Dubai popularity generating opportunities for Teesside firms

Aug 19 2008 by jez Davison, Evening Gazette

ITS economy was built on oil, but the sands of time are moving quickly in Dubai and it’s now a hot ticket for success for a wide range of Teesside businesses. JEZ DAVISON reports.

IT PAYS to be unique if you want to make a small fortune in Dubai.

That’s the view of Suzi Dear, creative director of Big Studio Glass Design in Hartlepool.

“The Dubai people appreciate products that haven’t been mass-produced elsewhere,” she says. “In this country you’re dealing with extremely wealthy individuals and businesses, all with different tastes. If we design something for the Radisson (hotel), we won’t design the same thing for the

Hilton.”

The irony is that the novelty of Dubai itself is beginning wear off as the celebrity A-list piles in with UK companies in their wake, hoping to capitalise on one of the world’s hottest economies.

Its growing popularity has generated plenty of opportunities for Suzi and other Teesside firms - and not just in the booming property sector.

Manufactured products with glitzy USPs, telecommunications equipment and industrial machinery are in high demand from the second largest of the United Arab Emirates (UAE).

And with Teesside contributing just £37m to the UK’s £2bn worth of exports to Dubai last year, the scope for local firms to make their mark is huge.

Simon Crosby, lead international trade adviser for UK Trade and Investment in Durham and the Tees Valley, believes potential is being unlocked across a wide cross-section of industries.

He says: “The huge influx of labour to support Dubai’s construction boom is creating demand for all sorts of consumer products including food, drink and clothing. Teesside hasn’t yet fully exploited the potential but that is beginning to change.”

The UAE is the UK’s ninth largest export market and importantly the government is keen to make concessions to encourage further inward investment, notably with the emergence of free trade zones.

Previously overseas companies have been stung by a UAE ruling that at least 51% of a new company or subsidiary in Dubai has to be owned by a local organisation. Now hubs such as Dubai Internet City and Media City allow company owners to operate freely without having to worry about giving up a majority stake in their business.

Described as the centre of the Middle East economy, Dubai has mushroomed into a thriving tourist hub that is easily accessible from Teesside via a direct flight from Newcastle International Airport.

Middlesbrough-based IT firm Onyx believes this vital transport link opens up a wealth of trading opportunities for local firms.

“You can get to Dubai in just about the same time as it takes to get to London,” says technical director Sean Allison. “The potential of this market is huge, especially with the recent boom in property and financial services.

He says the time is ripe for other Teesside firms to pile into Dubai, an “investment gold mine with no real disincentives.”

But there are pitfalls.

“Companies should make sure they are registered properly,” he says. “Nobody will deal with you if you don’t have a trade licence. Also the payment terms aren’t as stringent as they are in the UK so it’s best to check the finer detail of any contract you might be signing.”

But Teesside firms say the pros outweigh the cons in one of the more liberal communities of the Arab world, which, along with the Norther Emirates, handles in excess of 85% of UK-UAE trade.

Thornaby-based K Home International is an old hand in the Middle Eastern market and employs 100 staff in Dubai on the back of multi-million- pound contract wins.

The company has designed and developed a new pipework system to deliver chilled water cooling systems to thousands of homes in Dubai and Abu Dhabi, and has also worked on Dubai’s Atlantis hotel, the world’s second seven-star hotel scheduled to open next year. Outgoing managing director Trevor Arnold said there are “massive amounts” of new projects taking place.

Meanwhile, Stockton-based glass specialist Creative Glass is bidding for six-figure contracts to supply innovative glass structures for hotels and palaces in Dubai.

Managing director and founder Tony Campbell believes Dubai’s infrastructure boom has put his firm in the driving seat for new business.

He says: “To cater for demand, hotel and leisure facilities in Dubai were built quickly and some are in radical need of a refit. Hoteliers are now looking to give their reception areas a wow factor. This can be achieved through the use of glass in modern design.”

With shifting economic sands at home, the dessert suddenly looks a fertile plain for investment and with a deliberate policy to diversify away from its primary industry, Dubai also looks to be insulated, should the bottom fall out of the oil barrel.

A booming automotive industry - £13m of goods were exported from the North-east to Dubai in the 12 months to March 2008 - and growing demand for high-value goods and engineering services, means what’s good enough for Hollywood’s billion dollar-aires is also good for Teesside.