Industrial transformation and disruption to supply chains has made it even more important for manufacturing and logistics operations to operate in suitable and cost-effective locations. 

The 2024 edition of fDi Intelligence’s Global Free Zones of the Year awards recognises the best industrial free zones, where the majority of their tenants manufacture goods or provide logistics services. 

The survey asked free zones to outline their main advantages, including incentives, infrastructure and tenant support, priority sectors, net-zero strategies and efforts to improve governance and transparency. Among the 38 industrial zones assessed across the world, a winner and highly commended zone was awarded globally and in each of the five geographic regions.

GLOBAL WINNERS 

Winner: Jebel Ali Free Zone, UAE

Jebel Ali Free Zone (Jafza) is recognised by fDi as the leading industrial zone worldwide and in the Middle East. Since being established in 1985, Jafza has grown from the UAE’s first free zone with 19 companies to a vast ecosystem of industries including logistics, e-commerce, petrochemicals and automotive. This growth has gone hand-in-hand with its parent company DP World, the port and logistics multinational company owned by the government of Dubai.

Today, more than 10,000 companies have a presence in Jafza, according to its website. A major benefit for companies in the zone is that it is connected to Jebel Ali Port, the Middle East’s largest container port with an annual capacity of more than 9m standard twenty-foot equivalent units (TEUs). Many tenants use Jafza as a base from which to export, making it critical to Dubai’s leading position as a regional trade and logistics hub. 

In 2023, Jafza welcomed 400 new companies across various sectors, including factories being built by Eaton Corporation, a US-founded, Dublin-based power management company, and India’s Global Surfaces, a manufacturer of engineered quartz. According to Jafza, the free zone attracts almost a quarter (23.9%) of Dubai’s foreign direct investment (FDI). 

The free zone has extensive experience in building bespoke infrastructure to support tenants. In February 2024, DP World broke ground on a new agri-terminals complex in the port, where it has invested $150m alongside Adroit Overseas Canada and Al Amir Foods. The complex will specialise in storing and processing agricultural products such as corn, soybeans, pulses and grains.

Aside from the free zone’s recent wins, the judging panel noted the mix of fiscal and non-fiscal incentives it offers investing companies. Among other benefits, Jafza claims to be one of the few free zones in the UAE that does not levy value added tax and custom duties, and eligible companies can also receive a discount of up to 60% in their setup costs. Jafza also took the award for top sustainability zone globally.

Highly commended: Hamriyah Free Zone Authority, UAE

Hamriyah Free Zone Authority (HFZA) is one of the largest of five special economic zones (SEZ) in Sharjah, the third-largest emirate by landmass. Across its 30 million square metres of land, Hamriyah has specialist areas for its three priority sectors of oil and gas, food and steel. 

Since it was founded in November 1995, HFZA has expanded to host more than 6500 companies and improved its infrastructure, such as ports and roads, to provide tenants with land, air and sea connectivity. The zone is home to a park dedicated to food production, storage and packaging, and helps oil and gas companies establish dedicated zones to distribute their products globally. 

The judging panel noted that 2023 was one of the most successful in HFZA’s history, as the zone posted record revenues. It welcomed major brands, including a new Amazon logistics centre and US-based oil service company Halliburton’s new drilling tool calibration facility. Ikigai Steel is also establishing a factory with an annual production capacity of 30,000 tonnes. HFZA claims it can help entrepreneurs to set up a business within an hour.

Alongside giving high marks for incentives, the judging panel was impressed by HFZA’s succinct marketing slogan, “Empowering Enterprise”, which the zone says demonstrates its openness to all types of businesses.

MIDDLE EAST

Winner: Jebel Ali Free Zone, UAE

See above.

Highly commended: Hamriyah Free Zone Authority, UAE

See above.

EUROPE

Winner: Katowice Special Economic Zone, Poland

Spread across the Polish provinces of Silesian and Opole, Katowice Special Economic Zone (KSSE) has been ranked Europe’s leading industrial zone by fDi.

KSSE — which was established in 1996 to support the restructuring of the Polish economy after the end of Communist rule — is home to a wide variety of production facilities across its four subzones. While most investments are in the automotive industry, others come from sectors including glass, steel, food and wood processing.

