UAE sectors (Click to navigate)
The creative industries sector comprises several sub-sectors offering a variety of opportunities in the UAE for British businesses as follows:
Retail and fashion
The UAE continues to be the first stop for any brand looking for a foothold in the Middle East market. Studies reveal that the UAE is now on a par with London as the top retail destination in the world, with 56% of the top brands maintaining a presence. UK retail and designer brands are well established here.
Interiors and design
The UAE remains one of the largest markets for interiors in the region. The sector is set to grow in the coming years, not only due to new projects in the region but also because of refurbishment and renovation. Increased spending will likely include key products such as walling, doors, cladding, canopy and skylights, signage, lighting and furniture.
Advertising and digital media
The UAE is 2nd only to Egypt with a share of the MENA regional advertising spend. Dubai Media City is home to broadcast and publishing players, while the Dubai International Media Production Zone (IMPZ) is a free-zone media production cluster that targets graphic arts, packaging and publishing companies. See: www.impz-dubai.com
Digital marketing in the MENA region is showing encouraging signs. According to the Telecommunications Regulatory Authority (TRA), the federal communication regulator in the UAE, the number of mobiles in circulation in the UAE in 2013 was around 16 million, with over a million broadband internet subscribers.
By early 2015, UAE mobile phone penetration was 72.7% of the population (up from 71.4% in 2014), with 4.2 million registered users (4.0 million in 2014). The UAE is first in the MENA region for smartphone user penetration too, at 64.6%, ahead of 2nd place Saudi Arabia (54.2%).
Recent studies also show that companies in the Middle East are increasing their marketing budget on digital platforms. However, traditional mediums of advertising remain popular.
Television and film
A few broadcasters and platforms dominate the broadcast scene with numerous free-to-air and Pay TV channels. There is an increasing desire to localise content and for content that is accessible through multiple platforms. Abu Dhabi and Dubai each host an annual film festival, both of which showcase a range of Arab and international productions. Free zones such as Twofour54 in Abu Dhabi and Dubai Studio City are home to many production and film companies.
Publishing and printing
The UAE hosts two annual book fairs. The Sharjah Book Fair has been running for 33 years and the Abu Dhabi Book Fair, although a more recent show, is quickly gaining popularity. Distribution channels are varied and range from independent retail stores to those that operate on a franchise model, as well as specialist distributors.
Video game development and game localisation aimed at the Middle Eastern market remains a tremendous opportunity. English is widely spoken but language localisation, relevant content and cultural sensitivity are important considerations in this region.
Dubai is home to numerous art galleries, some of which cater to seasoned art collectors and others target one-off customers. Art Dubai held annually is a major international art fair in the region.
Education is high on the agenda for the UAE Government. The UAE hosts the largest number of cultural and higher education institutions in the entire Arab world and is the most popular destination for students. Around a quarter of the UAE federal budget is earmarked for education each year by the UAE Cabinet.
Although the UAE has achieved much in the ﬁeld of education, there is a real awareness that constant updating of policy and continual investment in infrastructure is required to ensure that graduates are properly equipped to enter the workforce and assist in the country's development. The Ministry of Education has produced a policy document outlining a strategy for further educational development in the UAE up to the year 2020, based on several ﬁve- year plans, to promote and recognise further education in the UAE. For further information, please visit: www.education.gov.ae
The Dubai Healthcare City Authority (DHCA) has been created to develop innovative, top-tier medical colleges and universities, nursing schools and a wide range of research, diagnostic, rehabilitation, nutrition and physiotherapy centres.
The increased demand within the education and skills sector offers vast opportunities for UK companies as follows:
Reputable British curriculum schools to set up branch campuses as the number of children seeking places in these schools outstrips supply, especially at the secondary level
Improving staff competencies, integration of technology in education, leadership skills for pupils, training programmes for nationals, building schools for the future, developing and implementing an IT support plan and latest innovations in education such as virtual environments
Design technology and ICT resources in schools
Music and PE/sports education is becoming an integral part of most schools curricula
HSE professionals and related courses with specialisations in different areas
Teacher training opportunities exist as teachers are required to undergo structured training programmes in order to be eligible for promotion
Brand name universities, school management firms and assessment bodies
Vocational and occupational education in key industries such as aviation, hospitality, fashion, nursing, teaching, creative arts, logistics and public service
Good quality tailored executive education programmes and training courses that are linked to specific industries and can demonstrate value in the present economic scenario
The UAE offers free education to all male and female citizens from kindergarten to university. There is also an extensive private education sector, while several thousand students of both sexes pursue courses of higher education abroad at government expense. Education at primary and secondary level is universal and compulsory up to ninth grade. This takes place in a four-tier process over 14 years, from the ages of 4 to 18. Many private international schools in the UAE are accredited by international bodies and in 2014 there were 31 International Baccalaureate schools operating in the country, and all have obtained approval from the International Baccalaureate Organisation in Geneva to run their programmes.
The UAE has established an excellent and diversiﬁed system of higher education. Citizens can attend government institutions free of charge and a wide range of private institutions, many with international accreditation, supplement the public sector. The country now has one of the highest application participation rates in the world.
Furthermore, the Higher Colleges of Technology (HCT) system offers technically-orientated education. Aside from the HCT, several other institutions provide vocational and technical education in the UAE. Among them are the Etihad training centre, the Emirates Aviation College for Aerospace and Academic Studies, the Emirates Institute for Banking and Finance, and Etisalat's colleges and university. In addition, a number of foreign universities, from the Paris Sorbonne to Michigan State University, have opened campuses in the UAE, offering a wider variety of choice to local students.
Foreign universities must obtain accreditation to operate in the UAE from the Ministry of Higher Education and Scientiﬁc Research unless they are located in free zones. Until 2009, universities could open in Dubai's free zones without such accreditation, but the KHDA, which regulates education in Dubai, now requires that universities in free zones be accredited by its own University Quality Assurance International Board or the Ministry of Higher Education and Scientiﬁc Research.
There have been a number of highly-innovative milestones during the last few years, marking signiﬁcant milestones for tertiary education in the UAE, including the opening of the Abu Dhabi campus of New York University (NYU). NYU was the ﬁrst major American research university to open a comprehensive liberal arts college in the UAE, now with a permanent home on Saadiyat Island, completed in 2014.
INSEAD, one of the world's largest graduate business schools, has been operating a Middle East campus in Abu Dhabi since 2007, and now runs a number of executive-education programmes.
A branch of the New York Film Academy launched its ﬁrst Bachelor's Degree programme in Abu Dhabi in 2010, with offerings in ﬁlm-making and acting, and also offered its ﬁrst MA programmes, in ﬁlm-making and documentary film-making.
The Mohammed Bin Rashid School of Government (MBRSG) (formerly known as the Dubai School of Government, or DSG), is a research and teaching Institution focusing on good governance and public policy in the Middle East. MBRSG offers graduate programmes including the Master of Public Administration (MPA) programme designed in cooperation with Harvard Kennedy School, and the Executive Diploma in Public Administration (EDPA) awarded by the Lee Kuan Yew School of Public Policy at the National University of Singapore.
The Petroleum Institute (PI) was founded in 2001 with the aim of establishing itself as a world-class institution in engineering education and research in areas of significance to the oil and gas and the broader energy industries.
The Masdar Institute of Science and Technology, which is connected to the Abu Dhabi Government's ambitious carbon-neutral Masdar City project and opened in 2009, is a private not-for-profit research centre devoted to the study of renewable energy. Developed with the support of the Massachusetts Institute of Technology, it offers Masters degrees and PhD programmes in science and engineering, and provides fellowships to especially talented students and researchers. The Emirates Foundation has also been supporting research into areas such as science and engineering, information technology and environmental sciences.
In addition to its higher level institutions, the UAE has several vocational and technical educational centres for those seeking practical training in their chosen careers. These include the Emirates Institute for Banking and Finance, the Abu Dhabi National Oil Company Career Development Centre, the Abu Dhabi Petroleum Institute, the Dubai School of Government, and The Emirates Aviation College for Aerospace and Academic Studies.
Etisalat University College (EUC) provides higher education to UAE nationals, offering Bachelor of Engineering degrees in communication, electronic and computer engineering and a Master's in research.
Dubai has the largest and most sophisticated financial services industry in the region. It has strong and growing banking, insurance, financial and legal sectors. The Dubai International Financial Centre (DIFC) aims to be universally recognised as a hub for institutional finance and a gateway for capital and investment to the region.
Abu Dhabi is home to several sovereign wealth funds, including the government-owned Abu Dhabi Investment Authority (ADIA), which has estimated reserves of between US$500 and 900 billion.
The emergence of Al Maryah Island as a central business district is a key development in the sector, and a major part of the capital’s Vision 2030.
Banking – The UAE has a large banking sector with 51 banks (Oct 2014). 28 of these are foreign banks, representing just under 60% of the total market (HSBC and Standard Chartered account for approximately half of total foreign bank assets). UK banks are well represented, with a largely retail and commercial business base.
Source: Central Bank of the UAE, 13 August 2015
Professional Services –
Legal services: the major sources of secular law in the UAE are French, Egyptian, and Italian. The Constitution gives primacy to Shari’ah law, commonly used to settle cases of family law, and some criminal appeals. Commercial law is dealt with by the secular courts. Dubai and Ras Al Khaimah are not fully integrated into the federal judicial system.
Accounting services: international accounting standards are applied and regulated at federal level.
Insurance – Insurance is not yet a main driver of financial services output in the UAE. It is underdeveloped by international standards, fragmented and highly competitive. The market entry for new insurers has been somewhat restricted in the past, as the Emirates Insurance Authority has not issued new insurance licences for foreign companies. See: www.ia.gov.ae/en/Pages/default.aspx for the latest details.
Capital Markets – The Dubai Financial Market (DFM) and NASDAQ Dubai (formerly known as DIFX) are the two equity and bond exchanges in the Emirate which belong to Borse Dubai. Abu Dhabi is home to the Abu Dhabi Exchange (ADX). Regulated by the UAE’s Securities and Commodities Authority (SCA), the DFM and ADX are in merger talks.
Regulation – Banking, financial and insurance services are all regulated at federal level whereas DIFC and the securities are regulated and monitored by the Dubai Financial Services Authority (DFSA) and the Emirates Security and Commodities Authority (ESCA).
Islamic Finance – The UAE is shaping up to be one of the pre-eminent global centres for Islamic finance. The launch of Noor and Hilal Islamic banks demonstrates the country’s continuing desire to become the world’s capital of Islamic banking.
- Education, Training and Qualifications (ETQ) – There are many universities and professional bodies operating in this sector in the UAE. There is a big market for ETQ, especially for professional qualifications. Bodies such as the ICAEW, ACCA and CISI operate in the area along with well-known UK universities.
Throughout its history, the UAE has been recognised for its rich natural resources. Since the times of the Majan Civilization which flourished in the area between Abu Dhabi and Qatar, the people of the UAE mined copper and exported it to the surrounding nations of Mesopotamia and north of Persia.
Since then, various minerals have been explored and utilised such as phosphate, sulphur, and salt. In the 1930s, the initial signs of the existence of crude oil under the soil and water of the emirates began to attract international attention. Rights for exploration for oil were granted by the rulers of the emirates to reputable international companies.
In 1958, oil was discovered in commercial quantities in Umm Al Shaif field off the coast of Abu Dhabi. Four years later, the first oil shipment left Das Island, marking a historical milestone and a new era for the entire country. The discoveries and export of oil from Dubai, Sharjah, and Ras Al-Khaimah also followed in the 1960s and 1970s.
Today, the UAE’s stunning energy and mining sector comprises a strong oil and natural gas industry, a growing petrochemicals sector, a demand-driven utilities production sector, and attractive mining opportunities.
Since the formation of the country in 1971, building a reliable electricity and water infrastructure that satisfies the growing demands dictated by rapid development has always been a priority for the federal government.
Whilst the federal government sets the strategy for this sector and supplies the northern emirates with the needed utilities, Abu Dhabi, Dubai and Sharjah have their own state-controlled electricity and water supplies. Abu Dhabi and Dubai produce together around 94% of the electricity in the UAE, the other emirates producing the remaining 6%. Innovative projects of expansion and improvement of the utilities supply are well underway to meet the future demand.
Source: UAE Ministry of Energy and UAE National Bureau of Statistics 2013
The UAE also aims to position itself as a global leader in the innovative adaptation of renewable and environmentally friendly resources and technologies. It is already leading the region in adapting newer and cleaner energy sources to meet growing demand. It was the first country in the GCC and the Arab region to establish a nuclear programmethat aims to generate a significant part of the country’s energy needs. The country is also engaging in other major innovative renewable energy projects to utilise its rich natural resources and solar exposure. The Masdar initiative provides a clear example of how the UAE is determined to pursue its renewable energy goals.
Energy: Oil and natural gas exploration and production
Oil & gas industry
The UAE has the world’s seventh largest proven reserves of conventional crude oil (97.8 billion barrels) and seventeenth largest proven reserves of natural gas (2,250 billion m³). Oil and gas production has been the mainstay of the economy in the UAE and will remain a major revenue earner long into the future, due to the vast hydrocarbon reserves at the country's disposal. At the current rate of utilisation, and excluding any new discoveries, the oil reserves will last for over 150 years.
Source: OPEC 2011; World Factbook
The UAE government is pressing ahead with plans to expand oil and gas production capacity, but has extended the time frame for oil development while giving higher priority to gas projects. Further, government and industry have joined forces to develop new oil markets. Several emirates have launched programmes to bolster energy efficiency and encourage energy conservation, reﬂecting the growing public awareness of the need to reduce carbon emissions. Some of these directly involve the oil & gas sector.
Abu Dhabi is the biggest oil producer in the UAE, controlling more than 94% of the UAE's total oil output capacity and 90% of its gas reserves. Almost 92% of the country's gas reserves are located in Abu Dhabi and the Khuff reservoir beneath the oil ﬁelds of Umm Shaif and Abu al-Bukhoosh ranks among the largest potential gas reservoirs in the world.
The Abu Dhabi National Oil Company (ADNOC) supervises policy in Abu Dhabi, under the guidance of the Supreme Petroleum Council. Production is handled through joint ventures with consortia of international companies. ADNOC is proceeding with a range of major oil and gas developments to expand gas production and others aimed at oil development. The ﬁrst of these is the integration of gas production from two of Abu Dhabi’s main offshore and onshore oil ﬁelds, anticipating the unlocking of an additional 1 billion scfd (standard ft³ per day) of gas supply.
ADNOC have launched a joint venture with Occidental Petroleum to develop the Shah gas ﬁeld, located around 180 km southwest of Abu Dhabi, to produce sour gas, and expected to come online during 2015. The project will not only provide an expected 5 million cubic feet of gas per day, but will also advance the emirate’s capability to exploit challenging gas deposits.
As a spin-off from the Shah project, Abu Dhabi will become the leading regional exporter of sulphur, which is used to make fertilisers, rubber and sulphuric acid. The project involves construction of a 275 km liquid sulphur pipeline from the Shah gas field to Ruwais, Abu Dhabi. This second phase was tendered on 20 November 2014 and the project is expected to be completed by 2017. Further projects are planned to exploit sour gas ﬁelds, both onshore and offshore, including searching for gas deposits deep below the sea ﬂoor.
In oil development, the Aha Dhabi Company for Onshore Oil Operations (ADCO) awarded US$35 billion (AED 12.9 billion) of contracts for an integrated project to increase crude output from Abu Dhabi‘s Sahil, Asab and Shah oil ﬁelds by a combined 60,000 barrels per day (bpd) to 455,000 bpd by 2016. It also awarded an US$805 million (AED 3 billion) contract to raise production from the Bab oil ﬁeld, which was the ﬁrst onshore oil deposit developed in the emirate. In total, ADCO plans to increase oil production capacity to 1.8 million bpd by 2017.
Offshore, the Abu Dhabi Marine Operations Company (ADMA-OPCO) is moving ahead with a ten-year plan to increase output from two major Gulf oil ﬁelds, Umm Shaif and Lower Zakum, to 1 million bpd by 2019 from about 600,000 bpd in 2009. The unit also plans to develop three smaller ﬁelds that are expected to yield another 76,000 bpd of crude oil.
The Zakum Development Company (ZADCO), another ADNOC offshore oil subsidiary, is proceeding with a project to increase output from the Upper Zakum ﬁeld by about 50% to 750,000 bpd following the completion of a reservoir study. It awarded a contract for dredging work required to build four artiﬁcial islands to support drilling rigs for the project. ADNOC's partner in the development is the US company ExxonMobil.
Recognising the emirate’s challenges as it seeks to meet rising energy demand with diminished resources, the government created two bodies to oversee long-term energy policy: an Energy Higher Council to address demand issues, and a Department of Petroleum Affairs to look at supply.
Dubai’s main ﬁelds are offshore: Fateh, Southwest Fateh and two smaller fields, Falah and Rashid. The only onshore deposit is the Margham ﬁeld. Dubai Petroleum Company (DPC) is the main operator. The state-owned Dubai Natural Gas Company (DUGAS) is responsible for processing natural gas produced in Dubai's offshore oil ﬁelds as well as the gas piped from Sharjah.
Dubai remains deeply involved in the petroleum sector, primarily as a hub for oil trading and energy services. The port of Jebel Ali handles a large part of the UAE’s trade in refined petroleum products and can accommodate tankers of up to 80,000 tonnes capacity. A number of international oil companies maintain regional offices in Dubai, as do major companies providing services to the energy sector.
The other five emirates also have minor amounts of oil and gas production. Crescent Petroleum, a private-sector Sharjah company, produces oil from the Mubarak ﬁeld in the Gulf, near Abu Musa Island, but the ﬁeld has been in decline for some time. Crescent and Dana Gas, a Sharjah afﬁliate, are also developing an offshore gas ﬁeld located in territorial waters shared by Sharjah and Ajman. Dana and Emarat, a Dubai marketer of petroleum products, have jointly developed a common-user gas pipeline to serve Sharjah customers.
Gas production from the Atlantis ﬁeld offshore Umm Al-Quwain began in 2008. A unit of China's Sinochem is developing the deposit and sending as much as 92 million scfd of liquids-rich gas through an undersea pipeline to a Ras Al-Khaimah processing plant operated by the government-owned Ras Al-Khaimah Gas Commission, or RAK Gas.
RAK Petroleum, a private-sector Ras Al-Khaimah company, holds interests in oil and gas concessions in Sharjah, the Sultanate of Oman and its home emirate. In 2009 the company and its partners produced about 10 million scfd (standard ft³ per day) of gas and associated liquids from the Bukha ﬁeld, located in Omani territorial waters off the Musandam peninsula. The development of the nearby West Bukha ﬁeld, which produces about 8000 bpd of oil and 20 million scfd of associated gas, was also completed that year by a group including RAK Petroleum.
Fujairah does not produce oil or gas, although an onshore exploration programme is currently under way. However, the world's second largest bunkering port is located on its coast. The port of Fujairah, on the Arabian Sea, handles about one million tonnes per month of marine transportation fuel and other oil products. The arrival of gas imports through the Dolphin Energy pipeline from Qatar has facilitated power and water development in the emirate and stimulated local industry.
The International Petroleum Investment Company (IPIC), owned by the Abu Dhabi Government, has built a strategic crude oil pipeline delivering up to 150,000 bpd of oil from Abu Dhabi's Habshan onshore ﬁelds to an export terminal in Fujairah. The project supplies an export route for Abu Dhabi crude that bypasses the Gulf's maritime choice point at the Strait of Harmuz. IPIC is also developing an oil reﬁnery and storage facilities at the Fujairah port.
The UAE provides opportunities for international oil and gas companies to operate on both downstream and upstream operations. Some of the major international companies working in the country include British Petroleum, Shell, Total, ExxonMobil, REX oil, Schlumberger and Partex.
The country’s crude oil is mainly shipped by a fleet of oil tankers and exported primarily to Japan, Thailand, and South Korea. Abu Dhabi National Tanker Co. (ADNATCO) is the sole company responsible for transporting the UAE’s oil to the world. National Gas Shipping Company Ltd. (NGSC) was also established to transport liquefied natural gas (LNG) on behalf of Abu Dhabi Gas Liquefaction Company (ADGAS).
Even though economic, environmental, and safety considerations have necessitated the increasing need for diversifying energy sources, oil remains the most cost-effective demanded source for energy for most countries. The UAE is a member of the Organisation of Petroleum Exporting Countries (OPEC), and as a result is bound by the regulations, policies, and limits of the organisation.
Natural gas, on the other hand, is the main source for electricity in the UAE, and natural gas production is expected to increase to 6.5 billion cubic feet daily. Domestic consumption outstripped production for the first time in 2007. Demand has been rising gradually ever since due to increased population and economic expansion, driving the government to produce more volumes or find alternative options. The country’s current capacity, which is supported by natural gas and a few coal-fired power plants, can only meet around half of the estimated 40,000MW domestic demand for power by 2020.
The petrochemicals products area has been witnessing an unprecedented growth in the Middle-East and North Africa (MENA) region.
The giant oil and natural gas producer aims to boost its downstream activities by enlarging its current capacities in the petrochemicals industries and entering new specialties. Therefore, huge investments are being pumped into strategic initiatives to increase the sector’s portion of the total GDP and to decrease dependency on the export of raw materials. The country’s current two classes of petrochemicals (olefins and aromatics) products include ammonia, polyethylene, polypropylene, and urea.
Data from the UAE Ministry of Economy Foreign Trade indicates the petrochemical sector’s success, with an average growth rate of 6% in annual international demand. The UAE Government has made massive plans to boost the performance of this sector, and by the end of this year (2015), the total UAE investment is expected to have reached US$10.3 billion.
In 1998, in a joint venture with Borealis, ADNOC established one of Europe’s largest polyolefin (plastics) producers, Borouge, to be a leading provider of polyethylene and polypropylene, and their total manufacturing capacity by 2014 was 4.5 million tons per year.
ADNOC also established Ruwais Fertiliser Industries (FERTIL) with a capacity of 1,000 tons of ammonia and 1,500 tons of urea per day. It signed a US$1.2 billion contract with Samsung Engineering to construct a new fertiliser complex, and after commissioning of the FERTIL-2 project in July 2013, the combined complex production of Ammonia reached 3,310 MTPD and Granulated Urea 5,800 MTPD.
Both companies are located in Al Ruwais Industrial Zone and are expanding their production capacity by installing more plants, increasing utilisation, and depending on new advanced technologies. Borouge and FERTIL’s expansion plans have been attracting local and international investors who are actively participating in the construction of chemical plants, storage, processing and treating units, and other related projects such as cooling systems.
Abu Dhabi’s petrochemicals’ strategy has been shifting from basic products to end-user products. It has been establishing itself as one of the major petrochemicals producers in the world. Strategic International and local investors have been invited to join the development in petrochemicals. According to one of BMI’s recent petrochemicals reports, the profusion of feedstock in the UAE gives it a great potential for growth in this subsector. “Development of a domestic petrochemicals industry is now gathering pace, which could significantly enhance the growth of the small and medium enterprises (SMEs) sector.”
Many international petrochemicals companies have been headquartered in the UAE. The strategic location in the heart of the Middle East, and the UAE’s innovative business-friendly policies and regulations have made the country the ideal place to start a petrochemical business.
Energy: Utilities infrastructure development
Due to its ever-increasing population and in order to meet its economic ambitions, the UAE is demanding more electricity and water.
