|: Dubai’s Manufacturing and Heavy Industries sector:
Dubai Industrial City:
[b]: Dubai Industrial City:
: Progress Since opening:
: Logistics Partnership with Deutsche Post World Net:
: Dubai Industrial City Master plan:
[c]: Dubai Aluminium industry:
[d]: Dubai Textile industry:
[e]: Dubai Manufacturing industry:
DUBAL Dubai’s Aluminium producer:
The manufacturing sector is considered one of the main drivers of the Dubai economy accounting for a fifth of its production:
20% of Dubai’s increasingly service and knowledge focused economy is still concerned with ‘making stuff’ - actually producing goods for sale.
Even amid the 2007 -2009 global financial crisis, the UAE manufacturing sector grew at a rate of 15% in the first three quarters of 2008 – a remarkable development that is motivating a growing number of existing companies and new investors to take advantage of Dubai's business-friendly environment for industrial production.
The rising demand for tube products and the setting up of numerous industries is fuelling growth in these markets – is acting as a magnet for investing in regional and international industrial centres.
Demand for machinery and industrial equipment and in the Gulf region alone – is projected to grow at 20% annually.
According to Satish Khanna, GM of Al Fajer Information and Services - and organiser of Dubai’s main industrial exhibition - Tekno Tube Arabia:
"Dubai's free zones are home to some of the world's most recognisable brands across all industry sectors, including manufacturing where it has begun to make an impact in local and regional trade in the last few years … In fact, the development of Dubai Industrial City, a massive manufacturing and industrial complex covering 560 million square feet of prime land, is expected to boost the emirate's position as a regional hub in the sector."
See: “Manufacturing sector in UAE remains strong”
In December 2008 – in a recently released study of Dubai's manufacturing sector – Dubai’s Department of Economic Development [DED] – reported that the total capital investment in the manufacturing sector in Dubai reached AED26.4 billion in January 2005 - with the combined value of production exceeding AED2.5 billion.
The Departmental study – which is obtainable from: http://www.dedc.gov.ae/en/publications-and-collections/
sets out the long term future industrial policy for the Emirate – which envisages a gradual shift by 2010 from low tech, labour intensive, industries - to capital intensive/ advanced technology industries.
By 2030 - Dubai seeks to further focus on incentivizing the growth of knowledge-intensive/ high technology industries.
Commenting on the study - Mr. Khalid Al Kassim, Deputy Director General for planning and development, DED stated:
“The development of indigenous industry in a country is a measure of its true economic growth… Dubai's industrial policy, has been laid down with the objective of developing a sustainable manufacturing sector in the Emirate and focuses on developing key aspects of the economy, including focusing on export-oriented industrialisation and deepening the industrial structure by promoting selective industrial projects based on region's resources….Currently, the manufacturing sector provides employment to almost than 55,000 workers in various manufacturing sub-sectors.
The industrial policy also has a significant focus on developing local Small and Medium Enterprises functionally linked to world markets and multinational enterprises and creating a pool of nationals for entrepreneurial, managerial and technical positions…”
See: “Manufacturing sector in UAE remains strong”
Other components of Dubai's future industrial policy may include:
- a focus on selective attraction of foreign direct investments to strengthen the manufacturing base;
- encourage technology transfer;
- boost capital investment;
- acquire market channels;
- improve management skills.
- strengthen regional cooperation for industrial development
- rationalize trade and industry policies
- improve competitiveness within the manufacturing sector by achieving economies of scale through 'clustering' of industries and promoting 'inter-industry' linkages.
According to a Dubai Chamber of Commerce survey conducted in December 2007 and released in March 2008 - the size of heavy industry dealing with fabricated metal products in Dubai - shows there were 1,088 active fabricated metal, machinery and equipment companies - and three quarters of the companies involved in fabricated metal products, machinery and equipment are small and medium sized companies, while the remainder classify themselves as being 'large' or 'very large'.
8,455 workers are employed in Dubai’s fabricated metal products industry – with the total cost of these employees totalling AED 1.013 million – or AED 122.000 per worker.
The total production value of fabricated metal, machinery and equipment industries was AED 6.9 billion – about half of the total manufacturing sector's production – with production cost totalling AED3.6 billion.
[b]: Dubai Industrial City:
Dubai Industrial City:
[b]: Progress Since opening:
[c]: Partnership with Deutsche Post World Net:
[d]: Dubai Industrial City Master plan:
Dubai Industrial City was launched as a designated industrial district to provide a special Dubai base to catalyze and support the development of the Dubai manufacturing sector with a project providing business services, well designed buildings, quality health and safety standards - and the development of a live-work-play-learn environment in a special industrial economic free zone.
