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Iran signs €34m Petchem Deal with Italian Firm

Iran’s Ardebil Petrochemical Company cemented a deal with Italy’s engineering and construction giant Techint Group worth 34 million Euros deal for construction of a project aimed at production of propylene from natural gas.

Based on the deal, the Italian company will designate a licensor for a 500,000-ton GTPP or GTOP project in Iran in an 18-month period and then fund the project.

Upon signing the deal, Bahram Shahsavari, head of the board of directors of Ardebil Petrochemical Company, said once the €1.6b project becomes operation, over 1,500 direct jobs and over 10,000 indirect jobs will be generated.

Localization of the technical savvy for construction of the project as well as training of human forces for running such facilities have been stipulated in the contract, he added, highlighting the deal’s top features.

Techint is an Italian-Argentine conglomerate founded in Milan in 1945 by Italian industrialist Agostino Rocca and headquartered in Milan and Buenos Aires.

Source:http://www.iran-bn.com/2017/12/25/iran-signs-e34m-petchem-deal-with-italian-firm/

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Production surges in Iran’s car industry

Iran's car industry

Iran’s car industry is the second biggest sector in country after the energy sector accounting for more than 10 percent of its GDP.
Over 700,000 people are working in this industry which is equal to four percent of workforce of Iran, according to the 2015 data.

With a contribution of about $9.1 billion, the country’s carmakers accounted for 2.2 percent of Iran’s economic growth over the last fiscal year (ended March 20, 2016). The automotive industry is projected to form at least four percent of Iran’s economic growth by 2025.

The WB estimates show that Iran’s GDP in 2015 stood at $393.7 billion. This is while Iran’s car industry in 2015 witnessed a downward trend as the industry’s share in the country’s GDP was 0.5 percent lower than in preceding year.

However, the latest statistics on the output of the country’s automotive industry suggest a huge surge. The industry made more than 946,000 vehicles over the first nine months of the current fiscal year — indicating a 38.7-percent growth year-on-year.

A surge was observed in interest among multinational companies in investing in Iran following the nuclear deal signed in January 2015, while one sector attracting attention is Iran’s automotive industry.

Iranian car manufacturers reestablished cooperation with European companies, including Peugeot, Citroen and Renault. This resulted in a strong growth of nearly 151 percent for automotive sector, which ended 2016 as the top performing sector on the Tehran Stock Exchange.

At least two European carmakers had earlier announced that they experienced a considerable surge in their sales in Iran over 2016.

Traditional export markets for Iranian automobiles include Algeria, Azerbaijan, Cameroon, Ghana, Egypt, Iraq, Pakistan, Senegal, Syria, Sudan and Venezuela.

Recently, the Islamic Republic presented certificates to foreign car manufacturers willing to open sales offices in the country.

Some 40 foreign carmakers have already obtained the certificates, while the number can be increased in future. Companies may get licenses facing no limit in terms of the number of cars they would like to import. However, the companies are required to have a 10-year customer services experience in Iran, to be able to sell the production in the market.

The auto giant PSA Peugeot Citroen became the first foreign company since the implementation of the JCPOA to receive a license from the Iranian government to invest in Iran Khodro Co. (IKCO) — the country’s biggest car manufacturer.

The country imported some 49,331 motor cars in March-December 2016, while some 89 percent of the of the figure fell to a share of 5 countries, including the UAE, South Korea, Germany, Spain, Turkey. Imported cars had only a five-percent share in Iran’s total car market in the period.

Source:http://www.iran-daily.com/News/176525.html

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Qatar’s industrial sector sees robust expansion in September

qutar industrial growth

The economic blockade imposed by the siege countries appears not to have dented Qatar’s industrial sector, which showed robust expansion in September on higher production especially in the hydrocarbons and manufacturing sectors, according to official estimates.

Qatar’s industrial production index (IPI) grew 6.2% month-on-month in September this year mainly on account of production increase in crude and natural gas as well as refined petroleum products and rubber and plastics.

The Ministry of Development Planning and Statistics introduced IPI, a short-term quantitative index that measures the changes in the volume of production of a selected basket of industrial products over a given period with respect to a base period 2013.
On a yearly basis, the country’s IPI showed a 7.4% jump this September primarily on higher production of refined petroleum products, food products, electricity and crude and natural gas.

The mining and quarrying index, which has a relative weight of 83.6%, expanded 8.3% on a monthly basis in September 2017 on the back of a 8.3% rise in extraction of crude petroleum and natural gas; even as there was an 18.3% decline in other mining and quarrying activities.

On a yearly basis, the index showed an 8.2% growth on an 8.3% increase in the extraction of crude and natural gas; whereas other mining and quarrying index slumped 22.1%.

However, the manufacturing index, with a relative weight of 15.2%, showed a 3.1% decline month-on-month in September this year owing to a 9.1% drop in the production of beverages, 7.6% in cement and other non-metallic mineral products, 4.9% in chemicals and chemical products and 3.5% in food products.

Nevertheless, there was a 3.7% increase in the production of refined petroleum products, 2.1% in rubber and plastics products, 0.9% in printing and reproduction of recorded media and 0.2% in basic metals.

