New Industrial Licences Surge 16.6% in First Year After Abu Dhabi Industrial Strategy Launch

Launched by H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Chairman of Abu Dhabi Executive Council in June 2022, the Abu Dhabi Industrial Strategy (ADIS) has accelerated the transformation of the emirate’s manufacturing sector, strengthening its position as the region’s most competitive industrial hub within its first year.

Increased activity has been registered across all three stages of Abu Dhabi’s manufacturer licensing journey: Rowad (initial licence to establish an industrial company), construction (to begin constructing an industrial facility) and production (to commence operations).

The 12-month period from July 2022 to June 2023 recorded a 16.6 per cent increase in the number of new industrial Rowad licences granted in Abu Dhabi, from 204 to 238. 116 new Rowad industrial licences were issued during H1 2023 alone, an increase of 63.3 per cent from the number issued in H1 2022.

AED15.36 billion in capital investments made by manufacturing facilities moved to the in-production phase over the year, a growth of 85.7 per cent from a year earlier.

As a result, total capital investments by manufacturers operating in the emirate grew AED12.42 billion to AED384.06 billion in the same period, up from AED371.64 billion a year ago.

The number of operational manufacturers in the emirate now stands at 966, up from 922 manufacturers at the end of H1 2022.

Ahmed Jasim Al Zaabi, Chairman of ADDED, said: “Guided by our leadership’s foresight and unwavering commitment, ADDED is doubling down on its efforts to enhance Abu Dhabi’s competitiveness through a new multi-polar economic strategy, where the industrial strategy sits at its core.

As an ambitious blueprint to guide the emirate’s manufacturing sector, the Abu Dhabi Industrial Strategy has ushered in a new era in the economic landscape that leverages innovation and advanced technologies to harmonise human development, sustainability, and growth.”

Al Zaabi added: “The robust performance of the manufacturing sector is testament to Abu Dhabi’s ongoing economic resilience.

Our manufacturing sector, which contributed 16.4 per cent to Abu Dhabi’s non-oil GDP in 2022 and represents 49.9 per cent of the total industrial sector in the UAE, is moving from strength to strength, powered by successful implementation of the industrial strategy’s transformational programmes to enhance the sector’s competitiveness by increasing access to financing, enhancing ease of doing business, and attracting domestic and foreign direct investments.”

Led by the Abu Dhabi Department of Economic Development (ADDED), ADIS aims to strengthen the emirate’s position as the region’s premier industrial hub by doubling the size of industrial sector to AED172 billion, creating 13,600 new skilled jobs, and increasing the emirate’s non-oil exports to AED178.8 billion by 2031.

The strategy involves an investment of AED 10 billion across six transformational programmes: Talent Development, Industry 4.0, Circular Economy, Ecosystem Enablement, Homegrown Supply Chain, and Value Chain Development.

Over the past year, the Industrial Development Bureau (IDB), ADDED’s industrial sector development arm, has launched several initiatives to deliver on the goals of the strategy, including the Industrial Talent Programme, which is helping attract, develop, and upskill human capital in the industrial sector to meet the increased demand for knowledge-based jobs.

IDB also launched ‘Tech Champions’, a pilot programme to equip employees of food manufacturing factories in Abu Dhabi with Industry 4.0 skills, which graduated its first cohort in May 2023.

During the year, IDB also unveiled a smart manufacturing competence centre to support sector-wide Industry 4.0 transition, an incentive programme to support existing industrial SMEs adopt smart manufacturing methods and processes, and a value chain development programme to further enhance the industrial investment ecosystem.

Additionally, ADDED signed agreements with a number of leading global companies to enhance industry innovation and digital transformation, and nurture emerging talent by training UAE Nationals through in-country, global and virtual programmes on technology, business and behavioural skills. Preliminary estimates from H1 2023 highlight the robustness of Abu Dhabi’s industrial growth, with an increase in the number of investors and new industrial projects:

• 116 new industrial Rowad licences were issued in Abu Dhabi in the first six months of 2023 (an increase of 63.3 per cent from the 71 licenses issued in H1 2022).

• AED1.54 billion in government tenders were awarded to ICV certified companies in H1 2023 (58.7 per cent growth from AED0.97 billion awarded in H1 2022).

• The number of manufacturers enrolled in the Electricity Tariff Incentive Programme (ETIP 1.0) grew to 68 in H1 2023 (up 54.5 per cent from 44 manufacturers in H1 2022).

• Abu Dhabi companies benefiting from ETIP 1.0 increased their spending on logistics by 19.3 per cent compared to H1 2022.

The percentage of skilled employees in these companies rose from 41 per cent in H1 2022 to 43 per cent in H1 2023.

• The number of manufacturers that joined the Golden List initiative, which aims to increase the demand for locally manufactured goods through government procurement, increased to 164 establishments (up by 29.1 per cent from 127 in H1 2022).

• The number of products registered in the Golden List increased to 742 products in H1 2023 (a growth of 4.3 per cent from 711 in H1 2022).