Analysis Economy Abu Dhabi sets up KEZAD Group to bolster its industrial ambitions By Andy Sambidge September 20, 2022 Media Office Abu Dhabi KEZAD merges the operations of Khalifa Industrial Zone Abu Dhabi (KIZAD) and Specialised Economic Zones (ZonesCorp) Economic zones group hosts clients in sectors from agtech to energyPart of Abu Dhabi industrial strategy to grow manufacturing sectorEcommerce boom boosts demand for warehouses and logistics facilities AD Ports Group has set up a new business, KEZAD Group, to expand its economic cities and free zones offering. KEZAD, which stands for Khalifa Economic Zones Abu Dhabi, merges the operations of Khalifa Industrial Zone Abu Dhabi (KIZAD) and Specialised Economic Zones (ZonesCorp). It operates 12 economic zones with a total area of 550 square kilometres, including 100 square kilometres designated as free zones, as well as more than 300,000 square metres of pre-built warehouse facilities and over 40 staff accommodation complexes. Factory investments triple in Abu DhabiAbu Dhabi’s non-oil foreign trade grows 12% in H1 2022 The group has more than 1,750 clients from 17 industrial and economic sectors including pharmaceuticals, metals, automotive, food and agtech, retail and logistics, green energy, life sciences, chemicals and oil, and gas. KEZAD is designed to offer greater opportunities for investors looking to streamline every segment of their supply chain, said AD Ports in a statement. “With the industrial sector in the UAE accounting for over 10 percent of GDP, it remains a critical growth area,” Faisal Durrani, a partner and the head of Middle East research at Knight Frank, told AGBI. “The boom in online shopping in the wake of the pandemic, which has been underpinned by a seemingly permanent shift in consumer shopping habits, is placing rents for high quality warehouses under upward pressure, with distribution warehouses and last-mile logistics facilities in particularly high demand.” He added: “KIZAD has been rapidly expanding over the course of the last two years, attracting a range of manufacturers to establish a presence, further helping to cement its hub status and a perfect complement to [Dubai’s Jebel Ali Free Zone], further entrenching the UAE’s status as the region’s premier manufacturing hub.” The launch of KEZAD Group comes just weeks after the Abu Dhabi government unveiled its industrial strategy. It will invest AED10 billion as it aims to more than double the size of Abu Dhabi’s manufacturing sector to AED172 billion, create 13,600 skilled jobs and increase Abu Dhabi’s non-oil exports by 143 percent by 2031. Initiatives include a new circular economy regulatory framework, and green policies and incentives, as Abu Dhabi seeks to transform itself into a smart economy, powered by an industrial sector that champions responsible production and consumption. It is also part of the UAE’s Operation 300bn initiative, which aims to support more than 13,500 SMEs and increase spending on research and development in the industrial sector to AED57 billion in 2031. CBRE said in its latest research report that the launch of the industrial strategy “is likely to expedite future developments in the sector”. “This will be facilitated through increasing the ease of doing business, increased availability of industrial lands and reducing power costs, amongst other initiatives,” said Durrani. He added that rents in Abu Dhabi rose by 3 percent in the year to the end of June, attributing the increase to the continuing imbalance between supply and demand imbalance. Average rents in Abu Dhabi currently stand at AED370.8 per square metre. A report published last year by Knight Frank said Abu Dhabi’s industrial sector needed about 630,000 square metres of new space. KEZAD will be solely responsible for managing the process of planning, developing, operating, regulating and promoting its combined assets, which make up 55 percent of the UAE’s industrial area. A report by Knight Frank said Abu Dhabi’s industrial sector needed about 630,000 sq m of new space “The launch of KEZAD Group supports the expansion of dedicated ecosystems for strategic industries, boosting access to international markets, integrating advanced technologies, and accelerating the transition to a circular economy,” Mohamed Juma Al Shamisi, managing director and group CEO, AD Ports Group, said. “From a business perspective, economic cities and free zones provide AD Ports Group with revenue generated by long-term contracts, and stimulate further growth across our other operations as clients deploy our logistics, ports and digital services.” Mohamed Al Khadar Al Ahmad, CEO of KEZAD, said: “KEZAD Group is now responsible for the largest integrated trade, logistics and industrial hub in the region and is the largest operator of purpose-built economic zones and workers residential cities in the UAE. “We will deploy this enhanced scale to fully support strategic industries and enable sustainable diversification and growth. “By providing a suite of favourable business solutions and economic zone benefits, KEZAD Group will provide an unmatched platform across strategic locations that drives growth across the region and beyond.” Investment in Abu Dhabi’s active industrial sector has tripled over the past year, according to the latest figures released by the Industrial Development Bureau, part of the Abu Dhabi Department of Economic Development. The total value of factories that switched to the in-production stage rose to AED3.1 billion ($840 million) during the first six months of 2022, compared to AED1.03 billion in the same period last year. There were 136 new industrial licences in H1 while the number transitioning to the construction phase was 62, the bureau said.