ADNOC Leverages Procurement To Boost UAE Manufacturers
ADNOC aims to shift $19 billion in procurement contracts to local manufacturers to grow the UAE economy and attract new investment.
The Abu Dhabi National Oil Company (ADNOC) wants to shift $19 billion (AED 70 billion) worth of procurement contracts into the hands of private domestic manufacturers, hoping to boost the UAE’s GDP by an estimated $1.6 billion (AED 6 billion) annually.
ADNOC announced the program 21 June at the “Make It in the Emirates Forum” being held in Abu Dhabi. The company reported that UAE and locally based international companies have already signed agreements worth nearly a quarter of that target, $5.7 billion (AED 21 billion).
The Ministry of Industry and Advanced Technology is hosting the forum together with the Abu Dhabi Department of Economic Development and ADNOC to gather the UAE’s largest industrial companies to share their procurement plans and discuss how best to develop local manufacturing and investment opportunities.
Contracts for procurement purchases planned between 2022 and 2023 of more than 100 products up and down the ADNOC value chain are on offer.
The UAE’s Minister of Industry and Advanced Technology, Sultan Ahmed Al Jaber, who is also Managing Director and Group CEO of ADNOC, said the national oil company wants to reinforce its role as a critical engine for the UAE’s industrial growth “as we expand our operations to responsibly cater for the world’s growing energy demand.”
He told the forum that national firms would set aside for domestic manufacturers $3 billion (AED 11 billion) in potential purchase agreements that would create long-term opportunities for the UAE’s manufacturing sector.
Products identified as suitable for domestic manufacture encompass drilling; mechanical and heating ventilation and air conditioning; technology; piping, fittings and valves; electrical submersibles; instruments, control, and telecom; maintenance, repair, and operations; chemicals; electrical; and offshore architecture.
Schlumberger and Independent Technical Services have signed a framework agreement to manufacture and assemble locally electrical submersible pumps and their components.
In addition, the following strategic collaboration agreements were announced.
- India’s Intech Organics—to explore manufacturing calcium and sodium bromide in the UAE for the first time
- MaxTube Saje—for local manufacturing of glass-reinforced-epoxy (GRE) lining of various metallic tubular products including production tubing
- NOV-Tuboscope—to evaluate the localization of GRE-lined production tubing
- SoluForce—to set up a local manufacturing facility to produce reinforced thermoplastic pipes and nonmetallic solutions
Downstream, ADNOC’s joint venture with ADQ, the TA’ZIZ Industrial Chemicals Zone, will produce new industrial chemicals in the UAE for the first time, replacing imported chemicals while also exporting these same chemicals globally.
ADNOC has already welcomed major local and international partners and investors into the TA’ZIZ Industrial Chemicals Zone. Building on this success, ADNOC signed expressions of interest with more than 20 investors in the TA’ZIZ Light Industrial and Services Zone present at the forum.
The TA’ZIZ Light Industrial and Services Zone will house an ecosystem that will convert the chemicals produced in the TA’ZIZ Industrial Chemicals Zone into consumable products and host companies providing industrial services to TA’ZIZ and the Ruwais Industrial Complex, according to ADNOC.