According to all estimates, consumption will continue to rise for the near future. In the GCC region, the UAE records the highest projected increase in demand, which is expected to continue growing at a minimum rate of 10% per annum.
Abu Dhabi Water and Electricity Authority (ADWEA), Dubai Electricity and Water Authority (DEWA), Sharjah Electricity and Water Authority (SEWA), and Federal Electricity and Water Authority (FEWA) are the major players in the electricity and water production sector. ADEWA accountsfor half of the total capacity. While ADEWA, DEWA, and SEWA function in their designated emirate, FEWA is headquartered in Ras Al-Khamiah and supplies the northern emirates (Ajman, Umm Al-Quwain, Ras Al-Khaimah and Fujairah) with power and water.
Abu Dhabi became a regional benchmark in 1997 when it launched its privatisation programme that allowed private companies to take over the construction, operation, and maintenance of power and water plants. All independent water & power plants (IWPP) are now engaged in this programme on the basis of the BOO “build, operate and own” formula, designed according to partnership agreements made between ADWEA and a number of international companies.
The Gulf States Power Grid GCC Interconnection Authority (GCCIA) was founded to build, run, and maintain the connecting grids. Investment opportunities in this mega project are unlimited and can be in the form of tendering contracts, public-, private-partnerships, technical and consultancies. The GCC grid is also planned to be connected to the European, Pan-Arabian, and Mediterranean grids.
The UAE is not only focusing on increasing the import of natural gas and preserving the consumption of electricity energy by connecting to regional grids, it is also constructing its strategy of diversifying its energy resources. In 2009, Korea Electric Power (KEPCO) was given the green light to begin the construction of four nuclear reactors in Abu Dhabi. The plant will have a production capacity of 5,600 megawatts; the first reactor is expected to start generating in 2017. As a result, the country will be able to export its natural gas or use it as a feedstock to maximise its water gas-fired desalination plants’ production. The country will also be able to supply the region with enough electricity power through it’s already- developed network.
Building new power plants is a critical need for the future growth of the UAE. Federal government and local emirates governments are determined to put in place all the necessary resources to increase their power capacity. Shuweihat project in Abu Dhabi, with a capacity of 1,500 megawatts for its second phase, and Hassyan project, with a combined capacity of 9,000 megawatts are some of the key projects in this sector. Expanding power capacity in the northern emirates is also planned. The Federal Electricity and Water Authority has already built new power plants in that region such as the Fujairah F2 power plant, with a capacity of 2,000 megawatts.
Major opportunities are being given to international energy companies so the country participates in all energy frontiers.
Source: UAE National Bureau of Statistics, 2015
Energy: Renewable energy
As the UAE Government continues the drive to diversify its economy away from dependence on exports of oil and gas, increasing attention has been paid to developing the renewable energy sector. The government is moving ahead with innovative low carbon and clean energy developments, with close cooperation from oil and gas producers, in addition to fostering international energy partnerships and participating in more overseas energy projects.
The UAE is pursuing ground-breaking renewable energy and energy efficiency programmes. In 2005 the UAE ratiﬁed the Kyoto Protocol to the UN Convention on Climate Change, becoming one of the ﬁrst major oil-producing countries to do so. Abu Dhabi has also established one of the world's most comprehensive clean energy initiatives.
Current energy capacity can only meet half of the demand by 2030. For this reason, tapping into new sources of energy has become an economic necessity in order to cope with the increasing population and economic expansion. The UAE today is focusing on renewable energy for several reasons: the long duration of sun exposure and the frequent winds and storms, the high percentage of greenhouse gases produced from oil and gas extractions, and the high quantity of oil and natural gas required to produce electricity. The UAE’s innovative energy strategy aims to diversify the sources of energy generation and secure the UAE’s prestigious position in the future.
The UAE government believes that the most environmentally friendly and most sustainable solution to its energy requirements will be electricity generated by nuclear plants. Therefore, nuclear reactors are destined to become the UAE's second most important source of energy in the UAE after natural gas, producing about 25% of the UAE's electricity by 2020 and ensuring the continued economic development of the country. In 2009, the UAE joined the International Atomic Energy Agency (IAEA).
Another significant milestone of the UAE in renewable energy was marked in 2009 when the Preparatory Commission of the International Renewable Agency (IRENA) designated Abu Dhabi as the agency’s headquarters. Since then, strategic projects to achieve its goal have been initiated. Emirates Nuclear Energy Corporation (ENEC) was launched to deliver safe, clean, efficient nuclear energy to the UAE, with a target of delivering electricity to the UAE grid by 2017. By 2020, it is projected that nuclear energy will produce nearly a quarter of the nation’s electricity needs.
ENEC partnered with internationalreputable energy companies to construct its nuclear plants with the highest international standards. In 2009, the UAE Government awarded a US$20 billion contract to Korea Electric Power (KEPCO) to build four nuclear reactors. A partnership with Areva, Total and Suez to build a 1600 MW EPR unit in the UAE was also signed. The output is to be partly used for the desalination of water.
Masdar was established in April 2006, led by the Abu Dhabi Future Energy Company (ADFEC). It is a multi-faceted company advancing the development, commercialisation and deployment of renewable energy solutions and clean technologies. Masdar aims to develop renewable energy and low-carbon technologies at a global level. It seeks also to be a leading renewable energy and clean technology player by providing a test-bed for the world to develop commercially viable, sustainable energy solutions.
To achieve this it is working with global partners and institutions to integrate new research with proven technologies to produce efficient systems and processes that can be replicated globally. Masdar operates through five integrated units: Masdar Power, Masdar Capital, Masdar Carbon, Masdar City, and Masdar Institute.
Masdar Power is a developer and operator of renewable power generation projects. In building a portfolio of strategic utility scale projects, Masdar Power makes direct investments in individual projects in all areas of renewable energy, with a focus on Concentrating Solar Power (CSP), photovoltaic solar energy and on and off-shore wind energy.
In a joint venture with France’s Total and Spain’s Abengoa, Solar Masdar Power is running the Shams-1 solar power plant, launched in 2013 in the western region of Abu Dhabi – the largest concentrated solar power plant (CSP) in operation in the world. The US$600 million project took three years to build. It is also developing a 30MW wind farm and a PV array on Sir Bani Yas Island. Through these and future innovative projects, the unit will contribute to Abu Dhabi’s goal of generating 7% of its energy needs from renewable sources.
While the UAE developed ‘Masdar City’ at the domestic level, recognition of the UAE's renewable energy efforts received a signiﬁcant boost in June 2009 when Abu Dhabi was selected to host the UN agency headquarters for the new International Renewable Energy Agency (IRENA) at an international level. The UAE thus became the first developing country to host a major international organisation.
The UAE offered IRENA extensive ﬁnancial support, including free rent at Masdar City, and soft-loans totalling US$50 million a year to permit support of renewable energy projects in the least developed countries to commence immediately. In addition, the UAE pledged US$22 million annually in direct funding for IRENA for its ﬁrst seven years, and US$15 million annually after this period.
Energy: Mining and quarrying
The UAE’s mining and quarrying sector began when the country decided to diversify its economy. To attract global investors, the government declared its avoidance of using traditional methods of research and exploration that have been used for many years, and decided instead to use the latest scientific technology methods. Detailed geographic academic studies, aerial photographs, and geological maps have since proved the richness and diversity of the UAE’s mineral resources.
Today, the UAE produces a wide range of minerals that include copper, gypsum, natural and cultured pearls, silver, gold, and precious stones. The land of the UAE is very rich in terms of the diversity of minerals. However, the commercially-viable minerals range is comprised of gypsum, salt, copper, and marble. The capacity of gypsum found in the UAE is enough for self-sufficiency for the GCC countries.
The quarrying subsector’s GDP contribution has been steadily increasing.
For detailed statistics and more information, please see the source: UAE National Bureau of Statistics, Department of Economic Statistics – National Accounts Division, June 2015 - www.uaestatistics.gov.ae/EnglishHome/tabid/96/Default.aspx
Fujairah has 74% of the quarries, followed by Sharjah, and Ras Al-Khaimah; other emirates do not have quarries. Quarrying is expected to experience a growing trend within the coming years driven by the UAE’s policies, one of the main factors behind the sector’s growth from attracting FDI.
Developments in mining are gathering pace in the UAE. In 2009, the UAE formed a joint venture with GSL limited, an Indian steel manufacturer, to explore for chrome ore. ASCOM, an Egyptian mining company specialising in the management of quarry operations for the cement industry as well as the exploration of precious minerals, has been operating in the UAE since 2004. Ras Al-Khaimah Minerals and Metal Investment (RMMI), a global mining company in precious metals such as copper, cobalt, silver, and gold has multi-activities in the UAE.
Dubai’s gold and jewellery exports are valued at over Dh 100 billion, accounting for over 60% of total non-oil exports from the UAE. Re-exports of gold and other jewellery made of precious metals account for around Dh 70 billion, over 20% of total non-oil re-exports from Dubai.
Local and internationally-recognised operators in the quarrying subsector include Turkish Gulf Quarry, Global Crusher, Gulf Rocks Co. Shawkah Crusher, Lootah Crushers, and Fujairah Building Industries.
Saltpeter and barite opportunities in Sir Bani Yas Island
Huge amounts of salt with a purity reaching 91.6% of sodium chloride lie in the form of amorphous pink rocks tinged with a small quantity of sulphur and iron impurities. The commercially-viable quantities of salt and cost-effective extraction methods provide attractive investment opportunities for both local and international investors.
The mineral can be used to manufacture different types of chemical compounds such as Sodium hydroxide (caustic soda) and chlorine. It can be used also in the manufacture of soap, laboratory and chemical plant solutions, and petrochemicals industries. Salt can also be used to conserve fish and other foods.
Throughout history, Sir Bani Yas has been a source of salt. An old mine was found in the northern part of the island where salt deposits were found on the land surface. These are just a small fraction of the large deposits that lay underneath. Other sources of salt in the emirate of Abu Dhabi are marshes, buried blocks, and sea salts that contain various other salts such as calcium sulphate, magnesium sulphate, sodium sulphate, potassium chloride and calcium carbonate.
Around 4% of the island is also covered with the mineral barite. Its deposits are located in the Fars Al Adna and Strait of Hormuz areas. The sparse barites are found in the form of crystals that result from the rocks’ interaction with natural forces. The mineral is mainly used in the drilling processes of oil wells as well as in the manufacture of dyes. Barite is also found on the mountain of Dhanna, Dilma Island, Arzanha, Zakorah and the eastern side of Haffeet Mountain, but only in small quantities.
The environmental sector in the UAE has been characterised by rapid growth in the construction sector driven first by Dubai’s growing real estate market and lately by increased construction and building activity taking place in Abu Dhabi. An estimated £91 billion is being spent on real estate development in Abu Dhabi as part of its Vision 2030 master plan.
Municipal solid waste – the UAE generates massive amounts of waste. Dubai’s construction waste continues to increase, with only a fraction being recycled. In 2009, Abu Dhabi’s Centre for Waste Management gave an AED 1.1 billion (£186 million) contract for a recycling facility to help address the problem.
Green buildings – both Abu Dhabi and Dubai have implemented new green building regulations in the construction of all new buildings, in order to reduce the consumption of water and energy in new buildings across the two emirates.
Wastewater treatment – an estimated AED 22 billion (£3.8 billion) is being spent on improving water resources, where the general need for water and in particular desalinated water had tripled to 713 million gallons per day by the beginning of this year (2015).
Medical waste – approximately 35 tons of infectious and non-infectious medical waste is generated in the UAE per day (2015) due to the population growth and the subsequent increase in the number of medical and healthcare facilities.
Air pollution – the main source of air pollution in the UAE is the oil and gas industry, followed by the power and transportation sectors. The UAE also has a relatively high, naturally occurring level of particulate matter in the air.
Opportunities exist for innovative companies involved in EIA, marine pollution, water and wastewater management, air pollution, solid waste management, green building technology, hazardous waste management, site remediation and rehabilitation and potentially solar energy and green building that incorporate smart building technologies.
New and innovative solutions are always in demand in the UAE and R&D renewable companies are of particular interest in Abu Dhabi in the current climate of an increased construction boom.
The UAE is one of the world's most lucrative markets for foreign defence, and is expected to spend over US$140 billion on defence between 2011 and 2016. The UAE’s long-term goal is to grow their defence industrial capability, resulting in export. However, it is not yet at the stage where the advanced technology capability is close to meeting the demand. Coupled with the potential for instability in the wider region and the buoyancy that oil prices offer, defence spending is relatively assured in the coming years.
Emirates Defence Industries Company (EDIC)
At the end of 2014 Mubadala Development Company and Tawazun Holding launched the Emirates Defence Industries Company (EDIC), the region’s premier integrated national defence services and manufacturing platform, providing world-class facilities, technology and support services.
EDIC is intended to create a fully-integrated defence platform benefiting from improved alignment, performance and increased capacity, which will be better positioned to serve the UAE Armed Forces and compete for business in the region, creating significant opportunities for the UAE’s long-term industry growth.
In the first phase, companies identified for integration have included Al Taif Technical Services, Bayanat for Mapping and Surveying Services, and Horizon International Flight Academy from Mubadala; NIMR Automotive, Tawazun Dynamics and Tawazun Precision Industries from Tawazun; and C4 Advanced Solutions, Global Aerospace Logistics, Naval Advanced Solutions, Secure Communications and Thales Advanced Solutions from Emirates Advanced Investment Group (EAIG). Further industrial services subsidiaries of Mubadala and Tawazun are being considered for integration during 2015.
UK companies are reporting increased success in this sector, with relationships built over time eventually yielding fruit. An element of technology sharing and human resource capacity-building is key to pushing contracts over the line. Familiarisation with Abu Dhabi’s Vision 2030 is a good place to start when designing the training and technology transfer aspects of any bid.
The UAE Defence Forces are federally funded and controlled. Dubai is a strong market for commercial security. The RAF Typhoon aircraft has made regular appearances in the Emirates – a sign of the vital importance of the defence relationship between the UK and the UAE.
There are sub-sectors of opportunity in both defence and security sales and services across the UAE including nuclear, airports, ports and critical national infrastructure.
With the establishment of the modern state, the UAE’s manufacturing sector has grown to become one of the strongest economic growth drivers among non-oil sectors.
Motivated by the nation’s desire to diversify the economy and the sharp increase of the population, manufacturing at various levels of industry has been at the core of heavy government investment spanning the seven emirates. Most emirates have gone a step further by launching innovative policy initiatives that support the growth of free zones and dedicated industrial cities to cope both with the demand and the vision of being the world’s most dynamic manufacturing hub (see the 'Free zones' section in this guide). This new wave of manufacturers is catering for the ‘new economy’, providing machinery and tools for industries related to construction, shipbuilding, infrastructure, power generation and even retail and consumer-related industries.
Abu Dhabi has been successful with its Industrial City of Abu Dhabi operations. The first Industrial City of Abu Dhabi (ICAD 1) includes economic zones for base metals, building and construction products, electronics, plastics manufacturing and automotive industries and has attracted over US$2.99 billion in investment. ICAD 2 has already attracted US$1.63 billion with new projects including air conditioning water chillers, architectural hardware and aluminium windows and doors manufacturing. The ICAD zones have been built in a public-private partnership model that includes the cost of roads and sewerage and irrigation systems. Separately, water and electricity is handled by the Abu Dhabi Water and Electricity Authority. Three more phases are either under construction or at the planning stage.
A US$2.17 billion industrial zone in the Abu Dhabi desert for construction and building materials firms is one of a host of projects to industrialise the emirate. The 34 km² Al Fayah Industrial Zone, being constructed by the Higher Corporation for Specialised Economic Zones (ZonesCorp), reflects the government’s latest efforts to create industrial clusters to boost economic growth and diversify away from oil revenues. The location, 75km east of the capital, is also a sign of efforts to relocate industries away from residential areas and relieve congestion.
In Dubai, pulling its weight alongside the burgeoning number of free zones that support manufacturing is the Dubai Industrial City (DIC). DIC had achieved US$1.63 billion in investment by June 2012 and invested US$177 million. By the end of this year (2015), it will have built more than 500 factories for light and medium industries. However, this doesn’t replace the six hyper-active industrial zones that operate inside the city under regular licensing procedures.
Most significant has been the rapid progress of the manufacturing sector in the emirate of Sharjah. Sharjah’s Economic Development Department in a 2012 study reported that Sharjah is the third-largest emirate by contribution to the UAE’s GDP after Abu Dhabi and Dubai. In addition, the whole country is moving forward to ease up on regulatory affairs, and primarily raising the foreign ownership stake in industrial projects registered outside the free zones.
Employment is one of the key advantages of the UAE over other locations. In fact, the UAE is still better positioned in terms of cost of employment compared to Western countries.
This actually enables domestic manufacturing to grow further, unlike the West where manufacturing is now stagnating in the face of competition from China and other low-cost labour countries. Labour demand by UAE manufacturing is much lower than in the services sector, and equally productivity is much higher – reasons for which labour import policy is likely to remain liberal for the manufacturing sector, allowing the sector to grow further. Rental and operational costs are also still competitive compared to Europe and the US, which adds another advantage when combined with location and entry markets.
Of particular interest here is the empowerment of new ideas and innovative industries. Both local and federal governments have launched a series of parallel initiatives that recognise industry distinction and business excellence. The Dubai Quality Group, for example, is a voluntary corporate body that helps companies embed quality in their overall production process and then consolidate it in terms of revenues and ROI.
Intellectual property is a serious issue here and the government has a zero-tolerance policy regarding any violation of patent piracy and fake branding. The same regulations are applied regardless of whether the concerned company is a free zone company or not.
Manufacturing: Petrochemical industries
Although Jebel Ali Industrial Zone produces an annual capacity of 40,000 metric tons of granular compound and water soluble fertiliser, along with 200,000 metric tons of suspension and liquid fertilisers and has a capacity of 200,000 metric tons, the market is still in demand for further production, especially for exporting. Many investors have opted to use Jebel Ali Industrial Zone as their base for chemical fertiliser manufacturing for this purpose. Jebel Ali is well-known for its logistics and shipping centre, which makes it much easier to distribute to a wide array of countries with ease.
The UAE is slowly graduating into the next phase of petrochemical product development – branching into specialised products instead of just commodities, and with this transformation there is a growing emphasis on generating local consumption of specialised plastics too. The driving logic behind the momentum is to pump out crude form beneath the surface, and add value by converting it into plastics and then export it a few days later.
Despite emerging as a major plastic raw material producer, for a host of reasons the contribution of the downstream plastic industry to the nation’s GDP is yet to prevail. However, the government wants this to move faster, which is why there are some major initiatives to attract investment in the downstream plastic industry. Abu Dhabi embarked upon the Polymer Park concept, while other emirates, especially Dubai, are also opening up for downstream petrochemicals for both production and marketing operations.
While the Abu Dhabi Polymers Park is focusing on providing value-added services specifically to the plastics converters, the overall offering country wide is opening the door for five major industries to leverage the country’s downstream resources, including automotive, consumer appliances, plastic packaging, construction and metals processing.
From an investor’s point of view, feedstock and logistics are the top two cost components of petrochemicals products; the UAE enjoys an advantage over Asia and Europe on both accounts. First, feedstock cost is lower in this part of the world, owing to its rich oil and gas reserves. As ethane is expensive and scarce, Asian and European firms use naphtha as a major feedstock. Secondly, the GCC’s closeness to demand clusters – specifically India and China – offers a significant logistic cost advantage (the second-largest cost component after feedstock).
The UAE is in fact the only GCC country that doesn’t face the bottleneck problem known to hinder petrochemical exports in the region. The country realised early-on that the supply chain in the petrochemicals industry is a very important factor for success, as maintaining a feedstock advantage requires a reliable and cheap way to transport the product to end users too. Abu Dhabi National Oil Company (ADNOC), the main and largest oil operations company in the country, has its own fleet of carriers and container ships that cater for the needs of its investment partners. Although they are the busiest in the region, the Ports of Abu Dhabi and Dubai are far from any bottlenecks. Additional setup is also being built in Fujairah, by the Indian Ocean, to provide an alternative route to the global markets.
Of particular interest here is the government-sponsored development of the world’s largest grassroots integrated Chemical Complex in the newly planned Chemicals Industrial City at Khalifa Industrial Zone in the Taweelah district of Abu Dhabi. The project is one of a number of complexes globally to combine aromatics, olefins and fertiliser production.
This industrial city will have 12 plants – the aromatics plant alone is estimated to have a budget of US$2.5 billion – and is a joint venture of Abu Dhabi National Chemicals Company (Chemaweyaat), which owns 51%, and International Petroleum Investment Company (IPIC), which holds the remainder. The completion date is scheduled for the second quarter of 2017.
The Chemicals Industrial City is investor-orientated with a clear goal to help international business opt-in to develop the emirate’s industrial and downstream industries, create a sustainable petrochemical and chemical hub and deliver joint benefits for both the industrial zone and port.
While the direct objective is to speed up Abu Dhabi’s plans to develop a plastics-based industry for domestic and export purposes, the indirect objective is to utilise crude-derived naphtha as feedstock rather than ethane. This will free up ethane supplies which are in high demand from the power sector and utilise Abu Dhabi’s more abundant supply of naphtha, thus guaranteeing future feedstock supply.
The underlying success factor behind all of these initiatives is Borouge, which since its inception back in 1998 as the Abu Dhabi sole operator in petrochemicals, has been actively expanding its portfolio in order to attract further investments to fully unleash the petrochemical potential as outlined in its current three project phases.
Even with some global slowdown, Borouge has solid reasons for investment optimism. The combined capacity of Borouge I and Borouge II, located in Ruwais, is two million metric tons a year. There are two crackers, one olefins conversion unit and five polyolefin plants, which include two polypropylene and three polyethylene units. Borouge II, which started operation in 2010, was built at a cost of about US$5 billion. With the introduction of 2.5 million metric tons in mid-2014 as Borouge III, the annual capacity of the plant has since increased to 4.5 million metric tons a year.
For investors, Borouge can play a dual role: firstly by providing raw petrochemical polymers that can be used in further processing and manufacturing, and secondly by providing the plastics solutions themselves that can be utilised in the development of other plastics-based solutions and products. According to the company, its unique Borstar process and catalyst technology enables a differentiated range of polyethylene and polypropylene innovative plastics solutions for infrastructure applications (including pipe systems, and power and communication cables), automotive components and advanced packaging.
In the north, Dubai is potentially another hub for petrochemical downstream production. Although it’s not as big as Abu Dhabi’s, the petrochemical industry in Dubai has been so lucrative that a manufacturing giant such as BASF of Germany has built its construction chemicals plant in Jebel Ali Industrial Area (JAIA) to cater for its market across the Middle East. Petrochemical companies have been opting for JAIA since the mid-1980s as a regional manufacturing base for polymer-based chemicals and hydrocarbon derivatives. Thanks to its position, just off Jebel Ali Port and next to Al Maktoum Cargo Airport, this industrial area is well-positioned for manufacturers looking to reduce import/export overheads. The port itself is equipped with the Middle East’s largest liquid chemicals storage facilities, which serve the needs of the many chemical plants operating in the Jebel Ali Free Zone and Industrial Area such as Jotun Polymer’s 10,000 bpd unsaturated polyester resin plant, or the Middle East packaging plant that produces 600 metric tons per month of polystyrene sheets and 300 metric tons per month of polypropylene sheets.
