GMIS 2021: Operation 300bn targets are 'ambitious but achievable', industry leaders say

Goals of UAE’s Operation 300bn are “ambitious” but “achievable”, are central to attracting foreign direct investment and support the small and medium-sized enterprises ecosystem, which is at the heart of the country's industrial sector growth strategy, senior government and industrial sector executives said. “The target of Dh300bn ... it’s a stretched target but it’s achievable”, Abdulla Al Shamsi, assistant undersecretary at the Ministry of Industry and Advanced Technology, told a panel at the Global Manufacturing and Industrialisation Summit (GMIS) in Dubai on Tuesday. “SMEs are at the heart of the Operation 300bn and the next five to 10 years are very positive for SMEs in the UAE. We have demand growing exponentially in many sectors … I think it is really time for SMEs to be unleashed and growth unlocked in the UAE,” he said. The UAE is diversifying its economy and expanding its industrial base to reduce reliance on imports of industrial inputs and cut dependence on global supply chains after the pandemic that uprooted world trade last year. In March, the Arab world’s second-largest economy announced plans to increase the manufacturing sector's contribution to the country's economic output to Dh300 billion ($87.4bn) from Dh133bn over the next decade, boost local production and create world-beating light and heavy industries. The Operation 300bn industrial strategy supports spending towards local products and local suppliers, as well as promoting investment in research and development and incentivising adoption of advanced technology in the UAE. The strategy will focus on expanding sectors including petrochemicals, plastics and metals, and further develop food, water and healthcare industrial bases. “There is a lot we can do within existing sectors to go to the next level to increase value,” Mr Al Shamsi said. “We have the capital, know-how and comparative advantages to help us develop new sectors.” Co-ordinating efforts between government entities and national industrial champions, however, will be a “critical success factor in paving the way for industrial growth”, he added. The panel also included Saeed Al Remeithi, chief executive of Emirates Steel; Ahmed Al Naqbi, chief executive of Emirates Development Bank; Abdulnasser bin Kalban, chief executive of Emirates Global Aluminium; Khaleefa Al Mheiri, acting chief executive of Ta’ziz development in Abu Dhabi, and Saud Abu Al Shawareb, managing director of Dubai Industrial City. The UAE's industrial strategy also aims to establish 13,500 industrial companies, increasing the R&D investment to Dh57bn by 2031 from Dh21bn currently. “We are looking to deploy Dh30bn in the market by 2025 to support this ecosystem, support this acceleration of growth,” Mr Al Naqbi said. “We want to support the creation of 25,000 jobs and 13,500 companies here in the country.” The targets set by the strategy are achievable, he added. The strategy will not only support SMEs – that account for about 95 per cent of businesses in the UAE and 80 per cent of employment in the private sector – it will also boost foreign direct investment, Mr Al Remeithi said. Development of SMEs is at the top of the UAE’s economic agenda for the next 50 years. The government has launched incentives to boost their growth and nurture entrepreneurship and start-ups. EGA, which is among the biggest non-oil sector industrial companies in the UAE, is already procuring 45 per cent of its total needs from SMEs at home, its chief executive said. SMEs feed into your system. For us SME is [a] crucial [sector], Mr bin Kalban said. The company, which has spent $1.6bn every year on domestic procurements, plans to increase the percentage of local supplies. “Our strategy is to have a new ecosystem ... in our backyard,” he said, adding that near-shoring of supply chain is possible with the support of institutions like EDB that can help establish more local and international SMEs and EGA can do long-term off-take agreements with them. "It will take time", but it is achievable, he added. Ta'ziz, the chemical manufacturing hub within Ruwais industrial hub, also fits perfectly into the UAE’s industrial growth strategy, as it will create direct jobs. “The chemicals sector also plays a vital role as an input to different industries and manufacturing sectors. There will be opportunity [for growth] down the value chain," Mr Al Mheiri said. “Currently we are in a pre-feed stage and we expect a final investment decision next year, while we expect operations [to begin] in 2025.” Dubai Industrial City, an industrial hub situated close to the emirate’s Jebel Ali Port, is also collaborating with different entities to “complement the government agenda” and host industries from priority sectors defined in the Operation 300bn, Mr Al Shawareb said. The DIC expects to announce rail connectivity next year, which will add to its attractiveness for industries, he added.

GMIS 2021: Operation 300bn targets are 'ambitious but achievable', industry leaders say

The SME ecosystem is at the heart of the UAE's industrial growth strategy that will also boost FDI into the country, panelists at GMIS say