Abu Dhabi’s drive to establish itself as a manufacturing and industrial center has resulted in heightened engagement within the emirate. The emirate’s industrial strategy has led to a rise in both the quantity and value of manufacturing enterprises, according to Arabian Business.
Over the past year, there has been a surge in applications for manufacturing licenses in Abu Dhabi, along with substantial investments from established companies in the sector.
Abu Dhabi Manufacturing Initiative Introduced in June 2022 by Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Chairman of Abu Dhabi Executive Council, the Abu Dhabi Industrial Strategy (ADIS) has expedited the transformation of the emirate’s manufacturing industry, fortifying its position as the most competitive industrial hub in the region during its inaugural year.
Phases of Manufacturing Licensing
Increased activity has been noted across all three phases of Abu Dhabi’s manufacturing licensing process:
- Rowad (initial license for establishing an industrial company)
- Construction (initiating the building of an industrial facility)
- Production (commencing operations)
- In the 12-month period spanning from July 2022 to June 2023, there was a 16.6 percent rise in the number of new industrial Rowad licenses granted in Abu Dhabi, increasing from 204 to 238.
In the first half of 2023, authorities issued a total of 116 new Rowad industrial licenses, showcasing a significant 63.3 percent increase compared to the licenses granted in the first half of 2022.
Over the course of the year, manufacturing facilities that transitioned to the in-production phase saw a substantial capital investment of AED 15.36B ($4.2B), indicating an impressive 85.7 percent surge from the previous year.
Consequently, the cumulative capital investments from manufacturing enterprises operating within the emirate experienced a growth of AED 12.42B ($3.4B), reaching AED 384.06B ($105B) during the same period. This marks a rise from AED 371.64B ($101.1B) recorded a year earlier.
Investment and Capital Growth
The count of active manufacturers in the emirate now stands at 966, up from the 922 manufacturers that were present at the close of the first half of 2022.
“As an ambitious blueprint to guide the emirate’s manufacturing sector, the Abu Dhabi Industrial Strategy has ushered in a new era in the economic landscape that leverages innovation and advanced technologies to harmonise human development, sustainability, and growth.”
Al Zaabi added: “The robust performance of the manufacturing sector is testament to Abu Dhabi’s ongoing economic resilience.”
“Our manufacturing sector, which contributed 16.4 per cent to Abu Dhabi’s non-oil GDP in 2022 and represents 49.9 per cent of the total industrial sector in the UAE, is moving from strength to strength, powered by successful implementation of the industrial strategy’s transformational programmes to enhance the sector’s competitiveness by increasing access to financing, enhancing ease of doing business, and attracting domestic and foreign direct investments.”
Abu Dhabi Industrial Strategy’s Vision
Under the guidance of the Abu Dhabi Department of Economic Development (ADDED), ADIS seeks to reinforce the emirate’s standing as the leading industrial hub in the region. The strategy aims to double the industrial sector’s size to AED 172B ($47B), generate 13,600 new skilled positions, and elevate non-oil exports to AED 178.8B ($49B) by 2031.
This comprehensive approach involves an investment of AED 10B ($2.7B) spread across six transformative programs:
- Talent Development
- Industry 4.0
- Circular Economy
- Ecosystem Enablement
- Homegrown Supply Chain
- Value Chain Development
IDB also introduced the Tech Champions initiative, equipping employees from Abu Dhabi’s food manufacturing factories with Industry 4.0 skills, graduating its inaugural cohort in May 2023.
During this period, IDB unveiled a smart manufacturing competence center, introduced an incentive program for existing industrial SMEs to adopt smart manufacturing practices, and initiated a value chain development program, enhancing the industrial investment ecosystem.
Recent Expansion Highlights
Additionally, ADDED established partnerships with prominent global corporations to foster industry innovation, digital transformation, and the training of UAE Nationals through technology, business, and behavioral skill programs.
Initial assessments from the first half of 2023 underscore the robust expansion of Abu Dhabi’s industrial landscape:
- Authorities granted 116 new industrial Road licenses, indicating a 63.3 percent increase from the 71 licenses issued in H1 2022.
- AED 1.54B in government tenders were awarded to ICV certified firms, demonstrating a growth of 58.7 percent from the AED 970M awarded in H1 2022.
- The participation of manufacturers in the Electricity Tariff Incentive Programme (ETIP 1.0) surged to 68 in H1 2023, a 54.5 percent rise from 44 manufacturers in H1 2022.
- Abu Dhabi companies benefiting from ETIP 1.0 increased their logistics expenditure by 19.3 percent compared to H1 2022. Skilled workforce representation in these firms grew from 41 percent in H1 2022 to 43 percent in H1 2023.
- The Golden List initiative, aimed at promoting locally manufactured goods through government procurement, attracted 164 establishments, marking a 29.1 percent increase from 127 in H1 2022.
- The number of products registered in the Golden List expanded to 742 products in H1 2023, reflecting a 4.3 percent growth from 711 in H1 2022.
