Abu Dhabi: Five Chinese companies will start operations in Abu Dhabi’s industrial zone with an initial investment of $300 million (Dh1.1 billion) in a boost for the emirate’s economic diversification plans.
The companies, from Jiangsu province on China’s east coast, are involved in sectors ranging from power and metals to natural resources and banking, Abu Dhabi officials said.
Chinese companies are increasingly seizing opportunities in the Gulf as the Asian economic giant seeks to expand overseas with its ambition to rebuild Silk trade routes.
Abu Dhabi Ports has signed a 50-year [Musataha] agreement with the Jiangsu Provincial Overseas Cooperation & Investment Company (JOCIC) to take a lease on 2.2 square kms at the Khalifa Industrial Zone Abu Dhabi (Kizad), Mohammad Juma al Shamisi, chief executive of Abu Dhabi Ports, said.
The cooperation agreement on Monday was signed by Dr Sultan Ahmad Al Jaber, Minister of State and Chairman of Abu Dhabi Ports and Madame Huang Lixin, Executive Vice-Governor of Jiangsu Provincial People’s Government, in addition to officials from both sides.
JOCIC will in turn sign separate agreements with the five Chinese companies, he said.
The firms are Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development (Group) Co Ltd, Xuzhou Jianghe Wood Co, Jiangsu Jinzi Environmental Technology Co and Guangzheng Group.
Abu Dhabi Ports Co manages Kizad as well as the ports in the emirate.
Commenting on the signings, Dr Sultan Ahmad Al Jaber said: “We have worked hard to make KIZAD not only the largest free zone in the region, but also one of the most sophisticated free zone areas in the world, particularly for the industrial and manufacturing sectors.”
He added: “The Musataha agreement between Abu Dhabi Ports and JOCIC will attract foreign investment into Abu Dhabi – an ideal environment for investment opportunities due to the competitive advantages Khalifa Port Free Trade Zone enjoys, including its strategic location, world-class infrastructure and logistics solutions. Khalifa Industrial Zone and Khalifa Port will become magnets of increasing investment due to the UAE’s strategic location at the pivot point between Asia, Europe and Africa.”
Last year, China’s Cosco Shipping Ports Limited won a 35-year concession to build and operate a new container terminal at Abu Dhabi’s Khalifa Port in the capital of the United Arab Emirates. Cosco, at the time said it planned to invest over $700 million.
The UAE and China also set up a joint strategic investment fund worth $10 billion in late 2015, financed equally by both countries.
The lease agreement is the biggest yet signed at Kizad which has a total area of 100 square kilometres, Al Shamisi added.
“The foreign direct investment into industry will contribute positively to Abu Dhabi’s non-oil GDP and help in diversifying the economy from oil,” Al Shamisi said.
Jiangsu province is one of China’s major exporters and the agreement is aimed at accelerating trade between China and the UAE, reflecting China’s ‘Belt and Road’ and ‘Maritime Silk Road’ initiatives.
Kizad, which opened in 2012, had attracted investments of around Dh55 billion ($15 billion) by the end of last year from countries including Brazil, India, Japan and Britain in industries ranging from food, metals, pharmaceuticals, aluminium and logistics, Al Shamisi said.
China is the UAE’s second largest trading partner and the biggest exporter to the UAE. The UAE is considered a gateway to about 60 per cent of China’s exports to regional markets at an annual volume of exchange worth $70 billion, a statement from Abu Dhabi Ports said.