On a yearly basis, the manufacturing index rather shot up 3.2% with refined petroleum products’ production soaring 36.1%, food products (23.5%), printing and reproduction of recorded media (7.4%) and basic metals (0.4%); whereas that of cement and other non-metallic mineral products shrank 11.2%, beverages (5.2%), chemicals and chemical products (2%) and rubber and plastics products (1.9%).
Electricity, which has 0.7% weight in the PIP basket, saw a 5.2% decline on a monthly basis but reported 13% expansion on a yearly basis; while in the case of water, which has a 0.5% weight, there was a 4.9% and 6.5% decline month-on-month and year-on-year.

Source:http://www.gulf-times.com/story/571898/Qatar-s-industrial-sector-sees-robust-expansion-in

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Qatar startups, manufacturing sector gain more govt support

Qatar startups

Three months into the Saudi-imposed economic blockade, Qatar startups and the manufacturing sector “are getting more support” from the government, which has laid out a number of self-sufficiency and sustainability-related projects, an official of a Qatari company said.
“As a nation we are aiming to become more self-sufficient; considering the amount of Qatar’s wealth, this goal can be achieved through the wise leadership of His Highness the Emir Sheikh Tamim bin Hamad al-Thani. This will also enable the government to develop areas it had not focused on earlier.

“Today, several new startups are getting a major push from the Qatari government and companies are beginning to invest more in newer projects. So definitely the blockade has acted as a great stimulant for the development of local businesses in Qatar, said Anoop Krishnan, the COO of end-to-end IT solutions provider Cherry Computer.

Prior to the blockade, Krishnan said the market was rife with “freelancers” or unregistered companies that are operating in some Asian and GCC countries. However, increased focus on local companies since June 5 helped considerably trim down the presence of freelancers in the market, “some of which do not even have a physical presence in Qatar,” Krishnan said.

“While there are still some freelancers operating in the market, the focus on local businesses since the blockade was a positive development for companies like us,” Krishnan pointed out.

He also underpinned the role of Qatar’s small and medium-sized enterprise (SME) sector in nation-building and economic development. “Two of the primary roles of the SME sector would be wealth creation and employment generation in the country,” he said.

Krishnan said the development of Qatar’s SME sector will create a spill-over effect on less-developed areas around the country when SMEs start setting up new businesses in less populated locations “to maintain cheaper operating costs.”

“The growth of industries and business in these areas will lead to great infrastructural development like better roads, new schools, hospitals, shopping malls, and other public and private services that would otherwise have taken a different timeframe had there not been a blockade.

“Adding to this is the already developing Qatar Rail project, which is going to interconnect neighbouring communities. There will be a serious growth in GDP and per capita income, which is again one of the essential goals of economic development,” Krishnan stressed.

The expected rise in the standard of living in Qatar and infrastructural development in areas like education, healthcare, and other public services “would be a direct result of the country’s growing entrepreneurship culture,” Krishnan said.

Source:http://www.gulf-times.com/story/563602/Qatar-startups-manufacturing-sector-gain-more-govt

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Global logistics market to reach $15 trillion by 2024

spare parts

The global logistics market is expected to reach $15.5 trillion in revenue by 2024, while investments in industrial and retail projects lead to a spur in the domestic logistics industry, according to a recent report by Al Masah Capital, a leader in investments and market analysis.

In terms of volume, the global transportation and logistics (T&L) industry is expected to reach 92.1 billion tonnes by 2024, said the report.

The report also mentioned that the global third party logistics (3PL) market is expected to grow at a compound annual growth rate (CAGR) of more than 5 per cent by 2020, it added.

Factors such as the rapid globalisation, increasing trade volume, and the revival of the global economy are some of the major contributing factors to the growth of the 3PL market. The growth of integrators will increase demand for contract logistics services and will significantly contribute to the growth of the industry.

Highlighting T&L’s role play in international trade, the report revealed that; robust trade, economic growth, and liberalisation policies followed by many countries worldwide have resulted in increased trade volumes, thus ensuing increase in transportation, handling and warehousing needs, which has led to a demand for integrated logistics solutions.

Increased globalisation in manufacturing and other technological advancements has made companies focus more on core activities, and thus logistics activities have been outsourced as a cost-effective solution.

Putting the spotlight on Middle East and North Africa‘s (Mena) strategic location, Al Masah reviewed Dubai’s favourable position for international T&L.

Dubai possesses well established and modern facilities including free trade zones and a local marine terminal operation considered one of the largest in the world. Most companies find that the region offers a range of benefits for their regional and international operations.

The rising exports and imports drove the supply chain and logistics market and the Middle East, led by the UAE, to become one of the most important hubs in the changing global trade lanes. Thus, overall, as Mena countries pursue political transformation and economic diversification, transportation and logistics investment is the cornerstone to its future growth.

Revealing interesting facts about the Mena region, the report cited that region has trade relations with almost every country/region across the globe. It exports hydrocarbons and hydrocarbon-related products that are in great demand, and meets a large part of its food requirement through imports.

Data from the WTO suggests that Mena engages in maximum merchandise trade with Asia (55 per cent of all exports and imports), followed by Europe (31 per cent), and North America (8 per cent). Others like the CIS and South/Central America account for the remaining 6 per cent share.

The Mena countries also lead in sea and air trade routes with the UAE and Saudi Arabia ranking among ‘Top 10 Air Freight Lanes’ globally. Although the region has a diversified network of air, sea and road transport, the bulk of economic activity is skewed toward maritime transport.

