stream of statistics.
“Last year we sold 35 million pieces ofmerchandise . . . In April, we did 886,000transactions on our registers, which is anaverage of 29,000 transactions every day,and that takes a lot to do . . . We sell 20,000or 30,000 dirhams’ worth of sunglassesevery day. We sell tons and tons of confec-tionary every day. We sell two tons of nutsevery day. We sold 100,000 mobile tele-phones this year,” he says, without pausingfor breath.
“Business has grown about 2,000% in thepast 20 years, and to just stay ahead of thatwas difficult. It was great fun but kept us verybusy,” he chuckles.
DDF stayed on top of the game by moving into areas not normally associatedwith perfume or cigarettes. Promotionalactivities include the popular car lottery
and the Millennium Millionaire draw. McLoughlin also took thebrand beyond the airport, building a tennis stadium, a sportscenter and, in tribute to his roots, the Irish Village, a pub that hasbeen voted one of the top 10 gathering places in the world.
“We have great fun in our work. We do a lot of other stuff apartfrom duty free. We own the tennis tournament, we own the tennisstadium, we own the Irish Village, we own the Aviation Club, wedo the Millennium Millionaire draw, we do the Finest Surprisedraw, we have done 1,100 motor cars, we’ve done US$38 millionpromotions, and this helps to pay for our marketing.”
From the start, McLoughlin knew better than to replicate Shannon,and DDF was designed for an airport that is a gateway between East and West. Over the years, DDF has sold fur coats to the affluentEuropean client, diamond-encrusted watches to the well-heeledArab princess, powdered milk for the child in Pakistan and goldbracelets for the prospective Indian bride.
McLoughlin’s role in carrying the Irish flag abroad was recognized in 2000, when he received the Millennium GalwayPerson of the Year Award. His adopted home has also found away of showing its appreciation. Next to the Irish Village is a replicaof the post office at Ballinasloe, the town where the man known as“Mr. Duty Free” was born. ■
www.dubaidutyfree.com
Colm McLoughlin has almost 40 years’ experience in the retail industry. After starting his career in London with a leading chain of departmentstores, he returned to Ireland, where he spent 15 years working as assistant manager, then general manager, of Shannon Duty Free.McLoughlin is married with three children. A keen golfer who plays off a single handicap, he also holds a private pilot’s license.
Colm McLoughlin, Managing Director of DDF
“Business has grown 2,000% in the past 20years and to just stay ahead was difficult.”
Dubai is unique in that the government moves as fast, if not faster than, the private sector.
The Speed of Economic Change
NOWHERE IS THIS MORE APPARENTthan at the Dubai Chamber of Commerceand Industry, which began promoting Dubailong before it became an international trading and business hub.
With almost 65,000 registered members,the Dubai Chamber of Commerce andIndustry (DCCI) is one of the biggest chambers of commerce, not only in the Arabworld, but on the Asian continent. “When thechamber of commerce was set up in 1965,the business community was very small, butthey were in need of an umbrella,” saysDirector General Abdul Rahman Al Mutaiwee.
“When the late Sheikh Rashed Al Maktoum, founder of modern Dubai,issued a decree establishing the chamber of commerce, he set in motion the real start ofbusiness and commercial activities in Dubai,”says the self-effacing Mutaiwee.
The potential for growth in the early yearsof the city’s development was very high, andwith the dawn of the 1970s, the chamber hadto cope with explosive economic expansion – and the task of promot-ing Dubai was left solely to the nascent chamber of commerce.
“The growth rate – compared with other countries – was very high,and we as the chamber of commerce had to cope with that and alsoinclude industrial activities, which started in 1975,” says Mutaiwee.“We had to start exhibits, host delegations, send delegations abroadand try to promote Dubai in a professional way.
“They were one of the first organizations to promote Dubai,” he says from an office overlooking Dubai Creek, the city’s economicartery before it acquired an international airport and the biggest man-made port in the world. “In the early 1980s, the Jebel Ali FreeZone and Emirates airline came along and the Dubai Trade Centerbegan to grow,” says Mutaiwee. These new organizations helpedshare the job of promoting Dubai, allowing the DCCI time to focus on serving its ballooning membership.
“The new strategy of the chamber had to accommodate all the newchanges and give more importance to members by providing themwith networking links, support and direct services,” says Mutaiwee.
In a few short years, DCCI has overtaken many of its contempo-raries in making use of technology to enhance its services. The
DCCI’s bilingual Internet portal contains acomprehensive business directory allowingaccess to information about its members inseconds. It includes links to other e-govern-ment sites and an online shopping service.
“The business community has grown andbecome very effective in the region so thechamber also has to serve this kind ofgrowth and be more interactive and proactive in order to support its members,”explains Mutaiwee.
But how will Dubai, one of seven emirates that make up the United ArabEmirates, survive in a world of huge economic blocs?
“No doubt, the trend now is towardseconomic blocs . . . obviously if you are asmall country, you benefit from these blocs,”he says. The Gulf Cooperation Council (GCC)and its promise of economic integration, customs union and eventually a commoncurrency will help to ensure that individualstates do not swim against the tide of
globalization. “We believe that an economic bloc for the GCC is theright way to protect our economies,” says Mutaiwee, adding that theEuropean Union’s enlargement was also likely to bring in newbusiness opportunities.
