From a small trading post to a regional economic powerhouse, the UAE has come a long way since the formation of the union in 1971. While celebrating its enviable record of growth and prosperity over the past 50 years, it has embarked on charting a new path towards a more resilient future with the launch of a series of unique initiatives, including the industrial strategy Operation 300bn. Combined with the unified brand identity – Make it in the Emirates – both are projected to further advance the nation as a robust economy for the future.
The objective of Operation 300bn is to transform the flourishing industrial sector and enhance its role in stimulating the national economy. While reinforcing the UAE’s competitiveness as a manufacturing hub, the strategy looks at ramping up the contribution of the industrial sector to the country’s GDP from Dh133 billion in 2021 to Dh300 billion by 2031.
Operation 300bn and Make it in the Emirates are significant and timely because they remind the business community that long-term sustainable growth is dependent on manufacturing and exporting products.
The Make it in the Emirates initiative – an open call to all industrialists, investors, innovators and entrepreneurs to manufacture in the UAE – further boosts the nation’s reputation as a global destination for advanced industries.
“Operation 300bn and Make it in the Emirates are significant and timely because they remind the business community that long-term sustainable growth is dependent on manufacturing and exporting products,” says Rashid Bashir, Public Sector Leader at Deloitte.
“The changing dynamics of the global economy require that we become more self-sufficient. Those same dynamics also create opportunity for growth, especially in our regional market that a strong manufacturing base will help to unlock,” Bashir says.
Why is Operation 300bn important?
Apart from promoting existing industries, such as energy, petrochemicals, metals and manufacturing, Operation 300bn industrial strategy focuses on developing sectors of the future and 4IR ventures that form the basis of a knowledge-based economy, including space, bio-tech and medi-tech, and supporting strategic industries such as food, agriculture, water and healthcare that help reduce dependence on global supply chains.
The strategy also looks at fostering the growth of new talent and capabilities, creating jobs, and enhancing domestic production and national competitiveness.
Unlocking in-country value
The UAE already boasts significant advantages that make it a very appealing destination for manufacturing. “Its location, business environment, infrastructure, talent pool and investment in technology are the hallmark and long-standing features that draw investors. Add entrepreneurial spirit and a desire for innovation into the mix and the UAE becomes a destination of choice for manufacturers looking to enter the region,” says Bashir.
The In-country Value (ICV) programme is critical for the UAE’s industrial sector as it supports local businesses by redirecting expenditure on procuring goods and services into the national economy.
“Companies need to understand the five components that contribute to their ICV evaluation score. While Emiratisation and investment are significant factors, actively managing the local supply chain can deliver a boost to a score that is equal to investment and hiring decisions,” explains Bashir.
Industry heads are upbeat that this future-focused strategy will significantly expedite the process of economic diversification in key industrial sectors, while enhancing the UAE’s competitiveness at the regional and global levels.
“Operation 300bn will play an integral role in assisting and boosting the local industrial sector and upcoming entrepreneurs by providing the necessary tools that will help in streamlining processes through the incentives and additional supportive policies,” says Mohammed Hussein Al Shaali, Chairman, Gulf Craft, a premier yacht manufacturer focused on advancing the maritime heritage of the UAE.
“Over the past 40 years, we have contributed to the UAE’s GDP, producing over 10,000 boats and yachts at our shipyard in Umm Al Quwain, and we are committed to continuing this legacy in the decades to come. Today, we export 92 per cent of all boats and yachts, designed and built locally, around the world to proudly fly the UAE flag in international ports and harbours,” says Al Shaali.
As a global leader in composite hull production, Gulf Craft made headlines last year with the production and delivery of Majesty 175 – the world’s largest composite-built superyacht.
Over the past 40 years, we have contributed to the UAE’s GDP, producing over 10,000 boats and yachts at our shipyard in Umm Al Quwain, and we are committed to continuing this legacy in the decades to come.
“The efficiencies of our Emirates-based manufacturing facility enable us to introduce high-quality products across the world. Our experience and expertise in the use of composites in superyachts and a strong dealer network across Europe, USA, Middle East, Africa, Asia and the Pacific is what sets us apart from other international shipbuilders,” adds Al Shaali.
