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Well-oiled industry

By Abdul Basit Since its formation, the UAE has transformed itself into a global player with an income comparable to many industrialised nations.

This progress has been rapid, fuelled by large oil revenues, which have allowed development to skip certain 'stages' that other industrialised nations had to endure, bringing wealth and prosperity to its citizens.

The economies of the all the seven emirates were largely dependent on pearl diving, livestock, agriculture and fishing before the discovery of oil.

Oil discovery in 1958 in Abu Dhabi boosted the country's manufacturing sector. In late 1960s construction material factories and beverages companies started operation. Some major developments happened during 1970s. In this decade first cement factory started production in Ras Al Khaimah (RAK). Bottled water company Masafi was established in 1976. A Federal Law to regulate industrial affairs was passed in 1979 and Dubai Aluminium Company and Dubai Cable Company were formed in the same year.

Over the past decade, the UAE economy experienced a remarkable boom, mainly powered by a sustained increase in oil prices between 2001 and mid-2008, which funded major government spending in large capital projects and increased wealth of the people.

Credit goes to all the right decisions taken during the last four decades for making the country in its current state. After the establishment of federation, the country's planned development of infrastructure and factories was the move that helped boost industrial sector.

Dubai

Looking specifically at Dubai's development, since 1971 the city has very successfully diversified its economy away from oil reliance to other sectors, like trade, tourism, logistics and financial services, which now drive the economy.

Industrial development outside the oil sector has been strongly linked to construction, directly via demands for cement, cement blocks, aluminium windows and metal furniture, and indirectly through the expansion of the food industry to cope with the large increase in population.

Meanwhile, manufacturing has seen growth in the textile sector, mainly during the second half of the 1980s, as well as paper and publishing industries, factories producing machinery and metal products, and basic metal industries.

It is worth noting the important role that aluminium has played in Dubai's manufacturing sector over the past two decades, in the form of Dubai Aluminium (Dubal), which is owned by the Dubai Government. Dubal accounts for around 60 per cent of the emirate's non-oil exports, and the importance of aluminium to the economy is increasing. This is partly attributable to Dubal's expansion drive and partly because of the emergence of significant downstream manufacturing facilities that use Dubal's output.

The establishment of free zones significantly aided the development of business in Dubai, the largest and most high-profile of which is Jebel Ali Free Zone Authority ( Jafza ). Formed in 1985, Jafza now hosts around 2,500 firms from over 100 countries and continues to attract new tenants of the highest international calibre, alongside local operators.

Abdul Rahman Saif Al Ghurair, Chairman, Dubai Chamber of Commerce and Industry , said: "Dubai's development over the past 40 years is something to be celebrated. The city's visionary leadership has achieved remarkable things and helped to increase the UAE's presence on the world stage. Dubai has gone from a modest fishing port to a leading international business hub, which offers companies access to some of the finest modern facilities and provides a stable and secure environment for investment."

Hamad Buamim, director general, Dubai Chamber of Commerce and Industry , said: "The private sector has played an important role in Dubai's rapid development. Behind the scenes, Dubai Chamber has played its part in representing, supporting and protecting the interests of the business community. We have helped to create a favourable business environment and promoting Dubai as an international business hub and will continue to do so for the next 40 years to come and beyond."

Sharjah

Sharjah's manufacturing sector accounts for more than 40 per cent of the UAE's industrial GDP. The number of industrial establishments in the UAE stands at 4,600 out of which more than 1,554 are in Sharjah and over 700 are in SAIF and Hamriyah free zones. The value of total industrial products is estimated to be more than Dh20 billion and total exports stand at Dh3 billion.

The Government of Sharjah is keen to provide a good investment climate and continuous support to small and medium enterprises, the backbone of any local economy.

"Industrial sector in the whole UAE and Sharjah developed significantly in the past 40 years," Hussein Al Mahmoudi, director-general of Sharjah Chamber of Commerce and Industry, told Khaleej Times.

"About 40 years ago there was no industrial space even in Sharjah," he said, adding that government created the environment for the industry and the sector was started to flourish because of the government vision to grow the country with diversified approach. Favourable laws, facilities and incentives have contributed significantly in attracting major international companies to Sharjah, he added.

Hamriyah Free Zone in the Emirate is the UAE's second biggest free zone after Jebel Ali Free Zone . Another free zone Sharjah Airport International Free Zone, or SAIF-Zone, has become a thriving business hub for regional and international investments that has over 5,000 businesses.

Ras Al Khaimah

Lacking the sizeable hydrocarbons reserves of some of its neighbours, Ras Al Khaimah's economy is primarily driven by manufacturing. With its competitive advantages -- location, large areas of open land and natural resources -- RAK building itself up as an industrial centre.

"The real change happened when the RAK became the part of the UAE and from that time the Emirate was booming and expanding business," Faisal bin Fares, head of corporate communication, the Development and Economic Department of RAK, told this scribe.

"I believe RAK is one of the fastest growing Emirate in the country. We have a lot of successful business examples," Fares said.

Capitalising on its large limestone deposits, RAK has developed into a leading producer of construction materials, and it is the home of RAK Ceramics, as well as a number of cement, steel and glass manufacturers.

The government is also very active to support and facilitate business community in the Emirate for both free zone and non-free zone investment opportunities, he added.

The emirate also has a well-established pharmaceuticals industry and the creation of free zones and RAK Investment Authority has helped diversify the manufacturing base with addition of high-tech and automotive producers.

© Khaleej Times 2011