The region has total of 134 Sea ports handling a total of 48.3 million TEUs of container traffic. Of these, the GCC has nearly 41 ports (35 major ports) which together handle 68 per cent of Mena container port traffic. Besides sea transport, the region has 114 international and domestic airports of which 43 airports are located within GCC.

The Middle East has also acted as a refuelling point for air freight carriers and shipping lines moving between Europe and Asia for many years which led to the creation of hub and spoke operations in the region.

GCC has further built on modern warehouses and transportation infrastructure, developed free zones, adopted ‘open skies’ policies, simplified customs procedures and has strengthened its anti-corruption measures in order to boost its non-oil economy.

Most notably, an increasing number of manufacturers are establishing their distribution facilities at hubs such as the Jebel Ali Free Zone in Dubai, from where they have been efficiently supplying a growing consumer market across the region.

Within the region, the UAE and Saudi Arabia are the most attractive targets for logistics investments and easiest markets to operate. Other Mena countries, particularly those in the GCC, such as Qatar, Oman, Kuwait and Bahrain, along with Morocco, Jordan are also emerging as potential investment destinations. 34 free trade zones, non-existent corporation tax and the offer of full ownership, coupled with unlimited repatriation of profits, makes the UAE a highly appealing business environment for producers and manufacturers alike, as well as to logistics service providers.

The growth of T&L in Mena is being driven by government initiatives toward economic diversification from energy-based industries to expansion into other commercial sectors such as trade, export, import and tourism.

Source:http://www.tradearabia.com/news/IND_320027.html

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Booming Spare Parts Business in Global Market

Spare parts services are flourishing day by day ,as demand for heavy machinery spare parts like marine equipment, ship equipment, engine parts, bearing parts, electrical & electronics parts, hardware & software parts, fuel system parts, pump parts, transmission parts, filters, seals & gaskets parts getting higher these days.

World is becoming concrete forest now constructing industries are expanding to a large extend from the micro level to macro. Spare parts are basically manufactured for the purpose of replacement or interchange. Spare parts are the life saver for any failed or detained part. Well there is one more term called capital spare that help failed machinery to get alive for more longer time as it take time for the replacement process that help for mass production. Spare parts expanding world wide as per their demand in international market.

Spare part market in Europe –

In this intensified competition globally, the European industry continues shaping itself. The field of innovation filled with highly efficient engines. European spare parts sector leading towards creating new opportunity that help exploring market. Spare parts which are manufactured are Eco friendly manufacturing parts.

There is a company named ‘Kogel’ a new logistic center which has acknowledged for continuous growth and increasing sale of spare parts market since two years. From Neu Ulm, Bravia to Ulm in Baden, Wurttemberg more specifically to Boschstrasse 25. In south germany C.E Neorpal GmbH is one of the fastest growing service provider gives Kogel more professional warehouse logistic services.

In recent time Europe enduring several dynamic changes on social front in making of car designs, manufacturing and deciding the how to implement new design and how to lure buyers and sellers. As Europe is the world’s largest market in spare parts affairs this promotes lot of business opportunities with cut throat competition.

Here O-jay spare Parts is a top leading spare part company in netherlands their professional team has highlighted some top tips to improve spare parts business in Europe.

Tips to improve spare parts business –

1. Promotion is the first step to start or run any business, same goes with the spare part business, strong marketing helps in expanding it. You need to boost your investment for selling and buying purposes.

2. For faster growth you need to serve your customers in the best possible way, provide them fast feedback, fast delivery. Customer satisfaction should be the main target. This will help you in build strong relation.

3. Always provide your customer quality spare parts that will help building goodwill of your company. Go for the last long guaranteed product also promote quality spare parts as compared to cheap rate products that fails too soon. Maintain your brand name reputation for the fully establishment of business.

4. Your target should be very clear about providing the best quality spare parts whether it be service and repair companies, self service technicians and fleet operators you need to work on wholesale market to supply spare parts.

5. Try to make customers comfortable by providing them frequent feedback and easy access to the company. For that you can make your companies website with full fledged information about almost every unit of the company, always respond them quick and provide better service.

As an example in Dubai spare parts exhibition happened in 2016 organized by Mattar AI Tayer, director general and chairman of board of executive directors at RTA. In that exhibition they displayed a healthy ex poser for the middle east auto spare parts and service industry. It was focused on higher rate of selling from 2.3 million in 2015 to 4.4 million in 2020 also there was a positive growth of exhibitor being shown. According to analyst in 2015 it was valued $ 12.98 billion and by 2020 $ 17.27 billion growth expected.

Conclusively you must need to know that in world market execution of electronic components in vehicles is leading now-a-days. Like today vehicles for example car contains more than 1000 electronic components and that is why these spare parts are more in demands now. This is how today’s global market comprises spare parts vendors.If you want to buy equipment parts online or to know more information about their spare part products you can hire O- Jay experts in Netherlands.

Source:https://yourstory.com/read/30cbd2e616-booming-spare-parts-business-in-global-market

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Saudi Arabia to spend big after country’s economy shrinks

Saudi Arabia to spend big after country's economy shrinks

Saudi Arabia’s response to its contracting economy is to invest in major infrastructure projects and privatise its oil company

Saudi Arabia’s Crown Prince Mohammed Bin Salman attends a cabinet meeting during the approval of the 2018 budget (Reuters)

Saudi Arabia said on Tuesday its economy contracted for the first time in eight years due to painful austerity measures as it announced record spending to stimulate growth.