Driving the energy sector
The UAE’s commitment towards new energy and creating a sustainable energy system is an integral part of its economic diversification agenda and the Operation 300bn strategy is set to further stimulate growth in the sector while unlocking new opportunities in the energy supply chain.
“The Make it in the Emirates campaign has helped to highlight some key industrial opportunities in the energy sector, where Abu Dhabi National Oil Company (Adnoc) went further in breaking this down into specific product groups that offer local manufacturing potential. There are various advantages on offer to those manufacturing in the UAE from offtake agreements, an enhanced ICV score and the fast-track registration and pre-qualification for UAE-based manufacturers,” says Ryan McPherson, Regional Director of the Middle East, Africa, Russia & CIS, at the Energy Industries Council (EIC), a trade association that provides dedicated services to help members pursue business opportunities globally.
There are various advantages on offer to those manufacturing in the UAE from offtake agreements, an enhanced ICV score and the fast-track registration and pre-qualification for UAE-based manufacturers.
EIC, in collaboration with the UAE Ministry of Industry and Advanced Technology (MoIAT), held an industry roundtable on the UK Pavilion during Adipec 2022 last month to highlight the opportunities in the UAE value chain. “EIC’s most recent UAE country report included a detailed section about Adnoc’s ICV programme. We have also formally invited MoIAT to be one of the keynote speakers at the Energy Exports Conference 2023, to be held in the UK, which will help to highlight the UAE as the manufacturing hub of choice.”
Supporting the Make it in the Emirates strategy, Adnoc has initiated an ambitious downstream and industry growth programme, identifying Dh70 billion worth of products with local manufacturing potential. Adnoc’s industrial opportunities are spread over various categories such as drilling, mechanical and HVAC, piping, fittings and valves, maintenance, repair and operations, chemical, and green hydrogen supply chain, among others.
British energy industry leader, Petrofac, has been using its operational base in the UAE for over three decades to service many of its international projects.
Petrofac has been buying and hiring locally across the Emirates for over 30 years, with over $4.6 billion spent on local supply chain over the past decade. In that sense, we were supporting the current Make it in the Emirates initiative long before its inception, which is something that I’m very proud of.
“A differentiator for Petrofac is our local delivery model, helping us bid on challenging projects and build stronger relationships with local stakeholders. We deliver some of the highest levels of in-country value (ICV) in our industry and the work we do here in the UAE is a great example of this,” says Elie Lahoud, Chief Operating Officer – Engineering and Construction, Petrofac.
“Petrofac has been buying and hiring locally across the Emirates for over 30 years, with over $4.6 billion spent on local supply chain over the past decade. In that sense, we were supporting the current Make it in the Emirates initiative long before its inception, which is something that I’m very proud of.”
Ecosystem for food and water security
Among other focus areas, enhancing long-term self-sufficiency through domestic food production has been a key element of the UAE’s industrial strategy, helping the country to mitigate supply disruptions during crises and promote innovative farming and food production practices to increase production.
Many new companies have started exploring opportunities in agri-tech, farming, food and dairy processing, and surplus and waste management in the past few years to bring in innovation and disruption in the much-needed areas of production, distribution and supply.Home-grown company Emirates Food Industries has launched a new dairy and juice brand Hayatna earlier this year to contribute to the UAE’s innovation-driven food security agenda. With a herd of over 6,000 cows, it has two farms and a state-of-the-art factory in Al Ain, producing over 31 million litres of fresh milk to meet local demand
We have control over quality within the value chain. This control ranges from the food that livestock consumes to how products are developed and delivered to the shelves.
“We have control over quality within the value chain. This control ranges from the food that livestock consumes to how products are developed and delivered to the shelves,” says Mohsin Abrar, Group Marketing Director. “We are a proud Emirati company with operations, such as production and sourcing, taking place within the Emirates. With our dairy farms and local production, our aim is to provide the best quality products to consumers in the UAE.”
Rajiv Warrier, CEO, Choithrams, emphasizes the role of retailers in driving the demand for locally produced food and supporting the manufacturers in the UAE.
