The Future of Manufacturing in the U.A.E.

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January 28, 2018

The U.S.-U.A.E. Business Council released a new report on the latest developments in the U.A.E.’s manufacturing sector at a high-profile event in Abu Dhabi on Sunday, 28 January.  Eng. Jamal Salem Al Dhaheri, CEO of SENAAT, and Badr Al-Olama, the Head of the Aerospace Business Unit at Mubadala Investment Company, provided keynote remarks at this exclusive business roundtable luncheon.

Image Credit: Ahmed Kutty:Gulf News

L to R: Badr Al-Olama, Head of the Aerospace Business Unit at Mubadala Investment Company; Eng. Jamal Al Dhaheri, CEO of SENAAT; and Danny Sebright, President of the U.S.-U.A.E. Business Council

U.S.-U.A.E. Business Council President Danny Sebright opened the briefing by highlighting the U.S.-U.A.E. Business Council’s new report, titled “Making the Future: The U.A.E.’s Growing Manufacturing Sector”.

Eng. Jamal Al Dhaheri, CEO of one of the U.A.E.’s largest industrial investment holding companies, subsequently spoke about the state of the country’s manufacturing sector. He also provided insights into SENAAT’s plans and projects, including the recently inaugurated Ducab Aluminium Company (DAC). SENAAT is now represented by no less than nine leading companies: Emirates Steel, DAC, Taweelah Aluminium Extrusion Company (TALEX), National Petroleum Construction Company (NPCC), Arkan Building Materials Company (Arkan), Ducab, Agthia, Al Foah, and Al Gharbia.

Mr. Al Dhaheri said: “SENAAT is a key contributor to Abu Dhabi Economic Vision 2030, strategically developing the Emirate into a global industrial player. As a fast-growing industrial champion with a track record in forging successful partnerships, we are currently managing AED 27.5 billion of industrial assets in metals, F&B, O&G services, and the construction and building materials sector. Our partners appreciate our vast experience in developing successful ventures as well as our deep knowledge of the regional business environment. In line with the Abu Dhabi Economic Vision 2030 & Abu Dhabi Industrial Development Strategy, we continue to explore multiple investment plans and strategic projects and we look forward to strengthening ties with the international investment community in this journey.”

Badr Al-Olama, who leads the organizing committee for the Global Industrialization and Manufacturing Summit (GMIS) in addition to heading Mubadala’s Aerospace Division, then shared his thoughts on the future of U.A.E. manufacturing. “The U.A.E. is a story of transformation,” Mr. Al-Olama said. “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. Al-Olama also discussed the role that Mubadala plays in this industrial transformation and on wider U.A.E. society. “At Mubadala, we believe that manufacturing, ultimately, has a transformative impact on society— by creating an agile economy that offers high-value employment opportunities that are more resilient to market dynamics.”

Following these keynote remarks, Mr. Al Dhaheri and Mr. Al-Olama engaged in a thoughtful discussion with senior-level attendees about the Fourth Industrial Revolution and the impact of 3D printing, automation, and artificial intelligence on industry. In addition, they reviewed the outcomes of GMIS, which was held in Abu Dhabi last year. Finally, they discussed opportunities and challenges to manufacturing in the U.A.E. and provided detailed advice to companies considering establishing operations there.

Mr. Sebright concluded the event by stressing the wide range of opportunities the U.A.E.’s manufacturing sector provides for U.S. companies and investors. “This new report and today’s event demonstrate that the prospects for U.A.E. manufacturing are bright,” Mr. Sebright said. “There are substantial opportunities for U.S. companies who are considering establishing manufacturing operations in the U.A.E. or exploring commercial relationships with U.A.E. manufacturers.”

The U.S.-U.A.E. Business Council’s new report on the U.A.E. manufacturing sector underscores how manufacturing has long been a key component of the country’s economic diversification efforts. Moreover, it shows how large government-linked institutions such as Senaat and Mubadala have played an important role in these efforts, alongside private-sector entities such as the U.A.E.’s Al Ghurair Group or the U.S.’s Guardian Industries or McWane.

The report also offers insights into sectors that have either been a focus of U.A.E. manufacturing growth or will be a focus in the future.

  • Metals: Both Abu Dhabi and Dubai have made the manufacture of primary metals and the development of high-value downstream processing sectors a key component of their industrialization strategies. This is epitomized by companies such as Emirates Global Aluminium, Emirates Steel, and Ducab.
  • Building Materials: The U.A.E. as a whole and Ras Al Khaimah in particular feature booming industries for construction-related materials such as cement, ceramics, and glass. Arkan, RAK Ceramics, and Guardian Glass are three brand names in their respective fields.
  • Chemicals: The U.A.E. has an important chemicals sector, centered in Abu Dhabi and epitomized by Borouge – a joint venture between Abu Dhabi National Oil Company and Borealis.
  • Pharmaceuticals:The U.A.E. has a growing domestic pharmaceutical manufacturing industry, marked by partnerships between U.A.E. manufacturers and prominent U.S. pharmaceutical giants such as MSD (as Merck is known outside the United States) and Pfizer.
  • Food and Beverages: The U.A.E. hosts a large  number of food and beverage manufacturers including Agthia, Al Foah, and the local partners of The Coca-Cola Company and PepsiCo.
  • Aerospace and Defense Equipment: The U.A.E. is quickly developing its nascent aerospace and defense industry through companies such as Strata, which produces key components for Boeing aircraft.

The report concludes by examining the U.A.E. manufacturing sector’s prospects. U.A.E.-based industry is poised to capitalize on the country’s strategic location as well as its world-class transportation and industrial infrastructure. It is also set to benefit from relatively low taxes, business-friendly regulations, and the ready availability of energy, goods, and labor. These advantages should help U.A.E.-based manufacturers navigate any potential challenges from lower oil prices, increasing regional competition, persistent foreign dumping, or a rising global wave of protectionism.

To read the full report, please click on the following link: “Making the Future: The U.A.E.’s Growing Manufacturing Sector.”