Welcome to Economic Impact, conversations from Emirates Development Bank, the key financial engine for economic development and industrial advancement of the UAE. In each instalment CEO Ahmed Al Naqbi will be speaking to change-makers and thought-leaders in the UAE to learn how they’re contributing to the nation’s economy and realising the UAE’s economic ambitions.
In episode one we're honoured to speak with His Excellency Omar Ahmed Suwaina Al Suwaidi, Undersecretary at the Ministry of Industry and Advanced Technology, to discuss the latest trends, changes and opportunities for the manufacturing sector in the UAE - as well as to highlight the role MOIAT plays in supporting the advancement of the sector.
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Speaker 1: HOST
Speaker 2: GUEST
00:00:00 INTRO V/O
'This is Economic Impact...Conversations from Emirates Development Bank'.
00:00:05 Speaker 1
A’Salaam A’laikoom. Welcome to conversations with EDB, Economic Impact. Today, we have a great guest with us, we have His Excellency, Mr. Omar Suwaina Al Suweidi, the Under Secretary of the Ministry of Industry and Advanced Technology. Welcome, Your Excellency, how are you?
00:00:22 Speaker 2
Shukran, Al Hamdu’lillah, all is good.
00:00:23 Speaker 1
Your Excellency, maybe we can just start by hearing a bit about yourself, about your background. How did you end up in this role in the ministry?
00:00:30 Speaker 2
Well, that's a whole different story on how I ended up in the ministry, but I did come from the Abu Dhabi National Oil Company ADNOC and in my last job I was working in the Commercial Directorate, which is mainly working on procuring for the ADNOC group and we were dealing, of course we were running the country value program and we're working with a large portion of industry, industrial products and services providers, to ADNOC and that covered quite a large sector of the industry in UAE and outside the UAE. And to me that was a natural move into the Ministry of Industry and Advanced Technology.
00:01:19 Speaker 1
Great. And you're an engineer by profession, I believe?
00:01:21 Speaker 2
Yes, I am a geological engineer, but that was quite a long time ago. And I worked in the, at that time, exploration production, which is upstream now, initially and moved through different areas within ADNOC. Again, a lot of work with industry and advanced technology specifically and a lot of the work that ADNOC does and its activities.
00:01:49 Speaker 1
And I know that the Ministry of Industry and Advanced Technology was formed. It's one of the fairly newer ministries. It was formed, I believe, during the COVID era. And if you could shed some light on that, the country when, we as the UAE, created this ministry? What was the purpose behind having a ministry focused on industry and advanced technology?
00:02:15 Speaker 2
True. So the ministry was created in the summer of 2020 during the height of the COVID pandemic, a lot of emphasis was on the supply chain, efficiency, er self, I guess self-sufficiency and resilience of UAE in the oil economy and making sure that we do have all of the requirements that the country needs.
Of course, there was emphasis on a lot of medical supplies on trade and on making sure that our industry, our economy, keeps running without any disruptions or delays in our supply chain the main functions that fall under the ministry are mainly, of course industry, advanced technology and the standards or the quality infrastructure.
00:03:15 Speaker 1
OK.
00:03:15 Speaker 2
And those three sectors were operating in different, I would say sectors. They were formed together to look at how we can one, um, kind of future proof our industrial economic activities and look at increasing our contribution to the GDP.
As you know, UAE is one of the leading industrial countries in the region we are ranked number one in the Arab world and the industrial competitiveness, and that's one thing that we want to continue to lead in and to look at how the world dealt with the challenges during COVID look at the sectors that we excel in and also looking forward, just like all of the global economies do, how do we go into new sectors, new areas of industrial development?
00:04:14 Speaker 1
Right. And that's one of the Silver Linings really, if we can, if we can deduce some Silver Linings of COVID is 1, how great, Al Hamdu’lillah, the country was able to manage the whole two or three years of the pandemicand then really to evolve out of it a national industrial strategy that carries the country towards more as you mentioned, independent self-reliance, ability to produce and manufacture for ourselves. And the ministry is obviously the pivotal in this.
I mean essentially the cornerstone I know that at the time and I know this because Emirates Development Bank was quite involved, was the launch of Project 300 billion. Could you shed some light on Project 300 billion, what was it, what was the objectives and the aims and how is that going to date?
