How UAE manufacturers turn resilience into scale
As supply-chain disruption reshapes industrial planning, the question is no longer whether to invest in resilience, but how to finance it without losing cost competitiveness
The UAE’s manufacturing sector is entering a phase where resilience is becoming a condition for growth.
Regional disruption has put pressure on trade routes, export flows and input costs, forcing manufacturers to reassess sourcing, inventories and working-capital needs.
At the same time, the commercial opportunity is expanding. Industrial exports reached AED 262bn in 2025, while medium and high-tech exports reached AED92bn, reflecting stronger demand for UAE-made goods and the growing role of advanced production in the country’s industrial base.
“The next phase will be defined by scaling advanced manufacturing and research and development adoption through artificial intelligence (AI), robotics and pharma, access to long-tenor, project-style finance for capex, and procurement and offtake guarantees from government and national champions that de-risk investments,” says Shakil Haider, executive vice-president, head of services and manufacturing at Mashreq.
For manufacturers, the strategic priority has shifted from expanding to building supply chains and financing structures capable of absorbing disruption while maintaining long-term competitiveness.
Demand-led scale
The UAE’s industrial policy framework is giving manufacturers clearer signals on where demand is expected to grow.
Operation 300bn, the country’s 10-year strategy, aims to raise the industrial sector’s GDP contribution to AED300bn by 2031, providing the long-term policy direction needed to deepen value chains. The Make it in the Emirates (MIITE) platform extends that framework, bridging the gap between industrial policy and investable opportunity, linking manufacturers to specific procurement commitments and structured offtake pipelines.
That visibility is material to capital deployment. Manufacturing expansion requires capital for machinery, technology, skilled labour and production capacity. Companies are more likely to invest when future orders are clearer, and lenders are more likely to support projects when revenue visibility is stronger.
“Operation 300bn and Make it in the Emirates provide the roadmap and demand visibility that will unlock larger private and institutional capital,” says Haider.
The scale of that opportunity is increasing. Industrial procurement opportunities under MIITE are expected to rise from AED168bn to AED180bn over the next decade, while the UAE is targeting the localisation of more than 5,000 products across strategic sectors.
The policy push was further sharpened in late April, when the UAE Cabinet approved a AED1bn National Industrial Resilience Fund ahead of MIITE 2026. The fund is intended to support local production, strengthen supply chains, build strategic reserves and accelerate the use of AI across production and operations.
For industrial companies, these initiatives are not only policy signals – they are informing board-level investment decisions. Manufacturers that can align expansion plans with procurement demand, local production priorities and technology adoption will be better placed to secure capital.
“We expect further economies of scale coming through consolidation in the next phase,” says Haider.
In practice, that could mean larger manufacturing platforms, stronger partnerships and better-capitalised companies securing a structural advantage as the sector matures.
Uneven exposure
The sector’s growth does not mean all manufacturers are equally protected.
“Most exposed today are low-margin businesses that face input cost volatility, shipping disruptions and margin compression,” says Haider. “These firms are more reliant on short-term working capital and face refinancing risk when demand softens.”
The exposure here is not purely operational, as financing structures are also under pressure. Higher logistics costs, longer delivery timelines and volatile inputs can weaken margins for companies with limited pricing power. Businesses that rely heavily on imported materials may also need more liquidity, just as cash conversion cycles come under pressure.
Other segments are better placed. “Best positioned are manufacturers in electronics, pharma and food processing with strong ICV [In-Country Value] scores that benefit from government incentives, export corridors through free trade agreements and CEPA [Comprehensive Economic Partnership Agreements] arrangements, and easier access to structured finance,” says Haider.
This distinction matters for capital allocation decisions across lenders and manufacturers alike. Competitiveness depends on margins, procurement access, supply-chain depth, export routes and balance-sheet strength. Even higher-value sectors are not insulated. “Electronics can still face supply-chain fragility in semiconductors and logistics,” says Haider. “Execution quality and balance-sheet strength of the corporates will differentiate winners in each segment.”
