Is $26.7 billion enough to boost Abu Dhabi's industrial sector?

Published May 1st, 2017 - 12:02 GMT
The UAE hopes to attract new industrial investments worth over $70 billion to increase the contribution of the industrial sector to the GDP from 14 percent to 25 percent by 2025. (File photo)
The UAE hopes to attract new industrial investments worth over $70 billion to increase the contribution of the industrial sector to the GDP from 14 percent to 25 percent by 2025. (File photo)

Abu Dhabi benefited from increased industrial investments over the past years as a result of efforts to achieve economic diversification. Seeking to support the industrial sector, Abu Dhabi has invested Dh32 billion ($8.7 billion) over several years to develop specialised industrial zones.

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The Khalifa Industrial Zone (Kizad) is the most prominent of these zones and is serviced by the Khalifa Port. Five more industrial zones operate under the authority of the Higher Corporation for Specialised Economic Zones and plans have been set to build new cities to meet the growing needs of business.

Investments in these industrial cities have today reached Dh98 billion ($26.7 billion), distributed over 606 factories practising various industrial activities, with more factories possibly opening soon.

The contribution of manufacturing industries to the GDP of Abu Dhabi reached more than six percent in 2015, their highest contribution since 2007, and around 12 percent to the non-oil GDP at the end of 2015.

Moreover, the estimates of foreign direct investment (FDI) in manufacturing activity in Abu Dhabi increased by 11.5 percent in 2016 compared to 2015, after attracting Dh19.2 billion ($5.2 billion), which boosted its share in the total FDI to 20 percent, according to an SCAD report.

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These developments came in parallel with Abu Dhabi's focus on attracting investments to advanced technology sectors, mainly aerospace and semiconductors.

The emirate has also concentrated its efforts on localising the necessary technologies to improve the quality of industrial products through partnership deals with leading sector companies from around the world.

Mubadala Investments covers many advanced industries that benefit the strategy adopted by Abu Dhabi to localise technologies. The company launched satellites in 2011 and concluded partnerships with large manufacturing companies. Emirate aerospace products have also become a key input into the manufacturing of Boeing and Airbus planes through Strata Manufacturing, a company based in the Nibras Al Ain Aerospace Park.

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Global Foundries, a company owned by the Mubadala Development Company, is specialised in the manufacturing of semiconductors. It is the result of a partnership between the Advanced Technology Investment Company, currently known as Mubadala Technology, and AMD, the Advanced Micro Devices company. Global Foundries owns nine manufacturing facilities, five in Singapore, one in Dresden in Germany and three in the US.   

The UAE hopes to attract new industrial investments worth over $70 billion to increase the contribution of the industrial sector to the GDP from 14 percent to 25 percent by 2025.


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