The OPEC kingpin said gross domestic product for 2017 shrank by 0.5 percent due to a drop in crude production in line with an agreement with major oil producers aimed at boosting prices.

Oil sector GDP fell by two percent in 2017, the finance ministry said.

The last time the Saudi economy contracted was in 2009, when GDP fell by 2.1 percent after the global financial crisis sent oil prices crashing.

Riyadh also posted a higher-than-expected budget deficit in 2017 and forecast another shortfall in 2018 for the fifth year in a row due to the drop in oil revenues.

It unveiled plans to spend more than ever next year in a bid to stimulate the sluggish economy, saying it expects GDP to grow by 2.7 percent.

Crown Prince Mohammed bin Salman, the architect of the “Vision 2030” programme of reforms for a post-oil era, has announced a host of mega projects, including a futuristic megacity with robots and driverless cars, which require about $500bn in investments.

He said the 2018 budget will have the largest state spending in the kingdom’s history, which was evidence of success despite low oil prices. He said improving living standards for Saudi citizens was a government priority, according to comments on the state news agency SPA.

The cornerstone of the reforms is an initial public offering of nearly five percent of national oil giant Aramco planned for next year.

Prince Mohammed has also been behind decisions to allow women to drive and to lift a 35-year-old ban on cinemas.

Last month, the heir to the throne launched a wide-ranging crackdown on dozens of elites, ostensibly to tackle corruption, but experts say it was also a way of consolidating his grip on power.

Since 2015, the ultra-conservative country has introduced a series of price hikes on fuel and electricity.

It has also imposed fees on expats and is preparing to introduce value-added tax in the new year.

The finance ministry said unemployment among Saudis rose to 12.8 percent in June, up slightly from last year.

The government has allocated $13.9bn for a cash transfer programme called the Citizen Account to compensate the needy for hiking prices.

The kingdom has set aside $260.8bn for expenditure, up 10 percent from this year, said the finance ministry.

“The 2018 expansionary budget includes a number of new development projects,” said Prince Mohammed bin Salman, who oversees economic affairs.

“About 50 percent of the new budget will be financed from non-oil sources,” he said, quoted by the official Saudi Press Agency.

source :http://www.middleeasteye.net/news/saudi-arabia-spend-big-after-countrys-economy-shrinks-369296740

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Iran Proposes Visa-Free Regime with Iraq, Trade in Own Currencies

Iran Proposes Visa-Free Regime with Iraq

Iran’s first vice-president put forward a proposal to lift visa requirements for the Iranian and Iraqi travelers, and also called for trade exchanges between the two countries using their own currencies, namely rial and dinar.

Addressing a meeting of high-ranking delegations from Iran and Iraq, attended by the visiting Iraqi Prime Minister Haider al-Abadi and held in Tehran on Tuesday, Iranian First Vice-President Eshaq Jahangiri called for the expansion of banking cooperation between the two neighbors by removing the trade obstacles.

To that end, he proposed, Iran and Iraq can begin to trade using their national currencies.

Jahangiri then noted that the political, economic and security cooperation between Iran and Iraq has reached such a high level that they need to formulate a “comprehensive document on trade and economic cooperation.”

The vice president also pointed to the huge number of Iranian pilgrims traveling to Iraq every year, suggesting that Tehran and Baghdad should sign an agreement to lift the visa restrictions.

For his part, the visiting Iraqi prime minister voiced Baghdad’s readiness to boost relations with Tehran in all fields.

Iraq and Iran are in the same front in the fight against terrorism, Abadi added, saying the Takfiri terrorist groups in the Arab country are on the brink of destruction.

Heading a delegation, Abadi arrived in Tehran on Tuesday and held meetings with Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei and with Iranian President Hassan Rouhani.

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OPEC chatroom dead as Qatar crisis hurts Gulf oil cooperation

Qatar crisis hurts Gulf oil cooperation

* For first time, Gulf oil ministers not meeting before OPEC

* Qatar crisis to complicate producer group’s decision-making

* OPEC’s Sunni wing weakens as Iran, Iraq raise game

DUBAI/LONDON, Nov 23 (Reuters) – OPEC’s most powerful internal alliance, bringing together the oil producer group’s Gulf members, is disintegrating fast.

As a six-month-old spat between Saudi Arabia and Qatar deepens, the organisation’s Gulf ministers will have to scrap their tradition of meeting behind closed doors to agree policy before OPEC holds its twice-yearly talks, OPEC sources say.

“We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chatroom. Now it’s dead,” said a senior source in the Organization of the Petroleum Exporting Countries.

Four other sources said there had been no official contact on oil policy between the Gulf Arab nations, in a grouping known as the Gulf Cooperation Council (GCC).

The GCC includes OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Qatar and non-OPEC Oman and Bahrain. OPEC meets on Nov. 30 in Vienna to decide whether to extend global output cuts beyond March.

OPEC kingpin Saudi Arabia and the UAE cut ties with Doha in June, saying Qatar backed terrorism and was cosying up to rival Iran. Qatar rejected the accusation.

