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How does Jafza’s F&B industry beat market odds?

Despite challenging market conditions and stiff competition prevailing in the UAE’s food and beverage (F&B) sector, this industry showed a significant growth out of the Jebel Ali Free Zone (Jafza), the UAE’s premier regional business and logistics hub, in 2017.

According to a recent press statement, the sector’s volume of trade rose to 3.5 million metric tones, valued at AED11.1 billion which accounted for 17.85 percent and 15.37 percent of Dubai’s total F&B volume and value respectively.

As per a BMI report, continuous industry growth has been supported by high disposable incomes in the country with major investment in grocery retail over the past few years.

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Main component

F&B is a major focus of Jafza’s business portfolio with over 570 companies from 75 countries. They include regional and global brands such as Unilever, Mars, AGC, and Gulf Food Industries.

“The growth of the F&B sector highlights Jafza’s success in establishing itself as a destination of choice for companies in the MENA region, in line with UAE Vision 2021 as outlined by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai,” said Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive, DP World, operator of Jafza.

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Middle East’s lion share

Of the F&B companies based in Jafza, 37 percent are from the Middle East; 24 percent from Asia-Pacific; 19 percent from Europe; 10 percent from the Americas and 10 percent from Africa.

Notably, the UAE’s F&B sector has seen steady growth over the past two years. According to a BMI report, food sales are expected to grow at an annual average of 6.6 percent over the next five years.

“Continued F&B growth also underlines our commitment to the government’s goals for economic diversification. By creating a world-class business environment, we are encouraging manufacturers to establish themselves here and develop new products and commodities that meet consumer demand,” added Sulayem.

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Cautious approach

Despite a robust growth in F&B sector, coming out of Dubai’s Jafza, overall industry is somewhat muted and adopting a cautious approach in the Emirates.

According to a KPMG report, UAE’s F&B players reported plunging sales for 2017 and they were likely to see muted growth in 2018. UAE-based national daily The National reported that almost two-thirds of F&B operators in the UAE suffered a drop in sales in 2017 because of challenging market conditions.