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The UAE's manufacturing push benefits from its focus on future industries as the country boosts efforts to develop its non-oil economy, according to industry analysts and executives.
At next week's Make it in the Emirates conference in Abu Dhabi, the spotlight will once again be on domestic manufacturing and the steps being taken to support the sector.
The event, now in its fourth edition, is hosted by the Ministry of Industry and Advanced Technology and will run from May 19-22 under the theme of "Advanced Industries. Accelerated", with AI and Industry 5.0 in focus.
Set to be spread across 68,000 square metres at Adnec – five times larger than last year's event – it will feature more than 700 exhibitors.
Experts say that the manufacturing ecosystem built by the UAE, the Arab world's second-largest economy, was a patient yet streamlined process, giving rise to investment and company set-ups.
“The good thing about the UAE, when we talk about manufacturing, is it doesn't suffer from any legacy or historical manufacturing industries, what you might call sunset [declining] industries,” Simon Penney, managing partner and chief executive of Dubai-based strategic management services Incrementum CGA, told The National.
Other parts of the world that have been manufacturing economies for 100 years or more are saddled with industries that are no longer viable. The UAE doesn't have that problem because, being historically an oil-driven economy, it has the opportunity to tap into other, more modern and forward-looking sectors, said Mr Penney, who is also the former UK HM Trade Commissioner for the Middle East.
“[The UAE] is in a very enviable position to focus on those industries which you might call sunrise industries – those that are going to be very much at the centre of global manufacturing for the next decades ahead,” he said.
The UAE has been focusing on industrial growth as it diversifies its economy away from oil. The country launched its industrial strategy, Operation 300bn, in 2021 to position itself as an industrial centre by 2031.
The sectors the strategy has been focusing on include chemicals, electrical, construction, machineries and equipment, food, transportation, metals, pharmaceuticals, rubber, plastic and fibre glass, and wood and paper.
The initiative is “not just about the UAE government wanting to expand manufacturing, but also expand manufacturing in specific areas”, said Jeanne Walters, a senior economist at Emirates NBD, Dubai's largest bank.
“The UAE government has already done a significant amount of work in setting the groundwork for that to become a reality,” she added.
The Emirates has also signed 21 Comprehensive Economic Partnership Agreements to boost trade and attract investment into the country. Deals with nine countries – India, Israel, Turkey, Indonesia, Cambodia, Georgia, Costa Rica, Mauritius and Jordan – have already taken effect, out of a goal of 27.
Those deals are proof that the government is “really putting a focus on developing itself as a key logistics hub that's a link between East and West”, Ms Walters said, noting that the Cepas “help manufacturers get confidence in the UAE as a place to base their manufacturing facilities”.
The UAE’s foreign trade exceeded Dh5 trillion ($1.36 trillion) in 2024, with a trade surplus of more than Dh490 billion, data from the World Trade Organisation shows.
ICV programme
The UAE's ICV programme, meanwhile, has been aimed at boosting the growth of domestic industries by redirecting half of government spending on procurements and tender contracts into the national economy by 2031.
Abu Dhabi, which is estimated to hold more than 90 per cent of the UAE's oil reserves, has increasingly advanced its manufacturing capabilities with high-tech tools, automation and robotics, and data analytics.
The manufacturing sector remained the largest non-oil contributor to Abu Dhabi's gross domestic product at 9.5 per cent in 2024, with its added value hitting Dh111.6 billion – the highest on record, the emirate's Department of Economic Development reported in March.
The sector posted an annual growth rate of 2.7 per cent in 2024.
Dubai last week launched its own ICV programme aimed at encouraging government entities to direct more of their spending towards domestic suppliers.
The emirate aims to double the size of its economy to Dh32 trillion over the next decade and establish itself among the top three cities around the world as part of its D33 strategy.
Other emirates also have manufacturing contributing a higher share to their GDP.
Manufacturing contributes about 16 per cent to Sharjah's GDP, while in Ras Al Khaimah, an industrial hub, the sector clocks in at around 27 per cent, according to Emirates NBD research.
The evolution of manufacturing in each emirate varies: Abu Dhabi has seen a “strong growth”, particularly after the Covid era, while Dubai has been “fairly stable”, Ms Walters said.
But no matter where, there is “definitely” opportunity for further growth, both at an emirate level and aggregate level in the UAE, with “a lot” going to depend on respective initiatives, she said.
From opportunity to reality
The UAE's manufacturing push has seen small and big companies across sectors start building in the country.
The AM Lab, a UAE-based 3D printing company, seeks to digitise manufacturing “in order to lower the entry barrier and democratise access to methods of manufacturing that were not accessible before”, its founder Abdallah Alawadi said.
In 2021, he realised it was hard to gain access to industries that wanted high volume production.
"We ended up having to purchase the machines and manufacture ourselves to be able to meet the current demand that we had for our prototyping needs," he told The National.
“What we were trying to do is experiment with different materials and, unfortunately, with such a tight budget, we were only able to iterate once.”
Fast-forward four years and The AM Lab is up and running, powered by AI, but the goal of mass manufacturing remains a patience game.
“We haven't developed the clientele and the reputation to be able to do that yet,” Mr Alawadi said.
But demand is growing, and he believes the UAE manufacturing and supplier network will play a key role in their business' growth. In turn, it will allow local businesses to purchase items locally, instead of from overseas.
“Our goal every month is to add two new manufacturers or two new vendors as part of our network to meet growing demand from our clients,” Mr Alawadi said.
“I see us setting a new standard for manufacturing within the region. I expect larger companies to jump on … to be able to produce their parts as we'll be able to guarantee and protect their IP [intellectual property].”
Mr Penny said the UAE spent the last number of years putting in place "an incredibly solid foundation to attract manufacturing – and that's something which takes time to do".
That has put the Emirates “in an exceptionally strong place right now”, having the agencies in place to support inward investment for manufacturing and “very clear in which sectors they want to attract international manufacturing”.