“The ministers can’t meet,” another OPEC source said. “They may relay the message through the Kuwaiti or the Omani oil ministers, but Saudi and the UAE cannot meet publicly with the Qataris.”

Kuwait and Oman have refrained from taking sides in the dispute, over which Kuwaits Emir Sheikh Sabah has led regional mediation.

SHI’ITE OPEC ALLIANCE

To be sure, OPEC has survived worse crises and operated under even greater strain, including the Iran-Iraq war in the 1980s, Iraq’s invasion of Kuwait in 1990 and proxy wars fought by Saudi Arabia and Iran over the past decade.

None of the OPEC sources suggested the Qatar crisis would derail a widely expected decision by OPEC to extend price-boosting output cuts until the end of 2018, as almost all producers agree on the need to maintain policy.

But dialogue within OPEC is likely to be complicated as the stand-off strikes at the heart of OPEC’s efforts to form a united front to stabilise a fragile oil market. It may also weaken the group’s Sunni faction at a time when predominantly Shi’ite Iran and Iraq are raising their game.

As OPEC president in 2016, Qatar was instrumental in bringing together oil producers – including non-OPEC Russia – to agree the supply-reduction deal.

“If the GCC is dead politically, then it will certainly have implications for OPEC policies. Not that it will necessarily disrupt decision-making, but it is making it more challenging and complicated,” the senior OPEC source said.

“Qatar is not talking to the Saudis or the UAE, so OPEC’s Sunni wing is weaker. On the other hand you have the rapprochement between Iran and Iraq, a Shi’ite alliance long in the making,” the senior source added.

With the world’s fourth- and fifth-largest oil reserves, Iraq and Iran are seen as the OPEC countries with the largest output growth potential and hence together can be the biggest challengers to the leading role Riyadh has played for decades.

Iraq has resisted calls from the United States to lessen its reliance on Tehran after Iran effectively helped Baghdad stifle a Kurdish independence referendum. Iran also plans to import significant volumes of Iraqi oil.

“The Saudis perfectly understand that challenge and are doing their utmost to lessen Iran’s influence on Iraq,” a third OPEC source said.

Relations between Riyadh and Baghdad have been improving in recent months, with the two states joining hands to coordinate their fight against Islamic State and on rebuilding Iraq.

With a thaw in relations, Saudi Energy Minister Khalid al-Falih visited Iraq in October to call for increased economic and energy cooperation, the first Saudi official to make a public speech in Baghdad in decades. (Editing by Dale Hudson)

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Abu Dhabi encouraging investment in Al Dhafra region

The region of Al Dhafra encompasses approximately 35,250 sq km and accounts for 60% of the total landmass of the emirate of Abu Dhabi. The region is bound by a 350-km northern coastline and lies between Saudi Arabia to the west and south, Al Ain to the east and the Abu Dhabi region in the north-east. Al Dhafra is mostly desert and lies on the edge of the Arabian Peninsula’s Empty Quarter (Rub Al Khali), the world’s largest uninterrupted mass of sand. As a result, Al Dhafra, despite being the largest of Abu Dhabi’s regions, is the most sparsely populated. Its harsh desert environment witnessed temperatures as high as 50.9° C and as low as 5.2° C in 2015, according to the “Statistical Yearbook of Abu Dhabi 2016” published by Statistics Centre – Abu Dhabi (SCAD). In 2015 peak rainfall in Al Dhafra was recorded in January, when a total of 3.3mm fell. Al Dhafra’s economy is underpinned by its hydrocarbons industry; the region is home to around 90% of Abu Dhabi’s total oil reserves.

Demographics & Settlements

In mid-2015 the population of Al Dhafra was recorded at 325,800, or 11.7% of the total population of approximately 2.8m for the entire emirate of Abu Dhabi. Of the total for the emirate, 536,741 people were Emirati citizens, of whom 30,342 (5.7%) lived in Al Dhafra.

Making up around 60% of the emirate’s landmass, Al Dhafra has a population density of 9.3 people per sq km, compared to 156.3 and 55.2 per sq km for the Abu Dhabi Region and Al Ain, respectively.

Despite the low population density, Al Dhafra’s population growth has outstripped that of Abu Dhabi Region and Al Ain in recent years, with the region’s population tripling between 2005 and 2015, rising from 108,600 to 325,800, according to SCAD. In comparison, the population of Abu Dhabi Region grew from 809,000 to 1.7m in the same period, while Al Ain’s population increased from 444,700 to 738,500.

Between 2005 and 2015 the Emirati population in Al Dhafra grew from 20,200 to 30,300. However, the total number of non-citizens living in the region rose by more than a factor of three over the same period, from 88,300 to 295,500. This increase is largely down to various ongoing developments aimed at spurring growth and diversifying the region’s revenue streams. As a result of these initiatives, demand for both skilled and non-skilled foreign labour has driven large-scale immigration into the region over the past decade.

The majority of Al Dhafra’s population is concentrated mainly across the region’s seven principal settlements, namely Madinat Zayed (the largest city by population and size and regional administrative capital), Mirfa, Ghayathi, Liwa, Ruwais (home to an industrial centre and port), Sila and Delma Island.

Government

The ruler’s Representative Court of Al Dhafra Region was established by Emiri Decree No.2 in 1977, and was reorganised in 2006. Sheikh Hamdan bin Zayed Al Nahyan has served as the ruler’s representative in Al Dhafra Region since June 2009. The ruler’s Representative Court of the Al Dhafra Region is responsible for overseeing and implementing the vision and development of Al Dhafra.

