Since the UAE’s foundation 50 years ago, the country has transformed itself into one of the most successful and dynamic commercial hubs in the world, and the second-largest economy in the Arab world.
Originally flourishing off the back of its natural oil and gas reserves, the country has since focused on diversifying its economy to build a sustainable economy for the long term, and today, the UAE is focused on developing its domestic manufacturing capabilities.
In 2021, the country announced its intention to boost local production and create a world-class industrial landscape, with a target of establishing 13,500 industrial companies and increasing the sector’s economic output to AED300 billion over the next decade.
Considering the UAE’s success in leveraging its strategic location between East and West to become one of the world’s leading global logistic hubs, the country is set to achieve its manufacturing sector growth objectives.
One of the most active global gateways for imports and exports, Dubai has become a successful trading hub, and is the third-largest re-export hub in the world after Hong Kong and Singapore.
With its world-class logistics infrastructure, the UAE provides the perfect base for manufacturers looking to enter and expand in the Middle East, Africa, and Asia, thanks to its ability to import raw materials and export finished products from the country with efficiency and ease.
Ongoing efforts to boost the UAE’s industrial manufacturing sector have yielded positive results.
Today, the sector’s contribution to gross domestic product (GDP) amounts to AED 133 billion and is forecasted to double by 2031 to reach AED 300 billion.
Some of the most popular locally manufactured items exported from the UAE are aluminum, clothes and shoes, soft drinks, perfumes, books, and ceramic bathroom fittings.
Driven by recent government reforms, the sector is set for further growth as updates to the economic, legal, and social environment have made the country more attractive to foreign investors, highly skilled talent, and international companies.
The support of logistics companies in the end-to-end supply chain process is critical to the growth of the UAE’s manufacturing sector.
From securing raw materials to storage, stock management, shipping, and delivery services, efficient logistics and a secure supply chain help manufacturers deliver the right product, at the right time and price, making them critical to their success.
To adapt to shifting consumer demands, manufacturers need flexibility, transparency, efficiency, and to adopt the technologies and tools which drive greater understanding about their products.
In turn, logistics companies which have adopted advanced technologies such as artificial intelligence, big data, and automation will help manufacturers meet the consumer demand, and provide a competitive advantage over service providers that simply move a product from point ‘A’ to point ‘B’.
With its world-class logistics hub, rapid adoption of digitalization, and ideal geographical location at the center of some of the fastest-growing economies, the UAE is ready to support a flourishing manufacturing sector.
Ongoing efforts to diversify its economy and increase the output of locally manufactured products, together with regulatory and financial reforms signal a bright future for the country’s manufacturing sector.
However, manufacturers will only be able to realize the potential of the many reforms put in place to support the growth of the UAE’s manufacturing sector with the additional support of the right logistics partner to connect them from one of the world’s leading trading hubs, to the global marketplace.
Taarek Hinedi – Vice President of FedEx Express Middle East and Africa Operations
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