Manufacturing sector records 23.6% growth in 2007


The UAE manufacturing sector recorded a substantial growth of 23.6 per cent to touch Dh90.8 billion in 2007, compared to Dh73.4bn in 2006, according to a report.

The growth in the manufacturing sector has been steady since 2003 and has recorded a compound annual growth rate of 21.1 per cent during 2003 to 2007, Kuwait-based Global Investment House (GIH) said in its outlook on the UAE manufacturing sector.

As per Ministry of Finance and Industry’s 2008 Statistical Industrial Book, investments in the country’s non-oil industrial sector continued to increase and reached Dh72.6b in 2007, 10.4 per cent of gross domestic product, on back of high economic confidence among both government and private institutions.

UAE-based investors accounted for 85 per cent of the total finance, while foreign direct investment contributed Dh8.1bn (11 per cent) and Gulf investors contributing the remaining 3.6 per cent. About Dh38.9b, or 53.6 per cent of the total investment was made in Abu Dhabi, while Dubai attracted only Dh17.1b (23.6 per cent).

Although the capital witnessed highest investment in the sector, there were only 334 projects in 2007. Much of the small and medium-size enterprise activity has been based in industrial quarters of Dubai and Sharjah, while Abu Dhabi has concentrated on developing its own industrial city.

Within the manufacturing sector, the segment of “food and beverage” contributed for the lion’s share of manufacturing investments totalling a massive Dh32.1bn in 2007. Chemicals came second in terms of investments, at Dh15.4bn.

Investments stood at Dh8.8bn in mineral products, Dh7.2bn in metal products, Dh5.1bn in equipment, Dh1.8bn in paper products, Dh960m in textile and garments and about Dh822m in wood products.

The manufacturing sector as a whole continues to be dominated by the aluminum and refined oil products, along with the output of various manufactured goods from the Jebel Ali Free Zone, the report said.

Aluminium production was up by almost nine per cent in 2006 and accelerating to around 14 per cent in third quarter of 2007 to 225,000 tonnes, as Dubai Aluminium continued to take advantage of the Gulf-wide construction boom, the investment bank said.

In March 2008, Dubai Aluminium (Dubal) has consolidated its status as the seventh largest aluminium smelter in the world by raising the production of its Jebel Ali plant to 950,000 metric tonnes per annum.

However, Abu Dhabi was not left behind. In February 2007, Mubadala signed an agreement with Dubal to establish Emirates Aluminium Company, which is planning to build, at a Dh29.36b, the largest single aluminum smelter in the world capable of producing more than 1.4m tonnes a year.