With its head office located in Madinat Zayed, the Al Dhafra Region Municipality is the body responsible for providing all municipal services, and for planning and managing the development of the region, particularly with regards to infrastructure projects. The Al Dhafra Region Municipality was established in 2006 as an independent governmental department operating under the umbrella of the Abu Dhabi Department of Municipal Affairs and Transport. In addition, several other bodies are responsible for administrating services across a range of spheres in the region. These include the Abu Dhabi Department of Economic Development and the Abu Dhabi Housing Authority.

Meanwhile, the Abu Dhabi Urban Planning Council (UPC) is the agency responsible for the developing and implementing the emirate of Abu Dhabi’s urban development strategy and has played a key role in implementing the policies and developments envisioned in Plan Al Dhafra 2030.

Economic Profile

Although the economic contribution of other sectors such as agriculture and tourism is on the rise, Al Dhafra’s economy remains underpinned by its significant hydrocarbons wealth.

According to figures cited by the Plan Al Dhafra 2030, the region is responsible for 40% of the emirate’s GDP, suggesting a total of Dh384bn ($104.5bn) in 2014 when the emirate’s overall GDP reached Dh960bn ($261.4bn). However, the region’s contribution is likely to be slightly lower given that the mining and quarrying (which includes crude oil and natural gas) contribution to GDP was down some 4.3% year-on-year in 2014, falling from around Dh511bn ($139.1bn) in 2013 to Dh489bn ($133.1bn) in 2014.

The drop was a result of the rapid fall in global oil prices, which started in June 2014, when the price for Brent crude stood at $114 per barrel; by the end of the year it had decreased to just under $60 per barrel with the fall continuing through 2015, and eventually bottoming out at $28.90 per barrel in January 2016. As a result, the sector’s contribution to GDP will likely hit a low in 2015 before increasing again in 2016 in line with the rally in prices that took place in the year. As of mid-March 2017 the price for Brent crude stood at a total of $50.90 per barrel.

In addition to multiple oil and gas fields, Al Dhafra is also home to Ruwais industrial zone. Located in the north-west of the region, this self-contained industrial area is home to the largest oil refinery in the UAE as well as various other downstream facilities.

The complex was developed in the 1970s by Abu Dhabi National Oil Company (ADNOC) as a base for its extensive operations in the refining segment. In 1999 Abu Dhabi Oil Refining Company (Takreer) was established to take over the responsibility of the emirate’s refining operations from ADNOC.

Plan Al Dhafra 2030

Plan Al Dhafra 2030 is the region’s overarching development strategy, and aims to deliver “managed, responsible growth” for Al Dhafra, driving economic “growth without sacrificing the cultural and historic significance of the region”. The plan, which was formulated and launched by the UPC in 2008, envisions different roles for each settlement in the region. Major investments have been earmarked not just for the dominant petrochemicals and energy sectors (which includes oil and gas, nuclear and renewable energy as well as desalination), but also in various other subsectors, notably transport, agriculture and fisheries, and real estate.

The UPC completed the update of Plan Al Dhafra 2030 in 2015, with Master Plans laying out the role of each settlement in greater detail now being created. These will further integrate the infrastructure developments taking place in the region into the roles for each settlement, while also designating specific areas of land for particular use. The UPC has developed the Master Plans to target the specific needs of each settlement in a way that enables local investors to operate at the level that is appropriate for them.

The real estate sector is a case in point. “The housing market for the expatriate population in Al Dhafra is exclusively a rental market, and as a result has few big Abu Dhabi-based developers operating in it,” Falah Al Ahbabi, director-general, Abu Dhabi Urban Planning Council, told OBG. “ADNOC is the only entity currently undertaking large-scale residential developments for its employees and their families in Ruwais. As a result, the UPC is developing the settlement plans in such a way that local authorities and stakeholders can seek out local investors interested in small-scale housing and mixed-use building projects.”

Oil & Gas

Today Al Dhafra is home to around 90% of Abu Dhabi’s known oil and gas reserves, while around 90% of the UAE’s total reserves are located in Abu Dhabi. ADNOC is responsible for Abu Dhabi’s hydrocarbons reserves, and as such plays a major role in managing Al Dhafra’s oil and gas-based growth. The company currently produces over 3.15m barrels per day (bpd) of oil, and over 9.8bn cu feet of raw gas per day through its various partnerships and subsidiaries.

Under the recently approved five-year business plan and budget and its 2030 Strategy, ADNOC has outlined expansion plans which include hitting a production target of 3.5m bpd in 2018. A stronger focus on the application of new and innovative technologies is also envisioned, with enhanced oil recovery techniques and significant development of the emirate’s sour gas resources on the cards. In November 2016 ADNOC unveiled its new Gas Master Plan as it works to meet the emirate’s demand for natural gas, which has been increasing at a rate of 15% per annum in recent years. The plan aims to ensure “a sustainable and economic supply of gas to meet the growing energy requirements of Abu Dhabi and ADNOC’s international customers” (see Energy chapter).

