Table of Contents

Introduction 5

Note 6

Legend 7

Dubai Economy: Overview 8

Economic Sectors: Rating Overview 9

Agriculture & Fishery 10

Mining & Quarrying 11

Manufacturing 12

Electricity, Gas & Water 13

Construction 14

Trading & Repairing 15

Hotels & Restaurants 16

Transport, Storage & Communications 17

Real Estate, Renting & Business Services 18

Education 19

Other Services 20

Conclusion 21
 Introduction

Dubai Chamber supports the business community through the provision of

current market information to practitioners.
Information in this Dubai Business Advisor supplements and provides a
contextual overview on the company credit ratings in the Dubai Chamber
Business Information Reports. Credit rating is a qualified assessment and
formal evaluation of a company’s credit history and capability of repaying
obligations. This is a joint initiative executed with Coface Emirates. The
Business Information Reports enable strategic focus on honourable clients
with high business potential, enable time-efficient business decisions, and
advance concealed data on your potential client portfolios.
The Dubai Business Advisor, Rating Economic Sectors in Dubai is reporting
rating opinions at sector level. The purpose of this report is to serve as a guide
for your market assessment. A snapshot of the Dubai economy is provided
at the beginning of this guide. This is followed by an aggregate overview of
the rated companies, according to the breakdown in the Dubai Chamber
database.

For individual rating opinions and more information on Business Information

Reports, contact Ms Deema Dajani, Business Development Executive, on
04– 2028402 or email deema.dajani@dubaichamber.ae.


 Note

Rating Opinion:
The Credit Rating Opinion is a rating system designed to assess the ability
of a company to fulfill its financial commitments, using a standard scale of
evaluation.

Benefits:
• A credit assessment score given by a credit expert
• An identification of potential risks associated with the rated company
• Reliable data on the rated company and its credit history

Rating Opinions are monitored for one year.


 Legend

A Credit Opinion is reflected in a 5-level scale and shows the credit limit for the
companies included in the sample:

R € 10,000
@ € 20,000
@@ € 50,000
@@@ € 100,000 and above (Customized Credit Opinion is required)
X Company shows weakness, no credit will be granted


 Dubai Economy: Overview

Source: Ministry of Economy

The graph offers a break down of economic activity by sector according to

most recent listed data from the Ministry of Economy.


 Economic Sectors: Rating Overview

Ratings were concluded for 5,585 cross-sector Dubai-based companies.

Almost a quarter of the rated companies have a credit limit of € 100,000 or
above. Another quarter is rated with a credit limit of € 50,000. The remainder
represent a credit limit of € 20,000. A minor number of companies are weak
and therefore illegible for credit.


 Agriculture & Fishery

Agricultural and fishery activities are a relatively small segment of the Dubai
economy – less than one per cent – but still account for over AED 1bn of Dubai
GDP. This sector will continue to attract attention as food security and water
management issues continue to be at the forefront of people’s minds.
Dubai farms produced nearly 90,000 tonnes of crops in 2005, for a total value
of AED 160m. Fifty-eight per cent of the crops were classified as ‘crops &
fodder,’ 37 per cent were fruits, and five per cent were vegetables. In addition,
farms produced over 38,000 tonnes of milk, nearly 7,000 tonnes of chicken,
and over 111m eggs. Approximately 16,600 tonnes of fish were caught by
Dubai fishermen.
The sector includes firms engaged in traditional farming and fishing activities
as well as businesses providing support services to the sector, in such areas
as irrigation and pest control.

This sector is represented by 42 companies in the aggregate rating sample. A

quarter of these companies have a credit limit of € 100,000, whereas one third
has a limit of € 50,000. Less than half of these companies represent a credit
limit of € 20,000.

