Get in the Zone

In 2009, as part of its efforts to achieve economic diversification, the Abu Dhabi government drew up plans to launch a $7.2 billion industrial park and ports operation. It would become the emirate’s first industrial free zone offering 100% foreign ownership. By 2030, Khalifa Industrial Zone of Abu Dhabi (Kizad) is expected to contribute up to 15% of the emirate’s non-oil GDP.

Between 60 and 80% of the goods manufactured within Kizad will be exported, adding further value to the nation’s economy. Accordingly, its strategic location linking east and west, and its intermodal infrastructure linking sea, air, roads and rail gives investors easy and efficient access to over 4.5 billion consumers. Its proximity to the state-of-the-art Khalifa Port guarantees accommodation for large cargo ships to ensure easy import of bulk raw materials and export finished goods. The port will offer capacity for 15 million TEUs and 35 million tons bulk and breakbulk cargo. The industrial zone is located almost equidistant between the UAE’s major airports, which have a combined air freight capacity of 14 million tons per annum.

Kizad’s road network links all major cities in the UAE, Oman, Qatar and Saudi Arabia by four-lane highways and dual three-lane arterial roads for efficient movement of goods and traffic. Another example of the innovative infrastructure that Kizad can provide is the “Hot Metal Road,” a specially constructed roadway that enables the transport and delivery of hot molten aluminum, saving downstream manufacturers the energy cost of re-melting aluminum ingots. Kizad is also working closely with Etihad Rail, which is currently constructing the UAE component of a planned pan-Arabian rail network. From its integration into the free-zone’s masterplan, Etihad Rail will link Kizad to Saudi Arabia, the northern emirates and to Oman and Yemen.

Including Kizad, the UAE is home to nearly 40 free zones specializing in a variety of business sectors, from media and advertising to technology and environmental business. In 2015, they accounted for approximately 33% of the UAE’s non-oil trade. Free zone growth has been in line with the country’s focus on foreign trade, investment and industry sectors. Khalifa Port handled record container volume in 2015 with 1.5 million TEUs, which represent a growth of 32% up from1.13 million a year earlier.

Kizad can create competitively priced infrastructure solutions tailored to address the specific utilities and logistics needs of major manufacturing projects. One of the major operating costs for industrial companies is utilities and even with the gradual removal of subsidies Abu Dhabi offers gas, water and electrical power at some of the lowest rates in the world.

The primary objective is to attract FDI that will generate job opportunities and help develop the economy. Kizad could lead to the creation of more than 150,000 jobs due to a deal signed with more than 50 local and international companies. A total of 21 long-term property Standard Musataha Agreements (SMAs) were signed this year with national and international investors and three plot-extension SMAs with existing investors. Kizad’s anchor investor, Emirates Aluminium (EMAL), which aims to be one of the world’s largest single-site aluminum smelters, produces now 800,000 tons annually. The free zone already has agreements with Brazil’s BRF SA, the world’s largest chicken exporter, for a $150 million processing plant, and Abu Dhabi’s National Food Products Company (NFPC) for a $408.39 million facility. The GCC states depend on imports for 80-90% of their food.

The targeted industries range from engineered metal products to healthcare equipment. Food, paper and steel segments are also among Kizad’s clusters. All these segments are vertically integrated through a value chain of anchor tenants, who produce basic materials, mid-stream and downstream producers, and specialist companies. As trade and logistics operations will be necessary to support industries, a warehouse and logistics park is being developed, and it will provide warehouses that meet the requirements of storage, cargo and other logistical operators within Kizad.