Smart Manufacturing Index

Abu Dhabi is rolling out a strategy that promises to place the country squarely and competitively at the center of Industry 4.0 based on measurable KPIs.

The Emirate is seeking to become a technologically optimized address of entrepreneurial fiber and competitive creativity across a diversified and circular industrial matrix. To achieve this, the government revealed the Abu Dhabi Industrial Strategy (ADIS) in 2022, featuring six transformational programs that are expected to double the value of the industrial sector to USD46 billion and create 13,600 jobs by 2031, while boosting the Emirate’s non-oil exports to USD48 billion.

To accurately measure industrial graduation to Industry 4.0, the Abu Dhabi Department of Economic Development (ADDED) has introduced the Abu Dhabi Smart Manufacturing Index, a blueprint for companies to gauge remaining requirements and close any capability gaps in meeting international benchmarks and best practices. According to ADDED, the strategy will change the region’s economic landscape by galvanizing the establishment of a smart, circular, and sustainable economy through measured KPIs in the “transition to methods of tomorrow’s manufacturing.”

According to ADDED, Abu Dhabi’s mission is supported by strong fundamentals and its “unique business ecosystem.” And meanwhile, the department’s ultimate responsibility is to preempt shifts in supply and demand by equipping “manufacturers with vital, seamless, and effective mechanisms to transition to Industry 4.0 technologies and applications to drive future growth.” The sweeteners accompanying ADDED’s strategy include a Land Incentives program that offers long-term lease contracts for industrial land through rental rebates. To facilitate the physical growth of manufacturers highly competitive rates as low as AED5 (USD1.36) per sqm are available based upon a commitment to relevant capital expenditure and cash flow management practices. Meanwhile, ADDED has also expanded the Energy Tariff Incentive Programme (ETIP 2.0) whereby preferential gas and electricity rates are available to industry, once again based on measurable eligibility criteria such as economic impact, Emiratization rate, and energy efficiency.

The UAE, while shoring up its in-country credentials, continues to welcome strategic foreign participation in its economy. After all, it has enjoyed lofty heights (16th) in the World Bank’s Doing Business Report that compares the costs to firms of business regulations in 190 countries. ADDED pursues collaboration with key global players capable of advancing the Emirate’s innovation and entrepreneurship ecosystem, significantly including the training and upskilling of specialists. Official data reveals that in 1H2022, ADDED’s Industrial Development Bureau (IDB) assessed the readiness of 76 facilities for the transition to Industry 4.0 technologies.

The Ministry of Industrial and Advanced Technology has presented the potential value of off-take investments in key industrial sectors. These are agreements between a producer and a buyer to purchase or sell some or all of the producer’s upcoming goods. The advantage is that such commitments often come before a facility is built so as to ensure an immediate revenue stream for its output upon completion. A selection of appealing numbers includes: drilling equipment AED38,064 million (USD10.36 billion); mechanical equipment AED19,949 million (USD 5.43 billion); electrical equipment AED15,073 million (USD4.10 billion); heavy industries (metals and materials) AED11,490 million (USD3.13 billion);technology AED4,489 million (USD1.22 billion); defense AED4,067 million (USD1.11 billion); and pharmaceuticals AED3,868 million (USD1.05 billion).

The government program has a comprehensive outlook on tomorrow’s industry across the value chain from production to supply. “The pandemic period was an eye-opener,” says Ansari Wahid, the Group CEO of local facilities management giant Adeeb Group. A period, “where aspects such as food security and local manufacturing were scrutinized deeply.” As a result, he adds, “both government and private enterprise developed a greater appreciation of the need to partner strategically and improve in-country capacity.”

As a result, he went on to add, “this year we have given very high priority to further enhancing our supply chain to ensure we tick all the parameters in providing our clients with quality products at a competitive price.” And with tangible success, “these initiatives have allowed us to boost and achieve a high rating with the ICV (in-country value) certification program set forth by the government of UAE.”

Clearly, many companies on the ground understand their role in the bigger picture. One example is Widad Haddad, the Vice President & General Manager, UAE, Oman, Yemen & Lebanon of Emerson Process Management, who noted: “We can play a fundamental role in digitizing and improving the process environment of almost any industry in the UAE. Whether it’s mining and metals such as Emirates Global Aluminum or oil and gas such as ADNOC and ENOC.” Active in the UAE since the 2000s, and a beacon of the competitiveness the Emirate is shooting for, the firm established a “massive footprint back in Jebel Ali Free Zone in 2008 [beginning] localization efforts in the country by investing multi-million-dollars in local manufacturing long before the UAE started driving in-country programs to encourage companies to invest.” Thus, while manufacturing locally, “UAE exports delivered products to the surrounding regions.”

Abu Dhabi’s industrial strategy could eventually rank the Emirate among the world’s industrial powerhouses. What’s more, its measurability means that it’s “all hands on deck” regarding the switch to Industry 4.0.