Abu Dhabi invests AED32bn to develop industrial zones

Abu Dhabi / Emirates Business

Abu Dhabi benefited from increased industrial investments over the past years as a result of efforts to achieve economic diversification, a strategic objective of the Abu Dhabi Plan and the emirate’s economic vision, with integral facilities and world class logistical and organizational capacities provided.
Seeking to support the industrial sector, the Emirate of Abu Dhabi invested AED 32 billion over several years to develop specialized industrial zones equipped with the best infrastructure and logistical facilities.
The Khalifa Industrial Zone (KIZAD) is the most prominent of these zones and is serviced by the Khalifa Port, considered one of the most advanced ports in the world. Five more industrial zones operate under the authority of the Higher Corporation for Specialized Economic Zones (ZonesCorp) and plans have been set to build new cities and develop the list to meet the growing needs of business.
Investments in these industrial cities has today reached AED 98 billion, distributed over 606 factories practicing various industrial activities, with more factories possibly opening soon.
Factories located in Abu Dhabi benefit from the advantages and incentives the emirate offers, starting with easy access to raw materials, ease of doing business, and improved competitiveness through integral logistical services and systems that are continuously reviewed and developed to meet the needs of the business sector. Export channels are also provided and can accommodate the increasing number of factories and their diverse products. Furthermore, Abu Dhabi has dedicated part of KIZAD as a free zone to help attract more investments.
Such efforts have helped register a rapid growth of 6.9% in added value for the manufacturing sector between 2014 and 2015, to reach 11.2%.
The contribution of manufacturing industries to the GDP of Abu Dhabi reached more than 6% (constant prices) in 2015, their highest contribution since 2007, and around 12% to the non-oil GDP at the end of 2015.
Moreover, the estimates of Foreign Direct Investment (FDI) in the manufacturing activity in Abu Dhabi increased by 11.5% in 2016 comparing to 2015, after attracting a total amount of AED 19.2 billion, which boosted its share in the total FDI to 20%, according to SCAD report.
These developments came in parallel with Abu Dhabi’s focus on attracting investments to advanced technology sectors, mainly aerospace and semiconductors. The emirate has also concentrated its efforts on localizing the necessary technologies to improve the quality of industrial products through partnership deals with leading sector companies from around the world, and on the provision of the most advanced online network in the region and the world. Abu Dhabi also continues to benefit from extractive industries to empower alternative sectors in the petrochemicals and plastics sector, and to support steel industries.
Furthermore, Abu Dhabi has for years increased its focus on advanced industries in line with the technological revolution, with the aim of developing a sustainable industrial sector built on knowledge and innovation. Mubadala Investments covers many advanced industries that benefit the strategy adopted by Abu Dhabi to localize technologies. The company launched satellites in 2011 and concluded strategic partnerships with large manufacturing companies. Emirate aerospace products have also become a key input into the manufacturing of Boeing and Airbus planes through STRATA Manufacturing, a growing company based in the Nibras Al Ain Aerospace Park.
Global Foundries, a company fully owned by the Mubadala Development Company, is specialized in the manufacturing of semiconductors and has achieved international success. It is the result of a partnership between the Advanced Technology Investment Company (ATIC), currently known as Mubadala Technology, and AMD, the Advanced Micro Devices company. Global Foundries currently owns nine manufacturing facilities, five of which are in
Singapore, one in Dresden in
Germany and three in the USA.
From a regulatory aspect, the Industrial Development Bureau, operating under the Department of Economic Development, is considered the key reference for industrial development in the emirate. Its authority is mainly due to its collaboration with key partners and its prerogative to execute policies, plans and programs linked to the private sector.

In this regard, the Bureau provides the regulatory, legal and environmental frameworks to develop and establish industrial projects, and to issue the licenses necessary for all industrial projects and establishments in the emirate. The Bureau further handles the supervision and monitoring of these frameworks in coordination with operational entities, developers and other concerned entities to help develop and promote competitiveness in the industrial sector in the emirate, improve the performance of sector actors, and achieve sustainable development.
In light of the growing industrial activities in the emirate, Abu Dhabi hosted the first edition of the Global Manufacturing and Industrialization Summit at the end of last month under the patronage of His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The summit was the first global gathering targeting the industrial sector and attracted more than 1,200 decision makers, including leaders from governments, companies and NGOs, who sought to adopt a transformative approach to shape the sector’s future.
The industrial sector is a key pillar of a sustainable economy based on knowledge and innovation. The UAE is hoping to attract new industrial investments worth over US$70 billion by 2025 to increase the contribution of the industrial sector to the GDP from 14% currently to 25% by 2025. The UAE is ranked as the best country for doing business in the Arab world and the 31st best in the world, according to the World Bank’s classifications.