Meanwhile the Dubai Multi Commodities Centre (DMCC) provides a unique marketing platform for petrochemical and plastics producers to operate freely and run their business development activities. In mid-2011 DMCC (which is actually a free zone) successfully attracted three international petrochemical makers to start their Middle East operations from the centre – a feature that can be easily utilised by UAE-based companies in conjunction with a manufacturing presence in the nearby Jebel Ali Zone.
Manufacturing: High-tech and heavy industries
The UAE’s drive to focus on high-tech industries was primarily motivated by the country plan to switch to high-income industrial activities in the long-term. Abu Dhabi was in fact the first emirate to adopt this policy when Mubadala was formulated a few years back. The company currently owns and operates several high-tech industrial initiatives including the manufacturing of aeroplanes and advanced processing chips among other disciplines.
A good example of such a thriving investment approach is Mubadala Aerospace2, which announced it would capitalise on its partnership with Ferrari and Tata to produce the first UAE-made medium-size business jet by 2018. This is one of four streamlines in the aerospace industry Abu Dhabi has defined as potential revenue generators. The other three include commercial and military aeroplane maintenance, manufacturing of aeroplane parts and high level training.
Abu Dhabi has good potential to excel in the aerospace segment for three reasons. Firstly, such a segment requires huge financial assets which are not a problem for the oil-rich emirate. Secondly, this type of industry requires a lot of energy, which can be provided by Abu Dhabi at competitive rates. The third factor is related to the human capital, as high-tech industries usually rely heavily on expert systems and robotics rather than a huge workforce. With the active educational system in the emirate, Abu Dhabi is able to provide this industry with the required skills based on its highly-trained national workforce.
Another high-income segment is the manufacturing of advanced processing chips. Abu Dhabi has acquired the flagship processor company Advanced Micro Devices, best known as AMD. The company is partnering with The Advanced Technology Investment Company (Atic), the technology unit of the Abu Dhabi Government’s investment fund Mubadala, and Global Foundries to build a US$6 billion semiconductor factory in Abu Dhabi.
Dubai Silicon Oasis (DSO) is a 100% government-owned free zone that promotes modern technology-based industries with an urban master-planned community, state-of-the-art infrastructure and in-house business services.
European and American companies make up 47% of the total number of companies operating at DSO, and Asian and MENA companies make up 19% and 34% respectively. To empower its partners with well-prepared employees, DSO has opened Rochester Institute of Technology (RIT), which is now located inside the free zone enabling it to accommodate the fast pace of growth in the number of students, with new applications expected to register an increase of over 50%. See: www.dsoa.ae/en for more information.
While high-tech industries are an emerging segment in the UAE, heavy industries are not, and still provide compelling opportunities for many. The growing demand for marine carriers has encouraged international partnerships to build dry docks for the build of large vessels that can be used for various cargo and transportation purposes.
The boat and yacht industry is another promising segment comprising both full manufacturing and partial assembly. There are currently few companies involved in this segment but the market is growing, especially as the dollar millionaire count in the UAE has now jumped to over 50,000. The segment is also a promising export business. At least one of the UAE yacht makers has an active export base in the USA.
In addition, Jebel Ali Free Zone has been home to several investments in the assembly and configuration of transportation buses and ambulances as well as firefighter vehicles. The ambulance and firefighter vehicle market is actually dominated by one company but the market is far from closed, for either local sales or regional exports.
A newly-emerging segment is the assembly of heavy vehicles and machines for various uses. A study by Dubai Industrial City estimates the market for heavy machinery in the GCC countries to exceed one million new machines every year. In particular, some investors have shown interest in assembly of vehicles used for mining, mountainous road works and construction mega projects.
Manufacturing: Light and mechanical industries
The rise of light and mechanical industries in the UAE was mainly affected by the diverse economic scene along with the large business infrastructure in the country. Companies that manufacture business supplies, building materials, hardware accessories etc., have found refuge in the nation’s wealth of opportunities derived from the unprecedented infrastructure boom over the past couple of decades.
In addition, the country’s open and dynamic export-friendly economy have given these companies the added value of reaching out to neighbouring nations and even to the rest of the world. For example, Dubai is now home to the world’s largest producer of BoPP and CPP films for packaging purposes. The same can be said about many factories based in the UAE serving both local and global demands.
The glass industry is one of the segments that has hugely benefited from the infrastructure and construction boom. Glass is an essential factor in the GCC construction scene due to its role in heat reflection. Solar reflective glass is in high demand as an external covering of towers and buildings for the protection it provides from conducted heat-gain (air-to-air) when ambient temperatures are high during the summer. The local demand for glass sheets is growing at a fast pace.
There are four key factories in the UAE manufacturing glass sheet products for buildings. The products include high performance solar control and thermal insulation glass, tempered glass, heat strengthened glass, single and double glass, and laminated and architectural glass. Roughly 30% of the output is exported to countries such as GCC and other Arab and African countries. Virtually all countries in the region depend on imports to meet their demand, and it is easier for them to import from the UAE than from far-away sources like the USA, Europe, Russia or China (the key global exporters).
In 2006, a group of Korean investors teamed up to establish a Dubai based auto-technology manufacturing plant for the production of light items that do not require heavy employment. One of the factors behind their decision was the facilities provided by Dubai Airport Free Zone and the cost-effective equation they found in terms of energy, transportation and premises.
Dubai Airport Free Zone is actually an example of one of the local initiatives that caters for this level of investment, in order to help them maintain a steady return on investments and reduce operational overheads. By combining flexible regulatory affairs with a central location and lucrative markets, these initiatives are ideal for many manufacturers who want to penetrate the regional market and beyond. However, UAE businesses outside the free zones are in good shape too. Both federal and local authorities continue to ease up on many issues to facilitate growth.
Manufacturing: Consumer industries
The consumer industry sector spans a wide range of products that cater for day-to-day needs for both domestic and business. While a large portion of the country’s annual consumption is imported, the consumer industries sector has grown at a fast pace for two main reasons: the sharp increase in population over the past two decades and the consolidation of the UAE as a regional hub for export-orientated manufacturing complemented with re-export-orientated partial manufacturing.
In fact, one of the main drivers in the success of the UAE as a hub for consumer manufacturing is the central position it plays as a regional logistics and exports hub, which enables manufacturers to reach their target markets at ease. In addition, the country has become a world destination for shopping tourism, with an estimate of ten million passengers arriving in the emirate of Dubai alone every year. The country’s shopping malls and duty free shops are some of the busiest destinations year-round. With such a lucrative market, it’s no wonder that many international manufacturers have established production and fabrication units in the country to help dominate the regional market.
Over 444 companies are operating from JAFZA in this segment. Market leaders such as Unilever, Procter&Gamble and L’Oreal as well as some local brands actually have their regional production plants in JAFZA. Moreover, the wide spread of industrial zones across the country allows for further presence of various types of consumer industries including contract manufacturing facilities that serve local and international labels alike.
As a case study, the cosmetics industry provides some interesting indicators of how appealing this country can be for consumer manufacturers. In terms of the domestic market, the wide demographic spread within the UAE means that the demand for cosmetics is widespread and across the price spectrum. Along with the strong demand for high-end luxury products, there is also a robust market for the everyday, reasonably-priced product lines, making the UAE an attractive market for cosmetic manufacturers and suppliers of all kinds. A recent study by Euromonitor International shows that the consumption of facial and eye make-up, lip care and nail care products has continued to grow at a healthy pace over the last few years in the UAE, reaching US$141 million by 2014.
Although neighbouring countries have developed some local cosmetics labels for export, the main selling factor is actually international labels which they all depend on the UAE market to cater for, thus providing additional momentum for the industry here.
Jewellery and gold design, perfume manufacturing and ethnic hair products are just examples of the new niche markets the consumer industry is embracing in the UAE. However, the higher end of the industry is also showing positive signs of attraction. For example, the local footwear industry is worth over US$350 million. Since there is a large demand for footwear products unique to the region, namely Gulf Arab sandals for men and women, a significant footwear manufacturing industry has developed, based on a niche demand specific to regional styles.
According to the UAE Industrial Bank, the demand for local-style sandals is too large to be entirely manufactured in distant factories, and this has opened opportunities for domestic manufacture with the advantage of reduced lead times, lower inventory and customised orders – even though the raw material and labour is imported.
Manufacturing: Food processing industries
Food processing and manufacturing constitute 46% of the UAE’s non-oil industrial sector, which highlights the hidden potential as a major growth opportunity for processed-food manufacturers. The sector has posted annual growth of over 11% since 2005, when food service providers spent about US$1.43 billion on foods and ingredients bought at wholesale outlets.
By definition, the food industries segment includes meat processing, dairy products, vegetable oils, sugar refineries, bakeries, desserts, bottled water, etc. Although the surge in the investment in this segment was mainly caused by new investments in bottled water, the hidden indicator here is the huge increase in the population; which tripled the size of the main market for all food products in the country.
At the socio-economic level, there are various factors that make the UAE’s food market a unique investment opportunity. With its immigrant guest worker-based economy, a large percentage of the UAE’s population is made up of single men, a fact that has shaped the food industry in the region and led to increased demand for fast, easy-to-consume, low-priced meals.
The sharp increase in the population has an added opportunity too. The population has increased from 4.3 million in 2007 to around 8.3 million by 2010, which is reflected in an increased demand for food supplies. These sociological changes are not only expanding the area’s food market, they are also changing consumer habits, and consequently opening the door for fresh ideas on a daily basis.
Whilst the country imports 90% of its US$4 billion food market (for both local consumption and re-exports), there are two potential areas for foreign investment that are bound for growth: to increase the local production catering for the growing demand in the UAE, and to utilise the country’s central position for regional production. A study by the Arab Forum for food industries reveals that the UAE produces only 36% of its food consumption, a gap that highlights the hidden potential in this segment. Agricultural production, meat & poultry and processed food are just examples of what this gap is waiting for.
The meat market is growing exponentially due to various social traditions combined with high individual-purchasing power. While the prime business in this segment is livestock imports, it actually leaves the door open for a huge process and packaging business that caters for the needs of working families and individual expats. The Jebel Ali Free Zone plays an essential regional role for this segment due to logistical reasons. Major companies that were based in Saudi Arabia and Kuwait have moved to Jebel Ali over the past decade to utilise its strategic position and easier access to manpower. The well-known meat packaging company Americana, is now based in Jebel Ali.
Furthermore, the establishment of private-sector slaughterhouses inside the country’s free zones allow for many companies to import their own livestock and consequently start fresh meat processing lines for regional distribution. The overall meat processing market across the Gulf Cooperation Council (GCC) is estimated at US$18 billion with a booming growth rate year-on-year.
An emerging factor is the franchising and branding of food products. With roughly three-quarters of the population foreign-born, international food products are in high demand and represent a major growth opportunity.
International brand owners are now using Dubai as a manufacturing base to establish their regional presence in an attempt to get a larger slice of the Gulf’s US$12 billion food sector and to cater for the local demand of their franchised products as well. The demand for internationally-branded food items is also boosted by the UAE’s booming tourism sector. A few years ago, on the eve of the international economic challenges, Nestlé opened a 100,000 m² factory in Dubai’s Jebel Ali Free Zone to provide a regional centre for its products.
The rise of private labels with their fast growing market is proving a tough challenge for branded food manufacturers, says Americana. More and more local businesses are gaining wider market share both locally and regionally. Al Ghurair Foods, one of the leading investors, has opened a large oats mill that caters for the oats markets in the Middle East, sub-continent (India, Sri Lanka, Pakistan, Bangladesh etc.) and African countries. In addition, the rise in the number of hotels and convention centres across the country has created a bigger demand for catering services, which is now becoming one of the fastest-moving food services segments. The UAE currently has more than 400 hotels operating across the seven emirates and at least one major convention centre in each emirate. Dubai hosts at least two regional exhibitions/conferences each week, all-year. Abu Dhabi and Sharjah have a relatively similar count.
The UAE is the regional centre for the innovative manufacturing of date-based products such as coffee, chocolate, drinks etc. However, the market is still new and has growing potential with many people across the region embracing date products as a healthier alternative to sugar-based products. In addition, with the large number of palm trees in the country, the potential is always strong for palm oil investments. Palm oil production is currently the fastest-growing vegetable oil business in the world.
The UAE Government strategy focuses on developing the country's industrial and manufacturing sector, which contributes immensely to the overall economic growth, and strengthening its competitiveness globally.
The UAE Government is committed also to further strengthen local industries, and believes that the industrial and manufacturing sector contributes to the country's prosperity and welfare. The policy of economic diversiﬁcation and the efforts to encourage innovative industries and manufacturing have paid strong dividends. The Ministry of Economy is working to make the country a preferred destination for investments in hi-tech and heavy industries for global investors.
The UAE continues to record strong growth in the industrial and manufacturing sector.
Source: UAE National Bureau of Statistics, Department of Economic Statistics – National Accounts Division, 2015
Partnerships with foreign enterprises and joint-ventures have allowed industrial and manufacturing companies to benefit from the most up-to-date technologies. Some have emerged as world leaders in their markets. The industrial and manufacturing sector has recently diversiﬁed towards more capital intensive, high-technology products, such as electronics and machinery, exported in large part from the free zones, which have state-of-the-art production facilities and trade infrastructure.
The governments of each emirate have invested huge financial resources to diversify their economies. Initially, the UAE's industrial and manufacturing sector developed in oil and gas-intensive industries, such as petrochemicals, fertilisers, cement, and aluminium. Subsequently, the sector has rapidly evolved to more diversiﬁed products such as electronics and light machinery, exported in large part from the free zones. Major growth areas include capital-intensive high-technology industries supplying, among others, security and safety equipment, IT equipment, medical equipment, construction products, air conditioning and refrigerating equipment, and sporting goods and equipment.
Abu Dhabi developed its new clusters the Industrial City of Abu Dhabi I, II, III and AI Ain Industrial City I, II, which were managed by the Higher Corporation for Specialised Economic Zones (ZonesCorp) and known as industrial zones of special economic nature, as well as the Al Ruwais industrial Complex, which hosts a number of petrochemical industries.
The Mussafah Industrial Area covers 14 km² and is made up of six zones based on industry sector, including automobiles, machineries & spare parts, food, textile & soft drink manufacturing, engineering works, wood and herbal industries, chemical, plastic & petrochemical industries, building & construction related materials and advanced technology Industries.
Furthermore, the Abu Dhabi Government has been building the Khalifa Port and Industrial Zone (KPIZ), a multi-purpose facility located in the Taweelah district of Abu Dhabi and strategically placed between Abu Dhabi and Dubai. The project includes the construction of a world-class container and industrial port and the development of industrial, logistics, commercial, educational and residential special economic and free trade zones, and is due for completion this year (2015).
Dubai is developing Dubai Industrial City, a new manufacturing zone that will help the region's largest trading hub to diversify its economy still further. Dubai Industrial City was launched as a landmark project and a business district to catalyse and support the development of the manufacturing sector within the emirate. The city has been conceptualised and planned in great detail as a state-of-the-art industrial infrastructure. It is spread across 560 million ft² of land with speciﬁc emphasis on medium manufacturing sectors (machinery and mechanical equipment), transport equipment and parts, base metal, chemicals, food and beverage and mineral products.
The other emirates are also rapidly developing their own industrial cities to attract investment in this booming sector. To this end, it is worth noting that the long-term policy objective shared by all emirates is to increase the industrial and manufacturing sector's contribution to GDP.
Aluminium and manufacturing sectors
Aluminium is one of the UAE’s most important industries. Dubai Aluminium Company (DUBAL) was established in 1979, and owns and operates one of the world's largest aluminium smelters. It represents one of the main global aluminium producers, and contributes substantially to the UAE economy.
Built on a 480-hectare site in Jebel Ali, the complex's major facilities comprise a 980,000 metric tons per annum primary aluminium smelter, a 2,335 megawatt power station (at 35°C), a large carbon plant, casting operations with a capability of more than 1,270,000 metric tons per annum, a 30 million gallon per day seawater desalination plant, laboratories, port and storage facilities.
DUBAL represents one of the largest non-oil contributors to the economy of Dubai and is widely regarded as the industrial ﬂagship of the UAE. DUBAL also holds a 50% share in Emirates Aluminium ("EMAL"), a green-ﬁeld smelter development at Al Taweelah, Abu Dhabi, where capacity has risen to 1.3 Mt/y (metric tons per annum) since completion of its phase II project in 2014. The potline at the Al Taweelah site is now the longest in the world at 1.7 km, and comprise 444 reduction cells powered by increasing the onsite power plant capacity to 3000MW, yielding an additional production capacity of 520 kt/y (kilo tons per annum).
Cable manufacturing is a very important aspect for the UAE development and Dubai Cable Company has been a success in this regard. The company is a technologically advanced cable manufacturing company that was established in 1979 as a joint venture with BICC Cables. It is the main producer of electric cables in the Middle East, producing the best quality electrical cables along with the best customer service.
It supplies a range of high-quality power cables and accessories across the world. Presently, with three cable manufacturing factories, a copper rod plant, and PVC compounding facility across the emirates of Abu Dhabi and Dubai, the company has a manufacturing capability of over 110,000 metric tons of high, medium and low voltage cables and wires per annum. The company also continues to build upon BICC's cable manufacturing technology and has supplied cables to some of the recent landmark projects such as Burj Khalifa, Dubai Metro and Dubai Palm Jumeirah.
Steel and alloys industry
UAE steel plants contribute greatly to the economy and are counted among the major heavy industries of the UAE. One of the largest UAE steel plants is Emirates Steel Industries (ESI), which utilises the latest rolling mill technology to produce reinforcing bars for the construction industry. The plant manufactures high yield deformed steel bars for concrete reinforcement.
Established in 2001 to satisfy the growing demand for quality steel products for the UAE's fast developing construction sector, ESI is the only signiﬁcant domestic supplier of deformed reinforcing steel bars (rebars). In 2012 the Company began producing at a capacity of 3.5 million MTPA (million tons per annum), following two expansions and the investment of AED 11 billion. ESI is a prime supplier of rebar to the local and neighbouring markets, and the company have been involved in prestigious projects such as the Emirates Palace Hotel in Abu Dhabi, the Corniche Development project and the Dubai Airport Expansion project, amongst others. ESI has been undertaking a major expansion project to substantially increase company rolling capacity and establish the factory as a fully-integrated plant and the ﬁrst steel making facility in the UAE.
The cement industry is one of the oldest manufacturing industries in the UAE. The ﬁrst factory was the Al lttihad Cement Company of Ras Al-Khaimah, which started commercial production in 1975. This was followed by the construction of several other factories in Al Ain, Sharjah, Dubai, Fujairah, Ajman and Umm Al-Quwain. Historically, non-oil industries were not very developed and contributed signiﬁcantly less to GDP.
The emirate of Ras Al-Khaimah is the largest cement producer in the UAE, and Union cement, RAK cement and Hazar cement are the most important cement producers of the UAE, utilising the high-quality limestone available in the Hazar Mountains, and expanding production capacity. These factories employ a huge number of workers, representing a true investment within the country.
The years 1970-2000 witnessed a historical renaissance in the construction sector in the UAE. Large cities came out of the desert and a state-of-the-art infrastructure was built across the country. Buildings including skyscrapers, lavish villas, large shopping malls and luxurious hotels began to decorate the landscape of the emirates.
The UAE real estate is now an active and dynamic sector. Land is owned by the government of each emirate and land ownership, leasing, and freehold rights are left to the discretion of each emirate. However, in most emirates, acquisition of land for commercial or private purposes is permitted in certain areas and governed by each emirate's own legislations.
In Abu Dhabi, a law on property ownership was adopted in 2005, which permits freehold rights to UAE nationals in the emirate. The law allows GCC citizens to own real estate located in investment areas. Foreigners have also been given the right, under the law, to lease real estate in investment areas located in Abu Dhabi for a limited duration. Further, in 2007, the law was amended to grant individuals and companies the right to own properties regardless of nationality outside the investment zones by the authority of Abu Dhabi’s Executive Council.
In Dubai, the acquisition of land for commercial or private purposes was historically restricted to UAE citizens and, to a certain extent, GCC citizens. However, in 2002 the emirate of Dubai issued a decree which granted foreigners the right to purchase private properties and own freehold in certain areas, up to 99 years. Further regulation was issued in 2006 designating further areas where expatriates can enjoy freehold ownership. In 2007, the emirate enacted a law concerning the establishment of escrow accounts for real estate development project and a Strata Law which governs the creation, registration and management of jointly-owned property.
Other emirates have their own regulations and decisions governing land/ property ownership, including the emirates of Sharjah, Ajman, Umm Al-Quwain, Fujairah and Ras Al-Khaimah.
Today, well-established real estate development and investment, a solid construction sector, a growing property and facilities management sector, a demand-driven infrastructure development sector and real estate consultancy and urban planning, make the UAE’s superb real estate and construction cluster.
The UAE’s aim in the realm of real estate is to position itself as an attractive global place for investment. According to the Ministry of Economy, the real estate, business services and construction sector contributed almost AED 151.6 billion to the country’s GDP in 2014. The bulk of foreign direct investment has been mainly directed into real estate projects, as demonstrated by the Ministry of Foreign Trade in the annual trade policy report.
A massive expansion of developments was witnessed in Abu Dhabi and Dubai as the decade of the new millennium was approaching, and more than US$163.4 billion is now being pumped into real estate development by Abu Dhabi to effectively reach its urbanisation ambitions plan by 2030. Other emirates; Ras Al-Khaimah, Ajman, Sharjah, Umm Al-Quwain, and Fujairah are also investing heavily in the sector to supply reliable real estate outputs for its residents.
The UAE today is the largest construction market in the GCC with a value of approximately US$15 billion of projects constructed during 2014. It has also announced the development of a great number of residential housing communities, commercial units, and industrial districts across all emirates. All emirates have been effectively working to construct a strong infrastructure of roads, ports, airports, and sewage systems – a high-quality highway network comprising about 4,000 km of asphalt-paved roads, 15 large commercial ports, six international airports and a state-of-the-art sewerage public system, mark the notable milestones achieved. The emirates continue expanding their infrastructure by upgrading and remodeling their roads networks, airports and seaports as well as establishing new facilities, meeting the demands of the growing population and economy.
Facilities management started to emerge as a new market in this industry due to the increasing number of buildings and housing units that require continuous care and maintenance. The demand for mechanical, electrical and plumbing engineers, cleaners, security guards and landscapers is growing as the construction projects in the UAE are growing. International FM companies are viewing the country as one of the most favourable locations in this industry in the world.
Real estate and construction: Real estate development and investment
The demographic fundamentals of the UAE, the mass available lands planned for urbanisation and the encouraging property ownership regulations are forming the new picture of the real estate sector. Dubai, Ajman, Umm Al-Quwain, and Fujairah have designated specific lands to be developed where expatriates can have freehold ownership over their properties, while Abu Dhabi and Sharjah have given the green light for 99-year leases. Further attractive regulations are expected to be passed during the coming years.
Emaar Properties PJSC is one of the largest property developers and one of the leading premier lifestyle providers. The company has accomplished recognised properties and master-planned communities in both markets domestically and globally. It is the prime mover of Dubai’s real estate and construction sector. Burj Khalifah, the tallest free-standing structure in the world, is the most noteworthy project accomplished by Emaar.
