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UAE Freezones Biz News Updates
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Industrial sector contribution to GDP increases by 14%
20% of 6,000 businesses in Jafza are in the manufacturing sector
The UAE’s industrial sector is providing 14 per cent contribution, on
average, to the country’s non-oil GDP over the past decade, according to a
study by the Dubai Chamber of Commerce and Industry.
The study shows Dubai has targeted services and light industries, while Abu
Dhabi believes its competitive advantage lies in heavier manufacturing
industries, due to the availability of cheap energy.
Investment in the UAE manufacturing sector has been spurred by the
development of free zones, with the largest and most high-profile of the
free zones being Dubai’s Jebel Ali Free Zone (Jafza), which hosts over 6,000
businesses from more than 110 countries. Seventy-five per cent of those are
involved in trading, warehousing, and distribution, while 20 per cent are
involved in manufacturing. The remaining provide services.
The bulk of industrial investment in Jafza is concentrated on light
engineering and final-stage assembly in sectors such as electronics.
“Dubai Industrial development is gaining prominence in the UAE’s economy
following a decline in several business sector during the economic crisis,”
said Dr Abdul Hameed Radwan. “Major free zones are attracting billions of
dirhams worth of investments, especially in the manufacturing sector.”
He said the emirate’s ability to provide excellent logistics and
infrastructure facilities, a rich talent base for knowledge-intensive
industries and an legal and regulatory framework, have helped in creating a
thriving industrial base in the emirate.
Mohammad Al Asoomi, a leading UAE economist, said that while the investment
in the industrial sector is secure, much more should be done to sustain the
growth in this sector.
“All the advantages offered to the industrial sector are excellent to
energise this business segment but it is not enough.”
“The investment potential in the industrial sector in the UAE is very high
and government should step in and offer extra facilitation and the right
support to this sector.”
Pointing to diversification the industrial sector can added to the UAE
economy, Al Asoomi said that since each emirate has its own resource, so it
can have its own industry and niche.”
Export
The Dubai Chamber study said that the UAE manufacturing sector has driven
much of the country’s non-oil trade. In 2012, manufacturing exports
(including re-exports) accounted for 53 per cent of the UAE’s total non-oil
exports of merchandise goods and 22 per cent of total exports including oil
exports, which are also considered as relatively high.
UAE manufactured exports increased from $8.3 billion (Dh30.4 billion) in
2000 to about Dh59.2 billion in 2012 registering a cumulative annual growth
rate of about 18 per cent.
In 2012, about 77per cent of the UAE manufactured exports went to Asia, 10.4
per cent to Africa, 6.4 per cent to Europe, and the rest to US and other
transition economies, according to the study.
Despite the increase in the domestic consumption of manufactured products in
the UAE with the expansion of the economy, it is estimated that the value of
manufactured exports exceeded the domestic consumption, said the study.
UAE establishment
According to UAE Ministry of Economy latest figures, there were there were
5,201 industrial establishments with total employment of almost 399,794
workers. This is compared to 4,960 industrial establishments in 2010,
registering an annual growth rate of 5 per cent.
Forty per cent of the manufacturing firms were located in Dubai, 29 per cent
in Sharjah, 15 per cent in Ajman and 7per cent in Abu Dhabi. However, about
58.8 per cent manufacturing sector investments were in Abu Dhabi, 22 per
cent in Dubai, 7 per cent in Fujairah and rest in other emirates.
UAE’s main industries include food and beverages, tobacco, chemicals,
mineral products, metal products, equipment, paper products, textiles,
clothing and wood products. The largest individual manufactured products
include aluminium, cabling, petrochemicals, steel, and marine industry
products.
Aug 14, 2013 |
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Courtesy Al Nisr Publishing LLC
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