OBG talks to Khaled Salmeen, CEO and Managing Director, Kizad

Interview: Khaled Salmeen

What industries are being targeted for the Kizad industrial zone project in order to align it with the objectives of Economic Vision 2030?

KHALED SALMEEN: Kizad is a key enabler of the Abu Dhabi government’s Economic Vision 2030 plan to diversify the emirate away from an economic dependence on oil. The industrial zone is expected to contribute up to 15% of Abu Dhabi’s non-oil GDP by 2030.

The targeted industries have been highlighted by the Economic Vision as primary segments that can drive the emirate forward. These include aluminium, steel, engineered metal products, petrochemicals and chemicals, pharmaceuticals and health care equipment, food, paper, print and packaging, trade and logistics, among a number of others.

The new zone will be a powerful magnet for foreign direct investment. With 60-80% of the goods manufactured within Kizad expected to be exported, this will add further value to the nation’s economy. By targeting these industries, Kizad is expected, directly and indirectly, to create over 100,000 quality jobs by 2030.

What is being done to ensure industrial infrastructure will be able to support investment in the zone?

SALMEEN: Warehouses are being developed for logistics units, comprising pre-built warehouses and leased land plots for occupiers and third-party logistics providers to build their own facilities. The total land area allocated for pre-built warehouses is 400,000 sq metres and the development of the warehouses is planned for two phases. Low utilities and leasing costs, a 0% taxing environment, 100% foreign ownership opportunities and a vertically-integrated clustering approach all put Kizad in a prime position.

How can small and medium-sized enterprise (SMEs) and local private companies add value in the area?

SALMEEN: SMEs and local private companies add immense value to Kizad. The vertical integration is closely tied to both investors and service providers located nearby. Upstream, midstream and downstream producers are located in clusters that add value to the chain where anchor tenants produce basic materials. With each tenant supporting the others, it becomes a circle of value creation, backed by SMEs and local private companies that invest in Kizad and provide services.

How will Kizad complement the existing industrial infrastructure in Mussafah and in other emirates?

SALMEEN: Industrial zones, such as Mussafah, have been successfully providing facilities for tenants for years, and there will always be companies whose business needs require them to remain in these areas. For example, light industries at Mussafah need to remain close to their end-market in Abu Dhabi City.

Kizad offers a different proposition. The adjacent Khalifa Port will offer tenants direct access to deep-water loading and unloading facilities, enabling easy import of bulk raw materials and export of finished goods. Kizad will therefore be attractive for companies that either require more space or need easy access to global markets via sea, road, air or rail, rather than direct access to the local market in Abu Dhabi. Further, many warehouses and industrial units in Abu Dhabi are oversubscribed; Kizad will meet the increasing demand.

How will clustering help encourage downstream and conversion industries in Kizad?

SALMEEN: Vertically integrated clustering offers a number of important benefits. Each cluster is focused on a key primary industry, with a number of related midstream and downstream processes located close by. Other suppliers and service companies serving each stage of the value chain will also be encouraged to establish operations in the cluster. Value is created throughout the industry value chain. Anchor tenants produce basic materials while midstream producers take these materials as feedstock and produce value-added products. Finally, downstream producers, also in the cluster, produce finished goods using the newly made products.