Ahmed Bin Sulayem certainly needs no introduction being widely popular globally as one of the leaders of modern Dubai. As the Executive Chairman of DMCC, Ahmed Bin Sulayem has and continues to play a key role in establishing and positioning DMCC as a major international commodities hub for trade.
Ahmed Bin Sulayem joined DMCC in 2001 as a director, prior to the Dubai Government Authority’s official launch in 2002, and his responsibilities included overseeing the organisation’s operations. Today, he is the Executive Chairman of DMCC, as well as the director of Human Resources, Director of Dubai Shariah Asset Management (DSAM) and Dubai Commodity Asset Management (DCAM). Bin Sulayem is also the Chairman of the Dubai Gold and Commodities Exchange (DGCX), an initiative of DMCC, Financial Technologies (India) Limited and the Multi Commodity Exchange of India Limited (MCX).
He has also played a leading role in reviving Dubai’s traditional pearling industry by launching the Dubai Pearl Exchange in 2007 and conceptualised the idea behind Almas Tower, the tallest commercial building in the Middle East, home to Dubai Diamond Exchange, the largest vault in the UAE, and DMCC headquarters. In April 2011, DMCC hosted the World Federation of Diamond Bourse's annual Presidents' meeting, an initiative spearheaded by Bin Sulayem. This event was the first of its kind to be held in the Arab world. In addition, on 15 August 2011, Bin Sulayem unveiled the prototype of the UAE's first gold bullion coin…and many more.
In June 2012, Bin Sulayem received UN accreditation to represent Western Asia on behalf of CIBJO, the international jewellery confederation of national trade organisations. In June 2013, he received the Crowe Horwath Award for 'Government Personality of the Year'.
Ahmed Bin Sulayem, Kimberley Process Chair (KP Chair 2016), delivered a speech on the draft resolution “The Role of Diamonds in Fueling Conflict” at the UN General Assembly 69th plenary meeting, 71st session, on February 2nd, 2017. The UAE led resolution on “The Role of Diamonds in Fueling Conflict” includes important decisions of the Kimberley Process.
In May 2006, Ahmed Bin Sulayem was honoured by the Diamond Dealer’s Club in New York City, U.S, during its 75th anniversary, for his contribution to the international diamond trade. Prior to joining DMCC, he was a Director at Asteco, a leading real estate company in Dubai.
Bestowed with numerous Awards for his contributions, Bin Sulayem was honoured by the New York Diamond Dealers Club (DDC) in 2006; Outstanding Performance & Innovation Award, MENA Fund Manager Awards 2012; Outstanding Contribution of the Year Award, Jewellery News Asia, September 2014, to name a few.
Here, in an Interview with Rough&Polished, Ahmed Bin Sulayem elucidates on DMCC, DDE, DPE and more… to present Dubai, the fastest growing diamond hub in the world.
For the benefit of our readers, please walk us through DMCC’s overall activities right from inception to date. Give us some insights on the gold and diamond businesses as well.
Established in 2002, DMCC has been tasked with and succeeded in creating and enhancing a global marketplace for commodities, whilst driving trade flows through Dubai. Over the years, we have developed some of the most dynamic, innovative market conditions and infrastructure for trade facilitation to take place through the emirate – a Free Zone, commodity exchanges and online trading platforms, alongside robust legal and regulatory frameworks. Today, DMCC is home to over 16,000 companies and a community of over 100,000 people, contributing over 10% of Dubai’s GDP.
Dubai is considered among the world’s leading physical gold markets and diamond trading hubs and the speed at which this industry has grown is remarkable. DMCC has played a central role here through the launch of Dubai Gold & Commodities Exchange (DGCX), a world-class derivatives exchange, and the Dubai Diamond Exchange (DDE), the only bourse in the Middle East affiliated with the World Federation of Diamond Bourses.
In October 2017, the UAE’s first state-of-the-art diamond polishing facility was inaugurated. The investment is boosting further trade into the region by providing the diamond industry with access to vaulting, polishing, boiling, cutting, certification, transport and logistics services all under one roof in Almas Tower.
The current trend in the diamond industry is around tenders and auctions, and we are currently investing in refurbishing the entire DDE floor. We aim to create a state-of-the-art tender facility which will be the biggest and first-of-its-kind in the region.
Later this year, we will host our biennial industry leading Dubai Diamond Conference bringing together the world’s experts to discuss the latest trends and developments in the sector.
DMCC’s Dubai Gold & Commodities Exchange (DGCX) broke its annual volumes record in 2018, trading 22.26 million contracts, up 28% from the previous year. The total value of the contracts was USD 474.94 billion, beating its previous highest value of USD 448 billion traded in 2013. Average Daily Volumes (ADV) also finished the year at an all-time high, reaching 86,615 lots. Just recently, the DGCX received a new Shari’ah certification for its Shari’ah Compliant Spot Gold contract. They also signed a strategic partnership with RAKBANK, which in time, will see the launch a Mini-Gold Futures product.