00:05:07 Speaker 2
So, 'Operation 300 Billion', the objective is in the name of the strategy, it's to get to 300 billion of manufacturing value add by 2031.
We started out with manufacturing value add of close to 131 billion at that time and we looked at targeting more than doubling that in the next 10 years.
We looked at different aspects of the industrial strategy we looked at the priority sectors that we can focus on, and that's built on the competitive advantages that the country has, the existing industries that have quite a strong performance and history, not only locally but regionally and globally and we looked at introducing advanced technology as a key pillar of driving this industrial growth.
We also looked at the infrastructure, whether it's the policies, the enablers and incentives that we need to work on to stimulate that growth.
And we looked at the partnerships that we need to have to strengthen with the private sector and also the enabling parties, so entities such as yourself at the Emirates Development Bank, all of the the key players that contribute to the in-country value program, of course, the in-country value program started in 2018 at ADNOC and as the ministry was formed, we took it nationally.
We expanded the circle of champion companies and entities that contributed to the ICV the in-country value program and we looked at bringing this whole ecosystem together.
We also looked at our own policies when it comes to standards and conformity requirements. We looked at the developing our own industry 4.0 index, the Industrial Technology Transformation Index.
We looked at how we can bring in sustainability in line with the commitments that the country made with the Net Zero commitment by 2050.
So overall, you know, we looked at a very clear objective that we want to hit as a number, but looked at all of the ecosystem, the enablers, the incentives, the players that contribute to getting to that goal to that goal and worked on a number of initiatives, a number of collaborations both internally and nationally, whether it's private sector, the government entities, other ministries as part of the objectives of, you know, the government to make sure that we have one cohesive, comprehensive approach to our national aspirations.
And also making sure that we contribute to the diversification objectives of the government for our economy going forward.
00:08:26 Speaker 1
If I can ask Your Excellency just a part of that actually, that just touched on my mind when it comes to manufacturing there's definitely a set of challenges for manufacturing in the UAE and setting up companies for manufacturing.
We see it every day as Emirates Development Bank. I'm sure you see it also from the ministries perspective.
Could you highlight what some of those challenges are and then what is the ministry looking to do or to enable or to work with partners on, to maybe tackle some of those challenges?
00:08:58 Speaker 2
So, a number of these key challenges cut across, whether it's from doing business to financing to markets and availability of demand or demand derisking so on the financing part, of course we have this great collaboration that we have with EDB that also has extended to a number of inancial institutions within the country.
Of course, in line with EDB’s strategy of putting together 30 billion for development in in UAE, we've linked our goals and initiatives to, like I said, key sectors and industry and we’ve also worked with these companies on developing their technological transformation road maps.
So we've, like I said, we've started the this index and we've evaluated over 275 companies from these evaluations on looking at their digital readiness and their advanced manufacturing transformation road map, we put together a plan.
We've assessed these companies and linked them to the financing opportunities and thanks to the collaboration with EDB, we've hit close to 700 billion dirhams in financing of manufacturers that look at improving their manufacturing operations going into advanced technologies and manufacturing, we've also looked at policies that help companies be more flexible in their products design, their productions. We worked with the Ministry of Economy on our CEPA agreements, the comprehensive economic agreements, trying to open up more markets internationally.
We also looked at, like I said, de-risking demand. So, we tried to match the demand and supply locally and also open up more markets for these companies and therefore also easing up some of the financial requirements that the companies deal with.
So, overall it's a variety of aspects that different companies face. We try to give them some of that guidance by looking at what the priorities are and work on road maps with them, link them to financial institutions and also some of the demand, whether it's local procurers or international markets.
00:11:47 Speaker 1
You touched on one aspect which I think is an understatement. The ministry is really a, let's say, central focal point between many enablers in the economy today.
Those enablers span from the Chambers of Commerce to the Department of Economic Development, to the industrial zones, maybe you can touch on if you don't mind, how does the ministry play that role in bringing these players together to complete a picture or to provide a full package to incentivize companies manufacturers to come here to the country and set up base here?
00:12:24 Speaker 2
So our entire operating model is based on partnership and engagement. So, we do that with our private sector.