Nakheel properties, a Dubai-based land reclamation and residential projects creator, is also a main player in the real estate development. By establishing imaginary projects like the World, the Universe Islands, and Palm Islands, it has driven the real estate market. Sorouh Real Estate, Al Qudrah Real Estate and Al Dar Properties are the largest real estate developers in Abu Dhabi. Other important players are Deyaar Development PJSC, Rakeen Development PJSC, RAK Properties, Aqaar and Burooj Properties.
International companies have been attracted by the great potential within all emirates. International Trident Holdings has developed a number of projects such as its signature “Waterfront”, Marinascape, and Bayside Residence. Best Homes, a Canadian-based international real estate developer, has also developed a number of excellent projects such as the Global Residencia, Rescom Tower, and others. International leading real estate developers are working together with local companies to develop properties in all emirates to meet the growing demands by the increasing population and economic expansion.
Building local housing communities
Due to the increased rate of marriage in the UAE, the government is building residential communities and selling community houses. Government-backed properties are preferred by many developers since they provide excellent liquidity, especially during real estate crises. Through public-private partnerships, international companies can engage in the development of these planned housing communities.
The emirate of Abu Dhabi is witnessing a historical growing period in its real estate sector. According to a recent study by Timetric’s Construction Intelligence Centre (CIC), Abu Dhabi is the leading city in the world in terms of having the highest value construction project pipeline. Abu Dhabi tops the list of these Construction Mega Cities, with total project values close to US$480 billion, just ahead of London in second place (US$477 billion) and Dubai in third (US$394 billion). For more information please see: www.constructionweekonline.com/article-31884-abu-dhabi-named-top-construction-mega-city/
Abu Dhabi’s current high hotels-occupancy rate of over 72% is giving a positive and secure feeling to local and international investors to continue investing in this vital industry.
Khalifa City, one of the largest planned projects, comprises all federal ministries and local government offices and embassies. The city is expected to be completed by 2030. Another gigantic construction project is the Yas Island Development, a tourist development that will house hotels, marinas, resorts, among other features.
In 2006, Dubai legalised foreign ownership of property in designated areas. Foreign capital has been flooding in since then. The massive commercial and residential developments such as Jumeirah Palm, Burj Khalifah, Burj Al Arab, and Dubai Marina are only some of the accomplished projects by the region’s real estate developers, placing Dubai as one of the most attractive and growing real estate hubs in the world.
To become the ideal industrial hub in the UAE, Sharjah is developing one of its largest industrial projects in the Saja’a district. The mega industrial initiative, Emirates Industrial City, is designed to accommodate the dramatic influx of industrial enterprises into Sharjah, providing world-class infrastructure and support in an easily accessible location. The master plan of the industrial area is built over a total of 8.3 million ft² divided into eight sectors to support different projects in the areas of industrial plots, warehouse projects, commercial/industrial, and residential/ commercial.
Sharjah is also developing its residential and industrial areas. Building approximately 5,000 homes for nationals in Rahmania and Seouh, two suburbs of the emirate, and a new town in al Juwaiza that houses around 2,000 plots for villas and low-rise residential and commercial buildings are a few of the notable residential projects that are intended to meet the increasing number of residents of the emirate.
After liberalising its real estate sector by granting expatriates the right of leasehold, Ajman is developing mixed-use, residential, commercial and industrial construction projects as well as infrastructure in order to transform the emirate to a modern urbanised city. Some examples of these mega projects include Al Hilal Tower, Al Ameera Village and Ajman One.
The government of Umm Al-Quwain is committed to the development of real estate projects and has linked up with Emaar to create a new development surrounding a purpose-built marina. Umm Al-Quwain Marina is a vast, master-planned waterfront community located on the shore of Khor al-Beidah, including resort and hotel rooms as well as parks and recreational areas, retail facilities, schools and community centres.
The Emirate’s investment arm is developing a mega industrial area “Al Ghail Industrial Park”. With a zone of 23 km², several manufacturing units are being housed in the park. Incentives such as low registration fees and long licensing periods are granted for local and international companies that operate this park.
Ras Al-Khaimah is also undergoing an ambitious phase of development including investments in infrastructure improvement, tourism, property, shopping, and efforts to attract industrial and commercial enterprises. US$27 billion worth of residential and commercial projects are currently in various stages of development across the emirate, including hotels, parks, recreational areas, retail facilities, schools, and community centres.
The eastern emirate, Fujairah, has also launched several strategic real estate developments that are concentrated on the shore of the Gulf of Oman coastline, including the Fujairah Dana, a combination of villas and hotels, and Fujairah Paradise. Furthermore, the emirate is planning to build a large number of residential units as well as commercial buildings.
Real estate and construction: construction
The global economic downturn had slowed the growth of the construction sector in the UAE in late 2008. However, signs of the economic recovery are now, seven years later, very visible to visitors and residents. The sharply-decreased prices of lands and construction materials began to shape new opportunities to property developers. The UAE Government announced its strong willingness to invest in the infrastructure development sector by initiating strategic projects such as the building of the union rail system, the road networks connecting Fujairah to Dubai, and Jebel Al Jais of Ras Al-Khaimah to Emirates Road, and many other large projects.
Real estate developers and construction companies have now shifted their focus from private to public sector schemes due to the increase in the number of government projects. This trend is expected to continue due to the massive infrastructure projects started by all emirates. Abu Dhabi has announced its ambitious plan to boost its infrastructure, residential, and commercial properties – the largest construction and infrastructure projects by value in the GCC show that five of the region’s ten biggest schemes planned or under way are in Abu Dhabi. The UAE was ranked as the most buoyant property market in the world.
Aldar Properties, Abu Dhabi’s largest listed developer, announced in early 2015 that it would fill Abu Dhabi’s housing supply shortage by building 7,300 homes there by 2020, and has now launched sales at three major new residential developments in prime areas of Abu Dhabi, on Yas Island and in the Shams area of Reem Island.
The West Yas waterfront scheme of 1,017 four and five-bedroom villas located along the mangroves on Yas Island went on sale in September 2015 and are reserved for UAE nationals, whereas property can be purchased by non-UAE nationals in the other development areas, including Mayan, a second project on Yas Island comprising more than 700 homes, and Meera in Shams Abu Dhabi comprising another 400 family homes on Reem Island close to the developer’s planned Reem Island Central Park.
Community facilities will also be built, including a mosque for 2,000 worshippers, two schools – one of which will be operated by Aldar Academies – a retail centre, sports facilities, a petrol station and extensive landscaping and greenery in open public spaces.
Prices for the capital’s stock of newer prime developments have been outperforming the rest of the market, and it’s expected these three new developments will enrich Yas Island and Shams Abu Dhabi with high-quality homes to meet demand across all segments of the market.
The mega projects that are underway or under the planning phase will significantly increase its share in the next coming years. Across all sectors and over all emirates, opportunities in the construction sector are countless.
In order to achieve social stability for both the national and expatriate population, the UAE has announced a number of residential housing communities. The expansion of Arabian Ranches, Porto Dubai Al Furjan, Al Warsan and Emirates Hills give a clear indication of how the residential construction subsector is booming not only in Abu Dhabi and Dubai but also in all emirates that are committed to develop state-of-the-art residential communities.
The emirates are also developing their commercial and tourist units to cope with the rapid growth incurred in this sector. High rise developments are being either planned or are under construction, as well as establishing power plants, water desalination plants and road and rail network systems. The massive expansion plan of the UAE’s rail system is one the largest infrastructure projects in the country.
Many local construction companies existed before the real estate boom in 2004. However, some of them have managed to take full advantage of the boom to become leaders in this sector. Arabtec Construction LLC, a regional and global leader in the construction sector, accomplished a range of notable diversified projects such as Burj Khalifa, Burj Al Arab, Jet Fuel Farm in Dubai International Airport, Mubarraz oil and gas island, and other luxurious residential and commercial developments. In order to complete its projects, Arabtec engages with other international specialised companies through partnerships and subcontracts. BelHasa Engineering and Contracting, Khansaheb Civil Engineering, Lootah Group of Companies, Overseas AST, Al Naboodah Group and Bukhatir Group are some of the leading conglomerates now in the construction sector in the UAE.
Foreign construction companies have also been involved in different fields of the sector. Monolith Constructions, an international engineering and contract services provider based in the Philippines, successfully constructed a number of residential housings in Fujairah. ACTO General Contracting Company, a multinational company, successfully completed various set of projects in all emirates from power stations to basic villas. ACTO is considered one of the leading companies in this sector.
Real estate and construction: Infrastructure development
During the harsh times of the economic downturn, the government’s spending on infrastructure gave confidence to investors in the UAE market.The UAE is now one of the fastest-growing infrastructure markets in the world. The planned infrastructure projects aim to meet essential needs in all aspects and regions of the country. The UAE is not only planning to develop new infrastructure but also to maintain, advance, and reconstruct the old utilities that are unable to support the growing economy and the population. The highly-modern and sophisticated infrastructure of the UAE includes ports, airports, a network of roads and rail systems, and multiple business parks.
The government’s spending on the development of its infrastructure reached AED 132 billion in 2014, approximately 25% of total government spending. The existing modern and sophisticated network of ports and airports has not only advanced the economy but they have also become central to the entire region, driving the government of the UAE to invest more in this sub-sector.
Mina Zayed, the main gateway for container and general cargo vessels, Musaffah Port, located in the heart of the industrial city, and Freeport are the operating ports in Abu Dhabi. Dubai’s ports include Jebel Ali Port, a large and rapidly-expanding deep seawater port infrastructure, and Port Rashid that is 13 metres deep and has a capacity of 1,500,000 twenty-foot equivalent units. Sharjah also has two ports, Sharjah Port and Khorfakan Port, while other emirates have one port each.
All emirates are planning to increase the capacity of their ports. Fujairah Port has been increasing its terminals’ capacity due to the increased demand by petroleum companies such as Gulf Petroleum, Oil Marketing & Trading group, and the Singaporean oil company Chemoil.
The UAE has six international airports. In 2014 Dubai International Airport became the world's busiest airport by international passenger traffic, handling 70.48 million passengers, and In addition to being an important passenger traffic hub, handled 2.37 million metric tons of cargo and 357,339 aircraft movements. Terminal 3 is the second largest building in the world by floor space and the largest airport terminal in the world. In January 2015, there were over 8,000 weekly flights operated by 140 airlines to over 270 destinations across every continent except Antarctica.
Source: Dubai Airports, 2015
Dubai’s second airport, Al Maktoum Airport in Jebel Ali, opened in 2010. With an area covering 140 km², it is the largest air-sea transportation centre in the Middle East. While the Dubai Civil Aviation Authority controls and operates Dubai airports, Abu Dhabi International Airport, Al Bateen, and Al Ain airports are operated by Abu Dhabi Airports Company (ADAC). Also, Sharjah and Ras Al-Khaimah have emergent airports due to the increasing activities by RAK Air and Air Arabia.
In addition to advancing the seaports and airports network, strategic initiatives have been taken to enhance and develop the road networks. In 2006, the UAE established the National Transport Authority (NTA) with the task of developing a licensing system pertaining to land transport and granting licences to relevant transport bodies covering all modes of Land Transport for federal inter-emirates transport and international.
Since then, the land transport sector has been witnessing a growth period, and by 2014 the UAE had a high-quality highway network comprising about 12,500 km of asphalt-paved roads connecting all emirates as well as the country to the Sultanate of Oman and Saudi Arabia.
In order to reduce the dependency on emissions-producing vehicles, Dubai started building its Metro in 2005. There are now (2015) 49 stations operating over 75 km, with a further 26 stations over 96 km proposed. Abu Dhabi also has set up its plans to develop its metro, covering 131 km and connecting major areas of the emirate. Contracts are due to be awarded this year (2015), and Phase One of the network (60 km) should be completed by 2017, with a further 70 km in later phases.
Another railway system, Etihad Rail, is under planning to link all the northern emirates with Dubai and Abu Dhabi Railway. When complete, the 1,200 km network will extend across the United Arab Emirates from the border of Saudi Arabia to the border of Oman. The network will run from Ghweifat to Abu Dhabi, Dubai and the northern emirates with major connecting points in between, including Al Ain and Madinat Zayed. Etihad Rail will have an extensive national network with freight terminals, distribution centres and depots located close to major transport hubs, warehouses, and storage facilities across the UAE, major construction companies are seeking these great opportunities.
Wastewater treatment and solid waste disposal sectors in the UAE are growing too, with the increased production of desalinated water and the solid waste generated by the increased numbers of UAE residents. The UAE is one of the three highest per-capita producers of solid waste in the world. Most urban and industrial areas and all new development projects are connected to the public sewerage system. Solid waste disposal is run by the municipalities and is well-developed in the UAE. Sewerage systems in the emirates of Ajman, Fujairah, and Ras Al-Khaimah are being developed, and international companies can participate to seize the benefits of these great opportunities through tenders and partnering with the public sector or local companies.
The federal government is improving the infrastructure of the northern emirate at the top of its priority list, initiating massive projects in order to improve the quality of life of its residents. US$1.6 billion worth of projects is being pumped to upgrade the water and electricity networks by building mega power stations and water desalination plants in Ajman, Ras Al-Khaimah, Umm Al-Quwain, and Fujairah, with new major road and rail networks connecting the whole area.
The UAE was one of the first nations to establish specialised free zones with unique infrastructure designed to suit a specific sector. The UAE had 52 free zones by March 2014, with some dedicated for specific services subsectors such as Dubai Media city and Dubai Healthcare. A number of free zones have been established to encourage trade and investment in all emirates, such as Himriyah Free Zone, Fujairah Free Zone, and Ajman Free Zone. In May 2004, the emirate of Abu Dhabi established the Higher Corporation for Specialised Economic Zones in order to provide an integrated infrastructure, a suitable business environment, and professional services through the establishment and management of special zones in Abu Dhabi. The 4 million m² free trade zone in Abu Dhabi Airport and 12 other free zones are now being developed. See the ‘Free Zones’ section in this guide for more information.
Real estate and construction: Property and facility management
The historic growth in the number of existing properties in the UAE has caused real estate developers and buildings owners to hand over the leasing and sales operations to specialised agencies, called property managers. The volume of these existing residential, commercial, and industrial properties and the ongoing projects necessitated the property management sector to be sufficient in terms of quantity and quality. The demand for property and facilities management continues to increase as the economy of the UAE is growing, and as companies and residents are demanding better-serviced and managed buildings.
Between 2000 and 2005, the UAE experienced an unprecedented properties growth. The total number of buildings reached 335,487. In late 2005, US$35.42 billion worth of projects were under construction, dominating the construction sector in the GCC, and the high demand quickly drove-up prices. However, prices declined due to the economic downturn in 2008 and late 2009. Early signs of recovery began to appear in early 2010 and property prices began once more to move upwards. The liberalising real estate regulations encouraged the emergence of property managers. Since then, the market has been experiencing a historical transformation from the driving-effect of a pure investors market towards a greater emphasis on an owner-occupier and end-user demand market.
National and international property management companies are greatly benefiting from the unique opportunities in the UAE. Union Properties, a subsidiary of Emirates Bank, manages a great number of existing and landmark residential and commercial developments currently under construction in Dubai or recently completed, such as Al Wasl Villas, Creekside Residence, and the Control Tower TM, Burooj Properties, Deyar Properties, RAK Properties, and Northern Emirates Properties.
Opportunities in the property management subsector have gained the attention of global companies, and seeing the great potential in the UAE market, Asteco Property Management LLC and Better Homes, international property management companies, have now established offices here.
Facilities management (FM)
Property managers, household owners, landowners, and real estate developers in the UAE began to realise the importance of investing in maintenance of buildings facilities to maximise life-expectancy and to attract tenants and buyers in a competitive market. The demand for facilities management (FM) is gradually growing due to this importance, to the growth in construction, and most importantly due to the harsh environmental conditions of the UAE that can reduce capacity of the facilities. New laws have been contributing to the increasing demand for FM services, requiring buildings under construction as well as existing buildings to follow guidelines set by the government which coincide with globally-recognised green buildings regulations.
In addition, these new regulations are playing a large role in increasing awareness with both developers and owners of existing properties to the benefits that can be gained from a sustainable facility, such as energy consumption, water use, and waste management. The increasing demand in the UAE in particular and in the GCC region overall has brought this attractive market to the attention of international FM organisations. Today, FM companies not only operate after a project is completed, but also cooperate with the developers from the initial drawing phase. By implementing FM guidelines, the developers ensure that their buildings will not just match the intended purpose but can also reduce maintenance costs and maximise the building’s efficiency.
One of the leading international companies in the UAE’s facilities management field is Drake & Scull International PJSC. The British company has successfully completed a great number of projects in Abu Dhabi and Dubai across all sectors, such as providing mechanical, electrical and plumbing (MEP) services for Abu Dhabi National Exhibition Centre, Rashid Hospital, and International Airport Terminal. The company has a number of ongoing projects in the UAE itself, one of the most recent contracts being for the Reef Residence Tower in Dubai awarded in January 2015.
The global recession, and the subsequent reduction of foreign investment in the UAE’s real estate sector, have meant that the region’s projects market is in-part being driven by state-backed infrastructure projects. Firms are branching into new markets, switching focus from private to public sector schemes and forming new alliances in a bid to win work in an increasingly competitive environment.
This trend is expected to continue in the short term with the UAE Government’s drive to stimulate the economy by spending heavily on infrastructure projects, particularly in Abu Dhabi, where multibillion dollar infrastructure investment programmes have been announced as part of its ongoing implementation of Abu Dhabi Vision 2030. In addition, strong investments have been announced in social infrastructure such as hospitals, schools and museums.
Transport has rapidly become a strategic priority. The objective is to make the UAE a major transport hub between Europe and South East Asia. Accordingly, public funds were invested in developing port and airport infrastructure, airlines, and shipping companies and agencies. The UAE welcomes the further beneﬁts that may come through greater liberalisation in the air transport sector over the coming months and years.
Since the mid-1980s, a strategic priority of the UAE has been to become a major aviation and maritime transport hub between Europe and South East Asia. The country has largely succeeded in this. The governments of each emirate have invested vast resources in developing port and airport infrastructure, which have also been among the leading sub sectors attracting foreign investment, albeit always on the basis of minority shareholdings. Transport not only plays an important role in the economy of the UAE, but the transport network has effectively become central to the entire region.
Passenger and cargo transportation have risen in importance over the last few years. According to the World Travel and Tourism Council, international visitor arrivals to the Middle East are forecast to reach 90 million by 2016.
Mattar Al Tayer, Chairman of the Board and Executive Director of the Roads and Transport Authority (RTA) said: “This year  the RTA will embark on a study of the use of autonomous/driverless cars with the aim of deploying them in Expo 2020, and next May it will finalise the Transformation to the Smart Government Project by introducing smart, innovative and user-friendly apps that meet customer needs. The number of smart services provided by the RTA has so far soared to as much as 88 services provided via nine smart apps. The RTA will shortly start the test run of the electric bus, which is powered solely by electricity supplied by a rechargeable battery which can be recharged up to 80% in less than 30 minutes. When fully charged, the battery will be provide the power needed for the bus to travel up to 200 km, and the bus can travel at a speed of up to 100 km per hour.
The RTA has constructed over the past years a host of innovative projects spanning roads and mass transit systems highlighted by the Dubai Metro project, the world's longest driverless metro system stretching 75 km. The metro operation is built on Artificial Intelligence technology that works out the intervals (headway) between journeys, measures the distance between rolling stocks, and automatically realigns the headway between services in case of breakdowns or delay in scheduled journeys. Innovative projects undertaken also included the Dubai Tram, the first tramway outside Europe powered by ground electric cables with no centenary lines used throughout the track. It is also billed as the first tram in the world that uses platform screen doors the mechanism of which is synchronised with the opening and shutting mechanism of the tram's doors.
The portfolio of innovative projects includes the Floating Bridge, which had been constructed by the RTA in a short time and contributed to easing tailbacks at the Dubai Creek crossings, toll gate system (Salik), and the automated fare collection system (NOL), among other innovative projects."
Abu Dhabi-based developer Aldar Properties is developing Yas Island, involving the construction of the Yas Mall, car parks, infrastructure and associated roads occupying a total land area of 2,500 hectares, of which 1,700 hectares will be claimed for development. The island holds the Yas Island Circuit, which has been hosting the Formula One Abu Dhabi Grand Prix since 2009. It will also feature attractions such as Warner Bros Movie World, a movie theme park by Warner Bros, the Ferrari theme park Ferrari World Abu Dhabi, hotels including Yas Marina Hotel, a water park, and Yas Mall, the Abu Dhabi destination retail development of 300,000 m² retail area, links and parkland golf courses, lagoon hotels, marinas, polo clubs, apartments, villas and food and beverage outlets that will create a tourist destination.
The 27 km² Saadiyat Island development in Abu Dhabi is being constructed in phases until its completion in 2020. When complete, it is expected to become a premier destination providing leisure and tourism facilities, as well as civic and cultural institutions to around 145,000 residents. The island has been divided into a number of zones, including Saadiyat Beach, Saadiyat Lagoons and Saadiyat Cultural District and will include outposts of the Louvre and Guggenheim museums, as well as a performing arts centre and the Zayed National Museum.
The UAE‘s aviation sector has played a signiﬁcant role in the country's current economic success and is now experiencing a period of phenomenal growth.
UAE airlines (Emirates Airlines, Etihad Airlines, Air Arabia and Fly Dubai) are updating their ﬂeets and capitalising on the increased passenger demand by pursuing several strategies, including transportation options that focus on superior passenger experiences as well as options that emphasise affordability.
Dubai International Airport
In 2014 Dubai International Airport became the world's busiest airport by international passenger traffic, handling 70.48 million passengers, and In addition to being an important passenger traffic hub, handled 2.37 million tons of cargo and 357,339 aircraft movements. Terminal 3 is the second largest building in the world by floor space and the largest airport terminal in the world. In January 2015, there were over 8,000 weekly flights operated by 140 airlines to over 270 destinations across every continent except Antarctica.
Source: Dubai Airports, 2015
Al Maktoum International Airport
Dubai’s second airport, Al Maktoum Airport in Jebel Ali, opened in 2010. With an area covering 140 km², it is the largest air-sea transportation centre in the Middle East. The US$120 billion project is expected to be the world's largest airport complex with a single A380-compatible runway, 64 remote stands, a cargo terminal building capable of handling 250,000 metric tons per annum expandable to 600,000 metric tons per annum and dedicated road link to the port in Jebel Ali when completed. It will make the emirate a centre of air travel and aviation services. This project is ranked by the UK Government as a high value opportunity for UK businesses. For more information please contact: firstname.lastname@example.org
Dubai World Central
Dubai World Central (DWC), a 140 km² urban aviation community centred around the world's largest airport – DWC-Al Maktoum International Airport – is one of the most strategically important commercial infrastructure developments in the Middle East. The city-within-a-city, 40 km from the existing Dubai International Airport (DXB), is almost twice the size of Hong Kong Island. DWC is designed to support Dubai’s aviation, tourism, commercial and logistics requirements until 2050 and beyond, transforming the UAE, and indeed the region, into one of the most powerful global centres for commerce, logistics and tourism.
