Emirates Global Aluminium, the UAE's largest industrial company outside oil and gas, joined the Ministry of Industry and Advanced Technology’s National In-Country Value programme as the industrial major moves towards its goal of doubling its economic impact by 2040.
The signing of the preliminary agreement represents a “big boost” to the ICV programme given EGA's scale, which generates around Dh20 billion ($5.44bn) in economic activity yearly and supports more than 60,000 jobs in the UAE.
“The National In-Country Value programme will enhance the capabilities of local suppliers holding a National In-Country Value Certificate through increased demand for local goods and services and the redirection of more than 42 per cent of government and participating private-sector procurement by 2025,” Omar Suwaina Al Suwaidi, undersecretary of the ministry, said on Sunday.
“This will create new business opportunities, stimulate industrial growth and incentivise advanced technology adoption. By joining the programme, EGA is making an important contribution to the UAE’s industrial strategy and we look forward to more national champions following suit.”
The main objective of an ICV Certificate is to boost the private sector's participation in the economy, enable the diversification of GDP and localise critical parts of the supply chain. Simply put, a supplier's spend that remains within the UAE or contributes to the UAE is calculated and considered as ICV.
EGA's ICV participation is the latest in a string of partnerships that are boosting the programme.
Last week, the Industry Ministry teamed up with Abu Dhabi's Department of Economic Development and Abu Dhabi National Oil Company to enhance support for the UAE's Make it in the Emirates campaign, which promotes locally made products and services.
This month, Etihad Rail, the developer and operator of the UAE’s national railway network, the Emirates’ defence conglomerate Edge and the Sharjah Investment and Development Authority also signed up.
In September, telecoms operator Etisalat, Emirates Steel and Abu Dhabi National Energy Company (Taqa) joined the programme.
Mr Al Suwaidi and Abdulnasser bin Kalban, chief executive of EGA, signed the preliminary agreement in the presence of Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and Khaldoon Al Mubarak, chairman of EGA's board.
The ministry's agreements are designed to enhance co-operation between the ministry and major national companies to achieve the goals of the ICV programme, which is in line with the national strategy for industry and advanced technology, Operation 300bn, launched this year with the aim of doubling industry's contribution to national GDP to Dh300bn by 2031.
One of the most significant opportunities is local procurement. Our demand for goods and services can help UAE companies grow and can spur the development of new industrial activities to supply us
Abdulnasser bin Kalban,
chief executive of Emirates Global Aluminium
EGA’s aluminium is the biggest made-in-the-UAE export after oil and gas and is shipped to more than 50 countries.
“One of the most significant opportunities is local procurement. Our demand for goods and services can help UAE companies grow and can spur the development of new industrial activities to supply us. We are looking forward to working with the ministry on this important project,” Mr bin Kalban said.
In 2020, EGA spent more than Dh6bn on goods and services procured locally, representing 45 per cent of the company’s total procurement spend.
In early November, the company completed the expansion of its Al Taweelah smelter in Abu Dhabi to boost output capacity at the plant by 78,000 tonnes per year.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
MATCH INFO
Euro 2020 qualifier
Fixture: Liechtenstein v Italy, Tuesday, 10.45pm (UAE)
TV: Match is shown on BeIN Sports
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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