The United Arab Emirates is hosting the Gulfood Expo in Dubai and opened its doors to traders on Monday (February 25).
Over 4,000 exhibitors from 110 countries vied for a piece of the multi-billion dollar food and beverage industry pie at an expo which has attracted thousands already.
According to data provided by Gulfood, the industry is one of the fasted growing sectors in the world, valued at seven trillion U.S. Dollars in 2013.
In an opening address, UAE Minister of Trade, Lubna al-Qassimi said that GCC food imports were expected to more than double in the next decade, growing from 25.8 billion USD in 2010, to 53.1 billion USD.
However, she said the imports were not just for local consumption.
“It still surprises a lot that the United Arab Emirates is actually the world’s leading re-exporter of rice and a logistical hub for commodities, such as sugar, coffee and tea,” she said speaking before a panel discussion between the regional heads of food and beverage giants, Mondelez International, Coca Cola and McDonalds.
Along with growing populations and rising wealth the GCC’s food consumption has increased considerably, making the manufacturing of produce locally both a necessary and lucrative area to develop.
Although these promising food industry figures are an undoubtedly welcome antidote to the global economic crisis of the last few years, not everyone is guaranteed to benefit.
Industry traders from Iran, one of the UAE’s longest-standing trading partners and geographical neighbor, said that although international sanctions against the Islamic country did not directly affect the export of foodstuffs, financial transactions and imports of primary materials were becoming harder and therefore threatened their trade.
“It is getting harder and harder to buy material from foreign countries,” said Amir Hussein Khaksar, Export Manager For Atlas Dina, Iran.
Saffron trader, Farhas Saharkhiz, admitted that arranging payment transactions for imports and exports was ‘very very difficult’ but he pointed to the downturn in the European economy as the primary cause for the fall in exports.
“The changes are mostly caused because of the economic environment changes, especially in Europe, and especially in Spain, as the biggest retailer of saffron to the world,” he said in an interview with Reuters Television.
Meanwhile the UAE, already a leading re-exporter of rice and trading hub for other foods such as, sugar, edible oils, chocolate, fruit juices, bread, and packaged drinking water, is gearing itself towards a greater capitalization on this growing food industry by expanding its local manufacturing capabilities.
Dubai trader Ananya Narayan said free zones, such as the Khalifa Industrial Zone Abu Dhabi - or Kizad - would play a major role in this.
“That’s where I see Dubai, they will manufacture more and more and more in the future and it is coming in the Kizad, for example, in Abu Dhabi which is another free zone which is opening, huge in size and really promoting manufacturing,” said Narayan, Managing Director of Hunter Foods Limited, UAE - one of the first locally produced food companies to open in the JAFZA free zone in 1985.
“All of these areas will get filled up but it will be based on people who can survive in this market and compete with the world, it’s not just about pricing, it’s really having the quality, the packaging and the standards to be on the world stage,” he continued.
According to a report by Dubai Exports, the food manufacturing sector now accounts for 14 percent of Dubai’s overall manufacturing sector.
Efforts to diversify the UAE’s economy away from reliance on oil and gas has spurred on government initiatives such as the Kizad industrial zone, a 417 sq km greenfield site with a dedicated food cluster aimed at promoting the local development and manufacture of food.
General Manager of Jordan’s Nabil Food Products, Nabil Qassam, has high expectations for the UAE market
“Our expectations for the UAE market are very big and hopefully we will get a lot of orders from them and we are thinking of buying a factory here as well so that we can be closer to the local market,” he said.
A record 4,200 exhibitors from 110 countries showcased more than 50,000 brands at this year’s Gulfoods. Ministerial delegations from 12 countries, including Australia, Argentina, Canada, Denmark, France and Germany, were also present at the world’s largest food and beverage trade show.