The UAE light industry overview

The UAE dynamic progress, a tendency for economic diversification and modern infrastructure has given a strong impetus for the development of all spheres of production in the UAE that was especially noticeable in the last decade. Taking into account that the UAE bordering countries are generally oil oriented, the Emirates light industry has a decent market share in the region. At the same time, due to the United Arab Emirates’ export-oriented open economy local manufacturers have been able to conquer both regional and global markets.

Light industry achievements in the UAE

The UAE textile industry brings $ 17.5 billion in revenue yearlythat makesit the second largest industry after the oil one. The UAE is ranked third in the world (7.7%) by the volume of textile product exports after the US and the UK, delivering products to more than 50 countries in Africa, Middle East, South Asia and Europe. According to the World Trade Organization statistical report, the UAE appeared to bethe 11th largest garment importer in 2012, with total import volume of $ 4 billion (0.8% of total import volume in the world).

Within the last few years the UAE government has been encouraging the entrepreneurs to invest in the automation of the textile industry. The prevalent usage of innovative technologies has allowed textile manufacturers to reduce labor costs and thereby increase the profits. As a result, it has contributed to product’s quality improvement with simultaneous production time’s reducing that surely led to the overseas customers’ loyalty. Furthermore, the UAE is constantly beefing up the storage conditions of raw materials, methods of transportation and packaging. The UAE’s major textile enterprises are located in Sharjah and Dubai, others - in Abu Dhabi, Ras Al Khaimah and Ajman.

Annually, specialized world-class exhibitions dedicated to the textile industry and related services are held in the UAE. Such events are in high demand among entrepreneurs engaged in light industry, since they have an opportunity to get useful contacts of suppliers and prospectivecustomers.

The secret of the UAE’s success

Currently, a greater number of foreign investors tend to invest in a new or existing manufacture in Dubai. The stable economy allows the expenses and income advance planning, the tax-free state policy helps to optimize the spending, the free zones enable companies to possess 100% capital, and herewith the business protection is at the highest level. The Emirates’ perennial image, as a trendsetter and a textile giant, gives undeniable advantages in marketing, and the geographical location of the country opens the Gulf markets for the manufacturer.

The secret of UAE’s success lies also in the possibility of victoriously overcoming crisis, which occurs in the global market such as price and production cost increasing, the energy crisis, etc.

The UAE as a regional and international re-export centre

Despite all the advantages of conducting textile business in the UAE, a manufacturer should be aware of his competitors. China, India and Pakistan are literally flooding the world markets with cheap garment, footwear and textiles, which makes them serious contenders in the production. Anyway, the factory service in the UAE is more expensive than in mentionedcountries, even though the manufacture is fully automated.

However, the Emirates possess a range of undeniable benefits for business: no taxes, a stable economy and investment protection. Its modern infrastructure, developed logistics and geographical location make the UAE a remarkable regional and international hub for re-export operations: storage, packing, packaging, etc. The market access for entrepreneurs is vacantand quota is unlimited, import tariff is negligible (5%), and in the free zones there doesn’t exist any.

Modern infrastructure, equipped warehouses and established logistical routes allow re-exportation of goods to any place in the world. At the same time the agreements on mutual cooperation with many countries, including China and India, are helping in establishing a profitable supply chain to the UAE and successfully exporting products to foreign markets.

The Expert’s advice

No matter how exactly you decide to invest, remember that you can not act without a thorough analysis of the market, as well as the board of experienced consultants. Those, intending to invest in production, should consider its cost in each emirate separately, taking into account the legislation features. Re-export requires knowledge about business peculiarities in the free zones and the correct choice of a license. Independent study of the issue is an option but do not waste time and money, gaining your own, not definitely a successful one, experience.

The Business Mart has been working in the UAE for a fairy long time, so all the issues relating to business in the UAE can be discussed with its professionals. The experts will provide a necessary advice at all work stages, and suggest youthe best presently available business in the UAE. With the Business Mart you’ll get the experience that has been accumulating for years, and you can use it for your business’ successful growth in the UAE!



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