Positioning GCC as an Export Hub

COUNTRIES in the Gulf have banked on oil-dominated account surpluses and hardly diversified their excess funds by running peripheral industries but, with time, a welcome change of approach has emerged. Oil-rich countries are now targeting food, logistics, tourism and local manufacturing sectors to expand their profile. Government authorities are also augmenting local food and beverage industries to increase the region's value added services.

With Abu Dhabi holding major oil reserves in United Arab Emirates, Dubai has long before diversified by focusing on mainstream industries such as tourism, food, jewellery and plastics. A refreshing orientation trend in recent years, however, is the development of Dubai as a manufacturing and export hub for food, plastic and other products rather than a re-export hub. In 2009, food exports in Dubai grew by an impressive 17 per cent, representing a little over 6.6 per cent of the emirate's overall non-oil exports.

Dubai has always welcomed new technology, infrastructure and techniques to stay on top of its game; Hydroponics, allowing farmers to grow produce by using minimal amount of water and other state of the art technologies has helped Dubai penetrate a number of foreign markets such as America and Europe. Though the bulk of the ingredients is imported by local manufacturers for use in their products, Dubai has gained a reputation for its processed and prepared foods, currently being exported to over 130 countries.

The Dubai Export Development Corporation took numerous UAE manufacturers to the international SIAL Food exhibition in France to showcase their products; also, it launched the Dubai Export Academy with the aim of enhancing the exporting skills of UAE firms to compete on a global level.Meanwhile, Saudi Arabia's economy is forecast to grow by an average of 3.7 per cent a year during 2010-2014, lower than the earlier annual average of 4.9 per cent during 2003-2008. Growth in the non-oil sector is set to pick up, however, to average at 3.9 per cent with hopes that foreign direct investment will soar and banks will ease lending policies.

GCC as a food export base

With the region at the helm of progression, what is necessary for GCC companies to export to other nations? Industry observer and market analysts Frost & Sullivan believe the region still has several gaps to hurdle. "GCC has traditionally been an import hub for food ingredients and end products. However, with increased interest in exporting and moving downstream into the food industry, the market is moving towards full-scale industrial production. Dubai, for instance, has become one of the global hubs for re-exports of food whilst other Gulf nations are working to establish a formidable production set up. Some of the initial and pressing challenges that GCC food exporters face are intricate international customs, laws and lack of in house knowledge of global export requirements," said Vishnu Sankaran, industry manager, Food & Beverage Practice, Middle East & North Africa, Frost & Sullivan.

Mr Sankaran further added that key requirements to export food products out of GCC would entail in-depth understanding of various countries' regulatory systems, value chain efficiency, tie ups with local distributors with market knowledge, and a keen understanding of each country's port structures, customs, regulations and duty structures.

Many industry experts feel that the new wave of industrial change has done well for UAE and the region as well. "For me, Dubai was always an export hub. Earlier, companies were established, products were imported and then re-exported to different nations. However, in the past few years, a rather surprising wave of change has emerged whereby companies are establishing manufacturingAir Jordan IV 4 Shoes