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*MELTING BORDERS*
By Roy Kumar

Usually in emerging markets talks revolve more around
the need to woo inward investments and how to preen domestic economic policies to make it look attractive to foreign investors. The frequency at which the need to lure FDI (foreign direct investments) is debated sometimes eclipse many bold moves by corporate entities in these countries that chart out their own go global growth.

These entities that have drunk the brew of success on home turf go at globalising their reach with an infectious verve. They put their entrepreneurial best foot forward leveraging core competencies.

In Dubai many business entities, cutting across both public and private sectors, are increasingly putting their expertise to test in countries outside its domicile. This is most true of corporations, like ports and free zones for instance, which have enjoyed consecutive successes over the years they have been in existence.

For some of the business entities, perhaps in industries like oil, branching out of the emirate is not just testing the waters but a natural necessity in growing. Mature business experience in the domestic market helps the foreign forays of these entities more sure-footed.

Sometimes, raiding the overseas markets is limited to product offerings, while for some business groups it entails joint ventures or also opening fully-owned subsidiaries. On a broader macro-economic front the logic of moving beyond domestic markets complements the rapid efforts at economic diversification on the home turf.

In its own way, these moves signify to the world the seriousness, with which efforts are undertaken to unshackle from the overdependence on oil for daily bread.

Which is why Dubai's Emirates National Oil Company (ENOC) joined hands with Dragon Oil, taking a major stake in the exploration company prospecting crude on a Caspian concession in Turkmenistan. Or why the Dubai Ports Authority (DPA) took up a port management contract in Djibouti on the Horn of Africa. Another instance is of Dubai's exhibition company, the Dubai World Trade Centre (DWTC), taking its premium IT expo, the Gitex, to Cairo, Saudi Arabia and India.

In industries like construction, Dubai-based companies have the expertise, which could be put to profitable use in the region and the Subcontinent, where the infrastructure development is on the priority agenda. In areas like banking, too, overseas opportunities are being looked at as a big business possibility now.

The New Quest

On the growth trail, Dubai's home-grown oil retailer and refiner, ENOC, and the hugely successful Dubai Ports, Customs and Free Zone Corporation (PCFC) - both government owned entities - are on a constant search mode to spot new roles for itself in overseas markets. ENOC has over 66 per cent stake in Dragon Oil Plc, an independent oil and gas exploration and production company listed on both, the London and Dublin stock exchanges.

On the distribution front, ENOC, is now reaching out to markets far and wide from Africa to Far East. The Dubai Ports Authority (DPA) and the Jebel Ali Free Zone Authority (JAFZA), under the merged entity of PCFC, are actively looking out to take management contracts in ports and free zones in the region and beyond. Both, the free zone and DPA have active dedicated divisions to this end, which is entrusted with finding new markets and responsibilities.

DPA has now two port management contracts - Djibouti and Jeddah, having exited from a third role in Beirut recently. DPA's quest for a `Middle East Triangle' in port management continues, apart from the authority eyeing port contracts in countries like India. In fact, according to a senior Indian cabinet minister on a visit to Dubai recently, DPA has been given a 30-year BOT (Build Operate and Transfer) contract for the Vizag port in the state of Andhra Pradesh in India. DPA has MoU-based relationships with ports and free zones of Sudan, Tunisia and Libya for developing human resources, technical management consultancy and information technology systems.

JAFZA is also scouting around to don management mantles in overseas free zones. The 20-year port management contract DPA has in Djibouti also envisages establishing a free zone in that country. JAFZA has signed many MoUs (Memorandum of Understandings) with countries for free zone cooperation and is sure to land a free zone management role for itself outside Dubai in the near future.

Spreading out into markets with its product portfolio, ENOC is now carving a brand niche for itself. The latest news is its intention to spread its wings to Iran where ENOC will soon open a representative office in pursuit of its marketing plans. Iran will be ENOC's 19th market when a distribution partnership, which the company is scouting for, comes through. "With an annual transportation sector of almost 5 per cent, Iran and its 17 million economically active people present us with what could be ENOC's largest lubricant market," Hussain Sultan, the Group Chief Executive and board member was recently quoted in a curtain raiser statement on ENOC's participation in the UAE Trade Exhibition in the Iranian capital of Tehran which took place between June 10 to 13 this year.

Just after the war rumblings subsided and the reconstruction switch was flipped on in Afghanistan, ENOC announced its foray into that market with lubricants specially developed for the Afghani weather and terrain. ENOC was among the first bevy of overseas companies to step into a market that was nursing war wounds, but stealthily trying to rise from the ashes of ravages with international support.

