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Plastic Exports from Dubai Touch Dh1 Billion

DUBAI - The plastic sector in Dubai is one of the leading manufacturing sectors, which recorded Dh1 billion exports and Dh1.3 billion re-exports in 2007, according to Dubai Export Development Corporation (EDC).

It is estimated that the value of plastic annual production in Dubai to be to the tune of Dh1.3 billion. This estimate is based on exports of Dh976 million in 2007 and the assumption that 75 per cent of production is exported.

The total number of plastic industries in the UAE in 2007 is estimated at around 505 units with an investment of about $732 million as per GOIC (The Gulf Organization for Industrial Consulting) database.

There are 153 units in plastic bags & packaging, 154 in pipes and hoses, 68 in artificial sponge and other plastics and 130 in other plastic products including glass fibre.

Dubai Plastic industry integrates with UAE industry and benefits from many inter-linkages, while some of the industries in other Emirates use Dubai as an export point. The plastic industry in Dubai is driven by a number of positive factors that are drivers of a sustained growth, the most important of which are the diversified domestic and regional markets and the well-established technology.

The industry produces a broad range of products targeting a fairly diversified base of consumers and industrial users mainly in food industry, cosmetics, household, construction, irrigation, pharmaceutical industry and primary polymers.

According to EDC, plastic exports registered 13 per cent compound annual growth in quantity over the period 2004-2007, while re-exports and imports registered similar growth rates of 10 per cent and 18 per cent respectively. In 2007 value of Dubai’s plastic imports reached Dh6.1 billion.

Plastic industry is one of the high value-added industries in Dubai contributing 50 per cent of its production value in net value added components. Outsourced services like design and manufacturing services make 9 per cent of production value.

The value of the top 5 exports, re-exports and imports account to about 75 per cent, 76 per cent and 52 per cent of the total values. Thus these products fairly depict the trade of key plastic products.

Recently UAE Minister of Foreign Trade Shaikha Lubna Al Qasimi said industries play a significant role in boosting the UAE economy and contribute to accelerating the pace towards a more diversified economy.

According to industry experts, the UAE manufacturing sector grew at 15 per cent in the first three quarters of 2008 — a phenomenon that is pushing a growing number of existing companies and new investors to take advantage of business-friendly environment.

Dubai plastic sector produces over 60 products for packaging of food and cosmetics and for a variety of applications in irrigation, construction, automobile parts, leisure, gifts and stationary.

According to the Industrial Survey carried out by the Dubai Statistic Center for 2006 the number of industries in rubber & plastics is 38, the value of production of the plastic & rubber sector amounts to around Dh800, 000 while the inputs in the form of raw polymers like polyethylene and polypropylene, and services such as moulds, engineering designs and parts supply, amounts to about Dh368, 000 leaving a gross value added of Dh445, 000 and a net value added, after deduction of depreciation, of Dh410,000.

The employment in plastic & rubber sector makes up 4 per cent of the total employment in manufacturing while the value-added represents 2 per cent of manufacturing value-added.

The key markets for the articles of conveyance and packing are regional markets namely: Sudan 16 per cent, Yemen 11 per cent, Pakistan 8 per cent and Ghana and South Africa 5 per cent and 4 per cent of Dubai exports in value.

There are no exports to Europe, presumably because of the relatively higher cost of shipping and the less demand for plastic containers in Europe.

The main markets for sheets, films and foils are South Africa, Italy, Pakistan, Egypt and Germany each with a market share of 10 per cent.

abdulbasit@khalejtimes.com