Factory investments triple in Abu Dhabi

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Investment in Abu Dhabi’s active industrial sector has tripled over the past year as the emirate seeks to become a regional manufacturing hub.

Latest figures released by Industrial Development Bureau (IBD), part of the Abu Dhabi Department of Economic Development (ADDED), showed that 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.

New industrial licences reached 136 in H1 while those transitioning to the construction phase reached 62, the IBD report said.

• Abu Dhabi bids to become electric vehicle manufacturing hub

It added that the number of licences moving from under-construction to in-production reached 44 while the total number of active in-production licences reached 866 by the end of June.

The report also revealed positive indicators including the growing number of government tenders awarded to companies with In-Country Value (ICV) certificates under the Abu Dhabi Local Content programme (ADLC) reaching 466 tenders, up from 95 in H1 2021. 

The value of tenders won by ICV holding companies rose from AED550 million to AED970.5 million in the same period.

Tenders with local content value represent 41.9 percent of tenders awarded to ICV certificate holding companies, which means AED407 million was reinjected into the local economy to support local products, compared to AED215.2 million in the first half of 2021.

The new figures boost the UAE’s Operation 300bn initiative which aims to support more than 13,500 SMEs and raise spending on research and development in the industrial sector to AED57 billion in 2031.

Operation 300bn focuses on industries including space technology, medical supplies and pharmaceuticals, clean and renewable energy, machinery and equipment, rubber and plastic, chemicals, metals, advanced technologies manufacturing, electronics and electrical gadgets and food and beverage, and aims to create an attractive business environment for local and international investors in the industrial sector.

It also seeks to encourage innovation, and the adoption of advanced technology and Fourth Industrial Revolution solutions while enhancing the UAE’s position as a business and technology hub.

The IDB’s report also reflected a growing interest in the Golden List initiative, developed to increase demand on locally manufactured goods through government procurements. 

The number of manufacturers that joined the list reached 127 by the end of June, an increase of 14.4 percent compared to 111 as of the end of 2021. 

At the same time the number of registered products in the list grew by 33.9 percent to reach 655 products.

“The strong indicators of IDB’s report reflects the strength of the manufacturing sector in Abu Dhabi, which is a key priority for achieving our economic diversification objectives,” Rashed Abdulkarim Al Blooshi, undersecretary of ADDED, said.

“The industrial sector is the largest contributor to Abu Dhabi’s non-oil GDP in addition to its role in creating jobs and enhancing knowledge and innovation-driven initiatives.”

Under the recently launched Abu Dhabi Industrial Strategy, the emirate plans to invest AED10 billion across six programmes to more than double the size of the manufacturing sector to AED172 billion by 2031 and create 13,600 skilled jobs, with a focus on Emirati talent, he added.

“IDB is implementing initiatives to deliver against Abu Dhabi Industrial Strategy’s objectives,” Sameh Al Qubaisi, director general of economic affairs at ADDED, said.

“The Smart Manufacturing Programme has assessed readiness of 76 facilities to transition to Industry 4.0 technologies.

“In addition, we are strengthening partnerships with leading global players to empower manufacturers to switch to Industry 4.0, and to support a circular, smart, and sustainable economy.”

To enhance the competitiveness of the funding environment IDB has signed agreements with 10 banks to help improve financial inclusion for industrial facilities.

Last week Abu Dhabi announced plans for its first electric vehicle assembly facility as it looks to join Saudi Arabia and Sharjah in building a regional manufacturing hub for sustainable transport options.

KIZAD, part of AD Ports Group’s Economic Cities & Free Zones, has signed a lease agreement with NWTN to establish an assembly plant in Abu Dhabi to serve growing demand.

The announcement follows recent regulatory updates by the Abu Dhabi Department of Energy that seek to accelerate the development of electric vehicle infrastructure as part of Abu Dhabi’s Low Emission Vehicle Strategy.