As for other commodities, in 2005, we launched the DMCC Tea Centre to strengthen the tea trade in Dubai through the introduction of world-class facilities and international best practices. Today, the Centre alone handles upward of 50 million kilos of tea each year while the UAE is the world’s largest re-exporters of tea with a 60 per cent share of the global market. Building on this success, we recently launched the DMCC Coffee Centre, a state-of-the-art 7,500m² temperature-controlled facility offering world-class infrastructure and services. The first-of-its-kind Centre in the Middle East will bring green coffee storage to the region, benefitting a wide range of stakeholders including coffee farmers, exporters, traders, roasters and retailers. As a result, Dubai is set to become the new global hub of the coffee industry, complementing Rotterdam, in a move that will add another significant, non-oil related, revenue stream to the UAE economy.
DMCC is the world’s leading Free Zone – in October 2018, we were the proud recipient of the ‘Global Free Zone of the Year’ by the Financial Times’ fDi Magazine for a record fourth consecutive year. DMCC was also the first Free Zone in the GCC to join the United Nation’s Global Compact, the world’s largest corporate sustainability initiative, and first in the UAE to sign the United Nation’s Women’s Empowerment Principles.
DMCC’s flagship international road show ‘Made for Trade Live’ brings together international business leaders who are interested in conducting their business in the region through DMCC – feeding into our mission of promoting, facilitating and enhancing commodity trade flow through Dubai. Since their inception, DMCC’s roadshows have taken place in 17 cities around the world, hosting over 3,000 firms. Our first road show in 2019 took us to the United Kingdom and throughout the year we will also be visiting China, India, Germany, Spain, and Sweden.
DMCC is also a thought leader. In May 2018, we launched the second edition of our report on the Future of Trade in London which builds on in-depth insights from 250 industry leaders, academics and experts across 6 leading commodity trade hubs - London, Zurich, Dubai, Singapore, Johannesburg and Hong Kong. The research highlights the emerging impact of digital transformation for importers and exporters, and the world’s top ten commodity trading hubs, along with the ongoing shifts in global economic power. The report was downloaded over 10,000 times in the first few hours after being launched.
DMCC is the master developer of Jumeirah Lakes Towers, a community of over 100,000 people who live and work in the Free Zone alongside 600 F&B outlets. In 2017, we also broke ground on Uptown Dubai, a world-class smart district innovatively designed to deliver a new urban destination for people to live, work and thrive in JLT area. The new district will include more than 10 million sq ft of Grade A commercial and residential space, over 200 retail and F&B outlets, approximately 3,000 residences, and a number of luxury hotels. Uptown Dubai will be anchored by two iconic super-tall towers designed by internationally renowned architects Adrian Smith & Gordon Gill.
Among the many initiatives at DMCC, can you name a few that you remember as those that gave you ultimate satisfaction? Are there still more to be introduced in the future?
There are so many initiatives, but I would say that the three most exciting projects for me at the moment are the DMCC Coffee Centre, Uptown Dubai and the upcoming Dubai Diamond Conference.
Globally, coffee is one of the world’s most widely consumed hot beverages while in the Middle East, it forms an integral part of our history and culture. The DMCC Coffee Centre will connect the fast-growing and high-value consumer markets in the Middle East and Europe, to some of the world’s major coffee producing nations such as Ethiopia, India, Indonesia, Uganda and Vietnam. Moving forward, we project that the Centre will handle up to 20,000 tonnes of green coffee bean annually – with an estimated annual trade value of around AED 367 million (USD 100 million). Creating this new hub for the region and expanding opportunities for traders around the world is extremely exciting.
Uptown Tower will feature a two-level central plaza twice the size of New York’s Times Square, will offer breath-taking views of the city skyline and waterfront. We have also partnered with Accor Hotels to bring their luxury lifestyle hotel and resorts brand, “SO/”, to the Middle East for the first time.
The Dubai Diamond Conference is set to bring world-renowned diamond experts to the emirate later this year to enable discussions and debate with a focus on stimulating innovation and growth in the diamond industry. The conference will provide an opportunity to build relationships between companies and governments in producing and consuming countries further highlighting the pivotal role that Dubai plays in the global diamond trade for diamonds.
I would also want to mention that in 2018, DMCC was honoured to have successfully claimed a new Guinness World Records title for the world’s largest jigsaw puzzle by surface area in celebration of the Year of Zayed. The wooden jigsaw of over 12,000 pieces featured the official logo of the national initiative.
We are constantly looking to innovate so there will be more to come in the future without a doubt.
Again, for those who came in late, please describe your tenure as KP Chair and your numerous efforts to make the global diamond industry free of ‘conflict diamonds’.
In 2016, the UAE was selected as the first and only Arab country to Chair the Kimberley Process (KP). As Chair of the KP, I led an “Africa Initiative” which took me to 14 countries across the continent as part of the commitment to keep a hands-on presence in diamond producing nations and give Africa a voice in the trade. I also visited South Korea, in an effort to support Seoul becoming a diamond trading centre.
