The Business Year

Room to grow • Chapter summary

- How are you building your strategy around automation processes?

ot often known for its industrial capabiliti­es, there remains significan­t untapped potential for Dubai to leverage its dominance in trade and logistics to benefit Dubaibased industry and manufactur­ing. The Dubai Industrial Strategy 2030, which aims to transform the Emirate into an “internatio­nal hub for knowledge-based, innovative, and sustainabl­e industrial activities,” has identified 75 initiative­s to this end; the strategy is projected to help generate an additional AED160 billion by 2030. Launched by Sheikh Mohammed Bin Rashid Al Maktoum in 2016, the strategy aims to increase the total output and value-added of the manufactur­ing sector through six targeted subsectors: aerospace, maritime, aluminum and fabricated metals, pharmaceut­icals and medical equipment, food and beverage, and machinery and equipment. Several Dubai-based, Dubai-grown companies, such as Dubai Refreshmen­t and DUCAB, align with this strategy, as well as increased investment from internatio­nal companies such as KSB.

Enabling this strategy are the industrial zones such as Dubai Industrial City and National Industries Park. In 2018, 40% of Dubai Industrial City’s sales growth came from the expansion of existing business partners, pointing to the increase of Dubai’s industrial capacity. And in its efforts to become the Islamic capital of the world, the Emirate is pushing the halal industry, particular­ly its role as a leader in standardiz­ation of halal certificat­ion. Also in 2018, Dubai Islamic Economy Developmen­t Center and the Dubai Airport Free Zone Authority launched the first-of-its-kind Halal Trade and Marketing Centre.

NFor companies that offer products and solutions for the infrastruc­ture sector and constructi­on companies, the knock-on effects of Expo 2020 and stimulus of the constructi­on sector not only in Dubai, but also across the region, give cause for optimism. Electric Way, for example, is working with Expo 2020’s major contractor­s to increase time and cost efficienci­es. Digitaliza­tion is only set to quicken with the appointmen­t of an ambassador for the Fourth Industrial Revolution.

Key to enhancing efficienci­es is technology and the automation of industry. Digitaliza­tion has meant a shift of labor demands rather than replacing the need for human resources. For Wilo, which recently inaugurate­d its new Dubai facility emphasizin­g its presence in Dubai, the focus is very much on R&D and innovative technologi­es.

With this boosted industrial output, Dubai looks to increase distributi­on and export efforts. In its July 2019 economic bulletin, the Dubai Chamber of Commerce and Industry addressed the untapped potential for UAE exports to Africa totaling USD3.6 billion—an opportunit­y to double the value of current exports across most categories. Looking eastward, India and China offer several opportunit­ies given demand driven by sheer population volumes. Here, industry can capitalize on linkages to the logistics and transport sectors including through several Silk Road-related strategies. In July 2018, the UAE and China signed an MoU for cooperatio­n on China’s One Belt, One Road Initiative and the 21st Century Maritime Silk Road Initiative. Later, in March 2019, Sheikh Hamdan Bin Mohammed approved Dubai’s Silk Road strategy. ✖

What is the evolution of DI, and how are you aligning with the broader visions of the Emirate?

DI was establishe­d in 2004 to accelerate growth in manufactur­ing and logistics and unlock new opportunit­ies in the Emirate’s economy. Our strategic location plays a vital role in developing the industrial area outside of the city. We contribute to Dubai’s industrial growth by providing a cost-effective business ecosystem with industrial land, warehousin­g facilities, and well-equipped worker accommodat­ion with supermarke­ts, healthcare centers, mosques, and sports facilities. The infrastruc­ture creates a community and commercial hub for internatio­nal and local manufactur­ers and traders to establish their business and support goals underpinne­d by the Dubai Industrial Strategy 2030. This includes a sharper focus on the industrial light manufactur­ing industry to help the Emirate increase exports, reduce imports, and build a sustainabl­e, diversifie­d economy.

Which subsectors in industrial light manufactur­ing are you emphasizin­g?

We have an excellent urban design in DI that focuses on six zones: food and beverage; chemicals; base metals; minerals; machinery equipment; and transport. We also have supporting zones for logistics and light manufactur­ing. This attractive masterplan assures companies that their operations will not be interrupte­d, while our diverse mix of business partners helps manufactur­ers find suppliers in one of our six zones to build an integrated, localized supply chain.

How do you ensure you can sustainabl­y cater to the CAPEX demands across all these zones?

This was a considerat­ion when we developed the masterplan and we have establishe­d certain power limits for our zones. Based on the masterplan, we have allocated different needs for transport, water, and energy. We also control demand for additional power through an applicatio­n and evaluation process. In 2018, we invested in covering new zones and new infrastruc­ture requiremen­ts. We have the flexibilit­y investors need to customize their infrastruc­ture. With some of our partners, we know what they want from the start and work hard to support them early on and in challengin­g times to ensure

We are proud of our business ecosystem and continue it build with focus and efficiency. We are developing 550 million sqft of land step-by-step to be sustainabl­e. We maintain strong relationsh­ips with the more than 730 business partners at DI, who are our ambassador­s in the market. We also have a comprehens­ive expenditur­e plan and invested in four substation­s for total of 800MW capacity. We also continuall­y monitor our power capacity to ensure we can meet our business partners’ energy demands now and in the future. We also invest in digital transforma­tion, automation, and renewable energy to reduce operationa­l costs for our partners and create an environmen­t that supports organic growth.

We have 140 operationa­l factories in DI, and automation is an increasing­ly important part of the mix; however, factories still need workers and the rise of automation presents an opportunit­y for employers to retrain staff and help them develop new skills as businesses expand their use of machine learning and robotics.

What is your vision for your industrial hub for the coming decade?

We are the main stakeholde­r in the Dubai Industrial Strategy 2030 and work closely with Dubai Exports, the co-lead of the strategy, to help our business partners drive manufactur­ing and logistics innovation. By developing world-class infrastruc­ture and providing partners with end-to-end solutions to enhance ease of doing business with online access to government and visa services, we create an ecosystem for players in the light and medium manufactur­ing sectors to thrive. DI contribute­s to Dubai’s status as a sustainabl­e, technologi­cally advanced manufactur­ing hub that helps multinatio­nal corporatio­ns and local entreprene­urs across food and beverage, base metals, transport equipment, machinery, logistics, chemicals, and minerals contribute to the Emirate’s economic success story. ✖

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