Gulfood 2022: For UAE’s industrial hubs and free zones, food sector is more than a need

Dubai: UAE’s free zones and industrial hubs have been assigning the highest priority to the food sector - and the results are starting to show up.

Dubai Industrial City reported an 11 per cent increase last year in leasing to food companies wanting to set up a manufacturing base there. This includes additional space for the Al Barakah Dates Factory in DIC, whose expanded 600,000 square feet space will make it one of the biggest in the category in the world.

“The food cluster is one of our best-performing of the six zones we have at Dubai Industrial City,” said Saud Abu Al Shawareb, Managing Director. “Offering financial support to our tenants through our partnership with Emirates Development Bank is a major factor. These funds can be used for working capital, automation or expansion plans, and more.

“Then, there is the partnership we have with the Ministry of Industry and Advanced Technology, which will help our tenants with getting into new export markets.”

It was last year that the UAE introduced its ambitious ‘Operation 300bn’ programme to boost the UAE’s manufacturing base, and grow its share in the country’s GDP to Dh300 billion by 2031 from the current Dh133 billion. In this regard, food production will have a sizeable visibility within these plans.

Dubai Industrial City is not the sole entity thinking food at this stage.

Once the world realised that there are no guarantees to global shipping and supply chain deliveries, each nation is intent on upgrading its food security needs. In Abu Dhabi, the AD Ports Group - which has just completed a Dh4 billion IPO - is developing one of the region’s biggest food trading and logistics centres at its industrial hub KIZAD.

With a built-up area of 3.3 square kilometres, the food cluster will have trading pavilions, refrigerated warehouses and more, which would together help with the region’s food security needs.

When it comes to food, the Jebel Ali Free Zone has built up its interests over the years, and all of that paid off in these pandemic-infested years. The F&B cluster there generates an estimated 20 per cent of Dubai’s total F&B-related trade volumes. The cluster offers specific incentives such as customs, no corporate tax and VAT exemptions.

According to Ahmad Al Haddad, Chief Operating Officer, Parks and Zones at DP World UAE, which operates JAFZA, “As a global food logistics and manufacturing hub, the UAE’s role is consequential. Hence, to ensure its diversification and increase investments and trade figures, identifying attractive opportunities in the F&B market is essential. To accomplish this, we rely on Jafza, the leading trade and logistics hub. Keeping in mind the evolving market, we are constantly upgrading our facilities that have helped us forge valuable global and regional partnerships.”

Abu Dhabi’s Khalifa Fund has seeded multiple F&B focused startups in recent years as Agritech and food security are assigned the highest priorities.

Since inception, Khalifa Fund for Enterprise Development has approved 271 projects and financed 215 projects in the F&B sector, with total disbursals amounting to Dh188 million.

The number of projects within this sector represents 18.5 per cent of the total number of funded projects, while the value of loans represents 14.4 per cent of the total loans activated.

Of the fund’s specific actions on F&B, it operates an Innovation Lab and offers specialized workshops to support SMEs in the industry.