As befits its location in Poland’s largest mining region, KSSE has recorded several major industrial investments in related areas. For instance, Elemental H2Tech is planning to invest 400m zlotys ($100m) to build a recycling plant for metals such as copper, tin, nickel, silver and gold in Zawiercie, a town northeast of Katowice city. The project is expected to create 250 jobs.

KSSE received high marks for innovation, including its co-operation with the European Digital Innovation Hubs Network, which helps support digital transformation in small and medium-sized enterprises. 

The zone actively promotes investments into automation and robotisation of processes, as well as research and development activities, offering a cash grant of up to 25% of investment costs for these types of innovative projects. KSSE’s approach to decarbonisation and promotion of good governance also saw it ranked as Europe’s top free zone for sustainability.

Highly commended: Klaipėda Free Economic Zone, Lithuania

Klaipėda Free Economic Zone (FEZ) is the oldest free zone in the Baltic state of Lithuania. Since being launched in 2002, it has leveraged its unique location next to the country’s only seaport, to secure strategic energy projects.

This comes as Russia’s invasion of Ukraine has heightened the focus on energy security and resilience in the Baltics, and the port of Klaipėda and its neighbouring FEZ have been crucial to the transportation of goods via sea following the closure of trade and road routes through neighbouring Russia and Belarus.

Klaipėda is also home to a liquefied natural gas terminal and high-voltage direct current electricity link with Sweden. Other recent investments include the construction of a rapeseed processing plant by biodiesel manufacturer Mestilla.

The judging panel recognised the zone’s focus on leveraging disruptive forces and trends, including energy security, the buildout of more defence capabilities in Europe, and nearshoring. In late 2023, Lithuania approved defence investments in its free zones. The judges also acknowledged Klaipėda FEZ’s efforts to improve transparency and uphold good governance standards, which include the private operator’s decision to publish its annual results. 

AFRICA

Winner: The Atlantis Special Economic Zone for Green Technologies, South Africa

The Atlantis Special Economic Zone (ASEZ) is located about 40km from Cape Town, South Africa’s second most populated city after Johannesburg. First designated as an SEZ area in 2018, ASEZ claims to be the country’s first eco-industrial zone entirely focused on attracting green investment.

The zone’s priorities are to develop a cleantech cluster, an agri-processing hub and advance manufacturing in technologies, including renewable energy components and green energy materials. It has already recorded some notable wins.

Gestamp Renewables Industries, a Spanish wind tower manufacturer, is operating a plant supplying towers to wind power projects across South Africa. More recently, Mint & Honey signed a lease agreement in October 2023 to build a facility to produce high-nutrition foods. An additional sub-zone of 22 hectares is currently under construction and expected to be completed as early as September 2024.

With a target to reach net-zero water, waste and carbon by 2050, ASEZ was given high marks for its net-zero strategy and efforts to promote decarbonisation, and the judges also named it the top sustainability zone in Africa.  

Highly commended: Lagos Free Zone, Nigeria

The Lagos Free Zone (LFZ), owned by Singapore-based conglomerate Tolaram, is located about 65km east of Victoria Island, Lagos. Due to its integration with the Lekki deep water sea port, LFZ is well suited to investors seeking to export into regional and international markets.

With a focus on promoting ease of doing business — including a single clearance window and well-developed infrastructure — LFZ aims to support companies seeking to leverage fast-growing markets in west Africa. Its services include facilitating business registrations and permits, which also work to lower the perceived barriers to manufacturing in Nigeria.

This has attracted several multinationals, including Tata International, a subsidiary of Indian conglomerate Tata Group, which recently expanded operations by leasing a 6,000 square metre facility. Other notable projects within LFZ include Italy-based Guala Closures, which produces closures for beverages, and nutrition specialist ADM International. 

Alongside LFZ’s approach to creating well-functioning infrastructure for prospective tenants, the judging panel recognised its green initiatives, ranking it the second most sustainable zone on the African continent. 

ASIA-PACIFIC

Winner: Sri City Special Economic Zone, India

Located about 60km from Chennai, Sri City Special Economic Zone (SEZ) is named the best industrial zone in Asia-Pacific in this year’s ranking. Since its establishment in 2007, Sri City has grown to become a manufacturing and logistics hub.