The UAE dirham is pegged to the U.S. dollar, but trade with theU.S. was down last year, though Mutaiwee says currency move-ments did not have much to do with it. “I believe it’s because thereare new players in the market. It is not because of the currency,” hesays, adding, “China is now the number one trading partner for theUAE and it is taking the share from other countries.” Japan, whichbuys much of its oil from the UAE, is the second. Trade with the U.S.and Europe is down because of others coming into the market and taking the share of European and American companies here.
Mutaiwee and other business leaders are hoping the launch ofdirect services by Emirates to New York will be a catalyst for growthin trade and business relations with the U.S.
He agrees that diversification of economic ties helps to createstronger political alliances while encouraging stability in the hostcountry. “We believe the more investment comes from differentcountries, the more stable the UAE will be because everybody willhave interests in it. It is a win-win situation and everybody will benefit,whether it is the exporter, the importer or the investor.” ■
www.dcci.gov.ae
Born in Dubai in 1953, Abdul Rahman Al Mutaiwee graduated from Cairo University in 1979 with a bachelor’s degree in economics. Al Mutaiwee is a board member of the Emirates General Petroleum Co. (Emarat) and a member of the board of governors of the EmiratesInternational Forum. He is married with eight children. His hobbies are reading and swimming.
Abdul Rahman Al Mutaiwee, Director General of Dubai Chamber
of Commerce and Industry
“We believe that an economic bloc is theright way to protect our economies.”
Nestled in a small street away from the bustle of Dubai is a low building dwarfed bythe skyscrapers sprouting all over the city. This is the headquarters of the DutcoGroup, a family business and one of the oldest and most successful in Dubai.
Carrying the UAE Flag Wherever the Job Takes It
“WE CONSIDER OURSELVES ONE OFthe lucky groups in town because not too manycompanies have had the opportunity to see thegrowth of a city from infancy to where we aretoday,” says Managing Director Tariq AhmedBaker, whose family and the Saleh family arejoint owners of Dutco. “We also grew with thecity . . . We’ve seen this city crawl, then walk,then run, and it is running faster . . .” The com-pany is about to move to new headquartersoverlooking the Dubai Creek, which Dutcohelped to transform into a lifeline for the citywhen it undertook the dredging of the khor, asit is known, to allow ships to sail right into thecity. The late Ruler H.H. Sheikh Rashid binSaeed Al Maktoum, affectionately referred to asthe “Father of Dubai,” ordered the expansionwhich helped to complete Dubai’s transforma-tion from fishing village to trading hub.
Dutco was established by the late YousufBaker in 1947, and in those days, “gut feeling” was your adviser, saysTariq Baker of the projects undertaken in the city’s formative years,many of which were deemed too ambitious for a tiny emirate that hadlittle more than sand, sea and pearls. “Our first real project was the deepening of Khor Dubai. At the time, ships and dhows would have to stop outside and goods were transferred into the creek by smallerboats. Sheikh Rashid wanted to consolidate Dubai’s position. Thatwas the pre-oil era and the dredging of the creek was the singlebiggest project at that time,” says Baker.
The vision of Sheikh Rashid for this region is being carried forwardfervently under the directives of H.H. General Sheikh Mohammed binRashid Al Maktoum, and Dubai is a good example of how a successfulpartnership between the government and private sectors can yieldgreat results. In 1976 Dutco began work on Jebel Ali, the biggestman-made port in the world then and now. As the city grew, Dutcobranched out from construction into manufacturing, hotels, engineeringand petrochemicals. Today the company employs more than8,000 people.
Dutco has been actively involved in many ofthe landmark projects executed in Dubai overthe last 20 years, not the least of which is theBurj Al Arab tourist development, a worldwideicon that has come to symbolize modern Dubai.“Our company constructed the island and theWild Wadi water park, among many other elements of the overall development,” says Baker.
From the airport and ports to the road infrastructure of the emirate of Dubai, the nameof Dutco has become synonymous with qualityand reliability. The group has many investmentsunder way in the UAE, including further touristand hotel developments, ship repair facilitiesand other real estate developments. In 1981,Dutco launched its own hotel chain when itopened the Jebel Ali hotel. “We are proud tosay that we were the first to introduce tourism toDubai. In those days, Dubai was known as atrading center, not a tourism center. The city
has grown in a phenomenal way and today tourism is one of the majorindustries in Dubai,” says Baker. Baker is modest about the scope ofDutco’s international operations. The group has joint ventures with UK-based Balfour Beatty and McConnell Dowell of Australia, with which it isinvolved in the massive Baku-Ceyhan pipeline project to carry Caspianoil and gas to the Mediterranean. Dutco, adds Baker without fanfare,was at one point among the biggest employers in Georgia. “We gowhere the job takes us, but we always carry the UAE flag,” he says.
He hopes the start of direct flights to New York will encourage moreU.S. companies to join in Dubai’s boom. “The sheer size of the projectsshows the need for further alliances,” says Baker.
