Staff Reporter, Gulf Today

Swift and decisive COVID measures by the UAE government and a focus on the nationwide vaccination rollout programme has positioned the UAE’s economy strongly and has brought most activities back on track. This has resulted in a little to no impact in the region for the construction industry – one of the main indicators of a nation’s economy and its prospects for development.

Among all countries in the GCC, the UAE’s steel and metal demand has made it the largest consumer in the region. As a global trade enabler, DP World, UAE Region along with its flagship Jebel Ali port and Jafza free zone pioneered technological advancement and stepped up to enable seamless remote operations for every customer. In a situation where the world was closing its doors, the organisation thought of ways to keep its doors open to provide a conducive environment to grow their business and an opportunity to participate in a competitive market.

Despite the challenging conditions, the UAE slid into gradual recovery and resumption of trade and business activities with a positive expectation of an increase in demand from local and regional steel and construction companies.

A recent report by Fitch suggests that the UAE’s construction sector will see a solid recovery in 2021, with construction industry value growing by 5.9 percent as delayed projects resume and certain projects are to be completed before the now-postponed Dubai Expo 2020, in 2021.

As one of the largest and most developed economies in the Middle East, and with upcoming projects and Expo 2020, the opportunities presented in this sector are unprecedented. Industry reports predict that the UAE’s construction sector will post moderate growth over the coming years, driven primarily by the transport and utilities sectors. This will be a result of the materialisation of regional rail projects. Decarbonisation efforts will encourage investment into renewable energy and nuclear and ongoing water scarcity will result in the expansion of desalination infrastructure.

While the odds have mostly played in favour of the UAE, when it comes to this major sector there are few headwinds that need attention and to be watched out for. With the disruptions caused by the pandemic, Fitch Solutions estimate that the construction market has contracted by a sharp 10.4 per cent in 2020 due to hindrances such as supply chain issues, project delays, financing constraints and weak investment capacity of companies. The outlook was further affected by weakened oil prices. Oversupply of residential buildings is an ongoing challenge in the UAE and has an overall weak outlook.

Aluminium & Fabricated Metals and Machinery & Equipment are two of the six priority industry sub-sectors identified for focussed development by the Dubai Government under the Dubai Industrial Strategy 2030, which aims to elevate Dubai into a global platform for knowledge-based, sustainable, and innovation-focused businesses.

Jafza and Jebel Ali Port’s combined capacity and capabilities especially the multimodal connectivity that it offers has attracted numerous local and global steel companies over the years.

With the presence of companies from 90 countries across the globe including key trade partners such as India, China, Russia, USA, UK, Kazakhstan, South Korea, Oman and Saudi Arabia, the free zone supports 14,400 port customers in this sector alone. Jafza today is proud to home major companies such as Danube Building Materials, Conares, Emirates Rebar Limited, Schneider Electric, ArcelorMittal, Tata Steel, Baosteel, CNBM, 3M Gulf, Komatsu and Makita Gulf, among others.

Companies have entrusted Jafza for decades due to its unparalleled products and services through its combined facilities of plots, LIUs, warehouses, offices and workstations spread over 7 million sqm. This combined facility is customised, equipped, and automated to efficiently handle construction-related cargo. Jafza’s optimised operations and high-performance logistics solutions are the key pillars of its suitability for businesses.

Jafza supports over 3,300 construction-related companies, enabling trade worth Dhs17 billion in 2020. This figure accounts for 29% of total construction-related trade in Dubai in 2020 – a significant contribution to the sector and the economy’s overall growth. A company associated with the free zone has access to over 3.5 billion consumers giving them wider access to GCC and beyond.

Proximity to markets, ease of operations, one-stop-solutions, plug and play model, reduced operational & logistics costs, multimodal access via land, air & sea are a few of the many benefits that make it ideal for businesses to operate out of the free zone. Through this sector, Jafza employs a workforce of more than 15,000 people and creates job opportunities at every level, further contributing to the UAE’s economy.