Make it in the Emirates ‘needs more SMEs’

WAM

• $33bn invested under MIITE campaign
• Industrial exports from UAE up 17%
• But ‘not enough done’ for SMEs

More than AED120 billion ($33 billion) has been invested by UAE-based companies to develop hundreds of new product lines under the country’s “Make it in the Emirates” (MIITE) campaign.

As the Ministry of Industry and Advanced Technology prepares to host its third forum on local manufacturing, latest statistics show that the number of MIITE products was up almost fivefold to 1,400 last year, from 300 in 2022.

But one observer, Wesley Schwalje, chief operating officer of Tahseen Consulting, which specialises in government relations and international development, believes not enough is being done to involve small and medium enterprises (SMEs) in the MIITE drive.

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“Make it in the Emirates has been successful in supporting large companies, but it needs to also do the hard work to support SMEs through more targeted programmes,” he told AGBI.  

“Such industry programmes have a tendency to favour large manufacturers… It remains difficult to scale down such initiatives so that they can encompass manufacturing SMEs, which make up the bulk of the economy.” 

Schwalje said the introduction of a research and development tax incentive could help bring in more SMEs to the MIITE campaign. 

“It is a very involved process to convince SMEs to adopt advanced manufacturing technologies and make them export ready. An R&D tax incentive to help companies innovate and grow is likely to be needed to ensure impact at all levels,” he said.

In addition to attracting global companies to the UAE, there should also be a growing focus on supporting the global expansion of homegrown champions, Schwalje said. 

He highlighted Al Fakher, a Dubai-based company with manufacturing facilities in Ajman that exports to more than 100 countries and is the world’s largest producer of shisha moassel, the syrupy tobacco mix that is smoked in a hookah, a type of waterpipe. 

“Al Fakher has a significant local economic footprint and could become the biggest global consumer shisha brand while preserving an important aspect of the Middle East’s cultural heritage,” Schwalje said.

MIITE is part of Operation 300bn, a 10-year strategy to expand the contribution of the industrial sector to the UAE’s economy to AED300 billion by 2031. Last year, the ministry of industry said the sector’s contribution to GDP was expected to reach AED197 billion.

At least AED6 billion in financing has been provided to local manufacturers by local lenders such as First Abu Dhabi Bank and Mashreq.

Since the launch of Operation 300bn, industrial exports from the UAE have grown by 17 percent, with the sector recording a 7 percent growth in productivity. The UAE has also started import substitution projects worth AED9 billion. 

Emirates Global Aluminium, the largest industrial company in the UAE outside the oil and gas sector, announced plans earlier this month to supply alumina for a new local industry making speciality aluminium products.

Last week, Kerno, a startup with plans to manufacture a range of IT server, storage and network equipment for Middle East markets, also committed to the campaign.

Kerno’s CEO, Demetrio Russo, said he wanted his SME to become “one of the key partners” in the MIITE technology strategy. 

The company has joined the UAE’s NextGenFDI programme, which provides help in areas such as licensing, banking, visas and leases to enable the launch of operations in the country. Kerno said it intended to use its NextGenFDI membership to speed up the start of operations at its first manufacturing facility in the UAE.

The third edition of the Make it in the Emirates forum will take place in May and is expected to attract thousands of government and private sector officials, entrepreneurs and investors.