The new project – has been conceptualized and planned in great detail as a state-of-the-art industrial infrastructure - providing tenants with a competitive advantage by clustering similar industries to share the common resources in the areas of human resources, logistics and business operations - in an effort to encourage growth within an industrial ecosystem.
The third largest land site in Dubai after Dubailand and Dubai World Central - extends over 560 million square feet of prime land – about 5203 hectares.
The site location provides easy and convenient access to global transportation points via road, air and sea - being located near Dubai World Central, the Jebel Ali Free Zone and Port – and direct access to trans-Emirates highways including Sheikh Zayed Road and Emirates Road.
Tenants include small, medium and large manufacturers in the UAE, GCC, and international corporations in 6 distinct industrial precincts:
- Machinery and Mechanical equipment,
- Transport Equipment and parts,
- Base Metals,
- Food and Beverage,
- and Mineral Products.
Existing tenants include:
- Al Attar Group,
- Al Zamil,
- Al Wasit machinery,
- Mecca Cola,
Facilities currently offered at Dubai Industrial City include:
- a 2.8 million square feet of open storage yards;
- three million square feet of warehouses;
- 64 showrooms;
- a labour village to accommodate 10,500 tenants;
- training programmes by Dubai Industrial Academy;
- and four office buildings 3 of which are fully operational.
[b]: Progress since opening:
Trainees at the newly completed Dubai Industrial Academy: DIC conducted a total of 36 industrial training programmes and four consultancy services were successfully delivered in 2008, benefiting nearly 364 participants from 73 private and government organisations and providing a wide range of training solutions to serve the growing needs of the industrial sector in the UAE and the region. DIA currently offers 19 academic courses covering eight industrial sectors including Quality, Health, Safety and the Environment (QHSE), Mechanical Engineering, Electrical and Power Engineering, Instrumentation, Chemical Process and Laboratory Operations, Oil and Gas, Construction, as well as Technical and Supervisory Development:
The first stage of the project has sold out and the second stage is now undergoing construction.
Rashed Al Ansari, Vice President of Dubai Industrial City, explained that the rapid growth and expansion of the new industrial project in these terms:
“We are achieving rapid occupancy, an indication of the high demand and fast track development of the City. The on-going construction within the city means that we will maintain our leading role in driving the emirate’s status as the region’s hub for the industrial sector …We expect to have 30 factories operating in Dubai Industrial City by end of 2009, some of them located in the second phase of the project….The new wave of construction will further expand the city and mark a milestone in our development with an increasing number of industrial units expected to be operational before the end of this year," he said.
More than 500 factories and manufacturing units for light and medium industries are planned to be built across the various six industrial zones of the city between 2009 and 2015.
"This is the start of massive and wide spread construction across our industrial zones as we have more than 450 investors who plan to have an industrial presence in the city with some of the investors planning to build multiple manufacturing units in the city", he pointed out.
Rashed also noted that the Dubai Centre for Industrial Standards, Maqayees – which has been appointed to manage and implement all Quality, Health, Safety and Environment standards in the new industrial hub - is currently assessing over 140 construction applications for factories by new industrial tenants.
Additionally facilities currently being added within the City include:
- logistic services a
- and the Dubai Industrial Academy.
Complementary facilities proposed for the future include:
- labour villages;
- commercial precinct;
- residential precincts;
- and sports ,leisure and entertainment zones.
Townhouses planned for Dubai Industrial City [sold out]:
In July 2008 Al Ansari, Chief Executive Officer of Dubai Industrial City, a member of Tatweer, a member of Dubai Holdings, stated that IC had succeeded in leasing large amounts of space since opening
“2007 was surely a successful year especially that we managed to lease more than 200 million square feet of land till date. We met the increasing demand for industrial land in the emirate by maximizing the use of our land and ensuring high level of efficiency at all times from master planning to actual hand over of industrial plots to clients."
He further pointed out that DI was already attracting many international companies and brands:
We are the first industrial destination that is strategically located and that offers a comprehensive range of commercial and industrial services and facilities. We are close to major highways, in close proximity to Jebel Ali Port and adjacent to Al Maktoum International Airport. This mixture is proving to be very attractive to industrial investors across the region ….We have attracted international clients such as Siemens and DHL, and major brands like Porsche, Aston Martin, Infinity, Audi, and Volkswagen in our automotive zone. These clients will set up innovative facilities and services including specially-designed test tracks for a wide range of vehicles ranging from four wheel drives to high performance vehicles, in addition to modern service centers that will further enhance the level of service and quality offered….