We do that with all of the players that are involved in economy and industry and UAE. So, like you mentioned, we work with the Departments of Economic Development, these within all of the Emirates, trade chambers, industrial zones…
00:12:47 Speaker 2
We look at matching again our competitive advantages, looking at the capabilities of our companies, also looking at the demand that's coming in, not only from our own local companies, but also from the international market and where the global indications are in terms of industry and advanced technology and end markets.
So we try to involve everybody in our initiatives we have a number of committees that we our platforms that we bring this in at a national level.
Of course, we work with all of the government entities, we have, the Industrial Development Council, which really looks at high level coordination initiatives across all of the government entities. We have a number of committees that also look at the quality infrastructure. So when it comes to developing our standards, our conformity requirements, of course they are all based on international standards, our conformity requirements.
But we try to custom make or at least adapt them to our local requirements and we try to include or develop our standards with or 40% of our standards with the involvement of our private sector. So a lot of engagement and participation from the sector itself.
The approach, there's so much that we can do at the government level, but there's also local authorities that bring in their own incentives, their own enablers, and we try to provide that environment, try to have that dialogue between all the players to make this happen.
00:14:37 Speaker 1
One of those forums that I see exactly that where you know bringing those players together in order to provide that full suite of services incentives is make it in the Emirates and make it and the Emirates is a great event.
I've had the privilege, I've attended the first two this year and the one the previous year. Could you talk a bit about making the Emirates and maybe some future plans? What are you planning on the next one?
Because I see that it's evolving from year on year and it looks like it's only getting bigger and better and bringing more players from the ecosystem all onto one platform to have these conversations.
00:15:19 Speaker 2
Yes. So make it and Emirates, of course, we've had two events, one in in 2021 and 22 and one this year and 2023.
This is a platform where we really bring together all of the players in the industrial sector in UAE. We bring in, we showcase industries we match demand and supply. We actually work on actual practical opportunities for the private sector, for the industrial sector to look at. There was a lot of effort in the 1st edition where we worked with our national champions about.
A dozen large entities and companies in UAE that have tremendous procurement scale and we looked at opportunities for local production and thanks to their contribution, we came up with more than 300 products that can be produced locally with a value of 110 billion dirhams over 10 years.
So that formed the main basis for opportunities for investors, existing companies in the UAE to look at whether starting or expanding their operations, and this last year….
00:16:44 Speaker 1
How can, if you don't mind me asking, how can people get a hold of this list if they wanted to see the list of…
00:16:49 Speaker 2
So, the easiest way is type in ‘Make It In The Emirates’, and you'll be guided to our, to look at our website and the Ministry of Industry and Advanced Technology where you will have direct access to the list of products, to a large level of detail. So, not only sectors, but products by category and almost by name. In addition, we've developed that list of products into specific investment opportunities, right. So almost pre-feasibility of development cases for these opportunities.
00:17:27 Speaker 1
Right.
00:17:30 Speaker 2
We've had a huge response from the champion network of companies, to the industrial companies that are looking into growing, expanding their activities. In one year only we managed to secure 28 per cent of our 10-year target just in the first year, reaching a level of almost 31 billion dirhams…
00:17:59 Speaker 1
Masha’Allah
00:17:59 Speaker 2
...and in the second year we've added another 10 billion to the list. So that list keeps growing. And I think the credibility and the progress that we've seen on the ground, really pulls in not only new investors and new companies, but also that assurance that the procurers have in having local supply and having their supply chain being closer to them and having that resiliency in place gives them a lot of assurance. And, of course, comes at the highest product quality and price baselines. So I think that's one key objective that we're working on and have achieved good results in.
We also have it as a showcase for our companies for the first time this year, and the 2nd edition we've launched the Make it in the Emirates award, so this is really the only local platform for industry that provides opportunities and also showcases leading companies and industrialists.
We also have started a platform for startups, especially in the advanced technology space to give them the opportunity to showcase their solutions, their ideas and match them with some of the larger companies that could take on their ideas.
Give them a platform and space to experiment and also opportunities to grow and develop with these companies.
00:19:43 Speaker 1
Very interesting, and on the advanced technology side and I'm assuming that has a lot to do with the 4th Industrial Revolution.
Essentially, future proofing the economy and the manufacturing base of the country that's currently being built to be hopefully in line with what's needed for the next 1020 years. How does the ministry look at this?
How do you look at this and what is being done in order to, let's say, shape the economy of the future towards this fourth industrial revolution?
