UAE Focus

UAE’s ICV scheme redirects $27bn to local firms

More than $27.23 billion has been redirected to the local economy since the UAE Ministry of Industry and Advanced Technology (MoIAT) and Adnoc launched major in-country value programmes to support domestic industries, it has been revealed.

Speaking at the Make in the Emirates Forum last week, Abdulla Al Shamsi, Assistant Undersecretary of MoIAT, said more than $14.43 billion of investment was redirected to the local economy last year alone, an increase of 25 percent year-on-year.

“The National In-Country Value Program is a nationwide program that speaks one language across many different sectors,” he said. “It’s one methodology and this is something we’re very proud of because it benefits the private sector and when the private sector sees this it helps them prepare, invest, and spend.”

The forum heard how the National ICV Program is “functionating well and accelerating”.

The forum also heard how industrial zones are playing a critical role in the in the country’s sustainable industrial development and broader economic prospects. Local industrial leaders described how they are utilizing alternative energy resources such as solar and hydrogen to reduce their carbon footprint.

The second edition of the Make it in the Emirates Forum concluded on Thursday (June 1) with the UAE showcasing its unique value proposition to international investors.

Investors were invited to explore opportunities and competitive advantages, with panel discussions focusing on the National In-Country Value (ICV) Program, the role of industrial zones, competitive financing as a key enabler and local talent in the private sector.

The UAE’s industrial exports reached $47.6 billion in 2022, growing 49 on 2021. The industrial sector's contribution to GDP rose to $49.5 billion in 2022, a 38 percent increase on 2020.

The Make it in the Emirates Forum is organised by the Ministry of Industry and Advanced Technology in partnership the Abu Dhabi Department of Economic Development (ADDED) and Adnoc.

On the first day of the forum, the UAE government announced $2.7 billion in industrial offtake agreements, building on the $29.9 billion of offtake agreements announced at the 2022 edition of the forum.

Meanwhile, Abu Dhabi National Oil Company (Adnoc) has signed new agreements with more than 60 companies, both UAE-based and international, to locally manufacture critical non-oil products in its supply chain.

Announcing this at the Make it in the Emirates Forum in Abu Dhabi, Adnoc said these new agreements bring the firm closer to its target to locally manufacture AED70 billion ($19 billion) worth of products in its procurement pipeline which was announced at the last edition of Make it in the Emirates forum. 

In addition, the agreements have enabled AED2.84 billion ($774 million) to flow back into the UAE economy through industrial investments by suppliers in expanding or establishing new facilities. Also Adnoc has accelerated its AED70 billion target to 2027, ahead of the previous target of 2030. 

Since the launch of Make it in the Emirates, Adnoc has more than tripled its direct spend with local manufacturers. 

Adnoc’s Make it in the Emirates agreements are estimated to contribute to 10% of the AED172 billion ($46.9 billion) target in the Abu Dhabi Industrial Strategy which will double the size of Abu Dhabi’s manufacturing sector. The agreements could also enable 21,500 jobs within the UAE by 2031. 

Dr Saleh Al Hashmi, the Adnoc Director, Commercial and ICV Directorate, said: "Adnoc is a critical engine for the UAE’s industrial growth and we are strengthening this role by localizing our supply chain and creating long-term domestic manufacturing opportunities for the private sector from our procurement pipeline, and ensuring its business continuity as we decarbonize our operations and work towards a lower carbon future."

"The agreements we have signed with the private sector supports our ongoing decarbonization efforts and will drive more sustainable value for Adnoc as well as enhance the resilience of our supply chain and the UAE’s industrial base. We encourage local and international manufacturers to take advantage of the remaining domestic manufacturing opportunities Adnoc has created and joined the UAE in our industrial growth journey," he stated.

Domestic manufacturing of critical industrial products strengthens the resilience of Adnoc’s supply chain and provides greater flexibility to respond to market dynamics as the company decarbonizes its operations and invests in lower-carbon energy solutions. It also also supports the UAE Net Zero by 2050 Strategic Initiative as new investors are encouraged to adopt clean technologies while setting up in the UAE through incentives in Adnoc’s In-Coutnry Value Program. 

Of the agreements signed to date, AED20 billion ($5.45 billion) is dedicated to local fabrication yards. These fabrication yards will create thousands of new job opportunities, drive gross domestic product (GDP) growth, and enhance the resilience of the local supply chain across multiple industrial sectors in the UAE.