Explainer: Where is the UAE’smanufacturing sector headed?
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Explainer: Where is the UAE’s manufacturing sector headed?

Explainer: Where is the UAE’s manufacturing sector headed?

The recently announced Operation 300bn strategy is set to be a game changer in transforming the nation’s manufacturing sector, opines Nidal Haddad, founder and CEO, Al Bayader International

How has the year been so far for the manufacturing sector in the UAE?
Despite the pandemic, this year has been extraordinary in the strategic direction that the leadership has set in promoting domestic manufacturing. Operation 300bn, the new strategy announced earlier this year to increase the GDP share of the sector from Dhs133bn at present
to Dhs300bn by 2031, has given a fillip to industry, with the ‘Make it in the Emirates’ plan set to increase not only the manufacturing base but also tremendous in-country value.

The pandemic has in fact given a boost to local manufacturing as industries sought to be more self-reliant and create a stronger domestic value chain.

Further, the growth in e-commerce and the healthy performance of the F&B sector driven by an online model, has underlined the need to strengthen core raw material supplies locally.

What kind of an impact do you expect the Operation 300bn strategy to have in the longer-term?
I see the Operation 300bn strategy as a game changer in transforming the nation’s manufacturing sector. It sets the commitment of the leadership to boosting local manufacturing, which encourages both domestic and international investors to explore the opportunity for growth that the nation provides.

By boosting national industrial and manufacturing competencies, the strategy will create a robust supply chain and promote innovation. The impact of the strategy is already being realised as it has strengthened investor confidence and contributed to more domestic manufacturing in diverse sectors. The long-term strategic impact will be the evolution of the UAE as a global industrial hub, serving the wider Middle East and North Africa region.

What are the biggest challenges that local manufacturers face?
A key challenge for local manufacturers has been attracting talent, given that manufacturing is still seen as ‘emerging’. With the new thrust of the government to promote localised manufacturing, I expect the nation to attract more talent from across the world. This is crucial to drive innovation in our sector.

There have also been challenges in supply chain management, especially in procuring raw materials.

Al Bayader recently announced the expansion of its Jebel Ali facility, and you are also constructing a mega industrial complex in Sharjah. Is this mainly aimed at domestic/regional growth or international exports?
Our new expansion – both through our enhanced Jebel Ali facility and the new mega-industrial complex in Sharjah – are aimed at both national level growth to meet the rising demand for food packaging products as well as for international markets.

These initiatives are aligned with our commitment to support the Operation 300bn strategy of the nation, and mark sizeable investments by us. We invested Dhs200m for the Jebel Ali facility expansion programme and we have secured financing to build the region’s largest food packaging industrial complex, spanning an area of 450,000 square feet, in Sharjah.

When completed in 2023, it will quadruple our total production capacity to over 120,000 tonnes, which will significantly increase our exports.

Looking ahead, how much of a role do you see automation play in the manufacturing process?
Automation is at the heart of strengthening manufacturing and I see advanced technologies play a stronger role in driving the sector. The fourth industrial revolution has unleashed significant opportunities for the industry at large to achieve higher levels of operational efficiency and productivity. Our new industrial complex continues to build on our focus of promoting R&D in industry.

Lastly, do you see many more manufacturers emerge in the UAE in the near future? Which are the segments within the industry most primed for growth?
Operation 300bn is a catalyst for new manufacturers as well as for existing players to expand their operations. There will be new manufacturing initiatives and ventures across all key areas: the most important aspect in driving this is to find your niche. The new economic landscape calls for innovative manufacturing initiatives, especially as customers pivot to e-commerce. There is tremendous potential in the food packaging and the F&B industry, as well as in all retail sectors.

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