Dutco also wants to expand the petrochemicals business ofInternational Octane Ltd., formed in 1990. Its Qatar plant producingmethanol and the fuel additive methyl tertiary butyl ether (MTBE) withthe expansion would become the world’s largest methanol-producingplant. Although MTBE has been a subject of controversy in the U.S.,IOL has been successful in replacing the reduced demand in the U.S.market for MTBE with the growing demands from the regional marketsand the Far East, says Baker. As for going public, there is talk withinthe family about possibly spinning off some of the group’s companies,says Baker. “Our challenge is to keep pace with the development inDubai and to introduce novel techniques and innovative concepts forthe 22nd century.” ■
www.dutco.com
Tariq Ahmed Baker holds a degree in civil engineering from the University of Southern California. He worked briefly at an MTBE plant in Canada before returning to work in the family business. He is a member of the Dubai Economic Affairs Council and of the YoungPresident’s Organization. He is an avid golfer, and his other interests include swimming, polo, deep-sea fishing, diving and football.
Tariq Ahmed Baker, Managing Director of Dutco
“We are proud to say that we were the firstto introduce tourism to Dubai. In those days,Dubai was known as a trading center. Thecity has grown in a phenomenal way.”
Motivate Publishing, the Middle East’s premier publisher of magazines, books,business and contract publications, celebrates a quarter century of success thismonth. Headquartered in Dubai, the company is in the perfect position to chronicle the UAE’s phenomenal growth.
The Power of Partnership
ON JUNE 1, 2004, MOTIVATEPUBLISHINGcelebrates its 25th anniversary marking thebirth of flagship magazine What’s On – thefirst magazine to be published in the ArabianGulf region. The same day an Emirates airplane takes off on its inaugural flight to NewYork, carrying in its seat pockets the inflightmagazine Open Skies, its own business mag-azine, Portfolio, and TV & Radio entertainmentguide – just three of the 16 magazinesMotivate Publishing now produces.
The two milestones demonstrate how thefate of a homegrown publishing firm is intertwined with the story of Dubai.
Born of a partnership between two youngmen, Emirati Obaid Humaid Al Tayer and 22-year-old Briton Ian Fairservice, Motivate hasalways had its finger on the pulse of Dubai witha string of titles covering all aspects of life in avibrant city – and throughout the Middle East.
Since that time, both the Fairservice family –Ian and his wife Janice have had four children –and Motivate have grown. Today the company employs 160 people,publishing a stream of quality magazines, including Gulf Business,the region’s best-selling business magazine, and Emirates Woman,the most popular women’s title in the region. Motivate is also the contract publisher of choice for the Gulf’s biggest brands. (See www.motivatepublishing.com for a full list of titles).
The company has also published, to date, more than 200 books,among them glossy coffee-table editions that chronicle Arabian
heritage and history, and, just out, a staggering two-volume recordof the craft heritage of Oman. (See www.booksarabia.com).
“Motivate Publishing has been able to shadow, report and, in someway, reflect the phenomenal development that the UAE in particular and
the Gulf region as a whole has experiencedduring the past 25 years,” he says.
And Motivate is in for the long haul, constantly looking out for opportunities toexpand globally. It has already establishedlucrative tie-ups with Australia’s Val Morgancinema advertising and a joint venture with aCanadian outdoor advertising firm, a naturalprogression for Fairservice, who for 20 yearshas been on the board of the InternationalAdvertising Association (IAA-UAE) and servedtwo terms as president. Fairservice alsoserves as the Middle East representative ofthe Cannes International Advertising Festival.
Other international collaborations includeworking with UK publishers HarperCollinsand with Walt Disney, publishing children’sbooks both in Arabic and English.
As for future plans, Fairservice will onlysay that a new joint venture is imminent.“We are looking at a tie-up with an international brand magazine. A great deal
of our future development, I believe, will involve partnerships, jointventures and strategic alliances.” Also in the making is a book beingproduced with the renowned photographer Lord Lichfield, cousin ofthe Queen of England.
Although Fairservice is identified with the brand he helped to create, he says credit for Motivate’s success must go to the enduring partnership between himself and leading Dubai businessman ObaidHumaid Al Tayer, who is president of the Dubai Chamber ofCommerce and Industry. “This partnership has really formed thebedrock on which Motivate Publishing has developed.”
As Dubai has grown, so has competition, but the irrepressibleFairservice welcomes the diversity. “When there were a dozen magazines being published in the UAE, we were publishing 10 of them. Now there are around 100 being published and we are producing 16 of them. I prefer this, because the magazine industry has finally come of age, and this was not something that we could have done alone. Now there are so many magazines that there are finally benchmarks, and in all of themajor categories, thankfully, we can say that Motivate sets those benchmarks.” ■
www.motivatepublishing.com
Ian Fairservice, managing partner and group editor of Motivate Publishing, together with business partner Obaid Humaid Al Tayer, have seenMotivate Publishing develop into one of the region’s most successful media houses. A founding member of the IAA-UAE Chapter, Fairservicehas been on the board for 20 years and served two terms as president. Al Tayer is president of the Dubai Chamber of Commerce and Industry.
Motivate Publishing has been able to shadow,report and, in some way, reflect the phenomenal development that the UAE inparticular and the Gulf region as a whole hasexperienced during the past 25 years.
Ian Fairservice, Managing Partner and Group Editor of Motivate Publishing
Red is the corporate color of Dubai Internet City (DIC), appropriate for a venture that takes pride in being at the forefront of “bleeding-edge technology.”And now, only three years since DIC’s launch, Chief Executive Officer Dr. Omar bin Sulaiman is ready to go global.
