Abu Dhabi manufacturing sector picks up

23 April 2014

Flurry of new announcements point to high spending in medium-sized industrial projects

Spending on industrial projects in the UAE is likely to pick up over the next two years boosted by string of recent announcements in the sector.

So far this year companies have awarded almost $400m in engineering, procurement and construction (EPC) contracts in the Gulf country’s industrial sector, according to regional project database MEED Projects. This compares with $924m awarded in the whole of 2013.

Year-to-date spending covers nine projects in the metals, plastics, minerals and food industries. The largest award in the first quarter was on Vandana Gulf Lime’s quicklime manufacturing operations at Industrial City Abu Dhabi (ICAD) 3 with India’s Hajee AP Bava acting as the main contractor.

The diversification of industry and the expansion of small-to-medium manufacturing operations is one of the key tenets of the Abu Dhabi Vision 2030 strategy, which aims to create jobs and decrease reliance on oil revenues.

Several announcements over recent weeks point to a significant expansion in the UAE’s manufacturing industries, especially in the emirate of Abu Dhabi.

India’s Jindal Saw and its partner companies plan to spend $230m on metals and minerals projects in Abu Dhabi including a ductile iron pipe plant, a ferro-alloys complex and a lime calcination plant, all to be located in ICAD in Mussafah. Meanwhile, United Iron & Steel Company (UISC) will invest AED507m ($138m) to build a steel rolling mill in the same zone.

At ICAD 2, Abu-Dhabi-based Ittihad International Investment plans to build a AED1bn ($272m) paper mill. The project will build region’s first uncoated wood-free printing and writing paper mill, which will target consumers in the Middle East and North Africa (Mena) region.

Emirates Calcium Carbonate Factory is planning to build a plant at Khalifa Industrial Zone Abu Dhabi (Kizad), midway between Abu Dhabi and Dubai cities. The plant will produce and distribute calcium carbonate projects to oilfield industries in the UAE and across the GCC.

Also at Kizad, Morgan Advanced Materials plans to build a plant in the metals cluster to produce engineering products for sectors such as aluminium, electronics, energy, transportation, petrochemicals, healthcare, and fire protection.

Palletco is preparing to construct a plastics manufacturing plant at Kizad and is awaiting government approval before moving forward, while Ben Seddig Group subsidiary Crystal Arc plans to build a crystal products plant in the same industrial zone.  

With industrial spending in the UAE in recent years dominated by the expansion of the Emirates Aluminium (Emal) smelter, the coming years could see an upturn in medium-sized manufacturing products.

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