The implication is clear. Access to growth capital will increasingly depend on whether manufacturers can demonstrate resilient contracts, disciplined inventory planning and the ability to manage volatility without disrupting production.
Localisation as a strategy
Localisation is moving from a policy objective to a commercial imperative.
The ICV programme was introduced to increase local economic value by encouraging government entities and major companies to procure more goods and services from UAE-based suppliers. Recent changes have expanded the programme from an incentive-led framework into a mandatory requirement for selected federal entities and companies in which the government holds at least a 25% stake.
“The ICV programme has expanded rapidly in the UAE and is being made mandatory across federal entities and national companies, creating a structural demand pull for local suppliers and upstream investment,” says Haider. “This is already shifting procurement and investment decisions in various large corporates towards domestic value chains.”
For manufacturers, stronger local supply chains can reduce exposure to external disruption and strengthen their procurement position. For banks, they can also improve a company’s risk profile by linking production plans to clearer demand.
The same shift is visible in inventory planning. “Manufacturers are shifting from pure just-in-time to hybrid models with strategic buffers, multi-sourcing and regional hubs,” says Haider. “Given the recent geopolitical crisis and supply-chain disruptions, we have witnessed corporates facing issues with exports, but contextual to raw materials, most had sufficient inventories maintained and continued production.”
The trade-off is a balance sheet question. Holding more inventory ties up cash. Developing local suppliers requires investment. Alternative transport routes can protect continuity but add complexity. The challenge is to fund resilience without permanently increasing unit costs.
Financing continuity
The banking requirement is changing alongside the operating model.
“Manufacturers are using hybrid financing such as supplier finance, sustainability-linked loans and receivables discounting to fund resilience without permanently raising unit costs,” says Haider.
Resilience is no longer limited to emergency liquidity. It is becoming part of how manufacturers structure working capital, capital expenditure and supplier relationships.
“Mashreq’s sectoral expertise in manufacturing has been adept to provide short-term liquidity through trade finance, guarantees and foreign exchange hedging, and long-term structured capex, including green loans, project finance and sustainability-linked facilities,” says Haider. “Mashreq has publicly allocated AED10bn over a period of five years for industrial financing and partners with the Ministry of Industry & Advanced Technology to support the industry segment in the country.”
The financing requirements vary materially by subsector. Food processors may need inventory-backed facilities and receivables support. Pharmaceutical manufacturers may require long-tenor finance for specialised production lines. Construction materials producers may need support in managing input-cost volatility and delayed payments. Exporters may require trade finance, guarantees and currency risk management.
Banks will therefore need to broaden their credit assessment frameworks. Cash conversion cycles, supplier exposure, contract quality, ICV positioning and access to trade corridors are becoming important indicators of resilience.
“Expect permanent strengthening of domestic value chains, broader use of ICV-linked procurement and financialization of resilience with integrated finance-operations products,” says Haider. “Smarter cash management solutions, banking APIs and structured trade finance solutions will remain the catalyst for manufacturing companies to optimise their working capital requirements and support the growth trajectory.”
The decision for manufacturers is no longer whether resilience matters. Recent disruption has made that clear. The more crucial decision is how to fund it.
Companies that treat resilience as both an operating discipline and a financial strategy will be better placed to capture the UAE’s next wave of industrial opportunities. Those that do not may find that growth becomes harder to finance, even in a market with expanding demand.
UAE manufacturers are entering a new phase of growth, reconfiguring supply chains and deepening localisation to stay competitive amid shifting global trade dynamics. For senior finance and business leaders interested in exploring these insights further, Mashreq and MEED will host a Manufacturing Business Leaders Roundtable on November 12, 2026, focusing on industrial resilience, banking support and the next stage of the UAE’s manufacturing expansion.
Please contact feven.assefa@globaldata.com to register your interest.