During my chairmanship, the KP also convened three forums dedicated to agreeing and establishing best practices for rough diamond valuation, a very important topic for the industry. The first was held in collaboration with the Organization for Economic Cooperation and Development (OECD) to clarify the process of rough diamond valuation in a bid to strengthen the debate and have a consensus on universal conformity. The second forum was held in association with the Antwerp World Diamond Centre (AWDC) focusing on valuation practices employed by the global diamond industry. The third took place alongside the KP Plenary Session.
I proposed several initiatives aimed at strengthening the foundation of the Kimberly Process, including the need for a Permanent Secretariat in the UN and a common fund for NGOs involved in the global initiative, which was agreed to by KP members in the Plenary Session hosted in Dubai in November 2016. Earlier this year, the UN General Assembly adopted a resolution calling for a strengthening of the Kimberley Process (KP), in line with what has been advocated by KP members and civil society. It was remarkable to see that the resolution was unanimously accepted by all 193 UN member countries.
You once said that Dubai had fast emerged as one of the world’s top three diamond centres, and you were always looking at ways of nurturing and growing this footprint by connecting producers with buyers along the Dubai – Africa axis and beyond. What are the latest achievements of the Dubai Diamond Exchange in this regard?
Today, the most promising and dynamic emerging markets of the future are in Africa. Given its proximity and infrastructure, Dubai offers markets in Africa a unique opportunity to maximise their economic potential through commodities trading by accessing global markets through DMCC. We are continually seeking to foster stronger and more productive relationships across the commodity value chain in both regions because we believe that these markets are where the truly transformative opportunities are to be found.
Our strategic partnership with Stargems to host diamond tenders in 2018 enabled us to connect producers, particularly from Africa, with buyers along the Dubai – Africa axis and beyond.
In March 2018, we also hosted a networking event dedicated to doing business in Africa. The presentation combined an analysis of current global trends and commodity prices with structural factors unique to African countries to unpack the macroeconomic outlook for Africa.
Direct flights between Sharjah, UAE and Surat, India launched earlier this year, has opened up a new facet to the DDE’s value proposition. Dubai is ideally located with connections between the producer countries and the major cutting centre that is Surat.
The DMCC diamond trading platform is often compared with the Antwerp diamond trading hub. How many diamond companies and traders usually come to your platform to offer their goods? Do you see their number increasing or decreasing going forward?
When DMCC launched the Dubai Diamond Exchange (DDE), the total imports and exports of rough and polished diamonds stood at $3.6 billion (2002, 2003). In 2017 this figure rose to $28 billion – this represents a seven-fold increase.
In 2018, the DDE held 29 diamond tenders, valued at around $330 million, which is a 75% increase compared to 2017. We are confident that 2019 is on track to break last year’s record.
Today, DDE membership currently stands at about 1,100 members – most of whom are members of our Free Zone. We are constantly innovating and updating our infrastructure and facilities, products and services so that Dubai remains one of the largest and most influential precious metals trading hubs in the world, offering the services that companies and traders are seeking.
Will the Dubai Diamond Exchange be interested in trading diamonds mined by AGD Diamonds at the Grib Diamond field in Russia's Arkhangelsk Province?
We are building a new state-of-the-art tender facility that will enable mining companies, tender houses and DDE members to trade diamonds and precious stones. Many companies have already expressed an interest in the new facility, and we look forward to opening it at the Dubai Diamond Conference and WFDB President’s meeting on 24-26 September 2019.
In 2017, when the UAE government announced the 5 per cent VAT applicable from Jan 2018, the Indian diamond industry was shaken. How do you think this step has affected Dubai’s reputation as a haven for overseas companies, especially for the Indian diamond companies? Was this VAT a ‘spike in the wheel’ for Dubai to become one of the largest diamond hubs in the world? Your views?
The UAE introduced VAT as part of a fiscal strategy, which in itself is a natural transition towards a more balanced and structured economic policy, reducing dependence on oil revenues.
However, a few months later, the government decided to withdraw VAT from the wholesale gold and jewellery sectors, which represented an important milestone for the industry. This move stands to primarily benefit smaller jewellery retailers and make the wholesale sector more competitive.
Despite major lending banks winding up operations and leaving the industry, other banks entered the diamond financing market which helped Dubai retain its growth as a diamond hub. What is the current situation as far as loan availability to the diamond business is concerned? Are newer banks likely to enter the market?
Diamond financing is a very specialised business with good opportunities for those who understand the industry. Nowadays, more financing is coming directly out of Dubai – with the National Bank of Fujairah and Emirates NBD playing an increasingly important role in the UAE.
At the DDE we see the role of financing as critical to the continued growth of the diamond trade. We are working on getting new alternative sources of finance into the trade as there are some excellent opportunities.