UAE, Egypt and Jordan agree on $10bn industrial partnership investment fund
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UAE, Egypt and Jordan agree on $10bn industrial partnership investment fund

UAE, Egypt and Jordan agree on $10bn industrial partnership investment fund

The five areas that the three countries will cooperate on include food, agriculture and fertilisers; pharmaceuticals; textiles; minerals and metals; and petrochemicals

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The UAE, Egypt, and Jordan on Sunday signed an industrial partnership agreement in Abu Dhabi to enhance economic growth in the three countries across five key sectors.

The five areas that the three countries will cooperate on include food, agriculture and fertilisers; pharmaceuticals; textiles; minerals and metals; and petrochemicals.

By way of the industrial partnership agreement, a $10bn investment fund has been allocated and will be managed by ADQ Holding. Under the partnership, a tripartite supreme committee, headed by the signing ministers, will be established. In addition, there will be an executive committee composed of undersecretaries of the ministries and representatives from relevant authorities and sectors. The committee will work with the private sector to increase opportunities, and the participating nations will identify the stakeholders and the course of action to deliver on the projects.

The three nations’ combined industrial capacity represents around 26 per cent of the total industrial capacity of the MENA region, according to news agency WAM.

These countries have a well-developed logistical infrastructure, including airports, ports and strategic transport corridors such as the Suez Canal. Almost half the total population of the partner countries comprising 122 million people are young people, which therefore represents a vibrant and sustainable workforce.

Dr. Bisher Al Khasawneh, Prime Minister of Jordan, said that the industrial partnership is expected to enhance integration, protects supply chains, empowers import substitution, and promotes sustainable economic development. “In Jordan, an attractive investment destination, industry contributes to 24 per cent of the GDP, and account for 21 per cent of the country’s employment,” said Al-Khasawneh. In Jordan, the industrial sector has an annual production amounting to $25bn. It employs about 250,000 workers in 17,000 establishments. The exports of the industrial sector amounted to $8bn, while industrial exports constitute 93 per cent of the total national exports. Jordanian exports reached more than 140 countries around the world, and the average annual growth rate of the industrial sector’s exports during the past decade was 2.3 per cent. Industry accounted for 80 percent of the flow of foreign direct investment to Jordan in the past decade.

As for Egypt’s industrial sector, the country’s GDP reached $394.3bn in 2021, while the increase in GDP per capita totaled 6.8 percent. Egypt’s economy achieved 9 per cent growth in the first half of the 2021/2022 fiscal year. The value of industrial output stands at $52.7bn (2020/2021), which represents around 15 per cent of national GDP. Egypt has over 120 industrial zones across the country. It also has 17 industrial complexes across 15 governorates and 5,046 industrial units that provide around 48,000 direct job opportunities.

Meanwhile, the contribution of the industrial sector to the UAE’s GDP has increased to $40.8bn, and industrial exports exceeded $31.6bn, an increase of more than 50 per cent compared to 2019. More than 220 new industrial production units were licensed; $11.3bn was directed back into the UAE market through the National In-Country Value Program. The UAE jumped five places in the UNIDO Competitive Industrial Performance Index based on the contribution of the industrial sector to the national GDP. The UAE’s logistics infrastructure consist of 10 civil airports and 12 ports with annual handling capacity of 80 million tons.

Read: Etihad Rail to build freight terminal at Dubai Industrial City

Areas of cooperation
The five areas that the three countries will cooperate with regards to the latest industrial partnership agreement include food, agriculture and fertilisers; pharmaceuticals; textiles; minerals and metal; and petrochemicals.

With regards to food and agriculture, Egyptis a leading producer and processor of food and agricultural processes. The Jordan Valley has diverse agricultural areas, bio-climatic and environmental conditions, and a variety of agricultural products with high technical specifications. The innovative technologies, fertiliser components and basic plastic products available in the UAE will be harnessed in agriculture and irrigation. The value of the agricultural and food products market in the three countries was estimated at $52bn in 2019, with an annual growth rate of 11 per cent. The value of imports such as wheat, fodder, fruits, vegetables, meat and fish reached $37bn in 2019. In the area of fertilizer production, the three countries have an estimated estimated annual production of 7.6 million tons.

As for pharmaceuticals, the UAE, Egypt and Jordan are amongst the largest drug manufacturing centers in the region, with more than 200 pharmaceutical factories and exports to 90 countries worth more than $1bn. The value of the pharmaceutical market in these countries is estimated at $9bn, with an annual growth rate of 7 per cent. The value of the pharmaceutical market of imports reached $5bn in 2019.

With the clothing and textiles sector, the textile industry across the three countries is currently worth $5bn. Egypt has a vertically integrated textile sector, and exports an equivalent of 300,000-plus tons of cloth and apparel annually. The value of clothing and textile imports for the three countries amounts to about $9bn annually, which provides significant opportunities for new projects, especially in the polyester industry, whose imports amount to more than $600m.

Within the petrochemicals industry, in 2019, the combined contribution of the petrochemical industry to GDP in the UAE, Egypt and Jordan exceeded $16bn. The three countries have access to a range of energy sources, especially natural gas, which is estimated at about 278 trillion cubic feet, in addition to advanced capabilities in the field of petrochemical production and derivatives, which are estimated at about 20 million tons per year. This allows for expansion projects in the petrochemical sector and manufacturing industries which could exceed $21bn.

As for metals and minerals, the value of the iron, aluminum, metal and steel market in the three countries is estimated at $13bn, with an annual growth rate of 2 percent. The UAE is one of the world’s five largest aluminum producers. There are opportunities in the metals sector (aluminum, iron, silica and potash) for projects worth $23bn by using these materials to manufacture higher value products such as glass, electrical wires, car components, solar panels and microelectronic chips.

“The partnership embodies the vision of President His Highness Sheikh Mohamed bin Zayed Al Nahyan, to enhance industrial integration with Arab nations and the rest of the world so we can achieve a major leap in the industrial sector and transform its potential an economic driver. Industry is the backbone of the world’s largest economies. Through its capabilities, effective policies and current focus on developing advanced technology and logistics infrastructure, we are confident that the UAE can build a global economic powerhouse by leveraging industrial partnerships across the region,” said Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs for the UAE.

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