Plot sales have been brisk - Dubai Industrial City “achieved more than AED 1.5 billion in commercial plot sales of lands till date for use as schools, shopping centers, hospitals, residential areas, and recreation and entertainment facilities".
Dubai Industrial City Offices:
Four office buildings - as well as 1.5 million square feet of warehouses - and the Dubai Industrial Academy - the first vocational industrial training academy of its type in the UAE – had been built within the first year of operation:
“We have so far leased three out of the four office buildings we launched in June 2007 and have already started leasing warehouses, as of last month to meet the needs of our clients as well as companies across the UAE…”
[c]: Logistics Partnership with Deutsche Post World Net:
Robotic warehouses are the next big thing in logistics:
transPARK - the Industrial City logistics provider formed in partnership with Deutsche Post World Net - the global leader in contract logistics and the parent company of DHL, Excel and Danzas – has been established to manage all logistic services and operations for the Industrial City.
By May 2009 Al Ansari states - Dubai Industrial City had completely leased all of its 1.5 million square feet of warehouses - which form 50% of first stage of storage facilities within months of release:
"This is an indication of the dynamism of the industrial sector which is experiencing a tremendous boom in the city. Moreover, we managed to grab the lion’s share given that our warehouses offer high standards when it comes to fire resistance and safety measures; which is what responsible companies look for. The warehouses are built using pre-cast concrete walls that can contain a fire for four hours and stop it from spreading into neighboring facilities, the doors are also fire proof, and all our units include independent fire fighting systems with equipment such as alarm panels, sprinkler systems as well as fire hose reels and fire exit doors."
He further noted that Industrial City was currently building another 1.5 million square feet of warehouses which are expected to be operational before the end of 2009.
[d]: Dubai Industrial City Master plan:
Dubai Industrial City’s advantage as a comprehensive one stop-shop destination for visa, premises, logistics, human resources, business operations, and a variety of live and work options – means it will attract most new entrants to the Dubai industrial production and manufacturing market in the future – as well many factories relocating from non cluster sites in Dubai.
Master plan: DIC: Click on the mini map above to open the full master plan: [ pause for loading ]:
[c]: Aluminium Industry:
“As well as major infrastructure and ports, the government developed a series of heavy industries during the 1970’s.With an initial investment of US$1.4 billion [including share capital and long term loans] in 1979, the Dubai Aluminium Company [DUBAL] was established near Jebel Ali and is now the largest single site aluminium producer in the West, and one of the world’s most profitable smelters, generating some 900.000 metric tonnes of quality metal in 2007.
Excess heat from the smelting process is used by a nearby desalination plant produce around 25 millions gallons of fresh water every day.
Other industries hatched by the government during this time include a gas plant, dry dock, and cable manufacturing plant.
DUBAL has done very well indeed. In 2006, it was serving clients in more than 14 countries and contributing around 5% of Dubai’s GDP.
And after 25 years in operation, DUBAL started expanding internationally with partnerships to develop a plant in India , each featuring DUBAL’s proprietary technologies.” Sand to Silicon: 14
DUBAL – Dubai’s most successful industrial enterprise - is a major supplier of foundry alloy to the Far East's automotive industry - a significant supplier of extrusion billet for construction markets - and a preferred supplier of high purity primary aluminum for use in the electronics and aerospace industries.
DUBAL produces more than 110 individual products 70 which are made to customer specifications for clients in three broad categories:
- foundry alloys
- and high purity ingots.
Total Dubai aluminum production had steadily increased but DUBAL greatest strength is their SAP powered production flexibility that enables them to adapt to changing market demands:
In 2008, DUBAL produced almost 945,000 metric tonnes of quality finished aluminum products and sold a record 924,308 metric tonnes to more than 290 clients in 48 different countries.
Door-to-door deliveries on a “just in time” basis – enabled by their SAP production software - to clients in Europe, North America, the Middle East and GCC Countries are achieved using a vast network of metal handling forwarders and logistics companies.
[d]: Textile industry:
In 2003 the Dubai textile industry was allocated a 5.800.000-square-metre plot of land for its own designated free zone - Dubai Textile City.
Phase-I of the project space is fully sold and around 110 textile traders have confirmed bookings in the project located in Al Warsan, near Al Awir in Dubai – close to International City.
The project is joint venture by Dubai Ports, Customs and Free Zone Corporation [PCFC] - in collaboration with Texmas – an industry body composed of most of Dubai’s textile merchants - and bookings for the second and final phase of the project have commenced.
Dubai Textile City retail zone:
The DTC complex is designed to accommodate over 250 units in a covered area of over two million square feet.
