Ahmed Al Omari, Director of Export Market Development, Dubai Exports
Ahead of The Big 5 Digital Festival Africa, we sit with Director of Export Market Development at Dubai Exports, Ahmed Al Omari, to discuss why Africa continues to attract UAE companies to do business, and to shed light on trends set to emerge in a post-pandemic era.
The Dubai Exports was established by the Government of Dubai to provide exporters with the services required to enter or expand foreign markets including trade information, branding advice, financial, legal and foreign trade representation and access to potential buyers. Dubai Exports’ strategy is to build exporter capabilities and thereby enhance their ability to penetrate foreign markets in doing so to contribute to the Dubai Strategic Plan.
A casual observation of Dubai and the UAE shows that the building materials sector is extremely important to emirate’s economy. The sector is large and diverse and covering many hundreds of companies in the production as well as re-export of building materials. Some of the most notable areas include ceramics, extrusion, electrical wiring, safety and so on. However, recent developments in the sector have allowed it to move into smart homes, offices, factories and leisure facilities. The country’s strategy of developing and promoting artificial intelligence has moved into the building materials sector. Further, ‘Building Green’ is a global trend which has now become an industrial norm in the country. In fact, Dubai Exports’ own internal research has shown that this segment of the building materials sector will be worth over US$300 billion in the GCC by 2025 -- this is a threefold increase over a 15-year period. Dubai Exports launched the Green Award to promote more energy efficient production leading to financial gains for companies. We now would like to share our knowledge and expertise in the green building sector, smart construction and traditional products to reduce the impact on the environment and create a better world for all of us.
Africa is a very important market for the UAE and it has grown quite considerably in the recent period. As the former UN Secretary General Kofi Anan stated that, “Africa’s profitability is probably one of the best kept secrets today”. He is certainly true in this regard and that’s why UAE based firms are already active in exporting goods to Africa especially in the area of food and beverages, building materials, machinery, electrical equipment, car parts amongst others. We are hoping through this trade mission to extend the existing relations with the country. Of course, Kenya is a natural entry point for our companies. The country is predicted to be one of the 20 largest economies in Africa. With growing prosperity and a rising middle class Kenya offers our companies a huge market potential
Dubai Exports has been active in Africa for well over a decade with amazing results and outcomes for our companies. We are truly excited by the African Continental Free Trade Agreement that will bring together all the 54 countries within a single market. Once completed this will be the largest market in the world in terms of population. We also believe that this agreement will make it more efficient for our exporters to penetrate the entire continent. From a building materials perspective Africa has shown its ability to generate domestic as well as overseas investment. Our own research shows that by the start of this year about 500 projects valued at USD 50m or above each that had broken ground. These projects are estimated at about US$500 billion. We have found that East Africa has the largest number of projects above US$50 million whilst North Africa and more particularly Egypt in terms of value. We also see great potential for West Africa.
During Covid-19 and even now our main concern has been to keep business going and deal with the unexpected interruptions. We worked to ensure that the supply of essential products was maintained such as foods, pharmaceuticals, personal protection equipment etc. Going forward we see considerable change in the manner in which global value chains will be carried out. We foresee a move from global production to regional production and the need to be closer to the buyer.
Interestingly, the growth in e-commerce over the last 8 weeks of Covid lockdown has been equal to the last 8 years. What we have seen is a disruptive change in consumer behaviour towards online be it working practices or even purchases. We expect the trend towards online consumer purchases to increase substantially in the coming period. E-commerce utilizes centralized warehouses and leads to better inventory control and management. We also see the development of dedicated facilities that are designed purely for the needs of e commerce-based companies.
We see more regional logistics hubs to deal with single-source dependencies and create flexible and adaptable supply chain networks. They will be supported by regional manufacturing and assembly. In relation to this we have already started working on Dubai industrial Strategy which sought to increase the diversity and contribution of the manufacturing sector in the emirate. We also believe that there will be greater automation and use of AI in logistics bringing down costs and providing greater flexibility. One of the things that Covid has made companies realise is that logistics is not a behind the scenes function but a prime driver of the company business. As we emerge from the Covid-19 situation we will now see more agile and flexible logistics solutions. This implies that it’s important to use AI and big data to support and strengthen the sector.
In regards to the later we already see the importance of big data to help and plan for demand but after Covid we believe that this role will widen so that it includes the risk aspects as well. Greater use of big data logistics will lead to a seamless flow of goods from one location to another. Further, the use of AI will make the sector more efficient and substantially bring down costs. We have already seen the use of automation in many of our logistics firms and this trend will continue bring benefits for the business community in the country.
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