Dubai becomes a destination for food-related retailers

Dubai’s goal of becoming a key regional centre for exports of foodstuffs took a big step forward in early 2017 with the launch of a designated food park in the emirate, occurring alongside several other major developments in the food and beverage sector.

Dubai Food Park

In July 2017 Dubai launched a Dh5.5bn ($1.5bn) food park within Dubai Wholesale City, located just 10 minutes from Al Maktoum International Airport and Jebel Ali Port. Launched in the presence of Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai and vice-president and prime minister of the UAE, Dubai Food Park will provide integrated services under a single umbrella, boosting competitiveness for re-exports of foodstuffs. “The food park will be unique for its strategic location and ease of access through all marine, air and land ports,” Dubai Media Office said. Dubai’s exports of prepared foodstuffs reached Dh6.9bn ($1.9bn) in 2016, accounting for roughly 5.3% of total exports and 34.5% of exports from its free zones. The food and beverages sector was identified as one of the six high-value segments to prioritise in Dubai’s new industrial strategy, launched in June 2016.

Confectionery

The UAE has managed to create a favourable investment climate as well as strong logistical infrastructure to support food processing companies, most of them located in Jebel Ali Free Zone and Dubai Industrial City. In early 2017 food giant Nestlé announced the opening of its 18th factory in the Middle East in Dubai South. The Dh530m ($144.3m) facility, expected to employ 340 people, will produce coffee and Maggi soup for regional markets. Nestlé has two other factories in Dubai Investment Park, one producing confection brands like Kit Kat, Mackintosh’s Quality Street and Nido products, and the other for Nestlé Waters.

Meanwhile, in June 2017 luxury chocolate manufacturer Patchi started construction on a new manufacturing facility at Dubai Industrial Park, which will also host its headquarters. The 11,300-sq-metre facility, to be completed by the end of 2018, will include production zones, a training centre, service areas and management offices, as well as 3000 sq metres of warehouse space to facilitate faster regional and global deliveries. Patchi received halal certification from the Emirates Authority for Standardisation and Metrology in early 2017, making it the first chocolate producer in the UAE to do so. According to the company, the UAE chocolate market is expected to grow by 8% a year until 2021.

It is not just confectioners taking advantage of Dubai’s welcoming business environment. Mai Dubai, a bottled water supplier owned by Dewa, is aiming to more than double its production capacity in the emirate, with the first of two phases of expansion set to be completed by mid-2018. The company produces bottled water for both the domestic market and for export to the GCC, Africa, Asia and Europe.

Food City

Dubai Wholesale City, a Dh30bn ($8.2bn) project being developed on a plot of 51 sq km, is set to strengthen the UAE’s share of global wholesale trade, which is forecast to grow from $4.3trn to $4.9trn over the next five years. In addition to its Dubai Food Park, in February 2017 the city saw a new specialised industrial centre for light industrial and refrigerated units launched inside its dedicated industrial cluster, Dubai Industrial Park, putting 197 pre-built units up for lease on a 140,000-sq-metre plot by the following July at a cost of around Dh350m ($95.3m). “We are targeting the big food manufacturing and logistics players, in addition to small and medium-sized enterprises. Our focus is to attract big companies from across the GCC to establish their facilities in Dubai Industrial Park,” Saud Abu Al Shawareb, COO of Dubai Industrial Park, told local media. These kinds of developments could help further establish Dubai as a centre for the food and beverage industry in the region, as well as further afield.