ADIDB identifies 13 target industrial sectors

The Industrial Development Bureau of Abu Dhabi Department of Economic Development, identified 13 industrial sectors targeted in the Emirate of Abu Dhabi based on the recommendations of the Industrial Strategic Plan (2011-2015) for the Emirate of Abu Dhabi, which reviewed the plans of all industrial sector stakeholders with a view to identifying industrial focus sectors that contribute to achieving industrial economic goals, according to the determinants of the Abu Dhabi Economic Vision 2030. The industrial focus sectors according to the IDB include building materials, petrochemicals, metals engineering, iron and steel, plastic, aluminum and food industries, renewable energy, oil and gas, semiconductor, packaging, aviation and transportation equipments. It should be noted that the Industrial Development Bureau (IDB) was established in accordance with the law No. 8/2013 on the Competencies Developed for the Departments of Economic Development and Municipal Affairs Issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan "In his capacity as the Ruler of Abu Dhabi. The Industrial Development Bureau (IDB) was set as an affiliate of the Abu Dhabi Department of Economic Development and envisaged with the implementation of the Emirate's industrial strategy, planning and organization of industrial activity in the Emirate, as well as issuance, renewal, amendment and cancellation of industrial licenses in the Emirate of Abu Dhabi. According to the Law, IDB aims at implementing policies, plans and programs relating to the industrial sector through setting the appropriate legal and environmental regulatory frameworks to develop, establish, license, supervise and control all activities of industrial enterprises and projects in the Emirate, in coordination with operators and relevant stakeholders; to contribute to enhancing, and strengthening the competitiveness of the industrial sector, raising the efficiency of employees and achieving sustainable development. As Article IV of the Law stipulates, the IDB is exclusively entrusted with the responsibilities of planning, organizing and supervising of the industrial activity in the Emirate of Abu Dhabi, in accordance with the best practices. The IDB is entrusted with the issuance, renewal, amendment, cancellation, and suspending of industrial licenses; as well as coordinating with all competent entities involved in providing services relating to the licensing of industrial establishments and projects, approving plans of industrial areas and lands and making recommendations to relevant authorities in relation to allocation of land to developers of industrial areas. The IDB has laid the details of the industrial strategy outcomes, for indicating targeted industrial activities and their development requirements. It also reviews and evaluates all phases which investors encounter in setting new industrial projects, and addresses some of the challenges, by in approving industrial development plans of stakeholders through conducting an independent feasibility study for each sector and industrial activity, taking into account the plans of concerned authorities, in order to tailor the industrial strategy of each sector. Ayman Al Makawi the Director General of Industrial Development Bureau said that IDB will focus in the coming period on five key areas stressed by the industrial strategy, namely; the general policy which embodies the strengthening of the legal and regulatory framework; the adoption of a long-term vision; governance and activation the role of IDB in separation between the legislative, regulatory, developmental, operational, and investment functions, in addition to enhancing transparency and speeding up decision-taking relating to the sector. Makawi explained that the implementation the industrial strategy prompted the establishment the Industrial Development Bureau as a specialized competent authority to organize, regulate and develop the industrial sector in Abu Dhabi, set and priorities the requirements needed to develop the targeted industrial sectors, and coordinate and monitor the implementation of supportive policies and initiatives in coordination with relevant authorities to best serve investors and develop the industrial sector. The areas of focus for IDB, according to the parameters of the strategy include the provision of national manpower for the industrial sector through rehabilitation, training and attracting experts, as well as creating a funding window for industrial development, providing timely facilities and infrastructure, establishing centers for enterprise development and export promotion, tailoring programs for the development of local industries by government companies and enhancing the local content in procurement and export promotion activities. According to Makawi the IDB first conducted a comparative study which involved many entities concerned with the development of the industrial sectors in successful countries, and formulated a vision to create and enable a dynamic and competitive industrial sector in Abu Dhabi, within sophisticated and advanced methodologies, main goals, and efficient implementation of industrial policies, plans and programs, and the provision of appropriate legal and environmental regulatory frameworks, for developing, establishing and licensing supervising and monitoring of all industrial projects in the Emirate, in coordination with the stakeholder and other relevant parties and to contribute to the development and enhancement of the competitiveness of the industrial sector in the Emirate, upgrade the performance of employees and achieve sustainable development. Engineer Makawi said that the main challenge that will confront the IDB's action plan for the development of industry in the coming years, which was indicated by the industrial strategy of the Emirate, is the distribution of land and industrial areas, through focusing on the development of industrial clusters, the geographical distribution, the balanced development and specifying investment regions. To achieve these goals, Engineer Makawi said