Abu Dhabi to attract car parts companies after launching Dh2.2bn tyre plant

Khalifa Industrial Zone is expanding as part of economic diversification efforts

Dr Sultan Al Jaber, the UAE Minister of State and chairman of Abu Dhabi Ports, and Roadbot Chairwoman Zhang Yingzi attended the the groundbreaking of the Roadbot Tire Project KIZAD. Courtesy Abu Dhabi PortsShow less

Abu Dhabi’s Khalifa Industrial Zone (Kizad) expects to attract more manufacturers of car parts after the start of construction of a Dh2.2 billion tyre plant in the area adjacent to the $7bn Khalifa Port, officials said.

Roadbot Tyre Project Kizad, which is being developed by China’s tyre manufacturer Roadbot, is the first investment in the 2.2-square kilometre China-UAE Industrial Capacity Co-operation Demonstration Zone, Kizad said on Tuesday. China’s Jiangsu Provincial Overseas Co-operation and Investment company is developing the free zone under a 50-year agreement struck in 2017.

“The Roadbot tyre factory will make an important contribution to the UAE’s manufacturing base as part of our leadership’s longstanding strategy to diversify our economy,” Dr Sultan Al Jaber, chairman of Abu Dhabi Ports, the operator of the zone said on Tuesday.

Abu Dhabi is developing a downstream industry in Kizad as part of efforts to diversify the economy away from oil, create jobs and attract foreign direct investments. Several industrial plants operate out of Kizad, including a smelter for Emirates Global Aluminium, Emirates Steel and petrochemical producer Borouge.

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Kizad, which along side Abu Dhabi Ports contributes 3.6 per cent to the non-oil gross domestic product of the emirate, has attracted Dh65bn in investments to date and is targeted to contribute to 15 per cent of non-oil GDP by 2030.

Roadbot Tyre Project Kizad, set to be operational by 2020, will create up to 1,200 jobs.

“We are talking to a number of spare part producers who are focusing on very specific elements of the cars to be produced in Kizad,” said Edwin Lammers, vice president of commercial and business development at Kizad. “We are confident that we will see more influx of the automotive industry into Abu Dhabi within this year.”

For example, Kizad is talking to manufacturers of brake pads to set up base in the zone, he added.

The zone already has a developing automotive cluster, with one company producing aluminium bumper parts for Porsche, he said.

Having resources from EGA, Emirates Steel and Borouge nearby helps attract companies to the free zone.

Kizad attracted Dh1.5bn in FDI in 2018 and expects to see inflows of up to $3bn annually, its chief executive Samir Chaturvedi said earlier this month.

Kizad and state-owned Abu Dhabi National Oil Company plan to develop a polymers park within the free zone as part of attracting more downstream industires. Polymers are used to produce plastics.

The economic zone and ports are attracting major Chinese investments as ties between Beijing and Abu Dhabi strengthen.

Khalifa Port last month inaugurated a $430 million terminal, which will be operated by China’s Cosco Shipping Ports according to a 35-year concession agreement.