10
 Mining & Quarrying

Although Dubai is located near many large oil-producing nations, the

contribution of the mining and quarrying sector – which includes oil and gas
– is quite small; only three per cent of Dubai’s GDP comes from this sector.
Crude oil and natural gas contributed nearly AED 7bn to Dubai’s 2006 GDP,
while quarrying activities accounted for only AED 140m. Nevertheless, many
multinational companies in this space have a significant presence in Dubai.
Perhaps the most famous example is Halliburton, which announced in 2007
that they were moving their corporate headquarters to the Emirate.
With its proximity to key sources of fossil fuels, and its reputation as a global
trading hub, Dubai has become a centre for the trade in raw materials. The
Dubai Government has created the Dubai Multi Commodities Centre, a free
zone authority focused on precious metals and stones, energy, and other
commodities.
Most companies in the mining and quarrying sector are international companies
engaged in providing services related to oil exploration and extraction. Also
on the list are UAE companies engaged in various aspects of oil and gas
extraction, refining, and distribution.

Fourty per cent of the companies are rated with a credit limit of minimal
€ 100,000. Thirty-six per cent of companies received a rating of € 50,000,
whereas twenty-two per cent are limited at € 20,000.

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 Manufacturing

Although not the best known of Dubai’s economic activities, manufacturing

is its second biggest sector – accounting for over 15 per cent of GDP. Over
160,000 workers are employed in Dubai manufacturing ventures. Metals and
petrochemicals have traditionally been strong suits of the Dubai manufacturing
sector, although there are many competitive firms manufacturing goods in
areas such as foodstuff and apparel and textiles. Dubai Aluminium Company
Limited – or Dubal – is one of the largest industrial concerns in the UAE and
one of the largest aluminium producers in the world.
Dubai has also worked to encourage small and medium-sized enterprises
engaged in manufacturing to set up operations here. Spearheading these
efforts is the creation of two free zones, Dubai Industrial City (DI) and Dubai
Maritime City. DI has several zones, each allocated to a specific sector. The
zones offer dedicated areas for firms engaged in the food and beverage,
base metals, minerals, transport and equipment, machinery and mechanical
equipment, and chemicals sectors.

Half of the companies in this sector received a notable “@@@” distinction. One
fourth is rated with a credit limit of € 50,000. The remaining one fourth of the
companies are rated with a limit of € 20,000.

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 Electricity, Gas & Water

Electricity, gas, and water production and distribution make up a small, but
vital, percentage of Dubai economic activity. This sector can be seen as
being divided into two main components: traditional utilities (including service
providers to grid operators) and bottled drinking water. These businesses
have experienced exceptional demand growth over the past several years,
as population growth and an expanding development footprint in the emirate
have created considerably increased need for these services. Between 2005
and 2007, the size of this sector in the UAE as a whole grew at more than 12
per cent per year.
Dubai Electricity and Water Authority (DEWA) provides electric power and
water service to Dubai residents and businesses. To meet anticipated demand
growth, DEWA has recently confirmed its commitment to its AED 72.5bn plan
– first launched in 2007 – to increase the production capacity of water and
electricity. DEWA currently has nearly 6,700 megawatts of power production
capacity and plans to increase capacity by nine per cent by the end of the year.
Water supply is largely provided by desalination; DEWA plans to expand its
current desalination infrastructure to reach a capacity of 333m imperial gallons
per day by the end of the year.

The ratings for this sector are evenly distributed over the credit limits of € 100,000
(@@@), € 50,000 (@@), and € 20,000 (@).

13
 Construction

Dubai’s construction industry experienced remarkable growth over the past

years. Ground-breaking projects testing new boundaries in building techniques
have grabbed worldwide media attention, including the Palm Islands – an
ambitious project to create man-made islands for residential and commercial
use. Dubai also boasts the world’s two tallest hotels (the Rose Rotana and Burj
al Arab), the world’s tallest skyscraper (Burj Dubai), and the largest shopping
mall in Europe and the Middle East (Dubai Mall). Thirteen of the 100 tallest
buildings in the world are located in Dubai. One third of the world’s construction
cranes are being used in the emirate.

