Adnoc signs deals worth $2.7 billion to boost local manufacturing

Agreements with 30 companies will support state-owned company's decarbonisation drive

Adnoc announced new deals to boost local manufacturing during its annual Business Partnership Forum at Adipec in Abu Dhabi. Photo: Adnoc

Adnoc has signed agreements worth up to Dh10 billion ($2.7 billion) with 30 local companies to manufacture critical non-oil products in its supply chain and support the company's decarbonisation drive.

The new deals also support the state-owned company’s target to locally manufacture Dh70 billion worth of products in its procurement pipeline by 2027 as part of the 'Make it in the Emirates’ initiative, Adnoc said on Thursday.

Among the products that will be produced locally include personal protective equipment to enhance the safety of operations across all Adnoc Group companies.

Battery energy storage systems and uninterrupted power supply equipment will also be manufactured in the UAE, which will replace diesel generators with more sustainable energy at Adnoc Onshore, Adnoc Offshore and Adnoc Drilling.

The deals were announced at Adnoc’s seventh annual Business Partnership Forum held at Adipec in Abu Dhabi.

“Adnoc’s localisation of its supply chain is consistent with our diversification strategy and the Abu Dhabi Industrial Strategy, which is accelerating the UAE manufacturing sector’s transformation and strengthening its position as the region’s most competitive industrial hub,” said Ahmed Al Zaabi, chairman of the Abu Dhabi Department of Economic Development (Added).

“These efforts have helped to increase the contribution of the non-oil sectors to 53 per cent of Abu Dhabi’s total [gross domestic product] by the end of [the first quarter] 2023."

Abu Dhabi last year launched a new industrial strategy to boost the contribution of the industry sector to the overall economy.

As part of the strategy, the UAE capital is investing Dh10 billion in six industrial programmes to more than double the size of the emirate’s manufacturing sector to Dh172 billion by 2031, create more than 13,000 new jobs and increase the emirate’s non-oil exports to Dh178.8 billion.

This week, Abu Dhabi also announced 100 investment opportunities with a combined market value of Dh123.3 billion by 2027 to support the growth of the industrial sector in the emirate.

This includes 33 new investment opportunities targeting chemical industries, with a market size of $6 billion, according to Added.

“Adnoc is a critical driver of the UAE’s industrial growth, and we are creating a wealth of local manufacturing opportunities for the private sector as we work towards a lower carbon future,” said Yaser Almazrouei, Adnoc's executive director of people, commercial and corporate support directorate.

“The new agreements we have signed for local manufacturing opportunities offer the potential to enhance the UAE’s industrial base, drive significant value back into the economy and create high-skilled private sector jobs for UAE nationals.”

Adnoc is providing incentives to suppliers to adopt clean technology while setting up new manufacturing facilities in the UAE as part of its In-Country Value programme. The initiative has driven Dh145 billion back into the UAE’s economy since 2018, the company said.

In February, Adnoc signed agreements worth Dh17 billion with 23 local and international companies to boost the UAE’s manufacturing sector.

That followed from November, when Adnoc signed agreements worth up to Dh35 billion with 25 companies, including Siemens, Halliburton and Schneider Electric.