x Abu Dhabi, UAESunday 23 July 2017

Big names flood into Abu Dhabi's Kizad

More than 40 industrial heavyweights have signed up to lease land at Kizad, the manufacturing hub that aims to add $40 billion to Abu Dhabi's economy.

Tony Douglas, the chief executive of ADPC, says Kizad is an enabler of the 2030 vision. Razan Alzayani / The National
Tony Douglas, the chief executive of ADPC, says Kizad is an enabler of the 2030 vision. Razan Alzayani / The National

More than 40 industry heavyweights have signed up to lease land at Khalifa Industrial Zone Abu Dhabi (Kizad), a manufacturing hub that aims to add US$40 billion (Dh146.91bn) to Abu Dhabi's economy.

Abu Dhabi Ports Company (ADPC), the developer and operator of Kizad, began pre-leasing of the industrial area in May and has signed tenants on 2 square kilometres of land and is in negotiations on eight more.

"We have got 44 companies who are now well advanced or they have paid significant deposits. They are fully approved and the deal is signed," said Tony Douglas, the chief executive of ADPC.

"People who have signed up, deals done, [will cover] 2 sq kilometres. We have 8 sq kilometres of interest that is at various different stages of commercial negotiations and feasibility studies."

In total, ADPC is looking to lease about 22 sq kilometres of land to manufacturing and industrial companies in the first phase.

In the master-plan for the Abu Dhabi Vision 2030, Kizad is expected to contribute about 15 per cent to the non-oil section of the Abu Dhabi economy, which would equate to about $40bn.

The 2030 road map aims to reduce Abu Dhabi's reliance on oil to 36 per cent of GDP from 58.5 per cent last year.

Kizad is expected, directly and indirectly, to create more than 150,000 jobs and ADPC anticipates between 60 and 80 per cent of the goods manufactured within Kizad will be exported around the globe.

"We're talking about mid-stream aluminium players and the glass producers ... big projects in their own right," said Mr Douglas.

"Hundreds of millions of US dollars for them to establish their processing plants. There's a lot of work for them to do in consultancy, government approvals, permitting and gas allocation ... This is not, understandably, anything like mixed-use commercial residential. It's heavy industry."

Emirates Aluminium is currently ADPC's anchor tenant at Kizad.

So far, companies such as Al Braik Investments, a silicon metal smelting company, Talah Board, a company that produces construction boards and Al Batha Trading & Industry Group, a logistics company, have all agreed to set up in Kizad.

Mulk Holding, a manufacturing conglomerate based in Sharjah, also plans to set up a facility with two other joint venture partners to make aluminium components.

Kizad is planned to eventually be a 417 sq kilometre industrial and manufacturing hub. That equates to four and a half times the size of Abu Dhabi island and two-thirds the size of the island of Singapore.

To reach that, Mr Douglas said the GDP of Abu Dhabi would have to grow about fourfold.

"This project is an enabler of the 2030 vision," he said.

"In 2010, the GDP of Abu Dhabi was about US$110 billion [Dh404.03bn], it was in that kind of zone. In terms of the 2030 vision, it has a target of having a GDP of about $417bn."

Mr Douglas said it would not be surprising to see car makers and or car parts manufacturers sign up for Kizad in the near future, given the close proximity of Emal and moves in the automotive industry towards using more aluminium than steel for environmental reasons.

The sectors being targeted at Kizad are aluminium, engineered metal products, petrochemicals, pharmaceuticals, logistics and food.

The industrial hub hopes to offer lower operating costs for international companies, in terms of cheaper energy and labour, as well as a tax-free environment.

It is also trying to take advantage of Abu Dhabi's location between the major exporting nations of the Asia Pacific region and western Europe and the United States.

Kizad will have designated free zone and non-free zone areas, depending on the requirements of the companies establishing businesses there.


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