Construction accounted for just over eight per cent of Dubai GDP and employs
over 250,000 workers – nearly one-fourth of the workforce. Despite the recent
slowdown in the global real estate market, there are still hundreds of billions
of construction projects underway in Dubai. Jones Lang LaSalle estimate that
over the next three years, current construction projects will bring nearly 35m
square feet of office space and 90,000 new residential units to market. Over
the next two years, retail space will increase by 50 per cent to around three
million square feet of gross leasable area, with completion of major shopping
centre projects.

Thirteen per cent of this large sector was rated with a credit limit of € 100,000
or above. One third was rated with a limit of € 50,000. Half of the sector was
limited at € 20,000.

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 Trading & Repairing

The trading and repairing space – which includes wholesale and retail trade,
distribution, maintenance, and repairs – is the largest sector of the Dubai
economy, accounting for over one third of GDP in the emirate. As of 2006, this
sector employed 29 per cent of the workforce of Dubai and occupied 60 per
cent of establishments.

Trade consists of wholesale activities – including import/export – and retail.

Exports are approximately 95 per cent of GDP, and imports make up two thirds
of total economic activity. A history as a trading hub, modern infrastructure, and
the creation of numerous free trade zones all play a role to make Dubai a leading
centre in international trade. The free zones provide a business environment
catering to firms engaged in international trade, allowing full foreign ownership,
no limits on repatriation of capital, and long-term tax holidays for free zone
based businesses.

Domestically, Dubai’s robust consumer market provides strong demand for

wholesale and retail trading services. The Dubai Statistics Centre estimates
2007 population at over 1.5m, 82 per cent of which were between the ages of
15 and 49. Since 2000, population growth has been over seven per cent per
year, largely due to the growing expatriate community. Private consumption
makes up about 40 per cent of Dubai GDP.

One fifth of the rated companies has a credit limit of minimal € 100,000. Another
quarter of the companies was rated with a limit of € 50,000, whereas half of the
companies has a credit limit of € 20,000.

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 Hotels & Restaurants

Hotels and restaurants form the backbone of Dubai’s rapidly growing tourism
sector. Mega-projects in the sector have grabbed headlines around the world,
including the ultra-luxurious Burj al Arab project and the recently-opened
Atlantis Hotel on Palm Jumeirah.

Dubai hotels saw nearly seven million guests in 2008, surpassing the previous
record set in 2007. As of the middle of 2008, 340 hotels were operating in
Dubai. Hotel revenue in the emirate reached AED 15.25bn last year, a 15 per
cent increase over the previous year. The total number of hotel rooms and hotel
apartments in Dubai stood at 49,598 as of the end of 2008. For the second
quarter of 2008, the overall room occupancy rate stood at 80.1 per cent.

The restaurant industry in Dubai reflects the cosmopolitan nature of its resident
population. From world-renowned haute cuisine to neighbourhood eateries,
Dubai restaurants cater to all tastes and serve dishes originating from all
corners of the world. In addition to locally-established restaurants, Dubai is
host to numerous international chains and franchises. Many fast-food chains,
including international brands, have reported steady sales in the UAE in recent
months, suggesting that this slice of the market is holding up well in the current
economic climate.

Twenty-eight per cent of the companies in this sector received a notable “@@@”
distinction. One fifth is rated with a credit limit of € 50,000. Fourty-two per cent
of the companies are rated with a limit of € 20,000. In addition, eight per cent
of the companies are rated as weak.

16
 Transport, Storage & Communications

Transport, storage, and communication account for about nine per cent of
Dubai GDP and employs over 90,000 people. Although this sector seems
relatively small, it is critical to the proper functioning of other sectors in the
economy.

Dubai International Airport handled over 37m passengers last year – an

increase of nine percent from 2007 – as well as 1.8m tonnes of cargo. Figures
at the beginning of 2009 show continued growth in passenger traffic on a
year-over-year basis. Al Maktoum Airport, currently under construction, will
offer an air facility near the Jebel Ali Free Zone, as well as considerable cargo
transportation capacity.

Dubai ports are led by Jebel Ali Port and Port Rashid, both part of the DP
World portfolio. Dubai Drydock and JADAF Dubai provide ship repairing and
maintenance facilities to members of the maritime community.

