She emphasized that competition, global market conditions and old contracts are the most important challenges

Energy companies demand preference in contracts and exemption from fees to reduce operating costs

• Companies that confirmed, on the sidelines of their participation in ADIPEC, that they have products of international quality.

  Photography: Najeeb Mohamed

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Officials and owners of local companies working in the field of energy and oil services said that competition and global market conditions, and the fluctuations it witnesses, in addition to the high prices that affect their profit margins from old contracts, are the most important challenges they are currently facing.

They explained to "Emirates Today" on the sidelines of their participation in the Abu Dhabi International Petroleum Exhibition and Conference "ADIPEC", that they have products of international quality, a large proportion of which are exported abroad, but they cannot obtain a fair share of the local market because of the large number of competitors, demanding an advantage for them in Contracts, financing facilities and fee waivers to reduce operating costs.

For its part, the Ministry of Industry and Advanced Technology confirmed that there are a number of initiatives that support local manufacturers, the most important of which is the value-added program, in addition to the "Make in the UAE" initiative.

The competition

In detail, the head of the oil and gas sector at the Ajmal Steel Pipes Factory, Eng. Abdullah Al-Shammari, said that “competition from abroad is very strong and we need strong official support to protect the local industry, especially if it is of international quality that can cover the needs of the local market.”

Al-Shammari added, "Industrial companies hope to have a preference in tenders, such as allocating a specific percentage of them, and let 20% of them be for local factories," explaining that "if there is a product that specializes in four or five factories in the market, and it can cover the needs of the local market." In full, it is supposed to stop importing this product, especially from cheap destinations of lower quality, because the absence of this negatively affects the profits of local factories and their ability to expand.

Al-Shammari pointed out that open markets, such as America, for example, impose strong duties on importing products that are manufactured locally, stressing: “We have obtained all international certificates that prove the quality of our products, and we cover about 20% of the local market, while the rest of the production is done. export it.”

Skilled labour

For his part, the CEO of Al-Fanar Gas Company, Eng. Mustafa Rashad, said that the value-added program greatly enhanced the work of national industrial companies, allowing them to take many tenders.

He pointed out that the biggest challenge facing local companies is competition with foreign companies, although there is a positive side to it, which is improving the quality of the product and its ability to be present in the global market through export.

Rashad added that employment poses another challenge to local companies, as the improvement of the final product requires skilled labour, in addition to the high prices of raw materials due to the Ukrainian war, pointing out that all of this affects the owners of local industry.

to encourage

In turn, CEO of Al Ghaith Energy Group, Atef Erekat, said that the competition and old contracts that took place before the recent price hikes in the world are among the most important challenges facing local industrial companies.

He stressed that this had a negative impact on the profit margin, pointing out that the value of the old contracts was fixed, while the requirements for their implementation increased by more than 400% in some materials.

Erekat demanded more encouragement of the locally made product and providing it with incentives to help it continue in the market and be able to compete with the imported product.

Initiatives

Commenting, the Assistant Undersecretary for the Industrial Development Sector at the Ministry of Industry and Advanced Technology, Abdullah Al Shamsi, said that there are a number of initiatives aimed at supporting the local industry, the most important of which is the value-added program, in which the number of registered companies and beneficiaries of which has reached 5,000, in addition to the “Make in” initiative. Emirates», which includes many advantages and facilities, such as obtaining soft financing from the Emirates Development Bank, and a number of commercial banks that focus on the industrial sector.

Al Shamsi indicated that there are strategic industrial sectors of the economy at the present time, such as food, medical, energy and technology, so we encourage existing industrial companies to expand in these areas, as well as the entry of new companies.

He pointed out that there are partnerships and agreements with a number of local economic development departments to provide discounts on fees for industrial companies, as well as specific exemptions, in the end in the interest of reducing operating costs and supporting operations.

Agreements with a number of economic departments to provide discounts on industrial companies' fees.

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