Firms looking to enter Sharjah's manufacturing segment

Manufacturing accounted for 16.5% of Sharjah’s GDP in 2015, making it the second-largest of the seven individual sectors for which data is available, behind real estate with 22%, according to ratings agency Moody’s November 2016 outlook for the emirate. The figure is broadly unchanged in recent years, having consistently stood at between 16% and 17% of GDP. The emirate has outsized importance as a national manufacturing hub: despite the small size of its population and broader economy, it accounts for one-third of total manufacturing output in the UAE, according to the Sharjah Investment and Development Authority (Shurooq). The sector is largely dominated by small and medium-sized enterprises (SMEs) backed by investors from a wide range of countries and active in a variety of different manufacturing segments.

Factories

There were a total of 1592 licenced factories engaged in manufacturing in Sharjah in 2014, according to latest available figures from the Department of Statistics and Community Development (DSCD). The manufacturing segment with the largest number of such factories was fabricated metals products, with 297 facilities, followed by “other non-metallic mineral products” (excluding refined petroleum, chemicals and chemical products, and rubber and plastic products) with 183 factories, and furniture and other manufacturing with 178 plants. The total number of new and renewed industrial licences stood at 2045 in 2014, up from 1889 a year earlier.

Sectoral Investment

The total value of investment in manufacturing in the emirate stood at Dh5.81bn ($1.6bn) in 2014, according to DSCD figures. Of this total, 75.4% originated from the UAE, 10.8% from other GCC states and 13.8% from outside of the GCC. Fabricated metals products made up the largest share of investment of all manufacturing segments, at Dh1.32bn ($359.4m), followed by “other non-metallic mineral products” with Dh1.06bn ($288.6), and food products and beverages on Dh585.6m ($159.4m). Gross fixed-capital formation for the sector stood at Dh1.41bn ($383.9m) in 2013, equivalent to 6.5% of the total for the economy as a whole.

New Openings

Recent openings in the sector include a 120,000-sq-foot manufacturing and office complex inaugurated by the Sharjah-headquartered plastics firm Gadoya Holdings in the Sharjah Industrial Area in November 2016, built at a cost of Dh60m ($16.3m). The facility is the company’s second manufacturing plant in the emirate. The first is a plastics extrusion facility located in the Sharjah Airport International Free Zone (SAIF Zone). In July 2016 US-based fuel injection system manufacturer Stanadyne opened a manufacturing facility in the SAIF Zone, its first such facility in the Middle East. In April 2015 Baalbaki Chemical Industries launched a polyester and pre-polymer manufacturing plant in the Hamriyah Free Zone (HFZ) and has since expanded it. Also in 2015, UK-headquartered firm Bash-P International opened a $20m nylon webbing manufacturing facility in the SAIF Zone.

More new openings are in the pipeline, too. For example, in March 2016 Sharjah-headquartered food manufacturer Delta Food Industries announced plans to build an Dh60m ($16.3m) tin can factory in the SAIF Zone. The announcement followed the firm’s inauguration earlier the same month of a Dh40m ($10.9m) evaporated milk and cream plant in the zone which has a capacity of 250,000 cartons per month. In June 2016 German textiles marketing and recycling firm SOEX also announced plans to construct a textiles recycling plant in the HFZ. The plant, to be built at a cost of €5m, will be inaugurated in mid-2017, with half of its output to be exported to Africa and the remainder split evenly between the Middle East and Eastern Europe. Promising segments for further foreign direct investment in industry include robotics and the production of spare automobile parts, according to Mohammed N Al Hazzaa, the director-general of Emirates Industrial City, one of Sharjah’s free zones.