Sharjah International Airport was the UAE's ﬁrst airport, built by Imperial Airways – the forerunner of British Airways – as a stopover en-route to India. Passenger traffic through Sharjah International Airport jumped by close to 12% in 2014 compared with 2013, with 9.5 million passengers handled as opposed to 8.5 million in 2013.
Freight handled in the same period of 2014 was nearly 240 thousand metric tons, and aircraft movements were up 6.5% in 2014, reaching 70,559 compared to 66,247 in 2013. Sharjah Airport is a popular trans-shipment point, especially for inter-modal cargo arriving by sea and air-freighted onwards.
Ras Al-Khaimah (RAK) Airport
RAK has been expanding its international airport to cater for the inﬂux of Europeans that are beginning to discover the emirate as a new tourist destination. In April 2014 Air Arabia, the newly designated carrier of RAK, announced its new hub at RAK International Airport, its fourth international base and second in the UAE after Sharjah.
Fujairah Airport is also being expanded and has outlined an ambitious plan to increase its cargo capacity ﬁve-fold during the next few years.
Air traffic in the UAE is increasing year-by-year as airports are expanded, new ones built, and more airlines choose to include the UAE in their ﬂight schedules. Each emirate is fully responsible for developing its civil aviation. The UAE’s aviation industry has advanced sizeably over the past few years, fuelled by considerable airport expansion in each emirate, as well as by the launch of a number of new airlines. Moreover, huge aircraft purchases have been made by all the UAE's carriers.
One of the strategies that has led to the development of air transport services in the UAE is the use of the UAE territory as a land-bridge on intercontinental routes. Typically, bilateral air service agreements have been concluded with countries in Europe and Asia, and UAE airlines have subsequently exploited sixth freedom rights, i.e. serving routes between European and Asian cities with a stopover in a UAE city. As a result, certain UAE companies are now amongst the dominant airlines on the New Zealand-Australia route.
In July 2003, the Abu Dhabi Government launched Etihad Airways, the UAE’s national carrier, and fully funded and owned by the Abu Dhabi Government. The airline has grown at a phenomenal pace to become the fastest growing airline in the history of commercial aviation, serving 69 destinations in 44 countries across Africa, Asia, Europe, the Americas and Oceania by the end of 2014.
Almost 14.8 million passengers flew with Etihad Airways last year (2014), a significant increase of 23% over 2013 levels, marking its strongest operational performance to date. Etihad has a fleet of 110 passenger aircraft and 10 freighters, and won the world's ‘Airline of the Year’ award at the 2015 Aviation 100 Awards.
The Government of Abu Dhabi is a shareholder in several other aviation companies. Abu Dhabi Aviation, established in March 1976, is the largest commercial helicopter operator in the region, with a fleet of over 40 craft. It is 30% owned by the Abu Dhabi Government. The bulk of the company's business is in supporting Abu Dhabi offshore oil, engineering, and construction companies, but also includes offshore rescue services and the aerial application of agricultural sprays. The company has expanded its operations in recent years to other countries, including Oman, Yemen, Saudi Arabia, Spain, and lran.
Royal Jet, a luxury air charter service, was launched in May 2003. By 2012 it operated a ﬂeet of ten aircraft. A division of Royal Jet, the Royal Med service, attracts passengers travelling for medical assistance; the Royal Med air ambulance, equipped with state-of-the-art medical equipment, was launched in 2003. Royal Med now accounts for almost half of Royal Jet business. Royal Jet is a joint-venture, shared equally by Amiri Flight of Abu Dhabi and Abu Dhabi Aviation.
The General Civil Aviation Authority
GCAA is a federal, autonomous body overseeing all activities related to civil aviation and providing navigation services, registration, and licensing services for the UAE aviation industry. Companies wishing to conduct commercial air transport in the UAE must obtain an Air Operator Certiﬁcate from the GCAA.
The GCAA proposes air transport policy general guidelines and relevant legislation to the Council of Ministers, and enforces international agreements and conventions. New foreign entrants are allowed into the market on the basis of bilateral air transport agreements. The UAE also signed open-sky agreements with the United States in April 1999 and with ﬁve other countries thereafter. However, the authorities have stressed that the UAE prefers an open tariff regime freely determined by the airlines. Cabotage is reserved for UAE carriers unless speciﬁcally authorised. “Wet” leasing of aircraft (with crew and, typically, fuel, maintenance, and insurance) by UAE carriers is not restricted to UAE companies or citizens.
There are no nationality requirements for crews engaged in domestic or international air passenger and freight services. However, the GCAA has embarked on a nationalisation programme since 1998, which has led to an increase in the number of UAE nationals serving in the GCAA.
Seaports and shipping
The UAE has developed as a regional hub for maritime transportation and logistics. UAE ports handle large through-put to and from the region, and ship and boat building are emerging as strategic competencies.
Maritime transport services
The growth of maritime transport to and from the UAE has resulted largely from the development of Dubai's Jebel Ali Port, a large and rapidly expanding deep seawater port infrastructure. The port has allowed the development of major shipping and trans-shipment activities as well as shipbuilding, repairs, and maintenance services.
The UAE has been a member of the International Maritime Organisation (IMO) since 1974. The UAE's merchant ﬂeet comprises shipping companies registered in the UAE and at least 51% owned by nationals. Foreign ﬂag vessels must have a contract with one of the federal or local governments to operate in UAE waters, and cannot carry out cabotage on their own account. This is designed to encourage local companies to register vessels under the UAE ﬂag. Crews working on ships servicing territorial waters must have residency visas. Foreign companies must obtain approval in the form of a licence. All ships operating in the territorial waters must be classed under one of the categories of the International Association of Classiﬁcation Societies (IACS). In addition, foreign ships must not be older than 25 years, and local ships must have IACS approval issued within ﬁve years.
The United Arab Shipping Company (UASC) is the largest container carrier to and from the Middle East. UASC was established jointly by the six GCC States in July 1976. The share owned by the UAE Federal Government is 16.5%. A number of other domestic shipping companies are partly or fully owned by the federal government or by the governments of the Emirates. These include ADNATCO, National Petroleum Construction Company, and National Marine Dredging Company (all three owned by the federal government); It is a Lat and Delma Co-operative Society, owned by the Abu Dhabi Government and Arab Maritime Petroleum Transport Company.
The UAE shipping agency and freight forwarding market comprises numerous companies. The UAE host one of the world's largest shipping agendas, Gull Agency Company (GAC), based in Jebel Ali Free Zone since 2002. The private company also supplies spare parts and various services to vessels worldwide.
The UAE has 15 large commercial ports (including oil terminals) with a total capacity of over 70 million metric tons. Dubai's Jebel Ali Port, which handles primarily bulk cargo and industrial material for Jebel Ali Free Zone, is the world's largest man-made port. The UAE's ports export mainly oil and gas, but also raw materials and ﬁnished goods. Imports consist of intermediary and consumer goods, as well as a signiﬁcant re-export trade to other economies in the Gulf region, East Africa, and the Indian subcontinent.
The UAE ranks among the top ﬁve locations in the world for bunkering and other ship chandelling, and its ship-repair facilities and ship-building capacity are developing rapidly. As previously noted, port services are regulated at an emirate level. Most port handling services, including crane lilting, loading, discharging, stevedoring and stowage, storage and warehousing, as well as pilotage, are supplied exclusively by the port authorities of each individual emirate.
The marine terminals of Jebel Dhanna and Ruwais, Umm al-Nar, Das Island, Zirku and Mubarraz islands handle the bulk of the UAE's crude oil and gas exports. They are owned and operated by the Abu Dhabi Petroleum Ports Operating Company.
Port Zayed is Abu Dhabi's main general cargoport, established in 1972. There are 21 berths for handling general cargo, including bulk cargo, ro-ro, project cargo, and petroleum products. Zayed port has been closed and redeveloped into prime waterfront property, while a much larger port and industrial zone, Khalifa Port and Industrial Zone, has been built on a reclaimed island 5 km offshore near Taweelah.
DP World is one of the top four marine terminal operators in the world with more than 65 marine terminals across 31 countries in six continents, including new developments underway in India, Africa, Europe and the Middle East (mid 2015). Its dedicated, experienced and professional team of around 32,000 people serves customers in some of the most dynamic economies in the world. in 2005 and 2006 DP World acquired CSX WT and P&O respectively. Together with recent developments and new concessions, DP World has transformed from a regionally based operator to one that has a signiﬁcant presence.
DP World is one of the innovators in the container terminal industry and has successfully developed and enhanced container terminal capacity and efficiency in the markets in which it operates in direct response to customer needs. It aims to enhance customer supply chains by effectively managing container, bulk and other terminal cargo and investing in equipment and facilities to improve productivity and efﬁciency. With an average concession life of 43 years, DP World invests for the long term.
Historically, the container handling industry is linked to GDP growth, with container terminals historically delivering volume growth 34 times GDP. DP World has always performed better than the industry, due in large part to 75% of its volumes coming from faster-growing emerging markets and its focus on the more stable origin and destination markets.
Its customers comprise more than 150 carriers, including all of the top ten global container shipping lines, as well as general cargo and car carriers. It has long-standing relationships with its top ten customers, many of whom who have been customers since it first began operations. Jebel Ali in Dubai is DP World's ﬂagship facility and the UAE is an important trading hub for the Middle East, African and Indian Ocean rim countries.
DP World’s flagship Jebel Ali facility in Dubai has been voted “Best Seaport in the Middle East” for 20 consecutive years, and is the sixth largest container terminal in the world by capacity and throughput. In addition, it can accommodate the draft of any container vessel in existence or on order, and deploys the largest quayside cranes currently in operation in the world. Jebel Ali holds the strongest market position as a terminal operator in the UAE and Middle East due to the high volumes of cargo originating in or destined for that market (O&D cargo). Container operations at Jebel Ali are strengthened by its position adjacent to the Jebel Ali Free Zone, which is home to nearly 7,000 international companies generating signiﬁcant volumes of captive container trafﬁc. The free zone and port are physically connected, creating a logistics hub potentially capable of serving over 2 billion consumers from West Asia to East Africa.
DP World's global business is run out of its head office in Dubai. Its executive management team has signiﬁcant industry experience and its local operations on the ground globally are also managed by senior executives with signiﬁcant experience in the container terminal industry and extensive local and regional knowledge.
DP World Limited is publicly listed and was admitted to the ofﬁcial list of securities on NASDAQ Dubai at the DIFC in 2007. DP World is majority-owned (80%) by a direct subsidiary of Dubai World, which itself is a holding company owned by the Government of Dubai. For more information about DP World and its businesses please visit its corporate website: www.dpworld.com
Jebel Ali Port
Jebel Ali Port, DP World’s flagship terminal, the world’s largest man-made harbour, the biggest port in the Middle East, and the busiest container terminal between Asia and Europe, is an integrated multi-modal hub, offering sea, air and land connectivity complemented by logistics facilities which include coolport, container freight station and warehousing.
Originally constructed in the late 1970s, it is now in 2015 a premier gateway for over 90 weekly services connecting to more than 140 ports worldwide. The poly-functional terminal facilities are spread over 20 km of quayside featuring 23 container berths and 78 quay cranes, geared to handle next-generation vessels.
Expansion plans adding 6 berths and 4 million TEUs (twenty foot containers or equivalent units) capacity will bring the total handling to 19 million TEUs later this year. As it foresees continued growth, DP World has outlined expansive plans to expand its capacity to up to 80 million TEUs by 2030 by extending the port out to a reclaimed island. Once complete it will be the world’s biggest container port, surpassing the ports of Shanghai and Singapore in size.
Source: DP World 2015
Sharjah is home to three of the finest deepwater harbours in the UAE. Sharjah Seaports Authority has invested in increasing the berths in all its three major ports. The depth at five of the berths in Port Khalid is being increased to 12m, while the cargo storage facilities in Hamriyah port have been extensively developed to increase the open yard storage in excess of 200,000 m². The expansion work has been completed at Khorfakkan port which saw two new berths of 840 m in length commissioned in March 2010 with an alongside depth of 16 m capable of handling the biggest container vessels.
Source: Government of Sharjah Department of Seaports and Customs 2015
Ajman Port, which also services Ajman Free Zone situated in the port, has eight berths designed to handle both container and general cargoes. Plans are under way to deepen the port. It has special facilities to handle cargoes of chemicals, wastepaper, and fodder. There are also two dry docks to provide maintenance and repair services.
Ras Al-Khaimah Port
Cement, marble, and gravel from nearby quarries and factories are the main products shipped from Port Saqr in Ras Al-Khaimah, which is situated close to the major shipping lines and the Straits of Hormuz. In 2004, Ras Al-Khaimah Port Authority awarded the Kuwaiti ﬁrm KGL a US$45 million contract to build, operate, and manage its container terminal at Port Saqr for 21 years. The port is has been expanded to handle 3 million TEUs to boost its trans-shipment potential, as well as to improve the capacity to handle bulk cement and aggregate.
Fujairah port, the largest oil-bunkering facility in the region, is strategically located on the United Arab Emirates Indian Ocean coast, outside the Straits of Hormuz and close to the east west shipping routes. Its location offers shipping lines with high transhipment volumes an excellent platform to serve the entire Gulf Region, the Indian Subcontinent, Pakistan, Iran, the Red Sea and East Africa. Fujairah is one of the world’s three largest bunkering centres along with Singapore and Rotterdam, with a container terminal spread over 200,000 m², and a capacity of 18,588 TEUs (2015).
Source: DP World 2015
The UAE has a good highway transport system, which connects all the main cities of the country. The land transport sector has been witnessing a growth period, and by 2014 the UAE had a high-quality highway network comprising about 12,500 km of asphalt-paved roads connecting all emirates as well as the country to the Sultanate of Oman and Saudi Arabia.
Road transport companies, which must be majority-owned by UAE nationals, generally employ foreign drivers. One of the most important highways is the 55 km Sheikh Zayed Road between Dubai and Abu Dhabi and linking via the arterial routes to the other emirates.
UAE President Sheikh Khalifa bin Zayed Al Nahayan has allocated AED 16 billion for infrastructure projects in the northern emirates, which is being used to fund the construction of roads network, new housing communities, drainage networks and other projects, providing integrated solutions where there are infrastructure deﬁcits.
The UAE is the region’s most advanced market in terms of rail schemes. In order to reduce the dependency on emissions-producing vehicles, Dubai started building its Metro in 2005. In 2015 there are now 49 stations operating over 75 km, with a further 26 stations over 96 km proposed. The metro system is one of the most advanced urban rail systems in the world and is a catalyst for tourism, ﬁnancial and economic growth. Abu Dhabi also has set up its plans to develop its metro, covering 131 km and connecting major areas of the emirate. Contracts are due to be awarded this year (2015), and Phase One of the network (60 km) should be completed by 2017, with a further 70 km in later phases.
Abu Dhabi’s Etihad Railway, fast-tracked procurement of the Gulf’s most significant transport project, with the first section of the US$11 billion federal rail network completed in 2013. Etihad Rail will link all the northern emirates with Dubai and Abu Dhabi Railway. When complete, the 1,200 km network will extend across the United Arab Emirates from the border of Saudi Arabia to the border of Oman. The network will run from Ghweifat to Abu Dhabi, Dubai and the northern emirates with major connecting points in between, including Al Ain and Madinat Zayed. Etihad Rail will have an extensive national network with freight terminals, distribution centres and depots located close to major transport hubs, warehouses, and storage facilities across the UAE, which will add to the UAE's competitive edge, create job opportunities and serve as a magnet for foreign investment.
The 537 km national railway will signiﬁcantly reduce traffic on the heavily congested roads connecting the emirate. It will ultimately unite with a trans-GCC network that will connect all six member-states. The ﬁrst phase of the UAE's rail network would see double track railway built from Ruwais in Abu Dhabi to Fujairah. Eventually, there would be about 900 km of track running from the coast to the Saudi border. The regional mega-project is estimated at around US$14 billion, and the ﬁrst stage of construction is expected to be completed by 2016.
Although healthcare as an industry is an emerging economic activity in the UAE, it has proven over the past decade to be one of the segments with high growth potential and lucrative opportunities for long term investments.
Rapid expansions in both the population and income, together with a more sedentary lifestyle are some of the significant growth drivers of healthcare in the region – this particular industry was highly stimulated with the sharp increase in the population which doubled the country’s residents in less than ten years, combined with the fact that the UAE has also become one of the leading travel destinations globally for holiday makers and shopping enthusiasts. The modern tourism infrastructure and the tourist-friendly environment have even opened doors for appealing opportunities in health and clinical tourism as well.
Until recently, the UAE has been a major consumer rather than provider of healthcare services. Now, this trend is reversing. The rising interest in the healthcare sector is largely due to the UAE Government’s initiatives to modernise the UAE’s healthcare systems. Progress is being made by focusing on improving and building healthcare infrastructure, including the privatisation of publicly owned healthcare facilities and the introduction of compulsory private health insurance.
Although in terms of GDP contribution, healthcare expenditure is low, the UAE is actually among the top 20 highest in the world in terms of per capita spending. In 2009 the overall health expenditure was US$5.4 billion, equal to 2.6% of GDP. By 2013 the UAE healthcare market was worth approximately US$18 billion, and is expected to grow at a compound annual growth-rate (CAGR) of nearly 13.5% by 2020.
From a structural point of view, the healthcare industry includes pharmaceutical manufacturing, hospitals and clinical treatment, wellbeing and plastic treatment, health tourism, medical supplies and medical education & MICE. While operating in the UAE, healthcare and pharmaceutical businesses may need to obtain proper licensing from both the federal Ministry of Health as well as the relevant emirate’s Health Authority in Abu Dhabi and Dubai.
The public healthcare services are run by different authorities: The Health Authority of Abu Dhabi (HAAD), the Dubai Health Authority (DHA), the Ministry of Health (MOH) and the Armed Forces, and Police Medical Services. While each entity has its separate autonomous operating authority and runs independently of each other, they all share the same national goal of excellence in healthcare.
The establishment of health-related free zones has increased the interest of global healthcare players. This has encouraged such players to set up regional centres in the UAE, so as to expand their presence in the MENA region. The Dubai Health Care City (DHCC) is one of these free zones and is part of the government’s efforts to develop medical facilities that will attract patients to Dubai from other regions. Another initiative is DuBiotech which enables many companies and universities to establish their own research facilities in the country which in effect helps pharmaceutical companies eager to penetrate the region to further understand various environmental and local issues associated with the development of region-specific medication.
The Government of the UAE, at both the federal and local levels, has shown commitment to expanding access to medical services and healthcare facilities including pharmaceuticals. The country boasts strong, innovative and high-quality healthcare provision, with the government planning further investment in such resources. To this end, the UAE is building multiple healthcare facilities, expecting demand for healthcare to more than double by 2025.
In March 2015 Dubai launched the second phase of its Healthcare City Project, built at a cost ranging between Dhs3 billion and Dhs5 billion, and spread across 22 million ft² in the Jadaf area. This second phase is in line with the UAE Vision 2021 and will help promote the emirate as a medical tourism hub. Almost 25% of the new phase consists of medical and healthcare services, with another 25% dedicated to hospitality and retail shopping, along with a focus on education.
In addition, two years ago the DHA announced several projects as part of its Dubai Health Strategy 2013-2025, some of which are now nearing completion. The new Kings College Medical Facility in Abu Dhabi opened on 19 October 2014, the 200-bed, 98,000 m² Al Jalila Children’s Speciality Hospital to be housed at the Latifa Hospital and the first of its kind, opened in the first half of 2015 and an additional 160 beds have been added at a cost of Dh161 million as part of the expansion of Rashid Hospital’s Trauma and Emergency Centre, opened in May this year (2015). In addition Abu Dhabi’s 126-bed Danat Al Emarat Women & Children’s Hospital and four new Primary health Centres are to be opened later this year, considered essential as frontline care. By 2025, Dubai will have 40 primary health-care centres.
Key drivers for growth in the coming years are growing health insurance penetration, rising per capita income, and increased health awareness, coupled with an increased incidence of lifestyle diseases and a favourable demographic profile.
In addition, the country has become an attractive market for foreign investments in the medical technology sector given that it is only at the “grass-roots stage” of its potential capacity, and many companies are willing to become early adopters of new technology. There are plenty of business opportunities for international medical equipment investors. One of the more lucrative investment opportunities in the sector is in specialised healthcare delivery and supporting services.
According to investment experts, some of the biggest opportunities are likely to be found in healthcare projects, which have already attracted major global companies such as General Electric and Siemens, both of which have large infrastructure businesses as well as being major suppliers of healthcare IT and diagnostic imaging technologies. Initiatives such as the creation of free zones, including the two free zones mentioned earlier, are increasing FDI in general and investment in healthcare research in particular.
More opportunities will arise in health insurance, which until now has been a relatively underdeveloped sector in the region. In addition to the market for healthcare products, there will be a growing market for regulatory consultancy services as the region’s governments struggle to adapt international best practices to local organisational, legislative and legal frameworks.
Healthcare and pharmaceuticals: Pharmaceutical manufacturing
The United Arab Emirates may not be the largest pharmaceutical market in the Middle East and Africa (MEA), but it possesses several advantages that make it an attractive prospect to have the largest pharmaceutical industry in the region. BMI forecasts that sales of prescription drugs and over-the-counter (OTC) medications will grow from US$1.59 billion in 2010 to US$3.27 billion in 2020, representing a compound annual growth rate (CAGR) of 7.5%.
Drivers of growth include increasing public and private wealth fuelled by the oil boom, and a strong healthcare infrastructure that ensures high-tech treatments are always available. A friendly regulatory environment and absence of significant local competitors are other factors influencing a growing number of small research firms locating to the country.
The government is keen to attract foreign investment and diversify the country’s economy, which is highly reliant on oil. To this end, the pharmaceutical and healthcare industries have been identified as important industries to develop. Among the reasons behind such a step is the fact that local production is way behind the level that caters to local consumption. Presently, domestic producers only account for around 20 per cent of the market by volume.
Some experts believe that the sector should grow at the same speed as the fast-developing biotech and healthcare sectors. A wealthy population with a preference for novel therapies ensures there is a high demand for patented drugs. In addition, the regional demand is a successful factor where the country’s strategic position as a logistics hub can be utilised. Julphar, the UAE’s largest domestic player, exports over 93% of its production capacity to the neighbouring countries including the GCC and beyond.
Meanwhile, the UAE continues to lead the region in terms of investment in its home-grown pharmaceutical sector. According to a report by Gulf Organisation for Industrial Consulting, UAE companies invested US$64 million in eight local production facilities. Domestic production is almost exclusively of non-patented drugs, which have been identified as a key growth area if the industry is to survive the entry of foreign generics, even if these are subject to price controls.
However, the growing local demand versus limited domestic production is only one of several marketing and regulatory factors that made the pharmaceutical industry increasingly attracted to the UAE. Major international players such as GlaxoSmithKline, Novartis, Abbott Laboratories, Pfizer and Johnson & Johnson have also expanded their operations in the country, attracted by major developments such as the US$400 million DuBiotech and the US$3 billion Dubai Healthcare City.
Both initiatives are part of the authorities’ plan to attract foreign investment. DuBiotech is aimed at developing the UAE’s biotech industry, while Dubai Healthcare City (DHCC) will enhance the country’s healthcare system and the UAE’s reputation as a centre for premium healthcare, encouraging growth as a medical tourism destination. Some of the world’s biggest names have already started ghost manufacturing some of their popular medications in the UAE to cater for the regional demand and to gain a faster time to market.