that the IDB started by assessing the needs of entities related to the industrial sector; focusing first on the investor through provision of industrial land , quality infrastructure, supportive services at competitive prices, transparency, speedy processing of applications and government procedures, offering investment incentives and facilitating the financing of industrial projects. Makawi explained that these steps represent the essence of the strategic objectives which the Government of the Emirate of Abu Dhabi strives to achieve, including the implementation of the industrial strategy the promotion and development of investment, setting harmonized communications with investors and generating employment opportunities to serve attaining economic diversification and sustainable development. According to Makawi, this demonstrates the important role and responsibilities envisaged on entities, developers and operators working in the Emirate of Abu Dhabi to provide competitive advantages for industrial areas and increase regional competitiveness by attracting industries and providing quality services at best prices, and creating industrial development enablers to facilitate attracting investors. Makawi explained, that the role of public investors as indicated by the industrial strategy, lies in creating investment opportunities, identifying the type of industries and industrial companies required to be present on the scene and providing enablers for industrial investments through the encouragement provided by supportive entities that seek to rationalize capital investments and efficiency manage operational facilities, taking into account investments in infrastructure and geographical locations of different industries. Mr. Makawi stressed the keenness of the Industrial Development Bureau to define the roles of stakeholders in accordance with the industrial strategy, provide information and conduct studies on the industrial sector, manage the industrial land plan in coordination with related parties, set industrial policies and incentives, support industrial projects and industrial promotion, apply industrial rules and regulations and develop management of industrial performance and industrial licensing. Makawi explained that the that according to the study, the duties and functions of the IDB were defined to encompass three axes: the first axis entails the development of industrial sectors in coordination with concerned authorities with view of finding means and mechanisms for providing industrial development enablers, developing detailed strategies for each sector and industry and overseeing their implementation, monitoring of the performance of the industrial sector based on performance indicators, studies, research and statistics and creating sound industrial database. Makawi added that the IDB works in that context to assess, approve, and follow-up the implementation of economic and development plans of various industrial areas, to ensure that they are consistent with the strategies and industrial policies of the Emirate, and to approve the major industrial land plan and industrial areas in cooperation with the competent authorities. The IDB, as Makawi said, makes appropriate recommendations to stakeholders with regard to the allocation of industrial land to developers of industrial areas, sets technical controls for private companies wishing to develop various industrial areas and contributes to the development and implementation of initiatives and special programs. He noted that the terms of reference of the Office also promote industry development projects and activities in the industrial sector and attract investment, local, regional and international projects and industrial activities in the Emirate. The second axis involves the development of policies and strategies and overseeing the implementation of the Emirate's industrial strategy and industrial development policies and initiatives through issuing, developing, supervising and applying rules, regulations and decisions and necessary controls concerning the practicing of industrial activities and the establishment of projects and enterprises in the Emirate in coordination with the relevant authorities. The IDB reviews industrial sector legislation and proposes appropriate amendments or enacting legislation in coordination with relevant authorities. It recommends industrial quality standards and specifications, submits proposals to relevant entities and sets supervises regulatory and technical controls concerning the establishment of industrial enterprises in free zones. The third axis concerns industrial investors' services, as the IDB coordinates with all competent authorities to provide licensing services and services relating to the establishment of industrial projects, undertaking issuance, renewal, cancellation, amendment and suspension of the industrial licenses and oversight of projects activities and industrial facilities in the Emirate. The requirements for the success of each focus industrial activity will be analyzed, as well as the economic impact, in order to replace imports, develop local content programs, enlist products manufactured in the UAE in public procurements, introduce local suppliers development standards in State-owned enterprises; and access technology and technical systems to raise minimum production through activation of common market agreements, export promotion, development of high-skilled labor, education, training and rehabilitation programs, as well as increasing financing opportunities. The Industrial Development Bureau aims to create a cumulative growth at the rate of 8% to 9% for jobs in the industrial sector by 2020, and to achieve the same rate for increasing skilled staff as well as increasing the number of companies operating in the sector by 4%. The Bureau also distributes industrial activities in the geographical regions of the Emirate of Abu Dhabi, according to specific criteria based on the investor requirements, proximity to raw materials and target markets, provision of transportation, infrastructure and the cost of doing manufacturing