Abu Dhabi issues 136 new industrial licences in first half of 2022 as sector grows

Abu Dhabi issued 136 new industrial licences in the first half of 2022, reflecting the growth of the emirate's manufacturing sector, which is a major priority for its economic diversification push.

The number of industrial facilities moving to the construction phase reached 62, while 44 factories moved from the under-construction to in-production stage, a report by the Industrial Development Bureau, part of the Abu Dhabi Department of Economic Development, found.

The total number of active in-production licences reached 866 by the end of June, the government body said, without providing comparative figures.

The total value of capital expenditures of industrial establishments that switched to the in-production stage rose to Dh3.1 billion ($353 million) in the six months to June, compared with Dh1.03bn in the same period last year, the report said.

"We are building on these successes and will continue our efforts to ensure ease of doing business, support industrial financing, and FDI [foreign direct investment] attraction to achieve objectives of the recently launched Abu Dhabi Industrial Strategy to strengthen the emirate’s position as the region’s most competitive industrial hub," Rashed Al Blooshi, undersecretary of the department, said.

"The industrial sector is the largest contributor to Abu Dhabi’s non-oil GDP [gross domestic product] in addition to its role in creating jobs and enhancing knowledge and innovation-driven initiatives."

Under the Abu Dhabi Industrial Strategy, the government is investing Dh10bn ($2.72bn) across six industrial programmes to more than double the size of the emirate’s manufacturing sector to Dh172bn by 2031. This will create 13,600 skilled jobs, with a focus on hiring Emiratis.

The strategy aims to strengthen the emirate’s position as the region’s most competitive industrial centre.

The number of government tenders awarded to companies with In-Country Value (ICV) certificates, under the Abu Dhabi Local Content programme (ADLC), rose to 466 tenders, up from 95 tenders in the first half of 2021, the report showed.

The value of tenders won by ICV holding companies rose to Dh970.5m in the first six months of 2022, up from Dh556m in the first half of 2021.

Due to tenders with local content value, about Dh407m were reinjected in the local economy to support local products, compared with Dh215.2m in first half of 2021.

There is also growing interest from manufacturers in the Golden List initiative, developed to increase demand on locally manufactured goods through government procurements, the report showed.

The number of manufacturers that joined the list reached 127 by the end of June 2022, an increase of more than 14 per cent from December 2021.

Meanwhile, the total value of customs fees exemption granted to manufacturers in Abu Dhabi during first half of 2022 reached Dh1.02bn, with five new factories receiving Electric Tariff Incentive Programme (ETIP) certificates.

The ETIP aims to boost productivity of industrial facilities, increase their economic impact and improve energy efficiency by providing competitive electricity tariffs.

The IDB is also introducing the Smart Manufacturing Programme, which has assessed readiness of 76 facilities to transition to Industry 4.0 technologies, Sameh Al Qubaisi, director general of Economic Affairs at the department, said.

"We are strengthening partnerships with leading global players to empower manufacturers to switch to Industry 4.0, and to support a circular, smart and sustainable economy," he said.

To enable funding for the industrial sector, IDB has signed agreements with 10 financial institutions, including the Etihad Credit Insurance, Abu Dhabi Export Office, Abu Dhabi Securities Exchange and Maqta Gateway.