Manufacturing

The UAE Government is focused on more than doubling the contribution of industrial manufacturing to the UAE’s GDP to 25 percent, as highlighted in Vision 2021, Dubai Industrial Strategy 2030, and Abu Dhabi Economic Vision 2030. Industrial manufacturing lies at the heart of Operation 300bn, a government strategy launched in 2021 that aims to develop the UAE’s industrial sector and enhance its role in stimulating the national economy. It aims to raise the industrial sector’s contribution to the GDP from AED 133 billion to AED 300 billion by 2031.

We hope to attract international companies to launch pioneering projects in this country and to develop strong partnerships with UAE industrial companies at both the local and international level. Add to this our strong support for SMEs to enter the advanced industrial sector and contribute to global value chains, and we expect home grown companies to eventually play a major role in driving innovation and employing new technologies within the national industrial sector

HE Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Infrastructure

1st in the Arab World

in terms of competitiveness of the industrial sector

AED 300 billion

Manufacturing's contribution to GDP by 2031

8.7%

Manufacturing as percentage of GDP in 2019

AED 30 billion

Allocation by the Emirates Development Bank for priority manufacturing sectors

The UAE is perfectly positioned as a major manufacturing and export center, located at the heart of the Arabian Gulf, the Former Soviet Union (CIS), South Asia, and Africa. Indeed, in the latest Competitive Industrial Performance Index report by the United Nations Industrial Development Organization, the UAE was found to have the most competitive industrial sector in the Arab world, ranked 28th globally for manufacturing value-added per capita.

At present, manufacturing's share of GDP amounts to AED 133 billion (USD 36.2 billion), with a goal of hitting AED 300 billion (USD 81.7 billion) by 2031.The UAE's strategy is focused on the following vital industrial sectors that will stimulate growth, increase productivity, foster sustainable economic outcomes, and create job opportunities:

  • food, beverage and agricultural technology
  • pharmaceuticals
  • electrical equipment and electronics
  • petrochemicals and chemical products
  • rubber and plastics
  • machinery and equipment
  • hydrogen
  • medical technology
  • space technology

 

The Emirates Development Bank (EDB) will act as a key enabler of Operation 300bn. Under the strategy, the bank has allocated AED 30 billion to support priority industrial sectors over a period of five years.

It is worth noting that beyond those areas mentioned above, specialized manufacturing for aviation, as well as shipbuilding have emerged in the UAE in recent years off the back of a number of successful joint ventures between foreign investors and UAE companies. Such ventures are supported through the multitude of free zones which focus on industrial manufacturing across the various emirates, and which tie in to the UAE’s strength as a major logistics hub, particularly around ports and airports. Investors could leverage know-how and best practice from the successful aerospace manufacturing industries in the UAE, as well as the Government’s focus on high-tech automation, to enable production of higher-value products.

