Posted By Jeff Moad, January 07, 2015 at 5:35 PM, in Category: Redefining the Supply Chain
Looking to diversify their economies, oil-dependent Middle Eastern states—particularly Saudi Arabia and the United Arab Emirates--are reportedly investing in efforts to convince global manufacturers to establish manufacturing plants in their countries.
Saudi Arabia, for example, is said to be investing $70 billion to build up to six “economic cities” with infrastructure and regulatory adjustments designed to attract and support manufacturers. Food manufacturer Mars has already set up shop in one of those special zones, and the Saudi’s are said to be in talks with Jaguar Land Rover which it hopes will do so also.
At the same time, Boeing reportedly plans to begin making aircraft components in Abu Dhabi.
The UAE and Saudi governments tout their central location between Europe and Asia as well as a relatively large number of local rich consumers as positive factors in their attempts to attract manufacturing employers. Another obvious strong point is access to cheap energy and raw materials such as petroleum-related goods and bauxite for the production of aluminum.
But the UAE and Saudi Arabia also present some negatives. Manufacturers considering establishing plants there may worry about the availability of experienced talent, the regulatory environment, and social norms that may make it difficult for them to freely leverage the talent they do have.
Manufacturers must also wonder how long and how seriously governments in the Middle East will continue to prioritize efforts to attract them.
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit