The road ahead for UAE manufacturing
28 October 2022
Participants at the closed-door event included 30+ manufacturing stakeholders based in the UAE, such as the Ministry of Industry and Advanced Technology, Ducab and Global Food Industries.
Enabling a flourishing local industrial and manufacturing economy has long been a strategic priority for the UAE.
Since the formation of the federation, the country has successfully built its base in key focus sectors, including metals, petrochemicals, building materials, pharmaceuticals, and high-value downstream processing sectors.
But arguably, the challenges of recent years and the effects of the Covid-19 pandemic have driven home the need to further reduce reliance on imports and to enhance the UAE’s manufacturing competitiveness.
“Fundamentally, many of the things happening in the world are in favour of the UAE’s industries and present many opportunities for success,” said Abdullah Alshamsi, assistant undersecretary, Industry Growth Sector, Ministry of Industry and Advanced Technology (MOIAT).
Speaking at the first MEED-Mashreq Manufacturing Business Leaders Club on 29 September, Alshamsi emphasised the UAE government’s seriousness to bolster its manufacturing sector.
“We have embarked on several changes to make the UAE a more attractive place to do business. Operation 300bn is one such example,” he said. “There is more to come, because industry has become a number one priority for our leadership.”
WATCH: Highlights from the MEED-Mashreq Manufacturing Business Leaders Club
Strategic focus
Introduced in March 2021 as the UAE’s national industrial strategy, Operation 300bn aims to expand the contribution of the sector to the GDP from AED133bn currently to AED300bn by 2031 – by no means an easy feat.
Spearheaded by the MOIAT, the programme will see a greater incorporation of advanced technologies, sustainability, and investments in talent to achieve the overarching goal.
The ministry is working closely with the Emirates Development Bank, which has allocated AED30bn to support priority industrial sectors and finance 13,500 large firms and SMEs over a period of five years.
The ministry is further introducing 17 initiatives – including a national in-country value programme, an updated industrial law, a unified digital platform, and establishing an ecosystem for research and development.
More specifically, the programme will target both established industrial sectors in the UAE, such as plastics, metals and petrochemicals, as well as industries of the future including aerospace and biotechnology; and strategic sectors such as food and healthcare.
“Some of the things we are doing through Operation 300bn include the opening of new markets, made possible through the free trade agreements signed with India, Indonesia and Israel recently,” said Alshamsi. “The UAE’s industries can build on this competitive advantage and enter high-growth markets.”
A crucial part of the programme is ensuring its reputation precedes itself. One way the MOIAT is doing this is through the ‘Make It in The Emirates’ campaign, a comprehensive promotional strategy that invites contributions from investors, innovators and developers to Operation 300bn, and highlights the strengths of the programme.
“The government is open to hearing from industries and to learn how we can make business better,” said Alshamsi. “Open dialogue will help us achieve our goals and ambitions.”
The national in-country value (ICV) scheme meanwhile aims to boost the growth of UAE-based industries by redirecting half of government spending on procurements and tender contracts into the national economy by 2031. In 2021, it redirected more than AED41bn of spend into the national economy.
A concern, however, raised by representatives at the Business Leaders Club is that the ICV scheme hasn’t fully created a level-playing field in many cases because the cheapest bid still wins.
“What you’ve seen of ICV so far was just the first phase,” said Alshamsi. “In the next phase, we’ll relaunch it as ICV, which we hope will be more aggressive and impactful, and will address concerns currently raised by industry players.”
By 2025, the ICV scheme aims to increase the number of ICV-certified companies and spend towards Emirati products and services to AED55bn, from AED33bn in 2020.
Making a case
A question to be raised is – why manufacturing?
Since the oil price crash of 2015-2016, the UAE has increased its efforts to counter economic fluctuations by reducing dependence on oil export revenues.
Manufacturing and industrial growth was quickly recognised as a growth driver. As a sector with easy links to several others – skills, transport, research, services – manufacturing supports a broader segment of the economy.
With the rise of Industry 4.0, manufacturing is benefitting from advancement in technology and innovation, areas that the UAE readily compliments with its own strategic visions.
Several factors are already working in favour of the UAE, many of which have been introduced in recent years. These include 100 per cent foreign ownership of specific businesses; favourable tax environment; long-term visa reforms; dual licensing; and a complementary legal system.
Further supporting the business environment is overall political stability; positive credit outlook; favourable bilateral relations and free trade agreements; and strong infrastructure in areas such as transport, logistics and telecommunications.
But that does not mean the manufacturing landscape is bereft of challenges. Rising competition in the region, especially from neighbouring GCC states has meant that manufacturers in the UAE’s ‘open waters’ have had to reassess their strategic priorities.
At the same time, macroeconomic challenges such as inflation, supply chain delays, rising commodity prices and surging fuel rates are hurting producers and their margins.
“Moving forward, the UAE manufacturing industry can differentiate itself from regional players by being recognised for sustainability, quality and advanced technology,” said Alshamsi. “It’s something in our DNA, something so many other countries lack. This can become a true differentiator for us.”
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Bahrain extends deadline for Hawar Island water station25 November 2025
-
November 2025: Data drives regional projects25 November 2025
-
Bahrain pursues reform amid strain25 November 2025
-
Chinese firms expand oil and gas presence25 November 2025
-
UK firm wins Saudi airport masterplan update deal25 November 2025
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Bahrain extends deadline for Hawar Island water station
25 November 2025
Bahrain’s Electricity & Water Authority (Ewa) has extended the bid submission deadline for the main contract to build a new water distribution station on Hawar Island.
The deadline, initially set for 23 November, has been moved to 7 December.
The $15m project covers the construction of two steel ground storage tanks with a capacity of one million gallons each, pumping stations, motors, pipelines and associated facilities.
The scheme forms a key part of Bahrain’s wider plans to develop Hawar Island, which currently has limited utility infrastructure and relies on water transported from the mainland.
The government is advancing tourism-led investment on the island, including eco-resorts and hospitality developments that require reliable potable water supplies.
The tender is linked to Ewa’s ongoing procurement for a new seawater reverse osmosis (SWRO) desalination plant on Hawar.
The engineering, procurement and construction contract for the SWRO facility, designed to produce one million imperial gallons a day, is currently out to tender, with bids due on 30 November.
According to Ewa, the desalination plant will connect with two related contracts.
One of these covers the construction of the new water distribution station, while the second covers offshore seawater intake and outfall systems.
The main desalination contractor will be required to ensure its design and construction align with these works so that all three components function together as one integrated system.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15149229/main.jpg -
November 2025: Data drives regional projects
25 November 2025
Click here to download the PDF
Includes: Top 10 global contractors | Brent Spot Price | Construction output
MEED's 2025 EPC contractor ranking
MEED’s December 2025 report on Bahrain includes:
> COMMENT: Manama pursues reform amid strain
> GVT & ECONOMY: Bahrain’s cautious economic evolution
> BANKING: Mergers loom over Bahrain’s banking system
> OIL & GAS: Bahrain remains in pursuit of hydrocarbon resources
> POWER & WATER: Bahrain advances utility reform
> CONSTRUCTION: Bahrain construction faces major slowdown
> TRANSPORT: Air Asia aviation deal boosts connectivityTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/15149339/main.gif -
Bahrain pursues reform amid strain
25 November 2025
Commentary
John Bambridge
Analysis editorCautious optimism defines Bahrain’s current economic moment as the country presses ahead with a broad agenda of diversification, reform and targeted investment. Yet the more assertively Manama moves to reshape its future, the more the tension between its ambition and its fiscal constraints becomes evident as the defining feature of its policymaking.
Bahrain’s projects sector, which has now been shrinking for the past seven years, is emblematic of the country’s constricted spending. This year, contract awards have fallen to their lowest value in a decade. This signals a decisive shift to a more disciplined investment strategy aligned with fiscal realities and a more selective approach to forward-looking capital spending.
The diminished projects market is in turn a challenge for the financial sector, which now faces a receding pool of project financing and other contracting loans. This is giving further impetus to the potential consolidation of local lenders in the overbanked market, which is also beset by thinning margins, rising compliance costs and pressure to scale amid financial system modernisation. While it could create short-term pain, consolidation should boost the financial health of legacy lenders and provide stability in a sector increasingly being defined by new digital banking models and innovation.
Yet even as some sectors change, Bahrain’s government remains deeply reliant on hydrocarbons, which continues to drive exploration, including in the technically complex Khaleej Al-Bahrain basin. These activities reflect the practical need to maintain oil revenues in the medium term and, should additional recoverable reserves be discovered, a potent source of optimism.
Manana is meanwhile looking to overhaul the utilities sector by creating a dedicated regulator and new national operator. The reforms should make space for greater private participation, drawing more capital into power and water projects while improving efficiency and reducing state expenditure in an aspirationally positive step towards greater long-term sustainability.
Even as fiscal concerns narrow Manama’s policy options, it continues to secure strategic wins. A new aviation agreement with Air Asia establishes Bahrain as a regional hub for one of Asia’s largest low-cost carriers. This move opens new connectivity corridors and, alongside the renewal of direct Gulf Air routes to the US, reinforces Bahrain’s position as a gateway between regions, promising benefits for tourism, logistics and services.
Overall, Bahrain’s economic trajectory remains delicately balanced – marked by reform-driven progress yet tempered by fiscal constraint. But in threading this needle, Manama shows that cautious optimism can still be a powerful catalyst for change.
MEED’s December 2025 report on Bahrain includes:
> GVT & ECONOMY: Bahrain’s cautious economic evolution
> BANKING: Mergers loom over Bahrain’s banking system
> OIL & GAS: Bahrain remains in pursuit of hydrocarbon resources
> POWER & WATER: Bahrain advances utility reform
> CONSTRUCTION: Bahrain construction faces major slowdown
> AVIATION: Bahrain signs game-changer aviation deal with Air AsiaTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/15109785/main.gif -
Chinese firms expand oil and gas presence
25 November 2025
> This package also includes: Larsen & Toubro climbs EPC contractor ranking
Chinese contractors have been present in the oil and gas projects market in the Middle East and North Africa (Mena) region since the turn of this century, but largely remained on the fringes. In a hydrocarbons market that has traditionally been dominated by European and American contractors, and those from Japan and South Korea, Chinese firms have become a rising force, especially since the start of the decade.Economic competitiveness in bid battles, significant improvement in engineering and technological capabilities and commitment to execution schedules have been primary factors behind the success of Chinese contractors in the regional oil and gas projects market since 2020.
Competitive edge
Traditionally, Chinese engineering, procurement and construction (EPC) contractors have enjoyed a lower cost base than their international competitors. This comes from lower manpower costs, access to cheaper materials and equipment, and financial support from state banks.
In addition, Chinese firms have typically had a different attitude to risk than many other contractors. Instead of seeking to turn a profit on specific projects, Chinese firms have entered markets cautiously and, as their knowledge of the local market grew, built a commanding long-term position.More recently, the edge that Chinese contractors enjoy has come from the technical experience they have gained from delivering large-scale, complex projects in their domestic market. While in the past Chinese contractors were only considered capable of delivering basic construction work, they now have some of the best project references in the world.
Regional leaders
Chinese EPC contractors have strengthened their performance in the Mena oil and gas projects market, particularly since the end of the Covid-19 pandemic. Since 2023, the combined value of projects won by Chinese firms has consistently remained well over $13bn, with them winning key contracts on major projects.
The largest EPC scheme under execution by a Chinese contractor in the region is on a project to maintain and increase the oil production potential of the Bul Hanine offshore oil field development in Qatar. China Offshore Oil Engineering Company won contracts worth $4bn for the two main EPC packages of the project in the third quarter of 2025.Also this year, Abu Dhabi’s Taziz awarded the main EPC contract to build a complex of specialty chemicals plants in the Taziz Industrial Chemicals Zone at Ruwais Industrial City to China National Chemical Engineering & Construction Corporation Seven (CC7).
