The Undersecretary said that the industrial sector plays a key role in boosting the emirate’s economic growth, which is considered the second largest contributor to the national GDP after the oil and gas sector. He pointed out that the contribution of the manufacturing sector to the non-oil GDP of Abu Dhabi at constant prices increased to AED 49.3 billion in 2018 as compared to AED 46.5 billion in 2017, scoring an increase of AED 2.8 billion and with 5.9 per cent growth.
He further added that this contribution represents the third highest rate of contribution in Abu Dhabi’s non-oil activities, reflecting the role of the manufacturing sector in achieving the growth of the non-oil sector, where its contribution increased from 11.5 per cent in 2017 to 12.1 per cent in 2018.
The conference will discuss important issues, including key topics such as the Fourth Industrial Revolution, renewable energy, specialized economic zones, the circular economy and gender and youth equality. Abu Dhabi will take advantage from this conference to highlight the UAE's position as a cultural link between the east and west countries, in addition to showing its adoption of the applications of the Fourth Industrial Revolution and its accomplishments in the industrial field and building a strong industrial base as part of its vision to establish a diverse and sustainable knowledge-based economy with global competitiveness.
The following is a dialogue with H.E. ADDED Undersecretary on hosting the 18th UNIDO General Conference
- What makes Abu Dhabi the most suitable place to host the 18th General Conference of the United Nations Industrial Development Organization (UNIDO) compared to other countries in the world?
Abu Dhabi is strategically located between the East and West, making it an ideal location for businesses that are aiming to reach more than 4.5 billion people across different markets.
Enjoying political stability and strong economic fundamentals, the emirate and the rest of the UAE attract foreign investors from across the world. Abu Dhabi, in particular, boasts a competitive edge not found in other cities in the region.
Abu Dhabi was ranked 69th in 2018 in the Innovation Cities™ Index of Think Now 2, an Australian company specializing in innovation research and studies, garnering a total score of 43 points. The capital has also been named an ‘Innovation Hub.’ Moreover, Abu Dhabi ranked 2nd globally as the best city to live, work, and do business in, according to Ipsos City Index 2017.
These achievements are the result of the emirate’s investment-friendly environment and attractive incentives for industrial investment. We can see clearly that the Abu Dhabi Government prioritizes, among other things, the industrial sector as part of its move to boost the economic contributions of the local non-oil sectors according to Abu Dhabi Economic Vision 2030. As a result, a myriad of opportunities in the field of research, development, innovation, and trade is continuously being generated.
Moreover, Abu Dhabi offers a wide range of options for industrial investors in several industrial and free zones, which were built with world-class infrastructure and top-notch services to support exponential business growth.
Also, over the last few years, Abu Dhabi has been working towards developing world-class information and communications technology (ICT) infrastructure, roads, ports, and airports to meet the logistical needs and other requirements of major industrial projects. The capital offers outstanding infrastructure solutions at competitive prices.
- What is the contribution of Abu Dhabi's industrial sector to the non-oil GDP?
Activities in Abu Dhabi’s manufacturing sector have increased over the recent years, ranking second in terms of growth rate (5.9%) in 2018. The sector was also among the 18 main activities during the same period.
Manufacturing activities contributed 12.1 per cent to Abu Dhabi's non-oil gross domestic product (GDP) in 2018. The manufacturing sector ranked first among 17 major activities with higher real non-oil GDP contributions in 2018, showing anew its pivotal economic role.
The manufacturing sector is critical to the government’s economic diversification initiatives and sustainable development goals in line with Abu Dhabi Economic Vision 2030. Foreign investors have continued to flock to the domestic manufacturing industry over the recent years. The volume of foreign direct investments (FDIs) inflow in the manufacturing in 2018 was estimated at 20.3 per cent. It ranked second in terms of relative importance after the construction sector.
The recognized performance of the manufacturing sector’s activities was due to the high growth rates of major activities in 2018 comprising the non-metallic mineral products (19.5%) and basic pharmaceutical products (13.8%).
- How do you see the future of Abu Dhabi's industrial sector by 2020 and over the next five years?
Abu Dhabi’s industrial sector is poised for more growth under the guidance of its wise leaders, who aim to build a knowledge-based economy, promote innovation and research and development, and diversify the emirate’s sources of income to reduce its oil dependence. By focusing on the manufacturing industry, the contribution of the industrial sector to the GDP in the future is expected to significantly increase. As such, the government has been bringing in sophisticated technologies required by the sector, collaborating with international partners, and investing heavily on research and development and human capacity development.
The Industrial Development Bureau (IDB) of the Abu Dhabi Department of Economic Development (ADDED), in cooperation with key industrial developers or investors, focuses on a range of sectors as identified under the Abu Dhabi Industrial Strategy. A total of 839
‘production’ licenses have already been issued, while 806 and 176 construction and industrial pioneers’ licenses, respectively, have also been granted. The industrial pioneers’ license is the initial license granted to new investors.
