Trade

Dubai free zone to build on UAE-Japan trade

May 2, 2024, 4:11 AM

DMCC CEO Ahmed Bin Sulayem says there is 'there is plenty of untapped potential' for UAE trade with Japan

DMCC courting Japanese companies
UAE-Japan trade worth $7.5bn
UAE supplies 44% of Japan’s crude

A Dubai free zone has concluded a trade roadshow in Japan as the UAE looks to increase non-oil bilateral trade, which was worth nearly $7.5 billion in the first half of 2023.

Dubai Multi-Commodities Centre (DMCC) said its first Made for Trade Live roadshow in Japan focused on web3, gaming and artificial intelligence.

DMCC contributes 11 percent to Dubai’s annual foreign direct investment inflows. It is home to 83 Japanese companies – around 25 percent of Japanese businesses that are set up in the wider UAE.

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At the event, DMCC executives briefed Japanese business leaders on the opportunities in expanding to DMCC.

UAE-Japan non-oil trade grew by more than 4 percent year on year in the first six months of 2023. In the same period, the UAE’s non-oil exports to Japan exceeded $718 million while imports from Japan to the UAE totalled $6.3 billion. Re-exports from the UAE to Japan reached $421 million.

Oil trade continues to play an important role in the bilateral relationship. The UAE supplied more than 44 percent – 32.7 million barrels – of Japan’s crude oil needs in March, according to the Agency for Natural Resources and Energy in Tokyo.

The agency said Japan imported 74 million barrels during the month, of which nearly 95 percent originated from the UAE, Saudi Arabia, Qatar, Kuwait and Oman.

Total trade between Japan and the UAE for the first 10 months of 2023 exceeded $38 billion, according to figures given at the 10th session of the Abu Dhabi-Japan Economic Council in March.

Ahmed Bin Sulayem, executive chairman and CEO, DMCC, said: “We believe there is plenty of untapped potential in the market.”

Last month, a consortium of Japanese companies signed a concession agreement with the Emirates Water and Electricity Company and Tadweer Group for the development of a waste-to-energy project in Abu Dhabi.

Marubeni Corporation, Hitachi Zosen Inova and Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development will build the project, which will have an expected annual processing capacity of 900,000 tonnes of waste.

Japanese investment into the country exceeded $3.3 billion at the end of 2022, accounting for 3 percent of total foreign direct investment inflows, and 13 percent of FDI from non-Arab Asian countries.

The UAE is one of the most important Middle Eastern investors in Japan. Its investment is valued at $1.2 billion, which represents 42 percent of total investment from the Middle East and North Africa.

UAE-Japan trade highlights

Japan has played a role in the Emirates lunar mission. The Rashid rover was transported to the moon on a lunar lander made by Japanese company ispace.
The UAE is home to more than 340 Japanese companies operating in sectors including technology, renewable energy, transportation, healthcare, infrastructure and manufacturing.
In July 2023 Japan’s prime minister Fumio Kishida paid an official visit to the UAE, resulting in agreements being signed across sectors including energy, AI, space, healthcare, transport and the circular economy.
In 2022 Emirates Steel Arkan announced a partnership with Itochu Corporation and JFE Steel Corporation to explore the construction of a ferrous raw material production facility in Abu Dhabi.
Japanese energy companies such as Itochu, Inpex and Idemitsu have agreed to buy blue ammonia from Adnoc, while the Japan Bank for International Cooperation has signed a $3 billion financing deal with the state oil company to develop hydrogen technology.