The E-volving Community
THE MOMENT YOU STEP ONTO THEred carpet leading into DIC’s corporateoffices, the secret to its stellar performance isrevealed, for the message is inscribed rightunder your feet. “Red carpet, not red tape”proclaims the writing on the red runner.“Everyone is a VIP at DIC” reads a secondinscription. “Dubai has always been a tradinghub. After the discovery of oil, the government utilized its oil resources andinvested in infrastructure . . . the airport,roads, logistics systems and the Jebel Ali Port. . . the largest man-made port in the world,” says bin Sulaiman. “People at the time askedwhy Dubai needed the biggest man-madeport in the world. The answer was that the government had a vision and that was tomake Dubai the hub of hubs.”
The 1990s saw diversification into tourismand other service industries, but soon the government was looking forother ways to generate economic growth. The concept of DIC grewout of consultations with industry leaders, says bin Sulaiman, whoseleadership traits would be obvious even if he did not hold a doctoratein the subject.
“We knew that locals in the UAE and Dubai represent less than20% of the population and that we could not do it on our own. We had to attract people, smart people, from all over the world. In order to attract smart people, we had to attract smart companiesfrom all over the world,” he explains.
Dubai was a natural choice to serve as a regional Information andCommunication Technology (ICT) hub for the emerging markets of theIndian subcontinent, North Africa, and the CIS (Commonwealth ofIndependent States) countries. “It is a huge market, and if you look atthe ICT technology industry in the region, it has been growing at arate of about 23% compared to about 8% or 9% in the U.S. andEurope,” says bin Sulaiman.
The government approached some of the leading companies that had some type of presence in the region and asked them forsuggestions. “Each company provided a wish list, and from this wish
list, we created Dubai Internet City,” he notes.What emerged was a tax-free oasis of
palm-fringed gardens and man-made lakes,what the DIC’s brochure describes as a“knowledge economy ecosystem,” an idyllicsetting for more than 600 companies and their10,000 employees. Bin Sulaiman says thetranquil environment encourages productivity,noting that most companies at DIC achievedtheir annual targets for 2003 in July of thatyear. “People talk about state-of-the-art or cutting-edge technology. We implementedbleeding-edge technology,” he says. Thisincluded the largest commercial implementationof IP telephony in the world. To help companiesfocus on their core business, DIC also provideda host of business support services.
The next step is to replicate the DubaiInternet City experience abroad. “The next
thing for us right now when we approve the strategy is to open campuses in other countries . . . we will start regional and then go international,” he says, adding that DIC is evaluating six countries.
For most people, that would be enough to take on, but binSulaiman is set to enter the lucrative outsourcing industry with a viewto capturing U.S. business. “Going forward, we will be focusing oncertain segments that we feel will create a new industry, and one ofthose segments will be business process outsourcing,” he says,stressing that Dubai is not competing with India. “We are focusing on the medium and high end. We are talking about financial services,
advanced medical services, advanced IT services.”Although bin Sulaiman has been at DIC’s helm since March 2002,
he proudly notes that it was completed a day before the 365-daydeadline set by Sheikh Mohammed, Crown Prince of Dubai, when itopened its doors in October 2000. The project has achieved morethan 100% growth in less than a year under bin Sulaiman’s leadership. There is little doubt that the outsourcing venture, whenlaunched, will set new benchmarks for quality and cost effectiveness. ■
www.dubaiinternetcity.com
Dr. Omar bin Sulaiman has been CEO of DIC since October 2000 and a member of the Board of the Dubai Technology and Media FreeZone since March 2002. He holds a bachelor’s degree in industrial engineering, a master of science in education and a master ofbusiness administration (MBA) in finance. He also has a doctorate in leadership.
Dr. Omar bin Sulaiman, DIC Chief Executive Officer
“That carpet is not for our guests. I put that carpet there for our own team. Because I wantthem to remember every time they walk out that this is what we are supposed to do: treateverybody like a VIP and make sure there is no red tape, only red carpet. This is the con-cept. It’s an attitude that’s part of our mission.”
Abdulhamid Juma holds a bachelor’s degree in economics from the University of Colorado. His early career included six years in seniormanagement positions at the Jebel Ali Free Zone. He was sales manager at Citibank for two years. In 2000, Juma was named a memberof the initiating project team for Dubai Internet City. He was appointed CEO of Dubai Media City in March 2002.
“To me, knowledge economy is using your brain rather than your muscles or yourinherited resources,” says Abdulhamid Juma, chief executive officer of DubaiMedia City, the region’s unrivaled media hub.
Development of a New Economy
“THE IDEA OF DOING SOMETHINGlike Dubai Internet City and Dubai Media Citywas revolutionary in this part of the world,”says Juma. “It represented a move away fromnatural resource-driven revenues for the gov-ernment of Dubai. And I am not afraid to say it,but the lack of natural resources has actuallybeen a blessing for Dubai.”
How so? “Dubai does not have many natural resources like oil and gas in the sameamount as neighboring countries. This forcedDubai to be innovative in trying to bring innew revenue to sustain growth.”
Dubai’s oil reserves are modest and it wasforced to diversify into tourism, the hospitalityindustry, real estate and transshipment, abusiness Juma was involved in previously.
