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Construction work continues on the offshore port island, which is a part of the Khalifa Industrial Zone Abu Dhabi ( Kizad).
Construction work continues on the offshore port island, which is a part of the Khalifa Industrial Zone Abu Dhabi ( Kizad).

Abu Dhabi industrial hub landing clients fast

The Khalifa Industrial Zone Abu Dhabi (Kizad) is fast becoming a magnet for attracting manufacturers, as the CEO behind the project provides a progress update.

The Khalifa Industrial Zone Abu Dhabi (Kizad) has attracted more than double its target of major manufacturers in the first phase of development.

Just one year after it was launched with an aggressive campaign to attract foreign investors, Kizad's first phase, a project called Area 1 and costing about Dh26.5 billion (US$7.21bn), has earmarked more than 2 square kilometres of land for companies in the advanced stages of signing lease agreements.

The total allocated for Area 1 is 51 sq km, including offshore space for the Khalifa Port. Kizad is to open in the final quarter of next year.

"We set a year-one target [of companies]," said Tony Douglas, the chief executive of Abu Dhabi Ports Company, which oversees Kizad. "We're double our year-one expectation at the moment."

While officials would not disclose the exact number of businesses that have so far applied to set up operations in Kizad's Area 1, it said in May that 100 companies had signed up.

Kizad officials have hosted more than 30 international trade delegations in an effort to persuade foreign business owners to set up manufacturing plants in the capital's industrial hub. They have also visited key countries in recent months, including China, South Korea and India, to lure investments.

A new office, the first to promote Kizad abroad, is to open in Mumbai.

"We've identified the markets for us which were strategically the most opportune," said Mr Douglas.

India is a close partner in the development of Kizad. Investments from the country are estimated to be worth Dh123 million, said Mohamed Al Rumaithi, the chairman of the Abu Dhabi Chamber.

"The UAE is the fourth key trading partner of India after the US, Japan and China, where the main exports from India are agricultural products, textiles, precious stones and jewellery, IT technology and services and chemical and leather products," Mr Al Rumaithi said at an investment forum in Mumbai last month.

Targeting countries in Asia is the "right approach" in growing the number of companies in Kizad, said Jitendra Gianchandani, a managing partner at Jitendra Consulting Group, a business advisory firm headquartered in the UAE.

In comparison with North America and Europe, Asia is performing relatively well amid the current global economic malaise, Mr Gianchandani said. Kizad should strike "while the iron is hot", he said.

Kizad is expected to contribute about 15 per cent of Abu Dhabi's non-oil GDP by 2030.

The entire zone is planned to cover 417 sq km and, once complete, is expected to consist of two distinct areas with numerous industrial clusters, plus a shipping port and a connection to the country's railway network.

Homes, mosques and retail outlets are also to be built.

Anchor tenants include Emirates Aluminium, which has built a smelter complex and is working on the $3.8bn second phase of its development. The first phase cost $5.7bn.

But finding more tenants will continue to be a challenge, observers say.

Some local businesses have yet to be convinced that they also need a manufacturing presence in Kizad. And attracting foreign investors may become increasingly difficult as the global economy wavers.

"Due to economic uncertainty, Kizad may face challenges in enticing companies," said Mr Gianchandani.



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