Introduction: The Rise of Manufacturing in the UAE
The UAE’s manufacturing sector is not just expanding, it’s transforming. As the nation accelerates its “Operation 300bn” industrial strategy, the sector is set to become a cornerstone of the non-oil economy, targeting AED 300 billion in output by 2031. From advanced materials and automotive components to sustainable packaging and food processing, manufacturing is now among the fastest-growing industries across all seven Emirates.
For investors, analysts, and business owners, business valuation in this sector has never been more strategic or more complex.
Industry Snapshot: UAE Manufacturing by the Numbers
| Key Metric (2025) | Insight / Data Point |
| Contribution to GDP | 15% (targeting 25% by 2031) |
| Number of active manufacturing firms | Over 14,000 |
| Government funding programs | AED 30+ billion under Operation 300bn |
| Top manufacturing hubs | Abu Dhabi (ICAD, KIZAD), Dubai Industrial City, Sharjah SAIF Zone |
| Export growth (YoY) | 18% increase in 2024–2025 |
| Key sub-sectors | F&B, metals, pharmaceuticals, plastics, EV parts, construction materials |
Source: UAE Ministry of Industry & Advanced Technology, 2025 forecasts
Why Valuation Matters More Than Ever
The UAE’s push toward industrial self-sufficiency and ESG-driven production has redefined traditional valuation parameters.
Buyers, investors, and even lenders are now scrutinising businesses through three lenses:
- Sustainability & efficiency – How green and automated are operations?
- Government alignment – Is the business benefiting from national initiatives (e.g., Operation 300bn, Make it in the Emirates)?
- Export scalability – How integrated is the firm with global supply chains, especially via free zones and CEPA-linked markets?
Valuation Methods Commonly Used in the Manufacturing Sector
| Method | Application in the UAE Manufacturing | Key Insight |
| Discounted Cash Flow (DCF) | Most used for growth-stage manufacturers | Captures long-term contracts, automation benefits, and expansion ROI |
| Comparable Company Analysis (CCA) | Benchmarking against regional peers | Useful for mid-market or family-owned businesses |
| Asset-Based Valuation | Relevant for capital-intensive factories | Reflects machinery, land, and plant value adjusted for depreciation |
| Earnings Multiple Approach | Used by PE investors | EBITDA multiples range from 6x–9x, depending on sector and scale |
Graph: EBITDA Multiples Across Key Manufacturing Sub-Sectors (UAE 2025)
Observation:
High-margin, export-ready, or government-supported manufacturers, particularly in pharmaceuticals and automotive components, are achieving premium valuation multiples, driven by strong demand, regulatory incentives, and sustainable industrial policies. According to PwC’s Middle East Industrial Manufacturing Insights (2024) and the World Bank’s UAE Economic Update (2025), these sub-sectors have consistently outperformed traditional industries in profitability and capital efficiency.
In contrast, construction materials and packaging manufacturers remain stable but yield lower valuation multiples, reflecting their relatively higher capital intensity and slower margin growth.
Key Value Drivers in UAE Manufacturing
- Government Incentives & Financing
- Access to low-interest loans from Emirates Development Bank (EDB).
- Customs and VAT exemptions in free zones.
- Preferential contracts under the “Make it in the Emirates” initiative.
- Access to low-interest loans from Emirates Development Bank (EDB).
- Technological Integration
- Adoption of robotics, IoT, and AI in production lines increases valuation premiums.
- Smart factories in Abu Dhabi and Dubai Industrial City report up to 20% productivity gains post-automation.
- Adoption of robotics, IoT, and AI in production lines increases valuation premiums.
- Export Readiness & Global Trade Links
- UAE’s CEPA agreements with India, Indonesia, and Israel are opening new markets.
- Export-oriented manufacturers enjoy better scalability, boosting DCF valuations.
- UAE’s CEPA agreements with India, Indonesia, and Israel are opening new markets.
- ESG & Circular Economy Focus
- Businesses adopting sustainable sourcing, renewable energy, and waste reduction are perceived as future-ready, directly enhancing valuation multiples.
- Businesses adopting sustainable sourcing, renewable energy, and waste reduction are perceived as future-ready, directly enhancing valuation multiples.
Challenges in Valuing Manufacturing Companies
| Challenge | Impact on Valuation |
| Volatile raw material prices | Affects EBITDA and working capital assumptions |
| Legacy machinery | Reduces efficiency and future scalability |
| Overreliance on a single buyer/supplier | Increases business risk |
| Lack of ESG reporting | Limits access to institutional capital |
| Family-owned structures | Governance issues can lower investor confidence |
Case in Point: Mid-Sized Manufacturer in Dubai Industrial City
- Company: Industrial packaging manufacturer
- Revenue (2024): AED 45 million
- EBITDA: AED 7.5 million
- Valuation Approach: Weighted between DCF (60%) and Market Multiple (40%)
- Resulting Value Range: AED 48–55 million, depending on export margin assumptions
This valuation demonstrated how diversification of the customer base and automation adoption added over 12% premium to the enterprise value versus peers relying solely on domestic sales.
Valuation Outlook: 2025–2027
The UAE manufacturing sector is poised for compound annual growth of 6–8%, driven by government support, nearshoring trends, and digital transformation.
Valuation dynamics will increasingly favour companies that:
- Automate production to reduce the cost per unit,
- Align with ESG and green manufacturing goals, and
- Build diversified export pipelines through CEPA and GCC routes.
Conclusion
In today’s UAE, valuation is more than a financial metric; it’s a strategic reflection of a company’s adaptability and future readiness.
For manufacturing businesses, accurate valuation helps guide:
- Fundraising and M&A decisions,
- Expansion planning, and
- Cross-border investor negotiations.
The winners of tomorrow will be those who treat valuation not as a year-end exercise but as a continuous performance barometer tied to innovation, policy, and sustainability.
FAQ’s
Because valuation reflects the true worth of tangible assets, production efficiency, and export potential, all crucial for mergers, acquisitions, or attracting investors in an industry that’s capital-intensive and fast modernising under the UAE’s Industrial Strategy 2031.
Typically, Asset-Based Valuation and Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) Multiples are preferred. For high-growth industrial firms adopting automation or green manufacturing, Discounted Cash Flow (DCF) models are also highly effective.
Under Operation 300bn and Make it in the Emirates, manufacturers receive low-cost financing, infrastructure support, and export incentives, which directly enhance profitability and therefore increase valuation multiples.
In 2025, manufacturing firms in the UAE are generally valued between 5x to 9x EBITDA, depending on their scale, automation level, export orientation, and ESG compliance.
Yes. Horizon Biz Consultancy provides industry-centric valuations, financial modeling, and strategic advisory services for manufacturing entities in the UAE. The firm helps align business worth with operational performance, capital raising goals, and international expansion strategies.