The food manufacturing industry is highly vital for the government and its food security program. Abu Dhabi has 65 food manufacturers that received a ‘production’ license; 57 factories with construction license; and 26 companies with industry pioneers’ license. The Higher Corporation for Specialized Economic Zones (Zones Corp) and the Khalifa Industrial City (Kizad) have dedicated industrial clusters targeting food companies.
Petrochemical, including the Abu Dhabi National Oil Company (ADNOC), is a target sector as well. In this regard, the government focuses on reinforcing the refining and petrochemical segments to ensure high economic returns. There are 75 production plants involved in refining and petrochemicals in the emirate.
Amid increasing export demand, the plastics industry is considered as one of the most significant as well. Abu Dhabi has 93 production plants in which Borouge is one of the big industry players. Kizad has also developed an industrial cluster aimed at attracting investments to the local plastics industry.
Under the Pharmaceutical Security Strategy, the pharmaceutical industry is also considered a key sector. Zones Corp is developing a plan for an industrial cluster that targets pharmaceuticals, relevant advanced technologies, and the environment.
The economic contribution of the mineral manufacturing sector is immense as well. Abu Dhabi has 165 production plants spread across the emirate.
- What is the role of the Fourth Industrial Revolution in local industrial sector? What are the targeted technologies?
The Fourth Industrial Revolution (4IR) has long arrived in Abu Dhabi’s industrial sector. So advanced science, technology, and data are the main engine helping drive the domestic sector’s development.
Abu Dhabi is continuously updating its policies and regulations to make it easier for small and medium-sized enterprises (SMEs) to invest in the industrial sector in accordance with the requirements of the Fourth Industrial Revolution. The emirate also regularly participates in major exhibitions and forums related to the 4IR such as the Global Industrial and Manufacturing Summit (GIMS) and Hannover Messe, one of the world’s largest trade fairs in Germany.
Next-generation technologies increase productivity of factories, improve product quality and global competitiveness, and fast-track the decision-making process.
Productivity is one of the main criteria of the Electricity Tariffs Incentive Program (ETIP). Under ETIP, the productivity level of a factory is divided by the standard international productivity. Applying new technologies will boost the emirate’s industrial sector and its productivity level.
Abu Dhabi targets the best advanced technologies, including 3D printing, robotics, and artificial intelligence, among others based on the needs and requirements of each factory.
- What is the objective of establishing Abu Dhabi as a global industrial hub? Is the emirate seeking to attract international industrial companies? What are the main areas of partnership you are focusing on?
Abu Dhabi is bidding to become a preferred destination for industrial investment in line with the Abu Dhabi Government’s transition to a knowledge economy and sustainable economic development goals.
By becoming a global industrial hub, Abu Dhabi aims to attract international investors. As such, it has been providing integrated logistics facilities with strong regulatory capabilities that meet the international standards. Zones Corp and Kizad are two main local industrial zones.
To ensure the private sector’s active role in the industrial sector, Abu Dhabi seeks to attract international companies by offering incentives and initiatives such as those recently launched by ADDED. The main focus includes aluminium, steel, petrochemicals, aviation, defense, industrial equipment, finished plastic products, and finished metal products. This way, the government is accelerating its economic diversification plan and increasing the contribution of the industrial sector to non-oil GDP.
- Could you please name some initiatives that aim to promote growth in the industrial sector in Abu Dhabi? What are the initiatives that you aim to implement to improve operations, strengthen efficiency, and decrease operational costs in the private sector?
Growth and economic diversification are Abu Dhabi government’s main goals. We believe that the focus on industrial sector will undoubtedly contribute to the achievement of our wise leadership’s vision for the future. At ADDED, we are working hard to implement world-class business practices and increase Abu Dhabi’s competitiveness through lucrative benefits and incentives. The department, in fact, has designed a bundle of integrated services such as the industrial pioneers’ license, which enables investors to easily set-up their businesses while meeting the requirements. Another is ETIP launched to reduce operational costs and increase
productivity, while trading secondary industrial products allows the sale of secondary products to other factories to use them as raw materials.
We have also exempted industrial imported inputs from customs duties to help companies save time and money. Additionally, ADDED has issued a resolution allowing the addition of commercial activities to industrial licenses to enable factories to carry out sales, marketing, and
transport activities. The IDB is also working on a range of initiatives to attract more investments. These initiatives will be announced later.
- What are your hopes for the outcomes of hosting General Conference of the United Nations Industrial Development Organization (UNIDO) in Abu Dhabi?
Hosting the UNIDO’s General Conference will help bolster Abu Dhabi’s position as a leader in global industrial sector. To help raise the emirate’s global status in the industry, the government will continue to leverage next-generation technologies. The gathering will also present an opportunity to strengthen Abu Dhabi’s relations with the UNIDO’s member states as well as learn more about the latest best international practices in relation to the Fourth Industrial Revolution, industrial parks, and the circular economy and implement the same in the local market.
© Press Release 2019