Market snapshot: UAE

SIGNS of growth are strongly evident in the UAE’s food and beverage industry. This year for example, the Emirates Modern Poultry (Al Rawdah) made an initial investment of $32.6 million in a poultry facility in Abu Dhabi, as reported by Arabianbusiness.com. This facility with hen houses for 7,000 birds, aims to reduce the company’s import of hatching eggs.

The dairy and juice producer Al Rawabi whose design is to become a major brand in the MENA region by 2020, is supporting its goal by investing over USD21 million to enhance its efficiency, from production capacity down to supply chain management for juice and dairy products.

More recently, the Arab & India Spices LLC (AIS) also opened a new production plant in the UAE, to increase capacity for pulses and ground spices. The company plans to market its products in the entire region.

This month in the UAE, the government is prepared to enforce its updated food safety laws. If you recall in 2015, the government stepped up measures to ensure the quality of food and beverage. Earlier this year, the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan approved the draft which imposes stricter penalties – from up to three years imprisonment and a fine of Dh2 million, according to Gulf News. In addition, the local Ministry of Environment and Water will approve all incoming food; all those that deal in food with pork or alcohol or their by-products require the permission of the Ministry as well. Anyone who fails to do so may face imprisonment and ordered to pay a fine. This may sound severe, but the UAE has always been serious about food safety. In fact in global ranking in 2014, it occupied the 32^nd slot and the 3^rd in the region, according to the EIU Middle East.

The second largest producer and consumer in the GCC, the UAE accounted for 14.8 percent and 18.5 percent of the region’s food production and consumption, respectively, in 2012 as stated in the most recent food industry report by Alpen Capital. The country has been working to increase its self-sufficiency in recent years, although this can only be done to a certain extent. More than half of the fruits and vegetables that it now consumes are locally produced. Other products widely consumed are cereal, dairy and meats. The demand for processed foods and Western foods is increasing, but mainly consumed by the growing number of foreign consumers in major cities. This trend though has encouraged investments in agro and food processing technologies to drive productivity and supply.

UAE imports food products from countries like the US, India, and Brazil, according to the Alpen Capital report. Half of its imports are re-exported to countries within and near the region.

Globally, Dubai ranks third largest re-exporter and food manufacturing destination, thanks to its capacity to manufacture value-added products. Aside from this, it has the infrastructure, logistics and the right location.

While in Abu Dhabi, the construction of a manufacturing facility of the National Food Product Company (NFPC) at the Abu Dhabi Ports, is anticipated to help meet the growing demand for food in the UAE and the rest of the GCC. The state-of-the-art facility will be fully automated and energy efficient, and will produce brands like Oasis, Gulf & Safa, Blu, Lacnor and Milco, will start operating two years from now.