UAE to build free zone for defense manufacturers amid Iran attacks

The UAE said it’s going to build a free zone in Abu Dhabi designed to attract foreign defense manufacturers, acting days after Iran renewed attacks on its oil installations.

The industrial complex in the capital city’s Al Selmiyyah district will be developed in partnership with Abu Dhabi-backed AD Ports and coordinated with state-owned military contractor EDGE and ADNOC, the national oil company, according to a statement published by the Emirates News Agency on Wednesday.

“The initiative marks a significant step in advancing the UAE’s efforts to build an advanced and sustainable national defense industrial base that strengthens national security and enhances long-term defense readiness,” the UAE’s Tawazun Council for Defense Enablement said in the statement.

The project was announced in Abu Dhabi at the “Make it in the Emirates” expo after Bloomberg reported that senior UAE officials have held preliminary talks on creating a new investment vehicle to buy stakes in foreign defense companies. Among those reported to have participated were Crown Prince Sheikh Khaled bin Mohammed and Mubadala CEO Khaldoon Al Mubarak.

UAE exit from OPEC will boost investment, Al Jaber says

By announcing its decision to leave OPEC last week, the UAE has seized an opportunity to attract more investment and strengthen the economy, ADNOC chief Dr. Sultan Al Jaber says.

“It serves our national interests and long-term strategic objectives, aligns with our industrial, economic, and developmental ambitions, and gives us greater ability to accelerate investment, expand, and create value,” Al Jaber, the state oil company’s Group CEO and the UAE Minister of Industry and Advanced Technology, said today in Abu Dhabi.

Al Jaber spoke at the opening of the annual “Make it in the Emirates” expo, a four-day government-sponsored trade show that promotes domestic manufacturing by offering incentives to attract global companies.

Among the event’s backers are ADNOC, L’imad Holding, International Holding Co., Mubadala and Dubai Islamic Bank.

The UAE’s exit from OPEC, which took effect May 1, was largely connected to its irritation with the oil cartel’s dictating of production quotas across the industry to keep prices high. UAE Energy Minister Suhail Al Mazrouei has said disruptions to oil shipping caused by the current conflict created favorable conditions to leave the organization.

Parting with OPEC “is part of a broader effort to reshape our economy and industrial base through a vision that connects energy, technology, and industry, aligning our resources with national priorities to build a stronger, more resilient economy,” Al Jaber said.

Aluminum prices spike after Iran hits plants in Abu Dhabi, Bahrain

The Iran war is hitting global aluminum supplies, with Emirates Global Aluminium and Bahrain’s Alba both reporting damage to key facilities after Iranian strikes.

EGA’s Al Taweelah plant in Abu Dhabi, one of the world’s largest aluminum sites, was hit in a weekend attack that injured workers and disrupted operations.

The incidents underscore how the conflict is expanding beyond oil into core industrial metals that feed global manufacturing supply chains, The Wall Street Journal reports.

Prices have begun to climb as traders factor in the risk of prolonged disruption to Gulf production. Aluminum prices on the London Metal Exchange jumped 6% on Monday, nearing four-year highs.

China’s Lenovo sets up regional headquarters in Saudi Arabia

Chinese PC maker Lenovo is joining the parade of international firms responding to Saudi directives that they establish their regional headquarters in the kingdom.

The company is teaming up with Alat, a unit of Saudi Arabia’s Public Investment Fund, to build a manufacturing facility for PCs, laptops, smartphones, and servers.

Headed by Lenovo veteran Lawrence Yu, the office will aim to reinforce the Chinese company’s presence and manufacturing capabilities in the Middle East, Reuters reports.

Saudi Arabia implemented new rules this year that require international firms to establish a regional HQ in the country as a condition for receiving government contracts.

India’s Titan, facing U.S. tariffs, mulls making jewelry in Gulf

India’s biggest jeweler and watchmaker Titan is looking into manufacturing some of its products in the Gulf amid trade tensions with the Trump administration.

The possible shift by Titan, part of India’s giant Tata Group, would follow the company’s recent announcement that it plans a $283 million acquisition of Dubai-based luxury retailer Damas, which operates 146 stores across the Gulf, Reuters reports.

Titan Managing Director C.K. Venkataraman told the news agency that the move could help the company maintain low-tariff access to U.S. markets even as President Donald Trump ordered a 25% levy last month on imports from India.

Imports from the UAE, by contrast, face a 10% tariff under Trump’s plan.

“If the tariffs remain like what they are currently threatened to be, then any arbitrage on a tariff … would be meaningful for us to consider,” Venkataraman said.