business. For distribution of industrial activities in the Emirate, the Bureau depended on the government development plans, the proximity of the main factory site to raw materials in accordance with the principle of industrial clusters, the closeness of the port and sea-water cooling, the nature of the target markets and shipping requirements. According to Mr. Makawi, the IDB embarks on studying and activating many initiatives and major enablers of industrial development, notably the organizing of the distribution of natural gas and electric power to priority industrial sectors at promotional prices, and setting foreign ownership ceiling in the industrial sector and the availability and cost of industrial financing and incentives to priority sectors with value added. Makawi added that incentives and enablers include minimizing the cost of raw materials for ancillary industries, the contribution of public investments to the development of industrial enterprises, offering industrial lands at promotional rates, the rehabilitation and participation national manpower and promotion of industrial exports. The Industrial Development Bureau reviews organizational matters affecting investors and identifies areas of improvement in the existing framework. This includes and reviewing of all local and federal laws and regulations governing the industrial sector, and studying all stages, steps procedures that investors have to go through, and reviewing the existing regulations at each stage to identify gaps and areas of improvement and set the general framework for the electronic system of industrial licensing to facilitate procedures. Makawi said that the next step intended to be implemented by the IDB as a start for achieving its set objectives, is to inform all entities related to industrial organizational matters of the functions and duties of the Bureau ; and to form joint working teams to review internal rules and regulations, make required changes to ease procedures and conditions for investors, work on linking all procedures through one electronic database and develop a strategy for industrial licenses based on the nature and needs of each industrial activity. The difficulties which currently face industrial investors in Abu Dhabi, and which the IDB will embark on overcoming, according to Makawi, include the difficulty of moving between several government agencies to find out the requirements, submitting a number different applications forms, completing frequent procedures, poor communication and cooperation between many entities and the long time required to start manufacturing operations. The Director General of the IDB said that the Bureau had prepared a comparative study involving several countries that provide services to industrial investors. The most important findings of the study revealed that the existence of specialized entities which render services in many countries, and the focus on the technical linkage of all requirements and approvals of various parties, in addition to providing support to investors and serving them after licensing and completion of government services through support operations within the establishment itself. Makawi stressed the keenness of the IDB during the next phase to provide a single point of contact to facilitate requirements and reduce organizational procedures for industrial investors in coordination with involved entities, to advance services and reduce time required for industrial licensing. The IDB will also render many facilities, including reducing technical burdens, providing information and data, informing investors of laws, regulation and requirements, facilitating business and increasing competitiveness in the industrial sector. The Bureau has already launched the "Industrial Licensing Services Center", to service industrial investors located outside industrial cities. The Center started receiving and serving this category of investors in January 2013, while the Bureau renders its services to investors in the industrial cities, through the management of the industrial cities themselves and the representatives of the Bureau. Currently more than 30 employees work in customer service centers in the premises of the IDB at of the Department of Economic Development and in the industrial cities, to process all industrial licenses transactions. The IBD is the competent authority for the industrial sector's environment, health and safety concerns, according to an agreement with the Environment Agency - Abu Dhabi (EAD). It is worth mentioning that the contribution of manufacturing activity to real GDP reached 6.1% in 2012, while the value added of the manufacturing activity at 2007 constant prices, increased to AED 41.5 billion in 2012 compared to AED 35 billion in 2007, registering an annual growth rate of 3.3% on average during the period (2007-2012). The growth rate of the activity in 2012 stood at 9.6% compared to 2011. This rate was nearly threefold the average annual growth rate during the period (2007-2012) and twice the growth rate of Abu Dhabi's real GDP in 2012. The contribution of extractive industry activity to the real GDP of Abu Dhabi dropped to around 25% in 2012, compared to 52.9% in 2011 as a result of the growth of non-oil activities at a greater rate than the growth of oil and gas activity in 2012. This is an indicator of the success of the policy of diversification of the Emirate. The value added of extractive activity at constant 2007 prices rose from AED 339.6 billion in 2011 to AED 352.6 billion in 2012, however; the growth rate of the value added of activity decreased from 11.7% in 2011 to 3.8% in 2012, due to the increase in oil production during 2012 at a lower rate than the increase in 2011. However, the growth rate of the activity in the 2012 remained above the average annual growth rate of activity during the period (2007-2012) which was 2.8%. The gross fixed capital formation in the industrial extractive activity, at current prices, registered a growth rate of 3.7% in 2012, which was less than the 24.7% average annual growth rate of the activity during the period (2007-2012).