UAE's industrial sector 16 per cent of GDP and expected to grow
The UAE’s industrial sector contribution to the GDP is expected to increase by three per cent this year over 2012 driven by petrochemicals, aluminium and steel products, the country’s minister of economy said on Monday.
The current industrial contribution to the GDP is 16 per cent and this is expected to increase by 1 to 3 per cent in 2013 depending on global demand for the UAE’s products, Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, told reporters on the sidelines of petrochemicals trade show Arabplast 2013.
The UAE will focus on the downstream industry this year, including petrochemicals, aluminium and steel, he said.
Petrochemicals is dominated mainly by plastics manufacturer Borouge with no major developments from the much-talked about Chemaweeyaat, the Abu Dhabi National Chemicals company, compared to Saudi Arabia where many existing petrochemical companies are already involved in detailed feasibility studies for diversifying into new products, said Vishnu Sankaran, Industry Manager of Chemicals and Materials Practice at Frost and Sullivan.
The UAE must now focus on how to direct its industrial exports to markets where the balance of trade is in favour of other countries, Al Mansouri said. “What is required today is how to direct these exports to specific countries where we can be competitive and increase our exports to them and dealing with an important issue: the balance of trade between us and other countries. The trade balance with the EU and some countries in Asia and North America is in their favour. Petrochemicals industry is one where we can compete with full confidence and maintain a balance in the trade exchange between us and these countries,” he said.
The industrial sector offers a major opportunity for qualifications-based Emiratisation in engineering, finance and marketing, Al Mansouri said.
The most pressing challenges for the UAE’s industrial sector is how it will implement its economic diversification plans over the next few years, said Sankaran. “Another challenge could be the level of investments coming into the UAE, especially given a negative sentiment owing to the state of the world economy in regions like the Europe.”
With Abu Dhabi announcing plans to increase its oil production output by 1 million barrels a day in the next few years, Frost & Sullivan expects “greater traction” in sectors such as oil drilling chemicals, fluids and metals in 2013, Sankaran said.