For the first time, special status has been granted to a state-backed industrial zone that allows 100 per cent foreign ownership in certain situations.
The ADPC (Abu Dhabi Ports Company) plans to invest $7.2 billion into KIZAD (Khalifa Industrial Zone Abu Dhabi) and will offer full ownership to those companies with a contribution to the GDP of the emirate, according to government officials. KIZAD has a seaport set to be in operation by the final quarter of 2012 and is found between Dubai and Abu Dhabi.
Under current regulations a foreign company must have a local partner in order to set up operations in the UAE. The government of Abu Dhabi has given KIZAD this special status allowing 100 per cent foreign company ownership, a first for the emirate according to Tony Douglas, a chief executive at ADPC.
All foreign firms within this zone will not be given the rights to 100 per cent ownership, however.
Chairman of ADPC Sultan Al-Jaber stated that management has the decision as to whether an ownership arrangement will benefit the economy in Abu Dhabi.
Al-Jaber noted that free zone status will be given to certain companies, manufacturing firms or specific industries based on whether the business plans of said organizations accurately mirror those of the government in terms of strategy and the economy.
Executive VP of industrial zones for the ADPC Khaled Salmeen commented that both full foreign ownership and joint venture set ups will be seen in the zone. All will be based on how strategically important the ownership and operation is to the region’s GDP.
KIZAD is financed entirely by the Abu Dhabi government, according to a chief executive for the ADPC the master development and regulatory group for the local ports and industrial areas.
The UAE capital is pumping billions in investments through the tourism, real estate, infrastructure and industrial sectors in an attempt to diversify away from an oil-based economy.
KIZAD has high expectations to meet. It is forecasted to supply around 15 per cent of the non-oil based GDP in Abu Dhabi by 2030, according to Salmeen. He noted that between 60 and 80 per cent of the goods manufactured in KIZAD will become exports.
Industries that are expected to be included in the zone and are of strategic importance include steel, food, aluminum, petrochemicals, pharmaceuticals and a variety of others according to Douglas. The second phase of construction in the zone is slated to begin in 2013.
Operations in the first phase are expected to begin in 2012 and have an annual capacity of 2 million container or 9 million tonnes of cargo. These amounts are four times those seen in Mina Zayed, the main port in Abu Dhabi. Interest has been pouring in from all over, according to Salmeen, and the ADPC is aiming for flexibility as more investors come into the zone.
It is expected that the area will create around 150,000 jobs in Abu Dhabi by 2030.Andrew Reid, Staff Writer, Gulf Jobs Market News