More than 120 companies have committed themselves to Dubai Logistics City, which is due to open at the end of 2008, the free zone's CEO said yesterday.

Logistics companies have reserved 3.6 million square metres out of an available 11 million, the equivalent of 30 per cent of the land area, chief executive Michael Proffitt said.

"We're delighted at the response we've had to date, which is for us a total validation of value proposition that we believe Dubai has to offer this region," said Proffitt.

Dubai Logistics City (DLC) is part of the 140 square kilometre Dubai World Central airport, which will have capacity to handle 120 million passengers and 12 million tonnes of cargo a year.

Proffitt noted Dubai's key strength is its central location - markets in south Asia, Africa, and the former Soviet-bloc countries lying within three to four hours' flight time.

"From our perspective, at the moment we're in a very strong position, we're very pleased with the response, and we're looking forward to the opening next year," he said.

DLC is slated to open at the end of next year, although completion of the first runway this year could result in some shippers commencing operations earlier.

The largest tenancy contracts were secured last September by logistics firms Aramex, Danzas AEI Emirates, Kuehne & Nagel and Panalpina.

Aramex signed for 140,000 square metres in the free zone's contract logistics area with an option for an additional 100,000 square metres, and Danzas AEI Emirates committed to 30,000 square metres in the forwarding area with an option for a further 15,000 square metres as well as 155,000 square metres in the contract logistics area.

Kuehne & Nagel signed for 52,000 square metres in the contract logistics area, and Panalpina secured 30,000 square metres in the forwarding area with and option for another 15,000 square metres.

Looking for new acquisitions

Global logistics firm Kuehne & Nagel said it was looking to acquire local firms in its bid to become one of the top five logistics firms in the region.

The Swiss-based company, which had revenues of 14.05 billion Swiss francs last year, last September committed to setting up operations at Dubai Logistics City on a 52,000 square metre plot in the contract logistics area.

The company will spend $100 million to develop the facility and will double its staff in the region to 280 employees, officials said yesterday.

With a presence of six facilities in the GCC covering 20,000 square metres, it expects to grow to 15 locations by 2010 totalling 200,000 square metres, through both "organic and external growth," executive vice-president Dirk Reich said.

The logistics firm, which buys capacity from major cargo carriers and shipping firms, is targeting pharmaceutical and UN emergency services, the aviation industry, and hotels.