Industry experts say that there is potential for further growth in the pharmaceutical products sector in the light of the changing lifestyle dynamics in the region which is based on an increasingly-westernised disease profile with non-communicable diseases such as obesity. Areas of growth for manufacturers include targeting the overweight and obese residents of the UAE.
Other diseases associated with a relatively sedentary lifestyle such as increased heart disease and diabetes will likely remain the mainstay of growth for patented drug manufacturers. New areas for pharmaceutical product growth could also include tapping the rising demand for medical tourism connected to these changes in lifestyle.
Other regional drivers for growth are access-related. The UAE is proving to be an efficient re-export regional hub and several regional markets are proving to be lucrative for companies that are establishing operations in Dubai. This is compounded by the fact that profitability for pharmaceutical products also remains high because they are, in comparison to other sectors, relatively light-weight in distribution and highly profitable at retail despite their regulated prices.
At the regulatory level, the UAE has been widely known for its strict and zero-tolerance policy with intellectual property issues. Also, provisional data issued by the World Intellectual Property Organisation (WIPO) has revealed that there are a number of international patents filed by the UAE under WIPO’s Patent Cooperation Treaty, despite the challenging economic conditions.
Another regulatory factor is believed to be a major decisive factor in foreign penetration of the UAE’s pharmaceutical production. The Dubai Chamber of Commerce and Industry expects the segment to become “one of the key sectors in the UAE” once foreign majority ownership is granted under a foreign investment ownership law. Currently overseas investors can only own up to 49% of most businesses in the country, only holding full control of companies in government-run free trade zones, such as DuBiotech, which are predominantly located in Dubai.
The Pharmaceutical production sector in the UAE is in fact in need of greater access to venture capital (VCs) in order to help it develop and expand and to encourage start-ups in fields such as biotechnology and R&D. Large-scale projects, such as DuBiotech and the Dubai Healthcare City are helping raise the profile of the UAE’s drug industry and secure greater foreign investment. There are several VCs operating in the country now, but they mostly focus on soft businesses rather than manufacturing, leaving the door open for manufacturing-oriented VCs to penetrate.
Healthcare and pharmaceuticals: Hospitals and clinical treatment
Future trends have something to say about the potential in clinical treatment in the UAE. By 2025, diabetes is expected to affect one quarter of the population. One third of Emiratis are overweight. Of those, 36% are obese, and 17% of UAE nationals have high blood pressure. In the UAE, there are 260 known genetic diseases ranging from blood disorders to cancers.
In addition, treatment for cardiovascular disease is expected to account for 24% of the total healthcare expenditure in 2025 compared to less than 12% of the total expenditure today. This will be followed by significant spending on infectious diseases, digestive diseases, maternal and prenatal conditions, genetic disorders, cancer and other diseases.
The demand for hospital beds across the GCC is expected to rise, with the UAE registering the highest projected growth in demand for hospital beds at 160% by 2025. Motivated by both the surge in the population and the development of the country as a medical tourism hub, the UAE is rapidly moving toward a higher-than-ever demand for hospital beds and relative clinical services. In 2013 there were 108 hospitals in the UAE (92 in 2009) – 33 public and 75 private (33 and 59), comprising 7,223 (7,061) public and 3,730 (2,665) private beds.
Source: UAE Ministry of Health, and UAE National Bureau of Statistics, June 2015
Dubai Healthcare City (DHCC) alone comprises nine hospitals and 1,100 beds and is due to be fully operational in 2017. By 2015, the need for hospital beds has more than doubled to about 165,000 and treatment demand has risen by 240%. This is pushing up healthcare costs fivefold to around USD 60 billion.
Two years ago the DHA announced several projects as part of its Dubai Health Strategy 2013-2025, some of which are now nearing completion. The new Kings College Medical Facility in Abu Dhabi opened on 19 October 2014, the 200-bed, 98,000 m² Al Jalila Children’s Speciality Hospital to be housed at the Latifa Hospital and the first of its kind, opened in the first half of 2015 and an additional 160 beds are being added at a cost of Dh161 million as part of the expansion of Rashid Hospital’s Trauma and Emergency Centre, which opened in May this year (2015). In addition Abu Dhabi’s 126-bed Danat Al Emarat Women & Children’s Hospital and four new Primary health Centres are opening this year, considered essential as frontline care. By 2025, Dubai will have 40 primary health-care centres.
At the federal level, a wide range of public health facilities are run by the Ministry of Health, including hospitals, Primary Healthcare Centres, School Health and Maternity & Child Health Units. In addition, there are facilities run by other public sector bodies, including the police and the armed forces.
A number of specialised hospitals have been built since 2011 across the UAE, costing nearly US$272 million. The largest of the hospitals is the 200-bed, Saqr Hospital in Ras Al Khaimah, which cost US$136 million and was completed in 2013. In addition, a specialised psychiatric hospital for patients in Dubai and the northern emirates has also been built. The 272-bed Al Amal Psychiatric Hospital, located in Al Ruwayyah in Dubai and costing US$163 million, is currently being built and is likely to be completed during 2015.
A few of these hospitals specialise in one field. Mafraq, for example, is known for being a cardiac centre, Corniche Hospital is a maternity hospital, and Tawam Hospital specialises in radiotherapy and cancer treatment, being the first hospital in the UAE to install radiotherapy systems. However, it seems the private sector is yet to take up some of these opportunities, leaving immense room for new investments.
Industry resources estimate that there is currently a shortage of 9,000 hospital beds in the UAE’s private sector, which provides a huge investment opportunity. The standard in healthcare is one hospital bed per 250 people, leaving a large gap in supply. With the Abu Dhabi government declaring private insurance mandatory, the demand has gone up, when previously patients would travel out of the country for cheaper treatment.
Private clinics across the country have shown tremendous growth and are participating well to the primary care needs of the population, and some international players are showing interest. The market has proven lucrative even to a giant such as JP Morgan, which owns a strategic share in Dubai-based Gulf Healthcare International (GHI). Operating at a regional level for a number of years, GHI spent US$27 million on a programme to expand affordable healthcare facilities in the UAE, opening six Amber Clinics in Dubai and Abu Dhabi in 2011.
The first of these clinics, in Al Rigga, Deira in Dubai, is a 22,000 ft² facility offering a wide range of medical services to middle- to higher-income groups of all nationalities. Staffed with medical experts across fifteen specialties and primary care departments, they are as diverse as the local community, with European, Indian, Arabic and Filipino doctors.
Healthcare and pharmaceuticals: Medical tourism
Demand for medical tourism has escalated over the years, driven by deteriorating national healthcare services in many Western countries, exorbitant medical costs and long waiting lines. This has contributed to strong demand for affordable medical treatment performed by highly trained medical specialists in state-of- the-art facilities.
The UAE has been able to provide medical services at a lower cost – when compared to North America and European counterparts in the private sector – with no waiting times in modern, fully equipped facilities. These factors provide significant incentives to patients who would otherwise face extensive queues for treatment in public healthcare facilities in their home countries. In addition, the UAE is hoping to become an ideal alternative for patients from neighbouring GCC countries who prefer to stay at a reasonable proximity to their families in a culturally similar environment.
Some resources also mention privacy as an important factor for choosing the UAE as a health tourism destination. The UAE authorities apply a zero-tolerance policy regarding privacy breaching incidents especially when it concerns celebrities and dignitaries. Government and private sector initiatives alike are actually targeting these two segments, though the competition is not with low-cost Asian markets, but with the rocketing costs in the Western hemisphere.
Among the significant initiatives to cater for GCC nationals is the new Cleveland Clinic Abu Dhabi. As part of Abu Dhabi’s push to expand its healthcare facilities, Cleveland Clinic Abu Dhabi, a joint venture between Mubadala Healthcare and the Health Authority-Abu Dhabi (HAAD), opens this year (2015) and comprises five clinic floors, three diagnostic and treatment levels and 13 floors of critical and acute inpatient units, totalling 364 beds, expandable to 490).
Initiatives introduced by Dubai such as the US$3 billion Dubai Health Care City have succeeded in attracting international healthcare brands including Mayo Clinic and Great Ormond Street Hospital as well as leading pharmaceutical and medical technology suppliers such as Johnson and Johnson, Novartis and Novo Nordisk. The Dubai Health Care City (DHCC) continues to attract a large number of patients from the Middle East and particularly the GCC who would have travelled to the West in the past. DHCC was built to become a state-of-the-art “centre of excellence” for clinical and wellness services, medical education and research. The emirate has also teamed up with Harvard Medical School to operate at DHCC. DHCC, occupying more than 370,000 m² includes two hospitals, over 120 outpatient medical centres and diagnostic laboratories and more than 4,000 specialists.
In addition, reforms such as the introduction of an international accreditation and certification organisation, the Joint Commission International (JCI), is increasing confidence in the market internationally. The JCI has now accredited 102 medical centres in the UAE (mid 2015).
The UAE’s Ministry of Health is at the forefront of developing the necessary infrastructure to attract medical tourists. According to the Ministry, the country is ready to receive medical tourists coming with their families, whether for plastic surgery, knee replacement or treatment of cardiovascular diseases. For Ministry officials, the UAE has managed to reverse the equation when people would go to London for shopping with their families and receive a check-up or undergo a small operation. Dubai is ready for this and has so much to offer now, with certified hospitals from international agencies. In fact, the UAE is quickly gaining popularity as a medical tourism destination due to its low cost, English-speaking medical staff, and virtually no queues for treatments.
In terms of treatment, the country offers a myriad of first-class medical treatments including cochlear implants, diabetes treatments, orthopaedics, cardiology, oncology, obesity surgery, neurology, plastic & cosmetic surgery, physical therapy, dermatology, rheumatology, ophthalmology, lung treatments, and urology.
In addition to the healthcare level, the UAE is relying on its tourism excellence in attracting patients from different parts of the world. Being the leading shopping destination in the Middle East, Africa, Central and Southern Asia, it is much easier for many people, especially wealthy patients, to bring in family members to enjoy a holiday in Dubai while being treated at one of the country’s hospitals.
Private sector hospitals are active in this field as well. Dubai was for years the chosen destination for treatment of American government officials located in the GCC and neighbouring regions. Plastic surgeons and cosmetic clinics in Dubai are known to be a favourite destination for many people in Europe and even Russia.
One appealing opportunity that specialty hospitals in the UK could consider is to establish their own ventures in the UAE to cater for their share of medical tourism. Such a move would benefit the UK hospital with an increased international reputation, as well as higher profitability by operating in a wealthier region. Working with the right insurance company on plans for medical tourists from the UK would also give such hospitals a competitive edge as the tourists’ choice while enjoying their holiday in the UAE.
Healthcare and pharmaceuticals: Medical equipment and technology
Despite the economic downturn, the UAE has retained its status as an attractive market for medical equipment in search of near-term returns with a high potential. In 2009, the UAE’s medical devices market size was US$600 million, the second largest in the GCC after Saudi Arabia. The medical device market is expected to expand at a 2013-2018 compound annual growth rate (CAGR) of around 8.7%, from an estimated US$0.8 billion in 2013 to around US$1.3 billion in 2018.
The accelerating growth is actually motivated by several factors that include increasing public and private wealth fuelled by the oil boom, strong and strengthening healthcare infrastructure, approvals of more medicines, internationally-recognised medical education institutions and a friendly regulatory environment.
The UAE imports of medical equipment account for an estimated 96.6% of the market in value terms. Due to a strong demand and the country’s limited domestic production capability, growth is expected to remain strong over the next years. UAE’s major trading partners in this segment include Italy, France, Germany, US, UK, Sweden, Japan and China. The high percentage of imports highlights the necessity of local production of complete medical devices, components and spare parts and maintenance services, in addition to specialised training.
Public spending has its share in the development of this segment as well. Approximately 5% of the Ministry of Health (MoH) budget is spent on medical machines, tools, and supplies. For example, the budget share allocated to the MoH in 2010 was US$762 million, an increase of about US$38 million over the 2009 budget allocation, and this trend has continued each year since then.
Whilst the medical equipment market is growing at a speedy rate in general, the following sub sectors have shown promising signs of accelerated growth in the UAE: Diagnostic equipment, therapy and rehabilitation equipment, disposables, monitoring equipment, medical aids and surgical tools and devices.
However, one of the emerging segments that deserves consideration is pre-hospital care equipment such as ventilation and resuscitation equipment, which keep people alive on the way to hospital, whether for use in police and ambulance vehicles or at home. These devices are gaining popularity among local citizens and expatriates alike as part of every home’s first-aid kit.
For a country with one of the highest number of diabetes patients in the world, glucose monitoring devices, insulin pumps, insulin pens, and insulin syringes are also becoming a significant segment of the market.
Another interesting growth segment is mobile medical devices (also referred to as m-Health), which allow medical professionals to manage patients remotely. These devices can monitor their conditions in real time and pass on vital statistical information between the healthcare provider and the patient.
M-Health represents a new and booming trend in the healthcare industry, and is set to become a trillion-dollar industry allowing the delivery of better healthcare while positively impacting the bottom line across the range of stakeholders in the healthcare industry.
Currently, 94% of physicians are using m-health consulting apparatus while on the job, and 63% of physicians are using personal devices for mobile health solutions that aren’t connected to their practice. At least one mobile phone operator in the UAE has started a business unit to support the m-health market and facilitate its integration into the country’s healthcare scene.
At the side of this segment lies the healthcare information and technology (IT) sub-segment which is rapidly growing since the UAE is the region’s sole IT capital. The market for IT solutions in the UAE healthcare sector has been driven by several factors including the worrying rise of several chronic diseases in the region, most notably diabetes. While the medical industry is gearing up to address this disease, particularly type one and type two diabetes, the aim is to obtain solutions for the facilities – the technical and back-end operations – to improve the overall care for the public.
Both international and local firms operate in the healthcare IT market although local companies are more involved in localisation and integration of systems to match both cultural and regulatory requirements. Of particular interest here is the rise in hospital and clinic-orientated Customer Relationship Management (CRM) applications. There is a growing demand for Arabic-based hospital and clinic management applications, especially for use with public sector entities.
Hospital Technical Services is an emerging business line but it is yet to prevail to its full potential. The transformation taking place is to move from hospital cleaning services, as in the past, to a more technical role that helps with various technologies and devices.
Healthcare and pharmaceuticals: Healthcare investment
The government is encouraging investment to enable the private sector to play a more signiﬁcant role in providing health services. Healthcare in the UAE remains a focus of investment with a number of government and private initiatives. SEHA, the health services company that operates government hospitals and clinics in Abu Dhabi, is funding a DH multibillion project to replace Al Mafraq Hospital. The new hospital, a state-of-the-art facility to secure Mafraq Hospital's position as a leading trauma and surgery hospital, is opening this year (2015). SEHA has also funded the groundbreaking and award-winning new Al Ain Hospital, in Al Ain city, due to open shortly.
The Ajman Health Zone and the MoH embarked on an AED 500 million expansion project involving Sheikh Khalifa bin Zayed Hospital and the creation of a number of primary health centres, a diabetes and obesity centre and a medical fitness centre. Umm al-Qaiwain Hospital has also undergone a revamp costing more than AED 400 million, and the new 400-bed Jebel Ali Trauma and Emergency Centre in Dubai opened in 2010. In addition the 200-bed Al Jalila Children's Specialty Hospital in Dubai has been built and opened in 2011.
Mubadala Healthcare, part of the Abu Dhabi government-owned Mubadala Development Company, launched the ﬁrst part of its major pathology laboratory project in Dubai in December 2009. Its hub in Abu Dhabi opened in 2010 and has had a dramatic effect on services. The National Reference Laboratory is the first of its kind in the region and tests a large number and variety of samples that in the past were sent abroad, thereby reducing waiting times for results and costs to local healthcare providers.
The UAE provides a high level of specialised health care at its medical facilities, including open-heart surgery and organ transplantation. Many of the new hospitals, public and private, offer advanced techniques such as ‘keyhole’, or minimally invasive, surgery, and interventional radiology. Until recently, these procedures were only available abroad.
Despite these major strides and the fact that the Ministry of Health's (MoH) budget has increased each year at an average of 4.5%, there is ever-increasing pressure on the country's healthcare services. This is primarily due to the unprecedented growth in population, but other factors come into play, such as the burgeoning cost of technology. Another is that the role of the private sector has been limited to-date.
Furthermore, expatriates were also entitled to use MoH facilities for minimal fees on production of a health card which used to cost as little as AED 300 (US$82) per year. This put a heavy burden on public healthcare and prevented the development of private facilities. The introduction of compulsory health insurance was considered to be the best way forward, ultimately leading to more cost-effective and efficient services. The introduction of mandatory health insurance in Abu Dhabi for expatriates was a major driver in the reform of healthcare policy – Abu Dhabi nationals were brought under the scheme from 1 June 2008, and health insurance has been mandatory for all citizens, residents and visitors to Dubai since 2014.
Abu Dhabi's Health Insurance Law states that except in circumstances outlined in Articles 2 and 3, all foreign residents and their family members must participate in the emirate’s compulsory health insurance system, which applies to both public and private hospitals. The system is, however, optional for UAE citizens. The law obliges employers to enrol all employees, spouses and three children under the age of 18 in the health insurance scheme and employees are required to secure health insurance for persons sponsored by them who are not covered by the employer.
Emphasising the need to ensure that quality and efficient health services are delivered to UAE nationals and expatriates, the MoH has been restructured and streamlined, both at administrative and technical levels, to keep abreast with international developments and reinforce the private health sector. Hospital boards are being revitalised, regular hospital visits are being initiated and a UAE council for medical specialists has been developed to upgrade the training of UAE medical personnel.
Travel and tourism is one of the fastest growing industries across the world and the UAE Government is increasingly embracing the sector as a core part of its growth strategies. Global travel and tourism is projected to be worth US$7.2 trillion this year (2015). The share contribution of tourism to gross domestic product (GDP) is set to strengthen in the next few years, especially in the Middle East with the UAE largely behind the rapid growth of the sector in the region. The UAE travel and tourism sector contribution to Gross Domestic Product is set to significantly outperform the global and the Middle East percentage.
This growth could be attributed to large public investment in airports, airlines, and other transport infrastructure, making it possible to travel to the UAE easily, large investments in hotels, and large and varied sports and leisure projects that respond to wealthy consumer’s preferences, such as the shopping festival, prestigious horse races, tennis tournaments, car rallies, and other highly-prized sports events.
The tourism industry is an important sector in the future and prosperity of the UAE economy. According to the World Economic Forum Travel and Tourism Competitiveness Report, for countries in the Middle East and Africa Region, the UAE ranked number one in terms of tourism competitiveness, based on the following criteria: safety and security, health and hygiene, infrastructure, information and communication technology, price competitiveness, human capital, culture and natural resources, preordination of tourism and policy rules and regulations. Globally, the tourism industry has had an increasing contribution to overall gross domestic product ﬁgures and this contribution is set to increase, especially in emerging markets, in the future.
Further, the positive effect of the tourism sector on the UAE economy is reﬂected in the fact that one in every 8.5% of jobs in 2010 was travel and tourism related and is expected to have increased to 9.1% by 2016. The UAE is now beginning to reap the benefits of investing in tourism, a policy which began with the establishment of the Dubai Tourism and Commerce Marketing Department in 1997, followed by the launching of Burj Al-Arab in 1999 and the ﬂood of hotels, resorts and entertainment facilities which have come online since.
The UAE is determined to attract foreign direct investment into commerce and tourism and is therefore offering an unrivalled business base across the region. The country has an open market system which is supported by a world-class infrastructure and service culture where the UAE Government acts as a facilitator for business and free trade. International companies setting up in the UAE can avail business advantages that are generally unmatched across the world. For instance, the highly successful UAE business free zones allow companies full ownership and control of their businesses, flexible investment options and non-payment of customs excise duty among others.
Abu Dhabi continues to make key strides towards the implementation of its Plan Abu Dhabi 2030, a roadmap that seeks to cope with an estimated tripling of the population of the capital in the next two decades as new industries, cultural attractions, hotels, schools and hospitals are built. The plan seeks to ﬁnd a balance between managing growth, fostering tourism and trade while preserving the city's cultural heritage and natural environment.
The tourism sector strategy is overseen by the Abu Dhabi Tourism Authority (ADTA) and under its five-year plan for 2013-18 the emirate is focusing on the luxury market, high quality entertainment and world class sports events. A third more people visited in 2014 compared with a year before, whilst the number of unoccupied rooms fell to just under 20%. The greatest proportion of visitors were from the UK, taking up to 20% of the accommodation.
Various hotel developments are under way to meet current demand as well as an expected future increase. The Louvre and the Guggenheim (the US$27 billion cultural district project), have developed Abu Dhabi branches on Saadiyat Island. In Sir Bani Yas Island, situated 170 km west of the capital, the Tourism Development & investment Company (TDIC) has also developed an eco-tourism segment. A luxury resort has been developed on the island, complete with an animal sanctuary and a promise to plant a mangrove seedling for every visitor to the island, turning the island into a nature reserve and luxury resort with sustainable development principles.
The government is developing eco-tourism niche projects and is targeting the high-end, low-volume segment in the eastern and western region of Abu Dhabi, Al Ain and Al Gharbia's natural beauty, including a formal tourism infrastructure with luxury hotels, golf courses and an indoor ski slope on the ﬂank of the Jebel Hafeet Mountain.
The tourism sector in Dubai contributes an estimated 18% of the emirate’s direct GDP and 30% of its indirect. Dubai's tourism sector is powering ahead in every segment, including retail through events such as the annual Dubai Shopping Festival, and sports through the likes of the Desert Classic Golf Tournament.
The emirate is now shifting its focus to the mid-market. Plans for 2015-16 are an additional 141 hotel establishments, which already brought the total for 2014 to 751 hotel establishments and just under 114,000 rooms. The aim is to create 20,000 more hotel rooms by the end of 2016, with an extra 35,000 by 2020.
Sharjah is carving out a distinct niche for itself in tourism in the Gulf, focusing on cultural draws and attracting families rather than the more jet-set crowd drawn by the bright lights of neighbouring Dubai. As well as culture, Sharjah offers an array of natural wonders, pristine beaches, beautiful sand dunes and rustic parks.
The authorities are capitalising on these natural attractions with initiatives such as the Emirates Desert Park and the affiliated Breeding Centre for Endangered Arabian Wildlife, located 20 minutes from Sharjah, whilst the Wasit Nature Reserve is a must for birdwatchers. Meetings, incentives, conferences and expositions (MICE) tourism remains important, as business travellers tend to spend more per day than pleasure visitors. The emirate is busily promoting itself abroad, with China and Scandinavia seen as key exporters of tourists to Sharjah in the future.
Ajman, with beautiful beaches, a solid transport infrastructure and a warm and welcoming culture, is seeking to create an image for itself with a luxurious, exclusive feel, making the emirate an ideal vacation spot. A number of ﬁve-star hotels have been constructed along the Ajman corniche and elsewhere within the city. In addition, the Al Zora project on the eastern side of Ajman Creek provides an exclusive, integrated holiday and residential destination. Overall, Ajman has become a place for holidaymakers looking for luxury and comfort.
