Scotland eyes stronger trade ties with UAE

The UAE has been the second-fastest international growth market for Scottish food and drink products, but the government of Scotland is also bullish about strengthening other avenues of trade with the Gulf state, an official said.

Richard Lochhead, Scotland’s Cabinet Secretary for Rural Affairs and Environment, said export trends have been particularly strong in the UAE not just in the food and drinks sector, but in other areas of cooperation such as higher education, renewable energy, as well as oil and gas.

“We are putting a lot more effort as a Scottish government into promoting exports and building trade links with [the UAE and the rest of] this region,” Lochhead said in an interview with Alrroya.com on Sunday.

UAE demand for Scottish food and beverages such as meat, dairy, seafood, bottled water, fruits and vegetables has been rising significantly over the past years and remained undaunted even during the height of the Arab Spring revolution last year.

According to preliminary data from the Scottish Development International (SDI), the country’s food and drinks exports to the UAE reached $80 million (Dh294m), surging by a massive 55 per cent in the first half of 2011 alone and outperforming Scotland’s global export growth rate of 29 per cent.

Lochhead is confident that the growth will continue this year, tracking a similar uptrend in 2010 when Scotland’s food and beverage exports jumped by an impressive 114 per cent.

On a wider scale, Scottish exports to the entire Middle East have also been robust, generating total revenue of about $118m in 2010.

Lochhead said statistics from this region have been very encouraging for the over 12,000 companies that comprise Scotland’s food and beverage sector.

“We’ve only seen an increase in the demand for our produce [as well as] the amount of business that Scottish food and drink producers are doing in this region. We’ve not discerned any impact [from the economic and political crises]. So that is clearly a vote of confidence in what we are selling to this market,” he said.

One of the Scottish products that made dramatic headways in the UAE is salmon. Demand for this succulent fish – whether fresh, frozen or smoked – expanded by 46 per cent in the first half of 2011 to reach $8m from $5.5m in the same period of 2010.

Beverage exported to the Emirates went up by 29 per cent in the first six months of 2011 to hit $67m from nearly $52m the year before. The SDI said the food and drink sector is the largest manufacturing sector in Scotland, generating employment to around 120,000 people.

Export revenues buffer impact of high oil cost

High oil prices have left big dents on many industries’ pockets. While Scottish farmers and manufacturers are not immune to the rising fuel cost and operational expenses, Lochhead said skyrocketing demand for their produce has helped cushion the blow.

“We are very lucky in Scotland because we have a beautiful country with rolling glens and hills, lively lochs and clean sea. As a result of that abundance of natural resources, we are a fantastic larder and therefore [able to supply top quality, high-end produce],” said Lochhead.

He added that income generated from the huge demand for Scottish products have helped food producers, farmers and fishermen against rising input costs such as fertiliser, animal feeds, and fuel.

Global sales of Scottish food and drinks totaled $6.9 billion in 2010 with food products alone generating a whopping $1.5bn.

Poland had been the top consumer of Scottish foodstuff in 2010 with demand growing by 139 per cent, followed by the UAE (114 per cent), Germany (29 per cent), USA (25 per cent), Canada (24 per cent), Japan (22 per cent) and France (15 per cent).

Because of the food and drink sector’s importance to Scotland’s economy, the Scottish government has provided assistance to help the sector become a $19.3bn industry by 2017.

Doing business in the UAE and beyond

Bilateral trade between Scotland and the UAE has enjoyed a strong history and continue to show cooperation in various fields.

According to SDI, there have been significant opportunities in diverse sectors such as financial services, construction, renewable energy, oil and gas, education and training for Scottish companies to collaborate with their counterparts in the UAE and other neighbouring Gulf states such as Qatar.

Scotland has also attracted investors from the UAE like the Abu Dhabi National Energy Company (Taqa), which has a strong presence in the North Sea oil fields in Aberdeen; the Al Tajir family, who owns natural mineral water company Highland Spring; and Dubai’s Leisurecorp, which bought the Turnberry Golf Course and Resort in 2008.

Secretary Lochhead said the oil-rich Saudi Arabia, which has a population five times larger than that of the UAE, is also a promising destination for Scottish food and drink products.