Telecommunication, television, and other information services have developed

rapidly in recent years, in response to rising consumer demand for these
services.In the communications space, Etisalat is the primary provider of
mobile and fixed line phone service, internet, and cable television. Du begun
competing in these markets recently.

This sector is represented by 615 companies in the aggregate rating sample.

Almost ten per cent of these companies have a credit limit of minimal € 100,000,
whereas twenty per cent has a limit of € 50,000. Sixty-five per cent of these
companies represent a credit limit of € 20,000. The remaining five per cent are
rated as weak companies.

17
 Real Estate, Renting & Business Services

The sector accounts for 15 per cent of Dubai GDP, making it the third biggest
sector of the economy. Nearly nine per cent of the workforce is employed in
real estate, renting, and business services – over 90,000 workers.

The companies listed in this specific sector overview fall into four major
categories: general business services, computer services (including various
information consulting services), real estate (including brokerage and property
management), and renting services (including everything from heavy machinery
to passenger car rental).

There are numerous free zones for firms in the business services sector.
Zones hosting information technology companies include Dubai Internet City,
Dubai Silicon Oasis, and Techno Park. Additionally, Dubai Outsource Zone, a
venture of Dubai Internet City, has been set up specifically for firms offering
professionally-outsourced services to corporations worldwide.

Within this sector one fifth of the companies are rated with a credit limit of
€ 100,000 or above. Another one fifth was rated with a limit of € 50,000.
Half of the sector was limited at € 20,000. Five per cent are rated weak.

18
 Education

The private education sector in Dubai has witnessed rapid growth in recent
years, as it expands to meet the needs of a knowledge-based economy.
Interest in developing educational organisations in the emirate has led to the
creation of several free zones, including Dubai Knowledge Village (DKV) and
Dubai Academic City (DAC). Both zones offer a base for leading international
organisations to provide education and training to the local population. DKV is
primarily focused on knowledge-based entities – including training centres and
learning support entities – and is host to over 350 educational partners. DAC
is home to traditional primary, secondary, and tertiary institutions from around
the world. Dubai International Academic City (DIAC), which is located in DAC,
caters specifically to higher education organisations, and currently hosts 32
international institutions from all corners of the world.

Among primary and secondary institutions, the private sector is the main
provider of education; more than 80 per cent of students, nearly 150,000
pupils, attend private institutions. The market for higher education is also
substantial. Approximately 12,000 students are currently enrolled in institutions
based in DIAC. The numerous professional training organisations in DKV offer
programmes in a diverse variety of subjects, from Biotechnology to Fashion
Design.

Fourty-four per cent of the companies in this sector received a notable “@@@”
distinction. Thirty-three per cent is rated with a credit limit of € 50,000. Twenty-
two per cent of the companies are rated with a limit of € 20,000.

19
 Other Services

Other services covers a variety of activities, including sanitation, business and

professional organisations, recreation, news agencies, and cleaning services.
This segment accounts for a relatively small portion of GDP, around 1.5 per
cent. Companies profiled in this report from the ‘other services’ category
include firms engaged in refuse removal, recycling, and waste management;
dry cleaning and laundry; and cultural, recreational, and sporting services.

Sixteen companies were rated under “other services”. Twenty-nine per cent
of the companies were rated with a notable “@@@” distinction. Seventeen
per cent is rated with a credit limit of € 50,000. Fourty-one per cent of the
companies are rated with a limit of € 20,000. In addition, eleven per cent of the
companies are rated as weak.

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 Conclusion

The Dubai Business Advisor, Rating Economic Sectors in Dubai is a pilot

initiative of the Business Development Department.

Information in this report serves as an instrument to assess Dubai markets

by sector. Data was gathered on the various sectors and compiled into brief
overviews.

The total number of rated companies add up to 5,585 companies. This

aggregate number is divided over the various sectors in this report.

The Business Development Department provides knowledge instruments to

facilitate businesses in Dubai.

The Business Development Department is continuing to design new market

benchmarking products to assist in your business decision-making.

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