One of the most renowned of the Umm al-Quwain tourist attractions is the Umm al-Quwain Museum. This museum portrays the history of this city, with old relics, paintings and artefacts on display highlighting the art and culture of the city's history. Tourist Attractions in Umm al-Quwain also include adventure activities, including Dreamland Aqua Park. Cultural activities which tourists can enjoy include falconry, ﬁshing, camel racing and dhow building, all common in the Umm Al Quwain emirate. The Aquarium, another tourist attraction in Umm al-Quwain, is situated on the peninsula near the new port. The island of Umm Al Quwain is situated to the east of the mainland peninsula on a unique stretch of coastline, with sandy islands encircled by thick mangrove forests and a series of creeks. The ancient ruins of Al-Dur, another popular tourist attraction in Umm al-Quwain, was a coastal city dating back to the third century AD.
Ras Al Khaimah (RAK) has a landscape and golden beaches that offer unique scenery in the region, and therefore its potential to grow into a notable tourist destination is boundless.
The emirate has plans for trebling the current supply of hotel rooms over the coming years, with a number of projects currently planned or under way. RAK Tourism is looking to develop its tourism strategy around the emirate’s cultural heritage and natural landscape, to include outdoor soft adventure sports, plus other eco and nature based activities. Ecotourism is viewed as a viable way forward, as related activities have a low environmental impact and can help further the economic development of local communities. The level of services and quality of RAK’s resorts is comparable to those found in the other emirates, with high occupancy levels between 90 and 95%.
Fujairah, with its location on the east coast of the UAE, is probably the most beautiful of the emirates. Along with its sandy beaches, the emirate has the Hajar Mountains and historic monuments such as old castles. These have made Fujairah a tourist destination for UAE residents, and recently the emirate has begun to witness an increasing ﬂow of people from Europe – mainly Russia and Germany. Fujairah has made important initiatives in the protection of the environment –advancing the ideals of ecotourism, particularly in the protection of the mountain reserve that spans nearly 220 km².
The Fujairah government has opened three mega projects in the last few years, including the Mina Al Fajer Resort, an AED 600 million sea-front community managed by Fairmont Hotels and Resorts and consisting of a marina, 48 mountain villas, 13 solarium villas, and 80 marina apartments, in addition to a 200-room ﬁve-star hotel.
Travel, tourism and hospitality: Hotels and hospitality
The growth potential of luxury and budget hotels and student accommodation in the UAE, can be assessed by looking at developments in each emirate, particularly in Abu Dhabi, Dubai and Sharjah. These three emirates are the largest and account for more than three quarters of the country’s GDP. Ras Al Khaimah has also made significant strides in this regard.
In 2009, Abu Dhabi was ranked the second most expensive city for hotel rooms in the world after Moscow. Abu Dhabi has since added more hotel rooms and the rates have dropped by 15% (from an average of US$301 to US$256). The latest data shows that Abu Dhabi is adding more hotels in the high-end market and this should add further pressure on the rates.
Abu Dhabi’s main source of guests has traditionally been the UK and Germany. However, visitors from Russia and Saudi Arabia are on the increase. The Emirate holds some of the Global premium sports events like F1 Etihad Airways Abu Dhabi Grand Prix which attract high-end visitors and therefore its continued focus on high-end hotels.
Another segment that could be given attention is budget rooms, as India is also becoming an important source for visitors, the majority of whom are likely to be low to mid-segment. Abu Dhabi therefore needs to ensure that it has the right balance of low to high- end hotels.
Dubai has made remarkable achievements in the hospitality industry. Dubai’s success can be attributed to the emirate’s ability to promptly adjust to the needs of the market and provide a balanced portfolio of accommodation that caters for all categories of customers – from low-end to high-end. The introduction of low cost airlines has seen a jump in demand for budget rooms, which the emirate continues to address.
Sharjah, the third largest emirate of the UAE, has made huge milestones in developing culture-related ecotourism. The emirate’s hotel network is biased towards the low- to-mid-end segment and, with the introduction of budget carriers like Flydubai, demand continues to grow in the budget traveller segment. There are a number of initiatives to address the growing low to mid-segment market. Rotana Hotels, a popular hotel group, has partnered with Air Arabia, a budget air carrier, to launch a low-cost hotel brand called Centro, mainly targeted towards budget travellers.
Travel, tourism and hospitality: Spas and recreation facilities
The Middle East has registered a substantial growth in spa facilities in the past few years. In a report by the Gulf News, the UAE is well ahead of its Middle East and North Africa counterparts in terms of the number of spa facilities in the country and in revenue.
The Dubai Chamber of Commerce attributes the growth of the wellness and spa industry in the UAE to two annual festivals: the Dubai Shopping Festival and the Dubai Summer Surprises, which are said to be directly raising the annual sales trends.
For the majority of people in the UAE personal wellness is at the centre of visiting a spa. The days have become busier and more crowded and hence more stressful for most, and a spa treatment brings some welcome relief. Spa facilities have become an integral part of the service offered by malls. Obesity is observed to be a growing occurrence in the region, and many spa facilities now offer specialty treatments to help people get into shape.
Because the UAE is the de-facto tourism hub, establishing specialised wellness spas that provide these treatments can be a lucrative business opportunity. The country’s diverse natural scenery, developed healthcare sector and ability to attract international brands in this field are strong competitive advantages that will allow this niche to flourish.
People across the UAE now have larger than ever disposable income. For many tourists, investment in their health is a natural way to enjoy their leisure time. The UAE also has the longest pipeline of hotels under construction across the GCC. Hotels have to have a spa for them to be seen as offering a full service.
However, a number of people working in spas do not have formal training and qualifications. Spas have become an integral part of community health and should be manned by qualified personnel. Therefore, the need for academies to provide formal training and qualifications will further increase as more of these facilities open each year.
Travel, tourism and hospitality: Tourism and travel services
With the variety of tourist offerings that the UAE presents and the ambitious tourism sector development plans embraced by the country, the establishment of capable tour operators and travel service providers is vital to complete and complement the tourism industry value chain. New innovative ways are being developed to utilise the country’s offerings and new concepts pioneered to further attract tourists from around the world to enjoy the UAE experience.
Currently, tour companies offer tailor-made services to help visitors discover the UAE. Organised tours range from a half-day city tour to one or two-night desert and mountain safaris plus daily programmes for desert driving, shopping tours, camel riding, canoe trips, sand boarding, sand skiing, dune buggy driving, theme park tours and water park adventures. Special interest packages can also be arranged to suit the visitor’s specialised hobby or sport such as diving, deep-sea fishing, cultural tours or bird watching.
Tour operators are licensed via the different tourism development authorities across the seven emirates. In general, tour operators wishing to organise in-bound tours are required to have qualified and licensed tour guides. Abu Dhabi Tourism Authority (ADTA), Dubai Department of Tourism and Commerce Marketing and Sharjah Commerce and Tourism Development Authority offer comprehensive training programmes in this field. Tour guides should have at least a recognised college degree and should have decent knowledge about the UAE history, geography and culture.
As the global economy is regaining momentum, the inflow of tourists is increasing. The United Nations World Tourism Organisation forecasts tourism- related revenues will hit a high of US$2 trillion by year 2020. Global tourism is expected to grow from 1.06 billion travellers in 2010 to 1.56 billion in 2020. Meanwhile the number of tourists travelling to the Middle East is expected to reach 136 million by 2020.
Tour operators come in three categories: overseas operators, inbound operators, and outbound tour operators. A number of operators provide both inbound and outbound services. Inbound tour operators offer a number of possibilities such as shopping tours in Dubai – hailed as the shopping centre of the world with around twenty shopping malls – water sports such as water surfing, skiing and kayaking, helicopter and hot air balloon tours giving the tourist a birds-eye view of the cities and the desert, and Mosque tours for non-Muslims helping to promote cross-cultural understanding.
The UAE market of outbound tourists is very diverse and therefore offers huge niche marketing opportunities for tour operators. A number of services offered in the UAE can also be offered in other GCC countries as they have many geographic features and cultures similar to those of the UAE.
Abu Dhabi Tourism Authority (ADTA) and MSC Cruises signed a landmark co-operation agreement that has seen the world’s fastest-growing cruise operators deploy one of its top vessels to the UAE capital on a homeport basis. This form of outbound operator service provides several opportunities given the UAE’s long coastline and large number of ports.
Travel, tourism and hospitality: Museums and historical tourism
Each emirate manages its own set of museums and heritage sites. Dubai, Abu Dhabi and Sharjah have a more established network of heritage sites and museums when compared to their counterparts.
Abu Dhabi has developed a number of sites to serve as historical tourism destinations. For instance Delma Island showcases the nation’s pearling history while Al Ain is popular for its forts and castles. There are major museum and art pavilions at Saadiyat Island, one of the major global cultural centres.
The innovative Saadiyat Island Development is at the core of the Abu Dhabi 2030 Economic and Cultural Vision. The Island is the host for seven mega projects including the three major museums: the Louvre Abu Dhabi, Sayed Museum and the Guggenheim Museum. The Government of Abu Dhabi succeeded in securing key international partnerships with these top-notch museums, which now provide top-tier collections and the transfer of technical knowledge and expertise.
The Tourism Development and Investment Company (TDIC), as part of this major cultural initiative, developed Louvre Abu Dhabi in partnership with the world-renowned Louvre Museum in Paris, completed in 2014. The Zayed National Museum in partnership with the British Museum has recently opened, and Guggenheim Abu Dhabi in cooperation with the Guggenheim Museum in New York, is due for completion in 2017.
Qualified local and international suppliers and expert houses are invited to contribute to different aspects of the projects and infrastructure developments including facilities construction, technical consultancy, curation, international marketing, and interior design. TDIC has been given the mandate to oversee these major development projects and is the point of contact for interested suppliers. See: www.tdic.ae
Sharjah has 17 museums and cultural centres dedicated to showcasing the different aspects of the country’s past, such as literature, archaeology, natural history and the pearl trade.
Dubai’s main archaeological sites are located in Jumeirah and Al Sufooh. The Dubai Museum is located in Al Fahidi Fort, built around 1787. There are also other specialised museums and historical areas that have been established and refurbished, including traditional houses such as Sheik Saeed’s house, the main house of Sheik Saeed Al Moktoum who ruled Dubai from 1912 to 1958, the Traditional Architectural Museum, Bastakiya Historical Area and the Hatta Heritage Village.
The emirate of Ras Al Khaimah has an interesting heritage. The emirate also has its own national museum and a number of ancient buildings and archaeological sites including the Queen of Sheba Palace and the “Tal Al Sanam” ancient sun-worshippers temple. Although these sites are not yet ready for tourists, the Government of Ras Al Khaimah is seeking serious partnerships to restore these sites and turn them into tourist destinations.
The UAE National Tourism Council
The National Council for Tourism and Antiquities was set up in 2009 and given the responsibility to actively represent the country at global tourism events, and create a federal level structure to regulate tourism departments in individual emirates to ensure uniformity and the successful implementation of a cohesive strategy to boost tourism throughout the UAE.
2009 saw the UAE cabinet take the formal decision to designate the NCTA as the official national representative for tourism and Antiquities affairs in the UAE.
One of NCTA's first steps was to negotiate the UAE's entry to the United Nations World Tourism Organization (UNWTO) as a full member. As the leading international organization in the field of tourism, UNWTO promotes tourism as a driver of economic growth, inclusive development and environmental sustainability, and offers leadership and support to the sector in advancing knowledge and tourism policies worldwide.
Since inception, the NCTA has worked tirelessly to promote tourism and Antiquities to the UAE as a whole by raising awareness of the unique cultural attractions, traditions, historical artifacts and various entertainment and leisure option each emirate within the country offers.
The NCTA is aware of the role aviation and tourism have played in the UAE's economic transformation, with international traffic to the Middle East region expected to increase to 220 million by 2030. The NCTA is committed to working with partners to ensure that the UAE continues to benefit from sustainable tourism streams in the future.
At the same time, the NCTA also has the remit of working with global partners including governments, international bodies and civil society to safeguard the UAE's heritage and protect key sites to ensure that residents and tourists alike can continue to enjoy the UAE's culture and antiquities in the years to come.
Please visit the UAE National Tourism Council website for more information: www.uaetourism.ae
Abu Dhabi Office
PO Box 408, Abu Dhabi, United Arab Emirates
Office Number: +971 2 4434166
Fax Number: +971 2 4468449
PO Box 92222, Dubai, United Arab Emirates
Office Number: +971 4 2545555
Fax Number: +971 4 2545554
Travel, tourism and hospitality: Events and incentives tourism
The events and incentives tourism sector is a significant driver not only of the UAE economy but also of the global recognition of the UAE brand. The country has become known as a host to some of the leading international events and conferences, exhibitions, and trade fairs spanning different industries and attracting both retail and corporate visitors and delegates thanks to the state-of-the-art conference and exhibition facilities across the seven emirates, and to the country’s position as a global airline hub that connects the world’s continents. Recent estimates indicate around two-thirds of the current exhibition space available in the GCC is situated in the UAE, indicating that the country has been able to capitalise on its strategic crossroads location between Europe, Africa and Asia.
The UAE is today one of the leaders in the international exhibition industry hosting some of the largest and most significant exhibitions across different sectors globally. Some of the notable annual exhibitions held in the country include International Defence Exhibition and Conference (IDEX), one of the biggest shows for defence equipment and services, Gulf Information Technology Exhibition (GITEX), one of the world’s largest information technology related exhibitions, and Gulfood, the world’s largest annual foodstuff-related exhibition.
Moreover, the country has also become a destination of choice for conventions, conferences and international organisations’ meetings. With the newly formed Abu Dhabi Convention Bureau (ADCB), launched in March 2013, the UAE is now ranked by the International Congress & Convention Association (ICCA) as one of the top destinations globally in this category. Annually, the major cities of the UAE host hundreds of regional and international conventions, conferences, forums and summits that draw professionals from different industries and with a wide variety of expertise.
In 2003, Dubai orchestrated the Annual Meetings of the World Bank Group and the International Monetary Fund. Held at the custom-built Dubai International Convention Centre, the event was remarkably successful, strongly reinforcing the brand of the city and the country in the international business tourism arena. The annually-held Abu Dhabi Future Energy Summit, pioneered in 2010 by MASDAR and attended by presidents and royalties, is another signal of the foresight of the UAE in bringing together thought-leadership from around the world to strategise one of the most critical issues for humanity. The Arab Strategy Forum, Arab Health Congress, Leaders in Dubai and Middle East Communications Exhibition and Conference (MECOM) in Abu Dhabi are just some of the many other leading events that take place regularly in the country.
Each emirate manages its own exhibitions and conference facilities. Abu Dhabi launched Advantage Abu Dhabi to promote conference and exhibition initiatives. The Emirate has a number of projects underway, one of which is phase four of the Capital Centre development, a fully-integrated community project which is part of the Emirate’s vision for 2030. This huge development will include provisions for large exhibition halls and a number of state-of-the-art conference facilities. Currently, Abu Dhabi National Exhibition Centre, with a total area of 73,000 m², serves as the main venue for major international exhibitions and conventions held in the capital.
Over the past three decades, Dubai has continued to upgrade its exhibition and conference facilities to position itself at the top of global standards. The Dubai International Conference and Exhibition Centre has evolved to be one of the largest and most advanced conference and exhibition facilities in the MENA region, providing a total area of 93,900 m². Some other notable conference and exhibition facilities in Dubai include Dubai Airport Expo, Madinat Jumeirah Conference Centre, DIFC Conference Centre and Knowledge Village Conference Centre, as well as a wide choice of venues in Dubai’s well-known luxurious hotels and other spacious buildings.
The other emirates of the UAE have also joined the trend, developing their own state-of-the-art exhibition and conference facilities to aid the realisation of their economic vision. The Expo Centre Sharjah and the Ras Al Khaimah Exhibition Centre are two examples of these well-established facilities. Projects are underway in the other emirates to upgrade and develop new venues that will enable them to increase their share in the incentives tourism arena.
The emirate of Fujairah is on the path of becoming a significant hub in international logistics among other emerging industries. The government is determined to increase the significance of the emirate in the business tourism arena through hosting international trade fairs and notable industry events. Currently, Fujairah has one exhibition facility with three halls. However, the emirate is keen for new concepts and ideas of exhibition and conference facilities which can host larger events and position the emirate high in this growing branch of tourism.
Abu Dhabi National Exhibitions Company (ADNEC)
ADNEC owns and operates the Abu Dhabi National Exhibition Centre, the world's most modern exhibition centre which the President of the UAE, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, opened on 18th February, 2007.
Since then, the centre has welcomed millions of visitors and hosted hundreds of events from large scale public shows such as the Abu Dhabi Book Fair, to international trade exhibitions such as IDEX (International Defence Exhibition & Conference) and ADIPEC (Abu Dhabi International Petroleum Exhibition & Conference). ADNEC hosts high proﬁle, large-scale events as well as promoting smaller specialist shows, by providing help and support to event organisers.
With live event space totalling 78,000 m², ADNEC is the largest exhibition venue in the Middle East & North Africa region and one of the few in the world capable of hosting indoor, outdoor and marine events simultaneously.
The Capital Centre Development surrounds the Abu Dhabi National Exhibition Centre (ADNEC). It is considered to be a fully integrated project that houses a business and residential micro city of 23 towers, including 7 hotels, a shopping mall and restaurants. The project is government-backed, while the project development and management is undertaken by ADNEC. Consultants, concept developments, interior design experts and specialised firms in the planning and development of exhibition and conference facilities can find interesting opportunities to participate in strategic projects such as this.
Capital Gate is Abu Dhabi’s signature tower. Standing 160 m tall, the tower is built to lean 18 degrees westward, making it the world's furthest-leaning man-made tower. Capital Gate houses the five-star ‘Hyatt Capital Gate’ hotel, as well as 20,000 m² of the most exclusive ofﬁce space in the UAE capital. The tower forms the focal point of ADNEC's Capital Centre development.
Abu Dhabi Hall
Abu Dhabi Hall is widely regarded as one of the world's most ﬂexible event spaces, capable of staging a variety of events such as concerts, sporting and entertainment events, exhibitions, conferences and weddings.
Abu Dhabi Hall has already staged a large number of very high-proﬁle events including performances of the Household Cavalry, the conference component of World Future Energy Summit 2010, the Sheikh Zayed Book Awards, several royal weddings and a number of Abu Dhabi University events. Abu Dhabi Hall is the UAE's largest hall to house a permanent retractable seating solution. It can be conﬁgured to a number of set-ups and is capable of accommodating up to 6,000 spectators seated and 8,000 standing.
Dubai World Trade Centre (DWTC)
Since its inception in 1979, the Dubai World Trade Centre (DWTC) has been instrumental in establishing Dubai's position as a global ﬁnancial and event centre.
The historic landmark on Dubai's dynamic skyscraper corridor of Sheikh Zayed Road is the iconic 37-storey Sheikh Rashid office tower, commissioned as the ﬁrst property of the Dubai World Trade Centre. DWTC facilities have expanded since, to comprise the Dubai International Convention and Exhibition Centre (DICEC), the Convention Tower office building, on-site accommodation at the Novotel and Ibis hotels and serviced accommodation at the Dubai International Hotel Apartments. The newest addition to the DICEC complex is the Sheikh Saeed Halls, a state-of-the-art extension that opened for the 2009 Exhibition Season.
Comprising four new halls, this extension brings the DICEC's total amount of covered exhibition space to over a million square feet. The halls have been designed and built with the aim of fuelling the growing momentum of the Meetings Industry (MICE) sector in Dubai and handling the increased demand for exhibition space throughout the region. In addition to this venue, DWTC also manages the Airport Expo Dubai. With an infrastructure ideally suited for industrial trade shows, this 33,000 m² venue is adjacent to the Dubai Airport and is home to the prestigious Air Show Dubai.
Pursuing a vision to make Dubai the world's leading destination for all major exhibitions, conferences and events, DWTC has evolved from being the forerunner of the fast-growing exhibitions industry into a multi-dimensional business catalyst that has propelled Dubai's meteoric rise to a leading global economic powerhouse alongside Singapore, Hong Kong, London and New York.
With 30 years of expertise in Venue and Estate Management, DWTC's offerings include exhibitions organisation, facilities management, property leasing, providing event services, Hospitality and Food & Beverage (F&B), both within our venues, and for weddings and outside catering requirements. As an estate manager, DWTC services government offices, foreign embassies, trade commissions, regional headquarters for leading international companies and Fortune 100 corporations.
Hosting more than 100 world-class shows annually, DWTC currently welcomes over one million visitors and thousands of exhibitors from every corner of the globe to some of the most acclaimed sector-speciﬁc trade fairs, blockbuster consumer events and prestigious international conferences in Dubai.
Being the region's largest hosting platform, the events held at DWTC cover a wide range of industries including technology, food and health, luxury goods, fashion and retail, construction, interior design, consumer electronics, travel & tourism and transport and education. DWTC's calendar of events is a diverse mix of some of the most authoritative proﬁles in the region, such as GITEX, Arabian Travel Market, Cityscape, Big 5, Dubai International Boat Show, Gulfood, the Motor Show and the Air Show, amongst others.
State-of-the-art facilities, unparalleled customer service and a suite of value- added services enable DWTC to change the way the world trades, and deliver world-class experiences to regional and international business travellers on every occasion. For further information, see: www.dcb.ae/en
Expo Centre Sharjah (ECS)
The ﬁrst established Trade Exhibition Centre in the UAE and considered a pioneer in its ﬁeld, Expo Centre Sharjah became the booming centre for international trade in 1977. Over the years, the Centre became the most popular trade exhibition venue and home of the Gulf’s best-attended trade shows. Expo Centre Sharjah has placed the emirate of Sharjah on the map of the international exhibitions industry and has been a focal point of international trade.
The Centre, the exhibition wing of the Sharjah Chamber of Commerce and industry, is now a prime destination for business meetings. Offering the perfect combination of sophisticated technical facilities and professional services across a broad spectrum of events, Expo Centre Sharjah‘s in-house services, combined with the centre's official suppliers, make one-stop-shopping smooth and hassle-free. It assigns a designated event co-ordinator for each and every event at ECS who will attend to all the details of your event, large or small.
Expo Centre Sharjah in-house services include:
Audio-visual supplies and services;
Food and beverage
Cleaning (complimentary for common areas and restrooms)
ATM and exchange services
Customer Service in the boulevard
Fax and photocopy services
Wireless Internet access
Telephone sets, fax machines
On-site technical support
Expo Design is a fully-ﬂedged exhibition booth design and construction department with highly-skilled and experienced technicians and designers who strive to provide high quality services to their valuable clients at all times.
From producing a straightforward news release to the complexities of organising a major campaign, the in-house advertising and PR department is highly skilled in delivering a focused and fully-integrated media and PR campaign.
Expo Catering specialises in indoor catering and offers a variety of services, depending on the requirements of exhibitors and their guests. Expo Centre Sharjah caters to small, medium and large gatherings including Press Conferences, Seminars / Conferences, product launches, annual meetings and Banquets. Banquets and dinners for up to 500 guests are staged to the same culinary standards as the entire exhibition catering service. For further information, see: www.expo-centre.ae
The UAE Government has been focusing on diversifying its sources of income to significantly increase the non-oil sector contribution to the national GDP, and is establishing knowledge-based industries across all emirates. The information, communication, and media technology industry sector, the highest-portion of the knowledge-based industries, is therefore receiving particular importance from the federal and local governments, with government spending continuing to boost this growing industry.
The UAE’s information technology and communications sector is one of the most advanced industries not only in the region but also in the world. This success was mainly attributed to the strong commitment by the national government to develop an efficient advanced communications network.