“By 2000, we were thinking: ‘We havedone well for the last 25 years, but how arewe going to go on doing that for the next 50 years?’” explains Juma. “Technology was there and Dubai wanted to jump on the bandwagon. The Internet was hot butnobody really knew what it could do for them. So the idea came to create the Dubai Technology and Media Free Zone.”
So the government set up Dubai Internet City and Dubai MediaCity as high-tech hubs for the media and technology businessesserving the Middle East, the Indian subcontinent, Africa and the CIS.Last year saw the addition of Knowledge Village, a multinational
learning center Juma hopes will develop future recruits.Before Dubai Media City was set up, the concept of a free press
was alien to a region where state-owned media prevail, which is whya giant sculpture of a butterfly, symbol of freedom and rebirth, waschosen to adorn the entrance to the media hub.
“It was revolutionary to even think of having a media city or something to do with the media in this part of the world,” explains Juma.
But the slogan “Freedom to Create” proved a strong lure. Morethan 820 companies in broadcasting (16% of the total), communication(26%), production (10%), multimedia or new media (10%) and services
(8%) have set up shop at Dubai Media City.The signs atop the state-of-the-art buildingsof Dubai Media City are a panoply of logosbearing the names of such media giants asCNN, Reuters and the Associated Press.Every inch of the 1 billion square feet of itsbeautifully landscaped grounds has beensnapped up, while an additional 40 millionsquare feet has been allocated to anInternational Media Production Zone, initiallyfocusing on the printing industry. The firstDubai International Film Festival in Decemberwill fulfill Juma’s ambition of using DubaiMedia City as a platform to build culturalbridges using music and art.
But has this freedom to create been challenged yet?
“No. People do not want to challenge justfor the sake of challenge, but they will testyou to see how far they can go.” One way of
ensuring that freedom is not abused was the establishment of anadvisory system for settlement of disputes before a UK-based arbitration committee. “I think the arbitration system is very good . . .It is healthy and very advanced,” says Juma, whose office overlooksone of the many man-made lakes that give the place an air of serenity.
But enter any one of the restaurants that serve the diverse mediacommunity and you feel the buzz. There are no barriers to creativityand no clutter of administrative chores. What is on offer is a one-stopshop that caters to every need from visa processing to licensing in atax-exempt package that provides for 100% business ownership.
“Media is like finance. It has to have credibility. People want to behere because they are different, because they are free. They want toexpress themselves and we have to provide an environment forthat. That did not come overnight. It comes with time,” he notes.
Juma says the aim now is to move out of the real estate side andconsolidate on that success without losing the original “wow” factor.
He is also looking to attract more U.S. business. “A lot of peo-ple thought after 9/11 that it was going to be difficult for mediacompanies to go outside the States, but actually it is the otherway round. Now they want to know: ‘How can we understandeach other more?’ And there is nothing better than the media todo that. A lot of broadcasters are trying to build those bridges and trying to understand because they don’t want this disaster tohappen again.” ■
www.dubaimediacity.com
“People want to be here because they aredifferent, because they are free. They wantto express themselves and we have to provide an environment for that.”
Abdulhamid Juma, Chief Executive Officer of Dubai Media City
“When H.H. General Sheikh Mohammed bin Rashid Al Maktoum built the firstgrass golf course in Dubai, its main purpose was to add to the infrastructure ofDubai. Since then, we have developed golf as part of the tourist drive.”
Desert Miracles Are Par For the Course in Dubai
RODNEY BOGG, THE AFFABLE managing director of Dubai Golf, hasplayed a significant part in bringing golf toDubai, creating from the desert sand golfcourses acclaimed as “desert miracles” and developing Dubai as a tourist destination.Tiger Woods helped a little too. WhenWoods was photographed teeing off fromthe helipad atop the Burj Al Arab beforeplaying in this year’s Desert Classic,Dubai’s reputation as a prime golfing destination was sealed. “That photographappeared in almost every newspaper andgolf magazine in the world. That’s the scopeof the publicity that you get from hostinginternational tournaments,” says Bogg, whois as modest about his managerial skills ashe is about his golfing ability.
Under his guidance, the Emirates GolfClub, with its distinctive Bedouin style clubhouse amid undulating green fairways,opened for business in 1988 and very quick-ly took a place among the world’s prime golfing destinations.Thanks largely to Bogg’s efforts and those of a highly professionalteam, Dubai today rubs shoulders with such prime golfing destina-tions as Scotland, Portugal and the U.S.
“One of the first things that we invested in was a European Tourgolf tournament, partly for the publicity and partly to put Dubai onthe world sporting map,” says Bogg from his office at the EmiratesGolf Club, home of what is now the Dubai Desert Classic, one ofthe top events on the European Tour and on Dubai’s social andsporting calendars. “We hosted the first one in 1989 and it’s beenrunning ever since,” he says with enthusiasm. “We’ve had the topplayers here. Tiger Woods, Greg Norman, Seve Ballesteros, NickFaldo and many more have been here and they all rave about thegolf course.”
The club’s award-winning par-72 Majlis course has been joined by a second par-72 challenge, the Wadi course, offering golfers a serious challenge in desert terrain that has gone tropical with theyears, attracting more than 130 types of migratory birds.
Former U.S. President Jimmy Carter camebird-watching with his wife a few years back.But how does one make a garden grow inthe desert? “Anything will grow here if it’slooked after properly, with the right fertilizersand sufficient water,” says Bogg.