What You Need to Know

  • At present, manufacturing contributes AED 133 billion (USD 36.2 billion) to GDP, with a goal of hitting AED 300 billion (USD 81.7 billion) by 2031.
  • Global manufacturing demand has increased sharply as many economies around the world continued to open up from COVID-19 related lockdowns and restrictions. 
  • Consumer sentiment has also improved, with increased vaccination rates likely to strengthen this trend.
  • Trends in manufacturing may change off the back of the supply chain disruptions that occurred due to COVID-19. In particular, greater attention will be paid to 'where' companies choose to manufacture, with many likely to move as close to the point of demand as possible.
  • The UAE offers opportunities to establish manufacturing businesses that are attentive to customer preferences and buying habits accross the world. Additionally, given its centrality to global supply chains, manufacturing in the UAE will offer opportunities to shorten and simplify supply chains.
  • The investment environment has been significantly improved for manufacturing through Operation 300bn, with 17 initiatives launched in support of the sector: 
    • establishing an integrated R&D ecosystem
    • positioning the UAE as a pioneering global destination for technology and innovation
    • developing an advanced technology roadmap that drives innovation
    • establishing standards and metrology that support advanced technology adoption
    • catalysing the adoption of the 4IR technology to boost the productivity of anchor industries
    • launching an ICV programme
    • promoting the ‘Made in the Emirates’ brand and national products
    • developing an integrated quality infrastructure
    • negotiating reciprocal trade agreements and work to control the classification system of traded products for export and import
    • modernising the industrial law
    • offering attractive energy and gas tariffs to eligible sectors
    • launching a framework for partnerships with industrial sectors to develop standards and metrology
    • providing flexible financing at competitive costs for priority sectors
    • establishing a digital ministry by 2022
    • advancing digital transformation to simplify registration, licensing and fee procedures
    • building a data management platform.
  • The Emirates Authority for Standardization and Metrology (ESMA) sets safety regulations.
  • If an investor decides to invest onshore, they will need to engage with emirate-level Departments of Economic Development, which will assist with manufacturing licenses. The Federal Ministry of Energy and Infrastructure will then issue license certificates to companies that meet certain requirements, which would allow manufacturers to receive exemptions of customs duties on machinery and equipment, spare parts, raw materials and packaging materials.
  • The Ministry of Industry and Advanced Technology (MoIAT)is the main driver behind Operation 300bn, assisting in incentive schemes and the determination of priority manufacturing sectors.
  • Emirates Development Bank (EDB) is a key enabler of Operation 300bn. As such, the bank has allocated a portfolio of AED 30 billion to support priority industrial sectors over a period of five years. The bank will contribute to financing 13,500 SMEs and creating 25,000 jobs in the following sectors:
    • manufacturing: petrochemicals, plastics, heavy industries, machinery, electrical appliances and renewable energy equipment
    • infrastructure: energy, transportation, communications and digital infrastructure
    • technology: software, IT, storage devices, peripherals, renewable energy technology and education technology
    • healthcare: pharmaceuticals, biotechnology, medical equipment and hospital services
    • food security: agriculture, livestock, aquaculture and water desalination.
  • On the higher value end, there has been substantial UAE investment in space technologies (exceeding USD 5.4 billion), and on moving the UAE higher up the value chain in aerospace through focusing on advanced aerospace structures and composite part manufacturing facilities. Dubai’s Maritime Vision 2030 also lays out the goal of Dubai in making the Emirate a leading global maritime hub.
  • There is strong potential for investment in the manufacturing of automobile parts (such as engine parts, tires and lubricants) in the UAE, given that the country is already a key player in the trade in automotive parts, and is a servicing hub for automobiles.
  • Investors could leverage know-how and best practice from the successful aerospace manufacturing industries in the UAE, as well as the Government’s focus on high-tech automation could enable production of higher-value products.
  • The UAE has been working to develop its own luxury yacht sector. 
  • Although there is already significant investment in the aerospace sector, the UAE’s goal in the aerospace sector is to be a key supplier to original equipment manufacturers (OEMs), through focusing on advanced aerospace structure and composite part manufacturing facilities and capabilities.
  • There are many free zones which focus on industrial manufacturing across the various emirates, and which tie into the UAE’s strength as a major logistics hub, particularly around ports and airports. These include Jebel Ali Port, Khalifa Port, Sharjah International Airport Free Trade Zone, and the Al Ghail Industrial Zone. Recognizing the importance of the automobile sector, a new industrial city called Rahayel City is being built as a specialized automobile hub.
  • The UAE has stepped up measures to promote electric vehicles (EVs). Dubai Water and Electricity Authority (DEWA) and Dubai Silicon Oasis Authority (DSOA) have installed EV charging stations in the Emirate. Dubai has a goal of autonomous vehicles accounting for 25 percent of all transportation by 2030, through Dubai’s Autonomous Transportation Strategy, which also covers mass transit.
  • Ministry of Energy and Infrastructure (MoEI)
  • Emirate-level Departments of Economic Development
  • Abu Dhabi Industrial Development Bureau
  • Ministry of Industry and Advanced Technology (MoIAT)

The UAE is a story of transformation. With strong leadership, and a continued focus on long-term goals, our advanced manufacturing sector is set to share a quarter of the national GDP in the very near future. Growth in manufacturing is encouraging greater investment in developing specialist skills, and promoting wider societal sustainability initiatives across the country.

Mr Badr Al-Olama, Director of Aerospace, Mubadala Investment Company

⇑