GMIS 2021: China's Wenchao to invest $200m in food and beverage factory in Dubai

China's Wenchao Group will invest Dh735 million ($200m) to build a factory in Dubai that will cater to the growing food and beverage and e-commerce sectors, and contribute to the UAE's food security programme, Dubai Industrial City has said.

The 88,300-square-metre (950,466-square-foot) complex will be Wenchao's biggest. It is expected to have a food production turnover of up to Dh500m annually.

The first phase, which is scheduled to begin in the first half of 2022, will mainly produce Asian food products.

The factory is "an added element to the food security agenda of the UAE", Dubai Industrial City managing director Saud Al Shawareb told The National on Tuesday on the sidelines of the Global Manufacturing and Industrialisation Summit, where the agreement was signed. "Having a diversified food security element is very important for us."

"This factory will play a major role in localising food production and distribution, and feed our ambitions to develop a more sustainable and self-reliant future."

The UAE has been moving forward with its food security programme, prioritising an expansion of local production and regional interconnectivity. It aims to attain the top ranking in the Global Food Security Index by 2051.

Despite its arid land, the application of food technology in the Emirates has grown, particularly vertical farming.

Earlier this month, the Abu Dhabi Agriculture and Food Safety Authority unveiled a new development plan aimed at increasing the efficiency of sustainable farming.

In July, Dubai-based Sokovo announced it was building a vertical farm in Dubai Industrial City to produce thousands of tonnes of fruits and vegetables every year.

The International Centre for Biosaline Agriculture in Dubai has also been working to cultivate crops with a minimal carbon footprint.

In October, the UAE Space Agency announced a Dh4m competition to encourage scientists, entrepreneurs, academics and innovators to find new ways to deal with climate change and improve food security.

Meanwhile, e-commerce grew significantly because of the Covid-19 pandemic, which changed the shopping habits of consumers, according to a recent study by Visa.

About 64 per cent of UAE respondents reported an increase in their online spending, it said.

The value of the UAE’s retail e-commerce market jumped 53 per cent to a record $3.9 billion in 2020 and it is expected to grow further, the Dubai Chamber of Commerce and Industry said in June.

Wenchao, which was established in 2006 and owns warehouses and hypermarkets in the UAE, is bullish about the "very big potential for food and beverage and e-commerce", chairman Jiansheng Sun said.

"Compared to other countries, these sectors will become bigger in the future. This is why we wanted our logistics hub in Dubai, which will also help us to look for new opportunities in growth and innovation," he told The National.

"Our facility at Dubai Industrial City will give us a very strong position in manufacturing, storage and distribution."

Mr Jiansheng said the group plans to build another factory that will serve the wider GCC region.

The F&B and pharmaceutical sectors have considerably grown over the past year, having become a necessity during and even after the pandemic, Mr Al Shawareb said, with consumers having discovered more choices and convenience at their disposal, thanks to e-commerce.

"We have seen good demand for these sectors and they will continue to flourish. Consumers will still require physical shopping but they are getting more used to the convenience e-commerce has to offer," he said.

On Monday, Dubai Industrial City signed an agreement with the Ministry of Industry and Advanced Technology to support Operation 300bn, the UAE's 10-year strategy to increase the industrial sector's contribution to the country's gross domestic product to Dh300bn.

The UAE has become an exporting nation thanks to government programmes and the high-tech manufacturing sector while the "Make it in the Emirates" initiative is becoming more popular overseas, Mr Al Shawareb said.

"Made-in-UAE products adhere to standards required by advanced countries, and they are looking for more of it," he added.

In August, Dubai Industrial City, whose business partners export to more than 65 countries, signed an agreement with Himalaya Wellness to invest Dh120m to build a herbal pharmaceutical factory that will support the Operation 300bn and Make it in the Emirates programmes.