With tourism in Dubai taking an increasingly important role as a revenuesource in the non-oil economy, Bogg andhis team are now expanding into golf travel through a new company, Dubai GolfHolidays and Events, specializing in inboundand outbound golfing holidays. Another veryimportant development is the central reservation system, which makes booking agolf holiday in Dubai easy.
“It’s actually been amazing how golf hasgrown. After opening the Emirates Golf Club in 1988, the government invested in two further clubs, the Dubai Creek Golf & YachtClub and the Nad Al Sheba Club, and sinceprivate investment began there are eight
golf courses and quite a few more on the drawing board,” saysBogg. “The growth of golf in Dubai has been parallel to theexpansion of commerce, tourism, the hotel industry and Emirates.Three years ago Dubai was awarded the Emerging Golf Destinationof the Year by the International Association of Golf Tour Operators,a great compliment to all the clubs, and to Dubai, considering ourshort history.”
The game has picked up to such an extent in the last few yearsthat the Dubai Creek Golf Club with its scenic views of the DubaiCreek and its stunning 18-hole course is being expanded to makeroom for a 230-bed hotel and 92 villas. Nad Al Sheba offers floodlit golfing for night play, popular during the sizzling summermonths. “I have always tried to follow the Disney mantra of creating enjoyment, and if there’s anything of me here, I’d like tothink it’s a welcoming and friendly atmosphere,” says Bogg whenasked what drives his ambition. ■
www.dubaigolf.com
Rodney J. Bogg (Rod) was born in the UK in 1947. Having started his career as a trading standards officer, he brought his consumerawareness skills into club management in the late 1970s. Recruited to launch Emirates Golf Club in 1987, he has opened and managedthe first three of Dubai’s golf clubs. Bogg is married with two grown sons, enjoys golf and walking, and is an avid reader.
Mohamed Ali Alabbar runs into the room, ready to tackle the next task on hisbusy itinerary. As the head of Dubai’s Emaar Properties, he knows all about setting the right tempo.
Bringing Invention and Creativity to Real Estate
“THIS PLACE IS MOVING SO FAST THATin order to catch up you have to be a sprinter,”he says of the fast-paced development thatDubai has seen in the last decade. He hadflown into Dubai that morning, attended aboard meeting of the Department ofEconomic Development and dealt withissues relating to one of the dozen or soconstruction projects being undertaken byEmaar Properties, which he heads. And allthis before lunchtime.
Much has been said about the role theU.S.-educated businessman has played inDubai’s transformation and how as a youngman he was transferred from a job at theCentral Bank to run the government’s real-estate operation in Singapore. Impressed bywhat he saw there, he set out to emulate theprocess at home, setting up EmaarProperties on his return to Dubai in 1992,with a self-appointed mission to enhance thequality of life in the emirate. Today, the company is one of the top 10 real-estate developers in the world in terms of the number ofhomes delivered.
“For 70 years, there was no development in the Middle East . . .development that affects the quality of people’s lives,” says Alabbar.In North America, it is usual to find neighborhoods where people liveas part of a community, where children can ride their bicycles, playbasketball and walk to school, but nothing comparable exists in thispart of the world, he adds.
Emaar Properties, which has just announced profits of Dhs208million (US$56 million) for the first quarter of 2004, up 22% over thesame period in 2003, is creating housing communities that arechanging the desert landscape and the social fabric of this onetimenomadic nation. About 15,000 housing units are under constructionin Dubai Marina, Emirates Living and Arabian Ranches developments,offering different lifestyle options to citizens of the 200 nationalitiesthat make up the diverse population of Dubai.
“It is about creating a lifestyle. It is aboutcreating a decent way of life that improvesthe quality of life for people and brings somereturn,” says Alabbar.
With all the properties sold even before the first brick was laid, Emaar Properties is moving on to bigger things with plans tobuild the world’s tallest tower, Burj Dubai,and the biggest shopping mall, which willcover an area of 5.5 million square feet. “Why Dubai? Because we have 1.5 billionconsumers around us that have nowhere togo. They have no baseball game to watch . . .and because they have none of these socialactivities, shopping becomes a pastime,”says Alabbar, who sees Dubai serving notjust the Middle East but India as well. EmaarProperties is in the process of building agated community of 700 houses and a golfcourse in Bangalore, with plans for a similarproject in Hyderabad.
“We are 300 million people here in the region, yet we have onlyone New York, and that is Dubai,” he says. “We need Chicago, D.C.,we need Los Angeles and San Francisco,” he adds, justifying theconstruction boom in Dubai, where land is being reclaimed from thesea and the desert to make way for new construction projects.
“We actually have 1.3 billion people because we have India next tous. India has only Bombay. We need another New York for India.”
With the number of visitors to Dubai growing at a rate of 10% to12% a year, a gigantic shopping mall makes sense, says Alabbar,adding that the response in the pre-leasing phase has been phenomenal. “In retail, you are either big or you are nobody. We like to do big things.”