Companies investing in Sri City SEZ benefit from having four sea ports within 100km, the closest being Ennore and Kattupalli. A large available workforce from nearby cities, as well as incentives for manufacturers linked to the central government’s Make in India initiative, make the SEZ well positioned to attract investment across its target sectors, which include consumer goods, electronics and automotive. 

Notable investments in the past 12 months include white goods and electronics companies. Air conditioning manufacturers Japan’s Daikin Air and local Mumbai-based Blue Star have set up plants, as well as Panasonic Electric, another Japanese multinational.

Sri City is also actively deploying technologies to improve its operations and become more sustainable, and has set up a civic services innovation incubator on site to this end, in partnership with the local Indian Institute of Information Technologies.

Highly commended: The Qinzhou Port Area of Guangxi Pilot Free Trade Zone, China

The Qinzhou Port Area in south-west China is at the forefront of the country’s efforts to boost industrial development and trade with the fast-growing Association of Southeast Asian Nations (Asean) economies. Leveraging its strategic location near China’s border with Vietnam, the port’s free trade zone (FTZ) is a key part of the Guangxi Beibu Gulf Economic Zone, which covers a vast area across the Chinese cities of Qinzhou, Beihai and Fangchenggang. It is one of three major areas across the 120 square-kilometre Guangxi Pilot FTZ.

The Quinzhou port area focuses on developing industries such as green chemicals, new energy vehicles and port logistics. Notable tenants that have expanded in the past 12 months include Guangxi Huayi Energy Chemical, which created 6000 new jobs at its integrated plant that produces chemicals such as methanol, acetic acid and ethylene glycol.

The zone’s performance indicators show its strategy is paying off, with its gross domestic product (GDP) increasing year-on-year by 8.8% to reach Rmb51.58bn ($7.27bn). Total trade volume, which includes imports and exports, rose by 20.1% to Rmb71.76bn over the same period.

AMERICAS

Winner: Coyol Free Zone, Costa Rica

Coyol Free Zone, located in the greater metropolitan area surrounding Costa Rican capital San Jose, is once again recognised as fDi’s leading industrial zone in the Americas. The zone has benefited from companies seeking to diversify and nearshore their production base close to the US market. 

Among Coyol Free Zone’s target sectors of life sciences, smart manufacturing and semiconductors, it has been most successful in attracting ongoing expansion from medical device companies, including Medtronic, Abbott, Philips and Cardinal Health. 

This success is reflected in national macroeconomic indicators: in 2023, Costa Rica’s medical device exports reached a record-breaking total value of $7.6bn, equivalent to 42% of the country’s outgoing trade.

The judging panel recognised Coyol Free Zone’s efforts to create the right conditions for its tenants to grow, which includes a “Join Coyol” programme — a collaborative effort between Coyol, academic and local government to reduce the gap between traditional education and the needs of industry. 

Highly commended: Santafesina Free Zone, Argentina

The Santafesina Free Trade Zone (FTZ) in the Argentinian state of Santa Fe is located on the Paraguay-Paraná Waterway, a 3400-kilometre inland waterway system connecting Brazil, Bolivia, Paraguay, Uruguay and Argentina. Santafesina FTZ’s strategic location and proximity to raw materials and production of commodities, including soybeans, corn and wheat, has made it an easy sell to companies.

US-based fertiliser and chemicals trader Nitron has set up in the zone to serve the Paraguay-Paraná Waterway region, while local crane, industrial machinery and truck providers have based themselves there to support the burgeoning mining and energy sectors of northern Argentina. 

Santafesina was also credited for its measures to enhance governance, transparency and trust within its ecosystem. These include establishing codes of conduct and ethics for all its employees and suppliers; confidential reporting mechanisms for whistleblowers; and participation in international governance initiatives with the World Free Zones Organization and the World Customs Organization.

Download the PDF to explore this year’s winners 

Visit the online hub for the Global Free Zones of the Year 2024 awards

Do you want more FDI stories delivered directly to your inbox? Subscribe to our newsletters.

This article first appeared in the October/November 2024 print edition of fDi Intelligence