ENOC had earlier forayed into the African market, closer from the vantage point of Dubai. It has a full-fledged distributor now in Uganda, which marked the company's foray into the East African market. The company has also made inroads into the markets of CIS countries. This year the company also announced entering the Indonesian market in The Far East. ENOC, according to senior officials, will also soon foray into Taiwan and Singapore with its products bringing a pan-Asean approach to marketing.

Fairs may not be a business in the same league as oil refining or port management, but Dubai, thanks to the experience in hosting umpteen exhibitions - from Information Technology and automobiles to more down to earth things like garments - has clearly a lead in this industry in the region. Perhaps nowhere in the nearby countries, including in the Indian Subcontinent, such a wide and varied plethora of expos are held round the year.

Dubai World Trade Centre (DWTC), the expo hub of the UAE, is now in the middle of a massive expansion in anticipation of the annual board meet of Bretton Wood twins, the World Bank and the International Monetary Fund (IMF). DWTC made its first step out of Dubai with its premium IT expo Gitex. For DWTC, taking out Gitex, its flagship show, to India was a "historic move," according to its officials. This was the first time DWTC took Gitex into markets outside the Middle East. The Indian show was held in January last year in Hyderabad, the state capital of the south Indian state, Andhra Pradesh.

Apart from India, the show now has been taken to Saudi Arabia, Cairo and Beirut. Taking out the exhibitions outside Dubai has also helped IT companies, which are based in Dubai, thanks to the IT community cluster free zone, the Dubai Internet City (DIC), forge new relationships in the nearby markets. It also exposes these companies to a stream of opportunities outside Dubai and fine-tune country-to-country cooperation.

Milestone Forays
The Dubai based Al Habtoor Group, recognized as one of the most dynamic and fast growing business groups in the Middle East, has expanded its frontier from the UAE to include UK, Egypt, Saudi Arabia and Lebanon. It is particularly active in Lebanon, where in addition to the five star Metropolitan Palace Hotel Beirut, is starting a new ambitious project, which include five-storey shopping mall and luxury apartments tower, an investment worth US$ 80 million. Along with Al Habtoor Group, the Dubai National Insurance & Reinsurance Company is expanding its operation to include Lebanon as well.

* Moving onto new pastures of opportunity, the Dubai-based business conglomerate, the Al Ghurair Group, had acquired a 50 per cent stake in a flour mill in Sudan recently. The takeover marks the Group's foray into the African market. The Group, which expects its investments in the food business in the next two years in the range of $100 million, is also pursuing building flour mills in Sri Lanka and Algeria as part of its expansion agenda.

* MMI Technology Solutions (MMITS), a division of the Maritime and Mercantile International has forayed into Sudan technology market by supplying and implementing business management software in one of the prominent business groups there. This is the first time MMITS have extended their services beyond the GCC (Gulf Cooperation Council) countries.

* The Dubai-based Emirates Bank International (EBI) has already got the green signal in Saudi Arabia to open a branch there. It is now waiting for the license from the Saudi Arabian Monetary Authority (Sama).
EBI, which recently floated the first overseas bond issue worth $250 million, the first by a bank in the UAE and perhaps in the region, has also pioneered a new retail hassle-free quick banking concept, the meBank, which will be taken out to GCC countries on a franchise basis.

* Construction, a bedrock industry in the UAE economy, is so mature that many companies in this segment are making deep inroads into overseas economies. For instance the Al Habtoor Engineering Enterprises, a joint venture with the South Africa-based Murray and Roberts has regional offices in Cairo and Doha to tap the potential of these markets. It also has a contract for two major building projects in Egypt - The San Stefano Residential Complex and the Alexandria City Center, and is actively pursuing business in Bahrain, Kuwait, Syria, Lebanon and Jordan.

For construction and infrastructure development companies India also offers a vibrant market. In fact there were concerted moves by the Indian government to woo infrastructure firms from the Gulf countries to India. In this context, Tricolour Investments Limited (TIL), an India-centric join venture between Emirates Banking Group (EBG) and non-resident Indians (NRIs) are in the process of lining up new projects. A proposal to source infrastructure equipment from the Gulf to set up a machinery pool in India which could be leased out for firms involved in Indian infrastructure development is one of the projects by TIL.

In the UAE's quest to ensure that 100 per cent of the country's GDP should come from non-oil ventures in future, the overseas forays of these companies will add value. It will also reflect the mature segments of the UAE's economy world over.