Over the past few years, contribution of local produce to our total sales, particularly in fruits and vegetables, has grown significantly.
“Retailers must support the growth of locally-grown food. Over the past few years, contribution of local produce to our total sales, particularly in fruits and vegetables, has grown significantly.”
Strengthening the SME sector is a key priority of this multi-pronged industrial strategy as the sector has the potential to diversify the economy sustainably, while promoting production of local products on the global level. The goal is to support more than 13,500 SMEs by 2031. A major push towards driving the UAE’s manufacturing as well as the SME ecosytem comes from the nation’s over 45 free zones offering cost-effective business incorporation packages along with various incentives, infrastructural support and benefits that help businesses scale and grow their operations.
“Free zones can be a useful tool as part of an overall economic growth strategy to enhance industry competitiveness and attract foreign direct investment (FDI). Through free zones, governments can aim to develop and diversify exports while maintaining protective barriers, create jobs, and pilot new policies and approaches,” says Saud Salim Al Mazrouei, Director, Hamriyah Free Zone Authority (HFZA).
Free zones can be a useful tool as part of an overall economic growth strategy to enhance industry competitiveness and attract foreign direct investment (FDI).
HFZA, which focuses on three core sectors – industrial manufacturing, food, and pharmaceuticals, offers prime industrial plots starting from 2,500 sqm at competitive fixed lease rates for the first five years and a range of facilities such as an extensive network of transportation, power, water and waste management, and dedicated labour accommodation.
“We have the largest number of steel fabricators in the region. Moreover, with an oil and gas zone spanning more than 4.6 million square metres, HFZA offers a host of integrated solutions for upstream, midstream, and downstream projects. It is also the second-largest petrochemical hub in the UAE, benefiting from a dedicated zone, easy access to core markets and a suite of professional services designed to help businesses reach their full potential. Additionally, investors are served by a host of exclusive value-added services tailored to those within the Food Park.”
HFZA has launched a number of packages and initiatives to assist all businesses and investors, including exemptions from inspection fees, exemptions from fines for late renewal of commercial licences and visas, and 50 per cent discount on transferring shares.
“We continue to develop our service offerings in line with the demands of new economic opportunities and are on track to boost our contribution to Sharjah’s GDP. We have tied up with Emirates Development Bank (EDB) to offer start-ups and SMEs a range of flexible financial solutions, including capex financing for expansion or facility upgrades, greenfield and brownfield project finance, and financial support for the integration of Industry 4.0 tech or clean energy transition,” adds Al Mazrouei.
Similarly, Ras Al Khaimah Economic Zone (RAKEZ) provides all the support industrial investors may need with their company registration process in a one-stop-shop. “For large investors, we have packages catering to their unique set-up requirements and dedicated account managers. We offer large warehouse spaces for manufacturing, storing and logistical activities in our dedicated industrial zones. We have ample land for investors looking to design and build their facilities as well as staff accommodations,” says Ramy Jallad, Group CEO, RAKEZ, which is home to over 15,000 companies, including some of the top local and international brands such as Ahmad Tea, RAK Ceramics, Ashok Leyland and Dabur Naturelle.
For large investors, we have packages catering to their unique set-up requirements and dedicated account managers. We offer large warehouse spaces for manufacturing, storing and logistical activities in our dedicated industrial zones.
Citing an example Jallad explains how RAKEZ facilitates the ease of doing business. “Both light and heavy manufacturing businesses in our industrial areas frequently use toll gates for the movement of their goods and the fees per trip could add to a huge amount. So RAKEZ coordinated with the Public Works Department in Ras Al Khaimah to reimburse the fees of its companies.”
Emphasizing that the RAKEZ ecosystem is already aligned with the main objectives of the Operation 300bn initiative, Jallad says that the strategy will encourage businesses to manufacture more competitively in the UAE.
“The Operation 300bn goals, coupled with the country’s existing strengths such as the location; highly developed logistical infrastructure allowing manufacturers to import, produce and export in quick timelines; the option to source manpower from anywhere in the world; and economic zones that simplify the entire set-up process, are highly attractive for industrial companies that want to flourish and expand their footprints keeping the UAE as their base,” says Jallad. ■