Each unit is self-sufficient and each comes with a front office and warehouse – offering traders an infrastructure enabling them to be close to their inventories.
An import/export wholesale and retail facility - rather than a production zone – like other free trade zones – Dubai Textile City – was delayed by almost 4 years in its realization - although about 80% of the 284 warehouses are already occupied and 130 companies have registered to operate from the zone – with more than 220 companies expected to eventually register.
Dubai Textile City was originally planned as a free trade zone - but the concept was not supported by the textile traders - who feared they would have to disclose too many ‘trade secrets’ to customs officials in order to maintain their duty-free status.
Dubai's textile exports are sent to over 50 countries in Africa, the Middle East, South Asia and Europe – and major exporters to Dubai include China, South Korea, Japan and Indonesia.
The Dubai textile industry serves the large local market – but faces increased competition from cheaper product produced in China – of which many Dubai textile merchants are now importing.
A future option for the industry is the production of synthetic carpets – which are produced from oil products – and can therefore be accessed cheaply in the local market – and have an enormous potential local market in the growing Dubai new built property market.
[e]: Dubai’s manufacturing industry:
A substantial restructuring of the UAE’s manufacturing sector has taken place - to meet the requirements arising from the new WTO regulations which come into effect in 2005.
The primarily objective has been to establish projects with production privileges – to increase exports and enable the penetration of new markets.
Dubai has accelerated its drive to attract capital and expand its manufacturing base – although most goods passing through its ports are still in transit.
The Dubai Authority for Investment and Development was established in April 2002 to attract attract investors to Dubai’s new business ventures.
According to UAE Ministry of Economy and Planning statistics Dubai’s manufacturing gross domestic product – increased by an average rate of 12% per annum during the 4 year period from 2000-2004 – and manufacturing’s share of Dubai’s GDP - increased by an annual average of 2% during the same period.
The Dubai manufacturing sector is dominated by the medium sized firms - medium small and medium large – represent approximately 74% of the total number of manufacturing firms in Dubai.
Legal forms were:
- 62% of the businesess operate as limited liability;
- 32% solde trader;
- 5% partnership;
- and 1% were publicly listed firms.
Labour employment increased by an average rate of 8% each year during the period 2000-2004.
The top 5 employers of labour in the manufacturing sector in 2004 were:
- Fabricated Metal and Equipment subsector :30% of Dubai’s industrial labour;
- Non- Metallic Mineral Products: 15%;
- Food, Beverage, and Tobacco: 14%;
- Wood Products and Furniture: 12%;
- and Chemical and Plastic Products: 10%.
During the period 2000-2004 investment increased by an average rate
of 4% per annum
In terms of investor nationality in 2004:
- 86% were UAE nationals,
- 6% other GCC nationals,
- and 8% by other nationalities.
The top 5 destinations of Dubai manufacturing investments were:
- Basic Metallic Mineral Products sub-sector 43%;
- Non-Metallic Mineral Products 13%;
- Food, Beverage & Tobacco 12%;
- Fabricated Metal and Equipment 11%;
- and Chemical and Plastic Products 10%.
The total turnover [total sales] of the manufacturing firms registered at DCCI was about AED 25 billion in 2004 - according to Dubai Chamber of Commerce and Industry database.
Although Dubai’s manufacturing sector is reasonably buoyant - it still
has challenges arising from the increased world wide effects of Free Trade liberalization – to which the UAE Government is committed.
To continue to compete efficiently competition, it needs to produce efficiently – it needs to adopt new technologies – seek strategic alliances and mergers to create economies of scale – arising from the small and medium size of the majority of Dubai’s manufacturing firms.
Dubai manufacturing firms and
Industrial activities: Number of Firms: Staff employed:
Food, beverage & tobacco: 128: 11,572:
Textile, wearing apparel & leather: 41: 4,072:
Wood products including furniture: 175: 9,904:
Paper products, printing & publishing: 86: 6,859:
Chemical and plastic products: 158: 7,947:
Non-metallic mineral products: 147: 12,340:
Basic metallic mineral products: 25: 4,528:
Fabricated metal and equipment: 377: 24,771:
Other manufacturing industries: 40: 1,086:
Total: 1,177: 83,079
Source: Statistical Industrial
Dubai’s main industrial activities are:
- oil and gas
- metals and heavy equipment,
- clothing and textiles,
- and food.
Dubai has supported the development of these non-oil industries – by providing attractive legal and economic structures – such as industrial zones – of which Dubai Industrial City – with its efficient and internationally accredited production facilities, storage solutions, and wide range of international transportation options – holds the most promise for Dubai’s manufacturing sector in the future.
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