In line with this, it was announced in November 2016 that Al Hosn’s landmark, the $10bn Shah Gas Development project near Liwa in the south-east of the Al Dhafra region, would be expanding its sour gas processing capacity by 50%. Al Hosn, which is 60% owned by ADNOC and 40% owned by Occidental Petroleum, started production at the Shah gas field in January 2015, with the plant going on to reach full capacity of 1bn standard cu feet of sour gas per day in October of that year. The plant was officially inaugurated by Sheikh Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi and the deputy supreme commander of the UAE armed forces, in April 2016.

The Shah gas development – considered the largest of its kind in the world – produces 500m cu feet of network gas, 4400 tonnes of natural gas liquid and 33,000 barrels of petroleum condensates daily. It also has a daily output of around 9000 tonnes of pure granulated sulphur, all of which is transported to Ruwais Port along the first phase of the Etihad Rail project.

Downstream

Abu Dhabi’s production and export of petrochemicals products has been growing steadily in recent years, rising from 5m tonnes in 2014 to 6.1m tonnes in 2015, an increase of 22.1%, according to SCAD. This growth looks set to continue, with ADNOC announcing several new projects aimed at expanding its domestic refining and petrochemicals capacity.

These expansion plans form part of ADNOC’s 2030 Strategy, and the company’s bid to maintain self-sufficiency in the emirate, while also falling in with its wider objective to target growing international demand for refined and petrochemicals products, particularly in Asia where the petrochemicals market is set to double by 2030. According to ADNOC, the new projects will add 1.4m tonnes per annum (tpa) of aromatics and 4.2m tpa of gasoline supply, bringing total gasoline production to 10.2m tpa by 2022, while the investments will see petrochemicals production grow from 4.5m tpa in 2016 to 11.4m tpa by 2025.

These plans follow on the back of several big-ticket expansion projects in the sector in recent years. Borouge, ADNOC’s joint venture with Austria’s Borealis – itself a joint venture between OMV and Mubadala (following the recent merger of Mubadala Development Company and International Petroleum Investment Company) – has been at the centre of Abu Dhabi’s petrochemicals development since it was founded in 1998 and recently ramped up its third expansion phase at Ruwais. The $4bn project more than doubled the plant’s capacity from 2m tonnes to 4.5m tonnes, making the facility the world’s largest integrated polyolefins complex.

In November 2015 Ruwais was also the site for the significant expansion of Takreer’s operations, with the full commissioning of a major $10bn expansion of its refinery taking place there, doubling the facility’s refining capacity and boosting crude oil production to more than 900,000 bpd.

Energy Projects

Various energy developments are under way across Al Dhafra, the most eye-catching of which is the Barakah Nuclear Energy Plant. The plant represents the region’s first nuclear power development, and its four reactors are scheduled to come on-line successively in the coming years, with the first reactor having completed its initial construction work in 2017 and expected to come on-line in 2018.

Elsewhere, Abu Dhabi Water and Electricity Authority and ENGIE, formerly known as GDF Suez, are in the process of building the gas-fired Al Mirfa independent water and power project. The $1.5bn facility, which is scheduled to come on-line in 2017, will have an electricity generation capacity of 1600 MW and will produce 52.5m imperial gallons per day of desalinated water once it reaches full capacity. ENGIE has a 20% stake in the project, and will operate the plant on a 25-year power and water purchase agreement.

Recent years have also witnessed a significant rise in renewable energy activity across the Gulf region, and Abu Dhabi has been no exception, playing an important role in the UAE’s target of 44% renewable energy by 2050. Abu Dhabi Future Energy Company (Masdar), which was established by Mubadala as a wholly owned subsidiary in 2006, is responsible for advancing the development of clean and renewable energy in Abu Dhabi and has launched several landmark projects since it was formed. The Shams 1 concentrated solar power plant near Madinat Zayed was commissioned in 2013 and represents one of the largest renewable energy projects in the Middle East. The plant, which occupies 2.5 sq km, has an installed capacity of 100 MW and powers over 20,000 homes.

Construction & Real Estate

Al Dhafra’s construction sector is gearing up for a flurry of activity in the coming years, as the huge uptick in the number of permits issued in 2015 presages a period of significant opportunity for contractors in the region. The number of building permits issued in Al Dhafra shot up from 601 in 2014 to 5011 in 2015, with the biggest jump coming in the residential segment, which saw the number of issued permits hit 2947, up from 406 in 2014, according to figures from SCAD.

Madinat Zayed is currently undergoing rapid expansion, with development plans there including 2775 residential plots, 37 mosques, 47 gardens and 13 schools across all educational stages, all within a residential compound. In October 2016 the Abu Dhabi General Services Company (Musanada) announced the launch of packages three and four of infrastructure works related to these developments, with all of the project’s works expected to be completed by the end of 2019.

In November 2015 Musanada also issued a statement saying that it had completed the execution of preliminary works on the Al Manayef project in Al Dhafra, where it plans to construct accommodation for employees of government entities in the area within an integrated city. The project will be divided into 12 construction packages classified according to type and is expected to host approximately 27,000 residents upon completion in June 2018.

