UAE’s industrial spend to jump by $14.2bn
Dubai, December 18, 2012
The total capital invested in UAE’s manufacturing sector will increase to Dh162.7 billion ($44.2 billion) by the end of the fiscal year 2017, marking an increase of about Dh52.5 billion ($14.2 billion) at a rate of 48 per cent over the investment in 2010, a report said.
The number of industrial units in the UAE reached 4,960 units at the end of 2010 compared to 3,036 factories in 2004, marking a total increase of 63 per cent and an average annual increase of 8.53 per cent, added the report published by leading research and consultancy firm Truth Economic Consultancy. The report is supported by Dubai Industrial City, a member of Tecom Investments.
The industrial sector still retains its contribution rate of around 10 per cent in the national GDP, said the report.
According to the report, UAE’s industrial growth rate will continue to increase in the coming few years due to the maturity of other economic sectors, such as the construction sector.
The report further expects the movement of additional investment capital in the industrial sector, highlighting the fact that the industrial sector has witnessed some significant and stable developments recently.
Abdulla Belhoul, managing director of Dubai Industrial City, said: "We, at Dubai Industrial City, believe in the comprehensive nature of the industrial sector, which cannot be developed effectively and efficiently without providing all the necessary industrial requirements for the success and growth of the sector such as infrastructure, roads, labour villages, modern offices, and energy, amongst many other industrial requirements.”
“Dubai Industrial City has been designed as the ideal destination for serving investors in the industrial sector, as it provides and combines many services to meet their industrial requirements.
“Moreover, the industrial sector has a significant contribution in the growth of the national GDP, as it is the second largest, coming after the oil and gas sector,” he added.
“The UAE has many advantages and potentials that can boost the industrial sector to competitive levels at the regional and international levels. This report shed the lights on one of the most vital economic activities in the country and provides us with important future readings on the sector's development in the near future."
"Dubai Industrial City is a clear example of the developments the industrial sector is witnessing in the UAE. Our food and beverage, chemicals and base metal zones in the city, grew by an average rate of 10 per cent in 2011,” Belhoul continued.
“The City also witnessed an increase in demand of industrial lands, whereby investors' demand for constructing factories has increased. To date, 20 factories are operational in the City, while another 20 factories are currently under construction. The number of registered investors in Dubai Industrial City is now over 450 investors.”
Dubai Industrial City investors invested over Dh2 billion in the city to build their factories and their Industrial units. Dubai Industrial City has also invested Dh4 billion so far in infrastructure development including energy, water, roads, drainage and irrigation systems, and telecommunication services. These services currently cover 30 per cent of the total area of the city that is built on 55 sq km.
The Truth report also pointed to the increase in the total capital invested in industrial units in the country between 2004 and 2010, from Dh63 billion in 2004 to about Dh110.2 billion in 2010, marking an increase of about Dh47.2 billion, with an average annual growth rate estimated at 9.77 per cent.
This increase was also accompanied by a rise in manpower in industrial enterprises during the same period, where the number of workers increased by 175.300 workers, from 206.700 workers in 2004, to reach about 382,000 in 2010, marking an increase of 85 per cent and an average annual growth rate estimated at 10.78 per cent.
The report estimates the number of industrial units for the same period (2010-2017) to increase by 2,812 units, from 4,960 units in 2010 to approximately 7,142 units by 2017, with an estimate growth rate of 44 per cent.
Accordingly, the size of the labour force in this sector is expected to grow by 198,539 workers, from 382,012 in 2010 to around 580,556 workers by the end of 2017, marking an increase of 52 per cent.
The report also identifies a set of important recommendations for the industrial sector, stressing the need to speed up the process of drafting, approving and enacting a new industrial legislation, since it forms the backbone for the entire industrial sector, calling for the establishment of an independent ministry of industry, concerned solely with the vital issues of this sector, with the responsibilities of restructuring, regulating and drawing policies and developing related strategic plans across the country.
Additionally, the report stressed the need for identifying current schemes of industrial investments across the country and mapping major activities that should be carried out to attract local, regional and international investments while benefiting from the latest technology in the industrial sector.
Lastly, the report recommended the establishment of specialized industrial-related financial institutions, in addition to Emirates Industrial Bank, to focus on serving this sector and encourage current financial institutions to provide proper industrial related funding, as well as establishing an independent authority for supporting and developing industrial exports. – TradeArabia News Service