The EPC contract is valued at $1.99bn, with work expected to be completed by Q4 2028. The chemicals cluster, known as Project Salt, will produce 1.9 million tonnes a year of marketable polyvinyl chloride (PVC), ethylene dichloride (EDC), vinyl chloride monomer (VCM) and caustic soda.
Chinese contractors have also enjoyed success in Saudi Arabia, with Aramco having awarded several key EPC contracts to Chinese firms since 2023. China Petroleum Engineering & Construction Company, Sepco and Sinopec Petroleum Services are executing EPC works on four out of the 17 packages of the third expansion phase of Aramco’s Master Gas System project.
Sinopec Group has played a significant role in Aramco’s Jafurah unconventional gas development in Saudi Arabia. In a consortium with Spanish contractor Tecnicas Reunidas, in 2024 Sinopec won packages one and two of the Riyas natural gas liquids scheme, part of the second Jafurah unconventional gas expansion phase. The combined value of the two EPC contracts was $3.2bn.
Just weeks after securing these EPC contracts, the consortium also won the contract to deliver the entire scope of work on the scheme’s third expansion phase, valued at $2.24bn.
In Iraq, China Petroleum Engineering (CPE) won a major contract in August to carry out EPC works on a package covering a major seawater transmission pipeline to be built in Basra as part of the larger Common Seawater Supply Project, which is one of four main components of the estimated $10bn Gas Growth Integrated Project masterplan.
Work on the $2.52bn contract will be carried out by CPE’s engineering arm, China Petroleum Pipeline Engineering.
China has built up extensive resources, from skilled personnel to technical know-how. As the domestic market shows signs of slowing, these resources are being deployed internationally, supporting the growing presence of Chinese contractors in the Mena region.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15149182/main.gif -
Ineco appointed for Spain-Morocco tunnel study25 November 2025
Spanish engineering firm Ineco has been commissioned to conduct an exploratory tunnel study to validate the feasibility of the railway connection linking Spain and Morocco.
According to reports in Spanish media, the $1m contract will establish a detailed technical roadmap for the project.
Ineco’s scope of work includes the preliminary design of the exploratory tunnel, revisions to previous studies, and a comprehensive update of the route, geology, geotechnical conditions, security systems, terminals and associated installations.
Ineco will validate the critical geological conditions of the Strait, particularly in the areas where the project’s greatest risks are located.
The study is expected to be completed by August next year.
The latest development comes after German company Herrenknecht completed its study in October. Herrenknecht said it found the project feasible to undertake due to the availability of the technology needed to execute it.
The media reports added that clients will further study the project and make a final decision in 2027 regarding tendering.
Recent developments
MEED reported in August that Ineco had secured an estimated €350,000 ($409,000) contract to carry out a financial feasibility study for the proposed infrastructure.
UK-based Vodafone also won a contract to provide advanced telecommunications support to teams working on the project.
These developments followed the appointment of Herrenknecht in January for a €296,400 ($307,483) contract to conduct a drilling feasibility study.
The Spanish government revived the Morocco-Spain undersea rail link in June last year, after allocating about $2.5m for a renewed design study.
Project background
The project, originally launched in 2003, was put on hold following the 2008 financial crisis. It has undergone several rounds of feasibility studies, but remains in the planning phase after nearly two decades of funding-related delays.
The proposed design includes a double-track railway and a service tunnel extending 38.5 kilometres (km) between Tarifa in Spain and Tangier in Morocco. Of this, 28km will run beneath the Mediterranean Sea at a maximum depth of 475 metres.
Each single-track tunnel will have an inner diameter of 7.9 metres, while the service gallery will be 6 metres in diameter.
The project is being jointly developed by Morocco’s National Society for Strait of Gibraltar Studies and Spain’s Sociedad Espanola de Estudios para la Comunicacion Fija a Traves del Estrecho de Gibraltar.
In 2006, Swiss engineering firm Lombardi Engineering was selected to design the tunnel. Preliminary studies were completed two years later.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15148660/main.jpg