And they don’t come any bigger than Giorgio Armani, who haslinked up with Emaar Properties to build 10 hotels and five resortsworldwide, the first at Burj Dubai. “The tie-up with Armani is in linewith the core of our business by bringing invention and creativity tothe real-estate business. It gives us a tie-up with a well-known globalbrand, a brand that people have a feel for: for its glamour, for itsstyle, for its prestige. It gives us the advantage to take somethingpowerful like that and go global with it,” says Alabbar. “It’s a goodgrouping. I think we are going to have fun, do business, make a bitof money and bring lifestyle to people’s lives.” ■
www.emaar.com
Mohamed Ali Alabbar is acknowledged as one of the most successful businessmen in Dubai. After a distinguished career in senior government positions, he moved into the private sector to establish blue-chip enterprises. He is a member of the Dubai Executive Counciland the Dubai Economic Council, vice chairman of Dubai Aluminium and director general of the Dubai Economic Department.
Mohamed Ali Alabbar, Chairman of Emaar Properties
“It is about creating a lifestyle. It is aboutcreating a decent way of life that, firstly,improves the quality of life for people and,secondly, brings some return.”
Sitting in the pristine waiting room of the Dubai Municipality building, it is easyto see why the UAE emirate of Dubai functions so well. From the ergonomicallydesigned chairs to the immaculate carpets and the coasters stamped with themunicipality’s logo, the room mirrors the well-managed world outside.
How to Create an Excellent City
AT THE HEAD OF THE INSTITUTIONis Qassim Sultan, director general of DubaiMunicipality, the body that has overseenDubai’s galloping transformation from a tinycoastal community to one of the fastest-growing, most modern cities on earth.
With land reclamation projects and a construction boom that will eventually morethan double Dubai’s land area, the need forthe municipality’s services is keeping themore than 12,000 staff busy. That is why themunicipality is wasting no time preparing forthe anticipated increase in road traffic withplans to build an urban over-ground andunderground train service at a cost of US$4billion in the next few years. The municipalityestimates that some 1.2 million passengerswill use the Dubai Metro when it is completed in 2010.
At the municipality museum, the history of Dubai has been laid out in a series of small-scale models showing past, presentand future housing developments, major park projects, industrialplants, a new zoo, a sports city and a shopping mall.
Before 1960, around the time that the first barrel of crude oil wasproduced in Dubai, the city consisted of two communities of some
10,000 people on either side of the Creek. There were no roads or util-ities, and Dubai Municipality, which had been set up in the 1940s, hada staff of three. The earliest model shows two clusters of mud struc-tures separated by a narrow body of water and surrounded by desert.That area still retains the city’s Arab heritage, where the ancient homeof the city’s ruling family and the museum have been restored.
Although not blessed with abundant oil reserves, Dubai at the timeproduced enough crude oil to generate revenue that helped fuelrapid growth.
In the 1960s, the Creek was dredged and widened, the world’sbiggest man-made port was built and a new trading hub was
created. The late H.H. Sheikh Rashid binSaeed Al Maktoum, the father of modernDubai, issued a decree at the time setting upDubai Municipality as a corporate body witheverything within the emirate’s borders coming under its jurisdiction.
The municipality and lands building, thesmall airport, hotels built for the use of airlinesand the Al Maktoum Hospital were the city’sonly landmarks.
By any yardstick, Dubai’s growth has beenphenomenal, with buildings 40 or 50 storieshigh sprouting up in a matter of months, notyears. Since 1983, spending on roads alonehas leapt from 73 million dirhams (US$20million) to 3.7 billion dirhams (US$1 billion) in1995. Dubai today does not resemble adesert state. The half-dozen verdant parks inand around the city and the palm-fringed beaches give it the look of a tropical resort.
All these projects helped to earn Sultanone of many international awards for urban
management. His role in transforming Dubai was recognized furtherwhen, in 1994, he was selected as the first goodwill ambassador forthe United Nations Centre for Human Settlements (UNCHS) in theArab region.
As residential space has run out, Dubai’s rulers have dredged thesea, creating man-made islands on which to build more homes andreclaiming the desert to build yet more. The population of just under1 million is set to more than double by 2010.
Asked whether the fast-paced growth will stretch infrastructureand civic services, Dubai Municipality says no project is approvedunless it meets strict environmental criteria and complies with thebody’s mission, which is: “To create an excellent city that providesthe essence of success and comfort of living.” ■
www.dm.gov.ae
Qassim Sultan started at Dubai Municipality as an assistant engineer and moved up the ranks to become director general. The UNCHSselected him as its first goodwill ambassador in the Arab region in 1994. He is also chairman of the development board of Dubai.
Qassim Sultan, Director General of Dubai Municipality
Dubai’s growth has been phenomenal, with buildings 40 or 50 stories high sprouting up in a matter of months, not years. Since 1983, spending on roads alone has leapt from US$20 million to US$1 billion in 1995. Dubai today does not resemble a desert state – verdant parks and palm-fringed beaches give it the look of a tropical resort.
A founder and principal of Capital Partners, W. Jonathan Wride began his career with Salomon Smith Barney. He has founded financial services companies and served as chief executive, with an emphasis on private equity, investment banking and brokerage.
ENTER JONATHAN WRIDE AND ToddThiel, managing directors of private equitycompany Capital Partners, who did justthat, blazing a trail by staking a half-billion US-dollar claim in the investment hub of the region. Capital Partners is now a premier international prospector in this new commercial frontier and is set to enjoy theresults of its commitment to the MiddleEast’s “City of Gold.”