Titan’s Tanishq brand has several U.S. stores and is planning a major expansion, while its diamond-focused label CaratLane launched in the U.S. in October.

Manufacturing in the U.S. is a less feasible option for Titan due to cost and skills constraints, especially for artisan-made jewelery, Venkataraman said.

UAE promotes manufacturing with $11B financing program

The UAE and its largest banks are pouring nearly $11 billion into a financing plan aimed at spawning new manufacturing companies and building the country’s industrial base.

Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology, said at the opening session of the “Make it in the Emirates” conference in Abu Dhabi on Monday that the government will provide backing for a cross-section of target industries, from food and construction to renewable energy and artificial intelligence.

“Investing in manufacturing is an investment in an advanced economy,” Al Jaber said in a speech at the Abu Dhabi National Exhibition Centre. “Every investment in the industrial sector has a multiplier effect, stimulating growth and related sectors.”

Among the lenders lined up to finance the program are Emirates Development Bank, First Abu Dhabi Bank, Mashreq, Emirates NBD, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, and Wio Bank.

In his address, Al Jaber noted last week’s visit by U.S. President Donald Trump to Abu Dhabi, where he was shown a model of a new campus being built in the emirate that is planned to be the largest hub for development of AI technology outside the U.S.

“We do not see artificial intelligence as just a tool or a new technology, but as a complete economic sector expected to generate over US$1.5 trillion globally by 2040,” Al Jaber said.

PIF-backed tech fund Alat inks $2 billion Lenovo deal

Saudi Arabia’s technology investment mega-fund Alat bought $2 billion worth of convertible bonds in Hong Kong PC giant Lenovo.

Under the deal, Alat has lured the world’s largest seller of personal computers to open a manufacturing plant to produce servers and PCs, as well as open a research center and its Middle East and Africa headquarters in Riyadh.

Launched earlier this year, Alat has previously signed partnerships with U.S.-based Carrier, Japan’s SoftBank Group and China’s Dahua Technology to build manufacturing plants in Saudi Arabia.

The SoftBank robotics plant is expected to open and assemble its first robot by year’s end.

In February, Saudi Arabia tapped ex-Dell Technologies executive Amit Midha to lead the new Public Investment Fund-owned industrial electronics company with $100 billion in backing that aims to become an AI investing and local manufacturing powerhouse.

Chaired by Saudi Crown Prince Mohammed bin Salman, Alat is targeting the creation of 39,000 direct jobs in Saudi Arabia and a $9.3 billion contribution to GDP by 2030.

The company is eyeing 30 product categories including robotics, computing and digital entertainment, as well as advanced heavy machinery. 

Rate cut timing top of mind as financial elite gather from Dubai to Beverly Hills

From Dubai to Beverly Hills, the question occupying the world’s financial elite is this: when will the U.S. Federal Reserve cut interest rates?

Not till September at the earliest, says hedge fund manager Ken Griffin, CEO of Citadel, who addressed the Milken Institute Annual Conference at The Beverly Hilton on Monday. Yie-Hsin Hung, CEO of State Street Global Advisors, sees rate cuts happening sooner: she predicted that the Fed will start to reduce rates as soon as July amid a more muted economy, speaking this morning at Day 2 of the Dubai FinTech Summit. 

The market-moving question is top of mind, but so too is the Gulf’s growth story amid the energy transition. “We’re known as oil exporters, but our second biggest export is capital,” Mohammed El-Kuwaiz, Chair of the Board of the Capital Market Authority of Saudi Arabia said at Milken on Monday, fielding questions from The Economist’s Editor-in-Chief Zanny Minton Beddoes. 

“For the first time in our history we may be capital importers,” El-Kuwaiz predicted, as the kingdom looks to lure foreign capital to help fuel the $3 trillion of investment from now until 2030 for its economic diversification drive.

The money is being poured into developing sectors like tourism, manufacturing and tech alongside mega-projects like NEOM.

“The capital markets are an extremely important fulcrum” at this time and why Saudi has opened up to the world and cracked into the top 10 capital markets, he said. El-Kuwaiz shared the stage with Jane Fraser, CEO of Citigroup; Harvey Schwartz, CEO of Carlyle; and Ron O’Hanley, Chair and CEO of State Street.

Back in Dubai, non-oil growth was top of the agenda for UAE Minister of Economy Abdulla bin Touq Al Marri. Speaking at the Dubai Fintech Summit, he repeated his belief in 7% annual GDP growth, but said that 4.9% non-oil growth is possible in 2024.

“We see growth away from traditional economies such as real estate and tourism to new types of tourism, such as sustainable tourism, health tech. We’re looking into AI, generative AI, the UAE is becoming the capital of AI,” he said.