The existing regulative and motivating environment that best reflects the country’s vision of becoming one of the best competitive communications markets, along with the high demand for advance telecommunications services, were the main drivers that positioned the country as a regional telecommunications provider. The telecoms sector is currently among the leading sectors attracting foreign direct investment (FDI). To best represent the continuing growth of this sector, the Telecommunications Regulatory Authority (TRA) conducts studies and surveys on a regular basis.
The media sector has also accomplished remarkable achievements, growing from a small number of broadcasters to a wide variety of television and radio channels, hundreds of newspapers and magazines and a growing number of publishing houses. The media industry in the UAE is the leading market in the Middle East. Renowned media broadcasters like CNN international, Bloomberg and BBC World have chosen the UAE as a main HQ to cover the Middle East and North Africa region. This was a result of the strong sector in the UAE, including business parks designed as media clusters like Dubai Media City, twofour54 zone and Creative City – all great drivers in the media sector.
Government spending in information technology (IT) and business process outsourcing (BPO) gave a strong boost to this growing sector. As a result, the UAE ranks first among Arab countries in terms of ICT utilisation. The UAE’s policies that protect IT services against piracy play an important role in promoting innovative and creative content. The free zones also contribute to the success of the IT and BPO sectors.
Telecommunications, media and information technology: telecommunications
The telecommunication sector in the UAE is one of the most advanced in the world. The UAE was the ﬁrst country in the region to introduce GSM mobile and the ﬁrst to offer third generation (3G) mobile data services. To help maintain the country's leadership position, the TRA has established an ICT Development Fund, ﬁnanced by licensed telecom operators, which will foster research and development in the UAE telecommunications sector.
Important institutional and regulatory changes have taken place in the past several years, notably the licensing of a second telecommunications service provider, Emirates Integrated Telecommunications Company (EITC, or Du), in 2007 ending the historical monopoly of Etisalat. Both licensed operators are majority state owned and pay the government a royalty which is a portion of their net proﬁts.
Etisalat is pursuing a strategy to invest abroad. The company has acquired green-ﬁeld licences in 15 countries across Asia, the Middle East and Africa, including Saudi Arabia (Mobily), Sudan (Canar), Egypt (Etisalat Misr), Tanzania (via Zantel) and Afghanistan, and has made investments in incumbent operators Pakistan (PTCL) and West Africa (Atlantique Telecom). Etisalat is one of the largest telecommunications companies not just in the region but also in the world and was named the most powerful company in the UAE by Forbes Middle East in 2012. It still controls the majority of the market share (80%) in the UAE. Etisalat is currently owned by the UAE Ministry of Finance (60%) and 40% is publicly traded on the Abu Dhabi Exchange (ADX).
Etisalat and EITC both support the nation and all levels of government by contributing to the advancement of education, social welfare, international relations, sports and culture. Etisalat and EITC work closely with government bodies in developing and implementing programmes aimed at enriching the lives of people in the UAE and the communities in which they live. Etisalat and EITC are involved with a number of organisations and initiatives that reach out to people in the UAE. These include signiﬁcant cultural festivals, family events and tourist attractions across the nation.
The UAE has one of the highest broadband penetration rates in the MENA region, with telecom companies offering new technologies for internet access with competitive tariffs. The telecommunications industry as a whole has seen substantial growth in recent years due to the significant growth of the population and of the number of tourists. The UAE’s telecommunication is also rated as one of the highest GDP per capita in the world.
International telecom companies can penetrate the telecom sector in the UAE by partnering with the main telecom providers, Etisalat and Du, or through applying for tenders and obtaining projects. In collaboration with Tata Communications and Cisco, Etisalat launched its virtual boardrooms in Dubai in 2010. The process of transforming Etisalat’s conventional infrastructure to fibre-optic next generation infrastructure, has also engaged the participation of international telecom companies.
Telecom companies in the UAE obtain a great number of tenders offered by Etisalat and Du. Upgrading telecom exchange sites, supplying and installing AC and DC cables, installing and testing plant cable networks and installing and operating antennas site towers fabrication works are a few examples – supplying service providers with high and efficient technology in order to solve recurring issues such as short coverage in some remote and indoor areas.
Telecommunications, media and information technology: Satellite communications
Driven by its ambitious aim of positioning itself as a global distinguished location offering advanced communications services of all kinds, the UAE has been actively building its satellite communications infrastructure. Currently, it has seven satellites, maximising its capacity to not only meet domestic demand but also to serve the whole MENA region by providing advanced communications solutions.
The Telecommunications Regulatory Authority (TRA), the communications’ regulator in the UAE, issued new regulations and policies to create a balanced, competitive environment, thus encouraging more satellite service providers with innovative technologies and competitive solutions to emerge in this young market. In 2009, the TRA issued four additional licences authorising GMPCS and PAMR services as well as mobile television and satellite communications.
Government, local and international private companies have been established to meet the growing demand for satellite imagery and communications services. International space and satellite manufacturers have been closely observing the UAE’s initiatives and considering them as attractive opportunities to form partnerships, contracts and alliances for the design and building of satellites as well as the infrastructure of launch bases.
Driven by its vision, Abu Dhabi has made strategic initiatives to become an innovative global satellite communications leader. Mubadala, established by Abu Dhabi to facilitate the diversification of its economy, incorporated its satellite communications company “Yahsat”, and invested US$1.58 billion to develop two satellites. Partnerships with EADS Atrium and Thales Alenia Space, both world-class players, were made for their design and construction. Yahsat 1A was launched in April 2011 by Arianespace and Intelsat New Dawn telecommunications satellites, and the fifth satellite was sent by the UAE into space for communication purposes.
Furthermore, the TRA granted two satellite communications services licences for a period of ten years for Al Yah Advanced Satellite Communications Company and Star Satellite Communications Company in July 2010. Both companies are subsidiaries of Yahsat. Services are mainly provided for military entities as well as for the commercial sector in the Middle East, Africa, Europe and South West Asia. The satellite control is operated from Yahsat’s gateway in Abu Dhabi.
The realisation of the great demand for high resolution Ariel images by the government to efficiently develop its infrastructure and urban planning as well as by the commercial sector, drove Dubai to take the initiative of launching the first Earth observation satellite program in the country “DubaiSat-1”in 2009. Design and development of the satellite was made in partnership with Satrec Initiative, a pioneer satellite manufacturing company in South Korea. Dubai also launched its second imaging satellite “DubaiSat-2” in 2012.
Thuraya Telecommunications Company, the first UAE satellite communications company, ramped up commercial operations in 2001. Through its three geo-mobile satellites in orbit, the company continues to provide a wide range of voice and data solutions via satellites. Since its inception, the company has been signing numerous service provider agreements with more than 40 countries across the world.
Different satellite communications services such as call transfers, data and video images, tracking and locating vehicles, tankers and naval vessels are among the most-demanded services not only in the UAE but also in the whole region. Realising this, SmartSat, an alliance of Jordanian and Kuwaiti companies, was launched in Dubai as the MENA’s first specialised company in the satellite industry.
Innovative UK companies can engage by initiating strategic relationships with the satellite communications service providers and supplying them with equipment, electronic programmes, control systems, maintenance and repairs. The lack of telecommunications infrastructure in many remote areas of the UAE, where telecommunications services cannot function, provide an excellent opportunity for satellite communications providers, as the demand by local and regional maritime and oil & gas companies is growing as the whole economy of the region grows.
Telecommunications, media and information technology: Business process outsourcing
Business process outsourcing (BPO) services have been growing in the Middle East and North Africa region especially in the UAE and Egypt. According to Frost and Sullivan, a global consulting firm, the outsourcing industry is expected to grow at a compound annual growth rate (CAGR) of approximately 8% for the period 2009-2016 with market revenues reaching US$2.69 billion.
Due to the competitive compensation cost, growth in the quality of its management schools and an improvement in the literacy rate, the UAE has successfully become the second largest market for the outsourcing industry in the MENA region. Many multinational corporations have chosen the UAE as their main headquarters functions and services.
The UAE was among the first countries in the region to feel the importance and realise the potential growth of this market in the MENA region. Accordingly, it established a number of specialised zones equipped with BPO infrastructure and issued a number of policies and regulations to organise and monitor the progress of this activity. Among these zones is Dubai Outsource Zone (DOZ) which was established in 2004.
Penetrating the MENA market through DOZ
Dubai Outsource Zone (DOZ), one of the first free zones dedicated to outsourcing companies in the region, has been significantly contributing to the performance of this industry not only in the UAE but also in the whole MENA region. DOZ is one of the places where activities such as business process outsourcing, HR outsourcing, IT outsourcing and back office thrive. The facility offers an environment that allows companies and individuals to operate with collective synergy and freedom.
Companies based in DOZ enjoy free zone benefits including 100% business ownership and exemption from taxes as well as value-added services such as networking opportunities, venue management services, industry awareness programmes and government services.
DOZ currently hosts a number of companies in diverse sectors such as banking and finance, accounting, IT, payroll processing, engineering, research and development as well as design. Current companies operating in DOZ include Nokia Siemens Networks, Emirates Airline, AXA Insurance, Du, Mashreq Bank, Arab Bank, First Data, Cupola, Larsen & Toubro Infotech Ltd, Al Futtaim Willis, and the Jumeirah Group.
Due to the great benefits gained as a result of outsourcing non-core businesses, many companies and government entities are taking this approach. Abu Dhabi Water and Electricity Authority (ADEWA) is studying plans to outsource administration. ADEWA has already signed a US$81.74 million contract with Injazat Data Systems, a leading company in outsourcing services in the region, awarding it a ten-year IT outsourcing contract to manage all of ADWEA’s IT requirements.
Understanding the demand of this industry in the MENA region, international BPO companies have been considering potential growth. In 2009, Sundaram Business Services, the business process outsourcing arm of Sundaram Finance Ltd. formed a joint venture with ETA Group of Dubai to start a first BPO outlet in Dubai, targeting the GCC region.
Call-centres, which are a major part of BPO services, are becoming integral to the UAE business sector. The contract and customer service activities of many banking, insurance, telecom and consumer goods sectors are now outsourced.
Telecommunications, media and information technology: Information technology
The IT market, which represented around 1.2% of the UAE’s GDP in 2009, grew to reach around AED 29.7 billion in 2013, and AED 32.9 billion by 2014 (preliminary figures).
Source: UAE National Bureau of Statistics, Department of Economic Statistics – National Accounts Division, June 2015
The UAE ranks first for its impact of ICT on access to basic services, and first in the world for ICT use and government efficiency, according to the 2015 Global Information and Technology Report released by the World Economic Forum. See: www.reports.weforum.org/global-information-technology-report-2015/economies/#economy=ARE
Software, hardware and IT services are the pillars of the UAE’s IT sector. The UAE is a key market for software companies. Applications from desktop accounting packages to ERP, CRM and HRM solutions are demanded by the UAE’s software growing market. In addition to the steady growing demand by the public and private sectors, the UAE is leading the way in addressing software piracy levels in the whole region. In fact, the UAE has posted the lowest piracy rate in the region for the past ten years.
Free zones have been providing exceptional opportunities for international IT companies. Dubai provides three highly-sophisticated zones equipped with advanced ICT infrastructure. These are Dubai Internet City (DIC), Dubai Outsource Zone and E-Hosting Datafort.
DIC, one of the largest information and communications technology clusters in the Middle East and North Africa (MENA) region, has been providing a strategic and cost effective platform for ICT companies targeting emerging markets in a vast region extending from the Middle East to the Indian subcontinent, and from Africa to Central Asia. Today, DIC is home to more than 1,400 companies ranging from Microsoft, Dell, Intel and IBM to Canon, General Electric and Cisco. Other Fortune 500 technology giants such as Oracle, HP, Samsung, Nokia, RIM (BlackBerry), Yahoo, Google, IBM, Symantec and AT&T also have roots in the DIC with new permanent regional headquarters in Dubai. Dubai Silicon Oasis (DSO) is another technology park, established in 2006 to host technology-based companies.
The capital, Abu Dhabi, is also developing its 3 km² technology cluster near Abu Dhabi International Airport. This development is an implementation of its 2030 comprehensive vision that plans to transform the city into an IT globally-recognised hub. The park is expected to host the first microchip factory in the Middle East due for completion later this year (2015). This initiative is carried out by Advance Technology Investment Company (ATIC), a regional leader in the semiconductor industry.
Telecommunications, media and information technology: Media
Because specialised zones have been established to solely serve the media sector, along with business-friendly regulations and a strategic location in the heart of the GCC, the UAE is the ideal central place to serve not only the domestic market but also to provide high-quality media services including advertising and marketing, publishing, broadcasting and media consultancy to the whole MENA region.
The substantial growth in the media sector since 1999 is a result of the country’s commitment to position itself as a global media hub. The UAE today is the home of more than 25 national television channels, 36 national radio stations, more than 200 satellite TV broadcasters, plus a large number of conventional and online newspapers and magazines. Through fostering innovation and quality in its emerging media sector, the UAE has been attracting global media companies from all over the world.
As an efficient step toward developing a globally-competitive media sector, the National Media Council (NMC) was established in 2006 to oversee media development in the country and to support media initiatives. The council’s mission of providing an integrated regulatory environment for the media sector has set up a clear vision of how the nation is genuinely committed to building a world-class industry.
Establishing an efficient technical broadcasting foundation has always been a priority of the UAE. In 2006, the Telecommunications Regulatory Authority (TRA) acquired rights to 225 digital channels at the ITU Regional Radio Communication Conference to allow more channels to be carried across fewer airways by converting from analogue broadcasting to digital broadcasting.
By locating in the UAE, the TV and radio broadcasters have access to different regional markets that speak multiple languages and with various interests and needs. They can easily source the talents for this from local and neighbouring countries.
Positioning in the UAE does not only mean the company is serving the domestic market. Using the advantageous location of the country as a central location to serve the wider MENA region has given major media groups access to much greater audiences.
Furthermore, even though the majority of the television viewers in the Arab region prefer TV in Arabic, the UAE has the highest number in the MENA region of those who prefer TV in English. According to Arab Media Outlook, 22% of TV consumers in the UAE prefer watching English channels. The large number of English speakers in the country has been and will continue to be the primary factor behind this result.
By providing the regulatory environment and the supportive climate for innovation, and given the multicultural nature of the society, the UAE is well positioned to continue its leadership role as the regional broadcasting hub. Already, the UAE is the host of the largest number of TV and radio channels that are free-to-air in the Arab world; they operate out of the different media business parks that are scattered around the country. The UAE not only provides the infrastructure, but it also creates the facilities that enable broadcasters to use innovative cutting-edge technology to enhance their reach and quality.
The UAE’s print industry has also achieved growth in terms of number of newspaper titles, increasing from 9 in 2003 to 23 in early 2015. Given the various interests of the region’s population, the UAE has also fostered the creation of a regional magazines and journals industry. The number of magazines that are operating from the UAE has reached over one hundred magazines. Although the UAE is a relatively small market with limited reach, most of the magazines look at the larger picture, making the UAE the distribution, digitally and via print, throughout the region. The newspaper and magazine publishing industry makes efficient use of the relatively low cost of printing in comparison to other countries of the region.
Recognising the significance of the modernised, standardised and cost-effective printing industry to the growth of a healthy and competitive media market, specialised business parks and infrastructure have been established that allow the creation of a regional printing hub. The International Media Production Zone (IMPZ) was established in 2003 as a specialised media production zone to develop a business environment that is uniquely geared towards the needs of graphic art, printing, publishing, and packaging and media production companies.
In spite of the relative downturn that was experienced in advertising spend due to the general economic conditions caused by the global economic and financial crisis, the UAE’s advertising industry is well on the way to recover and is now undergoing a major shift in the industry structure. Digital media and social media are now dominant means for marketing and advertising in the region, leading to the need to use different skill-sets and production resources. The UAE is today the host of the top-notch international names in the international advertising industry and is truly the regional capital for the advertising and promotion industry.
A range of well-established free zones and business parks has been built to provide all necessities that a media company could ask for. Dubai Media City, Fujairah Creative City, twofour54 zone in Abu Dhabi and RAK Media City are only a few examples of the strategic locations for setting up a media company in the UAE.
Dubai Media City, an initiative of the Dubai Technology Electronic Commerce and Media Free Zone Authority was established in 2000 to provide an advanced high-tech infrastructure and a supportive environment for media-related businesses to enable them to operate globally out of Dubai. The Dubai Media City is the place where every kind of media business, especially broadcasting, publishing, advertising, public relations, music, news media, production and post-production will thrive. Very well-known media groups like MBC media group that has the highest viewership’s rates in the region have chosen DMC as their headquarters.
The media sector in the UAE is rich in world-class media companies. Abu Dhabi Media Company (ADMC), established in June 2007 to revitalise the media industry in the UAE’s capital, has already established itself as a leading multi-platform media and entertainment provider in the MENA area. ADMC manages and operates 18 market-leading brands across television, radio, publishing, digital media, games, feature films, music, digital signage, outside broadcast/production and printing.
Dubai Media Incorporated (DMI), another media giant in the UAE and the region, has six television channels, three newspapers, a press and two radio stations.
The UAE is more than a sporting spectators' paradise: participatory sports are popular throughout the country, with a special emphasis on football, golf, tennis, water sports and just about anything to do with cars and horses. Sports sponsorship is also a major focus of UAE companies and organisations and has proven to be extremely successful in heightening international awareness of the country.
The UAE is renowned for having some of the best sporting facilities across the world, and the country therefore attracts major sports events. The Yas Marina Circuit annually hosts the Etihad Airways Abu Dhabi Grand Prix in November, attracting upper-end travellers with diverse needs from across the world and creating opportunities for niche tour operators. The circuit can accommodate 50,000 spectators. The Dubai Duty Free Tennis Championships and the Capitala World Tennis Championship are other major sporting events attracting thousands of high income travellers who can be targeted with customised tours suiting their interests.
Football is immensely popular in the UAE, ﬁrmly entrenched in the collective conscience. The pride that was engendered by the UAE's hosting of the 2009 FIFA Club World Cup, bringing stars of international football, was an apt expression of that passion.
The nation celebrated the arrival of world-class club football at Zayed Sports City Stadium. The sport received a boost when President H.H. Sheikh Khalifa bin Zayed Al Nahyan gave AED 50 million to the UAE Football Association to upgrade facilities at amateur football clubs. In addition Abu Dhabi has constructed a 65,000-seat stadium with a moving roof and is the home of the national team and a venue for major events.
The passion for horses in the UAE is expressed in many forms, including horse- racing, endurance racing, show jumping, and polo. All equestrian and racing activities are supervised by the Emirates Equestrian Federation (EEF), which was established in 1996.
Purebred Arabian horses are at the core of the UAE's culture and heritage and Abu Dhabi has taken a leading role in providing support for the breed at home and abroad. The debut of Purebred Arabian horse-racing, the third round of the UAE President Cup (Group 1), at England's historic Ascot racecourse in 2009 was a particularly successful milestone in the UAE's bid to promote Purebred Arabian racing and the culture and heritage of the UAE around the world. The President of the UAE Championship series for Purebred Arabians, organised in major European cities by the EEF, was ﬁrst staged in 1994 with the support of the late Sheikh Zayed bin Sultan Al Nahyan.
The warm and calm blue waters of the Gulf provide great scope for a range of water sports and Abu Dhabi International Marine Sports Club, Dubai Offshore Sailing Club, Dubai International Marine Club (DIMC), Fujairah International Marine Club and similar clubs in Sharjah, Ajman and Umm Al-Qaiwain provide superb facilities, enabling enthusiasts to indulge in their favourite pastime throughout the year.
The traditional dhow-racing season begins in October with the ﬁrst heat for the 22-foot class at the DIMC. Races are held throughout the season for all classes culminating, in May, in the Sir Bu Nu’air dhow race.
Organisations such as Emirates Heritage Club in Abu Dhabi bridge the gap between traditional and contemporary sailing, imparting maritime skills and providing competitive experience for local youngsters. The clubs also run races for all classes of dinghies and yachts, with the Dubai Muscat Offshore Sailing Race taking place in November. International teams, including America's Cup challengers, frequently train in the ideal local conditions and international competitions are often held in the UAE.
The UAE can boast one of the best venues in the Formula One circuit. Built on Yas Island in Abu Dhabi and designed by Hermann Tilke, the Yas Marina Circuit stretches 5.5 km and contains 21 corner twists, snaking through grandstands that can accommodate over 50,000 spectators.
The UAE Desert Challenge, one of the world's most prestigious international cross-country rallies, was renamed the Abu Dhabi Desert Challenge in 2009, with the ﬁve-day motor sport spectacular being staged in its entirety across Abu Dhabi emirate under the auspices of the Abu Dhabi Tourism Authority (ADTA). Originally the last round of both the FIA Cross Country Rally World Cup and the FIM Cross Country Rallies World Championship, the Desert Challenge is now the season-opening round.
The international motorsports fixture Rally Abu Dhabi debuted in the emirate in 2010 as a World Rally Championship (WRC), and is now an official WRC event. The Dubai International Rally, the ﬁnal round of the FIA Middle East Rally Championship, and a round that decides the champion for the year, has been staged in Dubai in December since the mid-1980s.
The success of the inaugural Capitala World Tennis Championship event has established Abu Dhabi as the host of one of the most anticipated events on the tennis calendar. The Dubai World Tennis Championships also witnesses some of the most exciting matches of the season.
The staging of major international sporting events not only brings visitors to the country, it also serves to stimulate local sporting enthusiasts and inspire them to greater efforts. In this context, the local tennis scene has undergone a major overhaul under the auspices of Tennis Emirates, the body responsible for promoting local players. This included the affiliation of all tennis academies in the country with Tennis Emirates in order to standardise training methods. A ranking system has been introduced, replacing the system started in 2007, along with more grassroots schemes for young players, including the creation of national junior training centres in each of the seven emirates. The scheduled season has also undergone changes and now runs from October to September.
The International Tennis Federation's (ITF) ‘Play and Stay’ scheme encourages new players into the sport as well. These strategies have been developed in consultation with the National Olympic Committee in order to produce players capable of competing in international events such as the Olympic Games and the Davis Cup.
Tennis Emirates has also entered into a cooperation agreement with the Spanish Tennis Federation, producers of some of the world's top seeded players. The UAE national team players will now be able to practice at the Madrid Tennis Federation's (MTF) headquarters, also dubbed the 'Magic Box’, the home of the Madrid Masters.
The UAE is home to some incredible golf courses including the Greg Norman-designed Earth Course in Dubai and the Saadiyat course in Abu Dhabi, designed by Gary Player. Other popular golﬁng venues include Abu Dhabi Golf Club, the Dubai Creek Golf and Yacht Club, the Emirates Golf Club and the Jebel Ali Golf Resort. Many of these world-class golf courses host major golﬁng events.
The UAE has established cricket at the grassroots level, introducing the game to Emiratis, promoting women's cricket and unifying governance across all regional cricket councils. The Abu Dhabi Cricket Club has become an Associate Club partner of the Marylebone Cricket Club (MCC) in England, enabling aspiring cricketers in the UAE to train under the same expertise.
The expatriate community brought their love of rugby with them to the UAE and the sport is now played in a number of clubs throughout the Emirates. Major tournaments such as the Dubai Rugby Sevens, which has become a significant international event over the years, have also increased its popularity.
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