Abu Dhabi to invest $2.72bn to double size of manufacturing sector by 2031

Government unveils Abu Dhabi Industrial Strategy which will provide increased access to financing and attract more foreign investment

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The Abu Dhabi government will invest Dh10 billion ($2.72bn) across six industrial programmes to more than double the size of the emirate’s manufacturing sector to Dh172bn by 2031.

This will be done by increasing access to financing, further improving the ease of doing business and attracting foreign direct investment, government officials said on Thursday.

The move is part of the Abu Dhabi Industrial Strategy to strengthen the emirate’s position as the region’s most competitive industrial centre.

“The industrial sector plays a major role in bolstering economic diversification in the UAE and the industrial sector in Abu Dhabi represents 40 per cent of the total sector in the country, as the emirate has invested more than Dh51bn in the past 15 years to set up a complete infrastructure,” said Mohamed Al Shorafa, chairman of the Abu Dhabi Department of Economic Development.

The first tranche of the Dh10bn investment will be disbursed by October this year, Mr Al Shorafa told The National on the sidelines of the conference.

“The planned disbursement is based on incentive programmes to priority sectors such as pharmaceuticals, food, chemicals, robotics, electronics and transport,” he said.

The investment was earmarked to “enable and incentivise” the industrial sector to raise its output to Dh170bn by 2031, he said.

The sector contributed Dh85bn to Abu Dhabi's gross domestic product in 2021 and was the second-largest sector contributor to the emirate's non-oil GDP.

The move will create 13,600 jobs, for mostly Emiratis, in the industrial sector, Mr Al Shorafa said.

The UAE last year unveiled its “Operation 300bn” industrial strategy to position it as a global industrial centre by 2031.

The 10-year comprehensive road map focuses on increasing the industrial sector's contribution to the country's GDP to Dh300bn by 2031, from the current Dh133bn.

The strategy focuses on boosting production in 11 priority sectors, supporting the growth of national industries, attracting foreign investment, modernising legislation and ensuring the availability of dedicated financing for local industrial companies.

The UAE, the Arab world's second-largest economy, has already launched the national In-Country Value (ICV) initiative that aims to boost the private sector's participation in the economy, diversify output and localise critical parts of the supply chain.

More than Dh40bn has so far been redirected into the national economy through the ICV programme. Currently, 45 government entities, 17 leading national companies and 5,500 suppliers are participating in the programme.

The UAE's industrial sector has grown rapidly over the past few years, despite the global economic slowdown caused by Covid-19 headwinds.

Last year, 220 factories were opened and began production as the government unveiled measures to improve the ease of doing business and ensure the industrial sector's continued access to financing.

"The Abu Dhabi Industrial Strategy complements the achievements of the industrial strategy of the UAE which was launched in order to boost the industrial sector and increase its contribution to the national economy," said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology.

"Within a short period of time, the UAE has developed its industrial ecosystem by focusing on existing industries, paving the way for future industries and attracting industrial investments. The strategy will support national industrial growth, nurture and empower Emirati talent, create a smart circular economy, develop a sustainable ecosystem, invest in future technologies, and enhance partnerships with the private sector," he said.

It will also create a business environment that supports investors and entrepreneurs, through new programmes such as Make in the Emirates, Dr Al Jaber said.

Abdullah Al Hameli, head of Economic Cities and Free Zone Cluster at AD Ports Group at the launch of Abu Dhabi Industrial Strategy in Kizad Logistics Park. Khushnum Bhandari / The National

The new strategy will boost Abu Dhabi’s trade with international markets, with the aim of increasing the emirate's non-oil exports by 143 per cent to Dh178.8bn by 2031, the Abu Dhabi Government Media Office said in a statement.

Initiatives under the strategy include a new regulatory framework for the circular economy and new green policies and incentives, the statement said. Abu Dhabi's transition to a smart, circular economy, will powered by an industrial sector that “champions responsible production” through waste management, parts supply and manufacturing.

“Abu Dhabi’s drive for industrialisation is aligning the emirate on an upward path that is bolstering non-oil GDP growth and at the same time facilitating a fast-growing, dynamic, and job-rich logistics and manufacturing ecosystem,” Falah Al Ahbabi, chairman of AD Ports Group, said.

New industry partnerships were also signed along with launching the new strategy.

Adnoc partnered with National Oilwell Varco (NOV) to expand the Houston-based oilfield equipment company's manufacturing footprint in the UAE. NOV will manufacture essential components used for drilling across facilities in Abu Dhabi to strengthen the local supply chain.

Adnoc also signed an agreement with international chemicals company Ingenia Polymers.

Added signed agreements with Italy's Made Competence Centre and Germany's TÜV SÜD on Industry 4.0 technologies.

The UAE’s industrial sector is the most competitive in the Arab world, according to a 2021 UN report.

It was ranked 30th globally in 2021 by the UN, climbing five places since 2020 and nine places in four years and, in the process, helping to attract the interest of global investors.

The UN Industrial Development Organisation’s Competitive Industrial Performance Index report tracks 152 countries.

Sheikh Khaled Bin Mohamed, member of the Abu Dhabi Executive Council and chairman of the Abu Dhabi Executive Office, has launched the Abu Dhabi Industrial Strategy. Photo: Abu Dhabi Government Media Office

Programmes Abu Dhabi plans to invest the Dh10bn in:

  • Circular economy programme: will drive sustainability in the industrial sector. A regulatory framework for waste, recycling and consumption will be developed, along with environmental, social and governance (ESG) policies, green procurement and incentives for improving environmental sustainability.
  • Industry 4.0 programme: will accelerate business growth by adopting new technologies and processes.
  • Talent development programme: will assess industrywide talent and offer upskilling courses to meet future needs. Job placement programmes will offer career opportunities in high demand areas.
  • Programme for digital geographic information system (GIS) mapping: for industrial land search and unified inspection for quality control. Doing business will be made even easier with reimbursement incentives for government fees, land rebates, R&D and tax. It will also streamline customs processes and costs.
  • Home-grown supply chain programme: will aim to increase industrial self-sufficiency and promote domestic products. The Abu Dhabi Golden List, which encourages government procurement of locally-made products, will be expanded.
  • Value chain development: As part of this programme, a supply chain equity investments fund will be established to drive local infrastructure development for end-to-end integration.
Updated: June 30, 2022, 7:07 PM
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