Meanwhile, the UPC’s master-planned communities projects, which form part of Plan Al Dhafra 2030 and are being developed in partnership with Musanada and the Abu Dhabi Housing Authority, are also driving large-scale construction growth in the region. The Mirfa Master Plan envisions a number of new developments for the city, with a beachfront community for Emiratis set to break ground in the first half of 2017. Spanning an area of 35,000 sq km, the development will include some 410 villas, five retail plots, several parks and mosques, as well as a public beach. Also in the Mirfa Master Plan is the mixed-use Al Wajeha Al Bahria development. Located close to the Mirfa Beachfront project on a site between Mirfa Beach and Mirfa City, it will include mixed-use blocks, villas and community facilities. The development incorporates the emirate’s mandatory sustainability requirements for a one-pearl Estidama Pearl rating under Abu Dhabi’s sustainable framework for design, construction and operation (see Construction chapter).

Transport

Underpinning the multiple development projects taking place across Al Dhafra is the region’s Surface Transport Master Plan (STMP). Originally introduced in 2009, an updated STMP was launched in December 2015 by Abu Dhabi’s Department of Transport. The update builds on the original strategy, and lays out plans for mass extensions to the region’s road networks, public transport services and rail links.

The Al Mafraq-Al Ghweifat motorway, which will run from Al Mafraq near Abu Dhabi City through Al Dhafra via Mirfa, Ruwais, Barakah and Sila, to Al Ghweifat on the Saudi border, represents one of the major infrastructure projects currently being rolled out in the region. In May 2016 Musanada announced that the Dh5.3bn ($1.4bn) project was 59% complete, with construction set to finish in mid-2017. The motorway will have between two and four lanes running in each direction along the 182-km-long section from Al Mafraq to Baynounah, while the remaining 46-km-long section from Barakah to Al Ghweifat will have two to three lanes in each direction.

The first phase of the Etihad Rail project is now fully operational, and connects the gas fields at Habshan and Shah to the Port of Ruwais, with some 9000 tonnes of pure granulated sulphur transported along the line from Shah to Ruwais daily. Mirfa was chosen as a regional base for the Etihad Rail project, with the railway basing their staff, maintenance facilities as well as depot operations in the city. On the sea front, December 2015 saw the opening of the redeveloped Al Mirfa Port, the first of five such developments in the pipeline for the region. The port plays an important role in the development of surrounding communities and provides a key source of income for them.

Agriculture

Al Dhafra plays a significant role in Abu Dhabi’s agricultural sector, and as of 2015 was home to 27.7% of the emirate’s plant holdings and 17% of its total livestock, the most recent SCAD data shows. The vast majority of plant holdings in Al Dhafra are dedicated to fruit trees, with an area of 103,368 dunums (a dunum is roughly 0.1 ha), or just under half of the region’s total, used for the purpose. Meanwhile, the number of productive greenhouses has been increasing steadily in recent years, from 3098 in 2013 to 4220 in 2015, or 25% of the emirate’s total.

Dates currently account for the majority of Al Dhafra’s agricultural output, and in 2015, the latest year for which figures are available, the region produced 31,133 tonnes of dates, approximately 33% of the emirate’s total output, valued at Dh213.7m ($58.2m).

Water scarcity remains one of the biggest challenges facing agriculture, and in line with Abu Dhabi Economic Vision 2030, the Abu Dhabi Food Control Authority has been pushing research in this area. A central issue in local agriculture remains the provision of water. There are opportunities to improve efficiencies around treated wastewater, which has been approved and verified as safe for use in many areas.

Tourism

The infrastructure upgrades under way across Al Dhafra are expected to bolster the region’s tourism industry, which is being developed primarily in the form of coastal attractions, and desert and oasis towns. There were 11 hotels in Al Dhafra in 2015 with a combined 1180 rooms, up from 939 rooms in 2014. Guest arrivals are also on the rise with the region welcoming approximately 168,000 visitors in 2015, up from around 132,000 the previous year. Sir Bani Yas Island is one of the major tourist destinations in the region, with the development of the island’s cruise port terminal set to allow for 65,000 passengers from 39 calls during the 2016/17 season. The island’s nature reserve represents a key attraction, and the facility is home to more than 13,000 animals, including cheetahs, gazelles and oryxes.

Festivals are also raising Al Dhafra’s tourism profile. The Liwa Date festival, for example, attracts upwards of 70,000 people annually, while the water sports festival returned to Mirfa for the eighth time in April 2016. Perhaps the biggest event is the Al Dhafra Camel Festival, held every December in which tens of thousands of camels are paraded for thousands of visitors.

Outlook

Al Dhafra’s hydrocarbons sector will continue to dominate the economy, with developments – particularly of sour gas – driving growth in the near term. The downstream segment remains strong too, with expansion plans targeting the rising demand for refined products in African and Asian markets. Expansion is also catering to rising demand at home, particularly for the natural gas needed to power the growing appetite for electricity and desalinated water. The Barakah nuclear power plant is set to be a game changer in this regard, while renewable energy projects under the supervision of Masdar are also becoming an increasingly important part of the region’s energy mix. Meanwhile, the urban master plans being rolled out by the UPC in line with Plan Al Dhafra 2030 look set to fuel the local construction industry. At the same time, ongoing infrastructure developments, particularly the highway project and port upgrades, will continue to underpin Al Dhafra’s expanding heavy industries, while providing welcome support for the region’s developing tourism infrastructure.

Source:https://oxfordbusinessgroup.com/overview/further-potential-investments-varied-sectors-are-set-boost-growth-and-diversify-region%E2%80%99s-economy