00:20:13 Speaker 2
So advanced technology 4IR technology is really key to our strategy. It is a key fundamental objective.
We know as we've mentioned, we do rank first in the region, or at least in the Arab world, we also lead so when it comes to advanced technology and we want to make sure that that is something that's well adapted in all of our industries, make sure that this opportunity is accessible and available to a wider range of companies from small to large, so we've initially started with an index that is readily available.
We evaluated, we saw that it is maybe limited in scope. We wanted to add more when it comes to efficiency and sustainability. So we've developed our own index, the Industrial Technology Transformation Index.
And like I said, we've started working and developing it with the companies, giving them that access. One, to make sure that they have that capability in-house.
So, in addition to running through the assessment, putting together a road map and making financing available to them, we've also matched them, or at least a couple that, with our champions network.
So we have a list of leading companies in, in the country, international and local companies that are quite advanced when it comes to 4IR and automation and AI and wanted to have a platform where they share, best practice and knowledge. So that gives whether it's large or small companies, the direct access of implementation of advanced technologies.
00:22:08 Speaker 2
And we've also with partnerships with companies such as Edge, started enablement centers where smaller companies startups can come in and have that space and that capability that helps them through this transformation so, we have a number of initiatives also that work on training and developing the leadership of companies because as you know AI and 4IR are buzzwords and everybody wants to be there but it's seeing and believing and actually practising is another thing, so we've also embarked on a training program for 100 CEOs of manufacturing companies in the country and that's a program that continues to be developed and implemented.
And so we're working on multiple levels, whether at a company level or at the leadership level, to make sure that transformation is penetrating throughout our industries and you know throughout involving them in initiatives such as ‘Make It In The Emirates’ and our initiatives within the ministry we try to make as many opportunities available to our industries and to our entrepreneurs to get into, you know, the best practices, the actual implementation of advanced technology and industry.
00:23:42 Speaker 1
You touched on one point, which I would like to close out with, which is essentially on the sustainability and the part of the future proofing of the manufacturing base of the country is ensuring that we have the sustainability for the future.
This is the Year of Sustainability of the UAE and we have COP 28 coming up, Insha’Allah, in a couple of month’s time. What is the role the ministry is playing there and what is the role that the ministry plays in bringing in renewables and renewable technologies and the manufacturing of that locally here in the country?
00:24:15 Speaker 2
Yes. So that's a great point.
There's a lot of emphasis this year in general on sustainability and whether it's low carbon or renewable energy in our manufacturing, of course that starts with the Industrial Technology Transformation Index. A lot of the components and that index work on, look at sustainability, energy efficiency maximum use of resources reducing of waste and manufacturing.
So, a lot of it is really built on making sure that our manufacturing is sustainable and, in turn, it also creates value for our companies, whether it's from feedstock to the kind of products that they produce and they've seen the value that it brings into the market.
The other part is working on the renewable part of energies, so we've teamed up with a number of companies, we've actually started one of the Electrolyzers…manufacturing in UAE with John Cockerill and we again one of the key things is the demand side de-risking. So, we try to match manufacturers with potential users.
So, companies such as Taq or Masdar or ADNOC, those that are actually going to be working on utilizing that energy, trying to make sure that the business case and also the trial phase of these new industries have that support.
We also worked on the Net Zero by 2050 Strategy, a large component of that comes from industry and it relies on our industry transitioning into low carbon and low and renewable energy.
So, a lot of our key players when it comes to the heavy metals, so that's aluminum or steel or any of the large manufacturing companies, we've devised a strategy to introduce renewables into their manufacturing process.
At the same time, we're working on the actual supply of renewable energy, hand in hand to go with that transition period. So, definitely, sustainability is one of our key priorities and we're working on all of the enablers policies also that build up to the implementation and working with all the users, whether it's on the development production side and the utility side for renewables.
00:27:16 Speaker 1
We look forward to Cop 28 and the role that definitely the ministry will play. Thank you so much, Your Excellency, for joining us here today. Thank you for taking the time. It was a great conversation and look forward to having more in the future.
00:27:27 Speaker 1
Thank you.
00:27:29 Speaker 2
Thank you. Pleasure to be here.
00:27:30 OUTRO V/O
'Economic Impact…Conversations from Emirates Development Bank'.