“We’ve made a tremendous commitment toDubai,” says Wride, seated in offices wherewhite walls, white carpets and black andstainless steel furniture suggest discretionand efficiency. “Our first project in Dubai isapproximately US$500 million,” he says ofthe “small city” development that is beingfunded primarily by private U.S. capital.Wride is very private about the details oftheir projects, providing only a few tantalizinghints such as the forthcoming launch of aleading U.S. business school in Dubai.
“Our first development will be built on the principles of NewUrbanism – an international movement to improve quality of lifeby creating diverse, walkable, vibrant, mixed-use communities assembled in an integrated fashion,” Thiel explains. “The projecthas been designed with a unique identity, but also to beinstantly recognizable by the international community. Our aimis to bring people together to live and work in an environmentconducive to personal and commercial success. Investments ofthis magnitude show a considerable commitment from ourAmerican group and demonstrate our level of confidence in theDubai market.”
Capital is not the only contribution CapitalPartners is making to Dubai’s success.Using its contacts within the financial markets, the company has been a proactiveadvocate for the emirate, courting both private-sector and government officials. Thishas helped turn the opinion of leading financial houses and attract attention frompremier Wall Street and European bankers.Now, less than two years since launchingtheir operation at Dubai Internet City, Wrideand Thiel are set to open a New York officeto handle the surge in interest from the U.S.
“Investors and executives who want to invest or open a business here askabout the corporate environment in Dubai.We tell them it’s quite remarkable . . . Wesay that if you were blindfolded and trans-ported here, you would think that you werein Southern California.” To hear Wridespeak, you would think he was born in the
UAE, so enthusiastic is he about Dubai.“I look out my window and I see Dell, Cisco, IBM, Microsoft,
CNN and more, so by no means are we alone. There is an opportunity to access a trillion-dollar regional market from Dubai,and where there is opportunity, capital will follow. We have confidence in the government of Dubai and its ability to deliver,”says Wride. “We are opening a New York office because of thedemand created and the interest in Dubai as a whole. We see it as abridge between the U.S. and Dubai and have received endorsementsfrom U.S.-government officials in support of our efforts.”
Capital Partners manages institutional real estate, private equityand hedge funds, and is in a position to act as a conduit between
Staking a Claim In the New FrontierIn 2002, if you were an American venture capitalist and announced your intentionsto invest in the Middle East, at best you might have been considered courageous.
“The project has been designed with a unique identity, but also to be instantly recognizable by the international community. Our aim is to bring people together to live and work in an environment conducive to personal and commercial success.Investments of this magnitude show a considerable commitment from our American group and demonstrate our level of confidence in the Dubai market.”
Jonathan Wride,Managing Director of Capital Partners
Todd Thiel is a founder and principal of a series of management companies and corresponding funds, including Capital Partners. He spent 10 years at Salomon Smith Barney, where he was a senior vice president. He holds an MBA from Marquette University and a bachelor’s degree in business administration from St. Norbert College.
the U.S. and Dubai. Its sister company in the U.S., Buena VistaEquities, is involved in a number of institutional-sized real-estateprojects and has a history of partnering with some of the largest financial firms in America. Its Dubai development is one of the largest in thegroup’s history – a clear signal of theopportunities that Wride and Thiel see in Dubai.
With Dubai going through a boom intourism, construction and industry, CapitalPartners is also looking at servicing and operating these developments. “With anarea expanding and growing as fast asDubai, there is a lot of need in these areasand a great deal of opportunity,” Thiel says.
Wride lists other advantages such as apro-business government, an excellent pool of talent and an eclectic and safe environment for Western families with children. “The biggest plus is the support ofDubai’s government; if you tell them whatyou’re looking for and what you will bring tothe market, they are more than happy topoint you in the right direction.”
“There is no government in the world today that is more progressive, more pro-business or working harder to develop a
strong business environment. Dubai is a very modern city with all ofthe amenities you would find in the U.S. or other established markets. My children are truly privileged, as they get to grow up
learning about other cultures, and I hopethat when they visit the U.S. that they sharethis knowledge with others,” explains Wride.
Capital Partners’ vision is to expand itsinvestment portfolio in Dubai prior to seeking new opportunities in emergingmarkets across the Middle East, Asia andthe Commonwealth of IndependentStates. “Capital Partners has gained a critical first-move advantage. We have themeans to explore an area that has consis-tently delivered results for some of theworld’s most complex projects. Becauseof our willingness and ability to step intothe market, we have captured a significantposition that will prove to benefit thoseinvestors and companies that are interest-ed in moving aggressively into this mar-ket,” Thiel says.
With several multimillion-dollar projects onthe way, Capital Partners is a case study
of how a company can overcome acceptable risks to provide thehighest returns through visionary leadership. “We have embracedthe culture, community and business environment here. Dubai isthe place to be for business today. In our opinion, if you are notseriously looking at Dubai, then you will be missing an opportunityto participate in one of the fastest-growing markets in the world,”Wride says.
The 21st-century Gold Rush has been declared, and CapitalPartners is blazing a trail for others to follow. ■
www.capitalpartnersfz.com
Dubai Internet City and its close neighbors, Dubai Media City and Dubai Knowledge Village, have had a huge impact on Dubai’s economy.
Todd Thiel, Managing Director of Capital Partners
“There is no government in the world todaythat is more progressive or working harderto develop a strong business environment.Dubai is a very modern city with all of theamenities you would find in the U.S. orother established markets.”
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