UAE Industrial Gases Market Research Report: Forecast (2024-2030)

Market Insights & Analysis: The UAE Industrial Gases Market (2024-30):

The UAE Industrial Gases Market size was valued at USD 872 million in 2023 and is expected to reach USD 1.31 billion by 2030. Along with this, the market is estimated to grow at a CAGR of around 6.07% during the forecast period, i.e., 2024-30. The factors attributing to the surge in the demand for industrial gas in the UAE are the expanding application of carbon dioxide in the food & beverage sector, rising usage of oxygen in semi-conductor industries, and economic diversification & industrial expansion plans.

Traditionally, the UAE's economy has been reliant on the oil & Gas industries since the country has been one of the leading exporters of these commodities. As per the International Trade Administration (ITA), almost 30% of the country’s finances are covered by the oil & gas output. However, the recent geopolitical tensions between countries like Russia-Ukraine and Israel-Iran have led to a disruption in the supply chain and also resulted in oil price volatility. The fluctuation in the prices directly impacts the UAE's economy. As a result, the official authorities of the UAE are focusing on diversifying its economic resources by establishing new industrial zones.

Different industry verticals, including chemicals, metallurgy, etc., depend upon the gases to carry out their production process. Therefore, the increasing focus on setting up manufacturing facilities in the UAE is generating the demand for industrial gas, thus enlarging the market size. Furthermore, the increasing number of working professionals & heightened urbanization rate in the UAE is leading to a higher demand for packaged food. As per the customer survey, more than 36% of the buyers prefer ready-to-eat food since it is more convenient & quick to make. These packaged food products are made using nitrogen gas since it helps in improving the shelf life of the food. Thus, the growing demand for these edible food items is consequently enhancing the need for industrial gases in the UAE & uplifting market growth.

Additionally, the UAE has been procuring food products from other nations, like India, the US, etc., and necessarily depends upon imports to fulfill the food requirement. As per the Food Export Organization, in 2023, the UAE imported around USD 1.28 billion in agricultural & related food products from the United States of America. In addition to this, around 80% to 90% of the food requirement is fulfilled by shipments from neighboring nations. However, this dependence is leading to higher prices of food products & causing food insecurity within the nation.

Therefore, to ensure food security, the UAE's governing authorities are encouraging F&B companies to set up their production bases within the nation. This, in turn, would continue to generate the demand for industrial gases, accentuating the market growth during the forecast period.

The UAE Industrial Gases Market Driver:

Widespread Application in the Chemical Industries – The immense utilization of chemicals in a vast range of industries, like pharmaceuticals, Oil & Gas, Consumer Care, etc., has led to the development of several chemical manufacturing bases in the UAE. These chemical companies require a wide range of industrial gases to carry out the production of various complex compounds, thus driving market growth.

Moreover, the chemical industries play a major part in boosting the UAE's overall economic growth. The Industrial Development Bureau stated that the chemicals sector emerged as one of the largest manufacturing sectors and contributed to around 53% of the entire Abu Dhabi's GDP. Accordingly, to improve the financial position, the country's administrative authorities are ramping up chemical production. As per the government reform, the aim is to increase the chemical production capacity to 14.4 million tons per annum by 2025, which would continue to drive the need for industrial gases in the forthcoming years as well.  

The UAE Industrial Gases Market Opportunity:

Increasing Expansion of Semiconductor Companies – Semiconductors are made using industrial gases since nitrogen & oxygen help in shaping up their electrical properties. Therefore, the increasing requirement for semiconductors in a wide range of industries, like automotive & electronics is leading to their higher production, consequently ramping up the industrial gas demand.

Further, in recent years, the sales of smartphones & PCs in the UAE have increased significantly. As per the statistics by the Gulf Council Corporation (GCC), more than 5.38 million mobile phones were sold in the UAE during Q1 of 2021 and the shipments of smartphones in the UAE reached 1.1 million in 2022, which is an increase of about 7% compared to the previous year. Therefore, to cater to the growing demand for electronic products, several foreign manufacturers are establishing their units in the UAE. This would pose an opportunity for the industrial gas companies to supply different gases to these units, thus enlarging the market size.  

The UAE Industrial Gases Market Challenge:

High Production & Distribution Costs – The prices of cylinders, bulk tanks, equipment, and welding consumables have increased significantly due to the rising cost of metals such as stainless steel and non-ferrous metals. These higher packaged cylinder prices result in a surge in the supply cost. As a result, the top companies are increasing the prices of industrial gases for both contractual & non-contractual customers. Thus, this rising cost is in turn, resulting in customers seeking alternative solutions, hence impeding market growth.

Furthermore, industrial gases require specialized storage to maintain the purity of the gases. They need well-ventilated, cool, and dry areas away from possible ignition sources and combustible materials. Therefore, top companies are required to spend a hefty amount on industrial gas storage, increasing the overall overhead cost. Thus, to have greater profit margins, the market players are selling these industrial gases at higher costs, making them inaccessible for a few of the industries, and restraining market growth.

The UAE Industrial Gases Market (2024-30): Segmentation Analysis

The UAE Industrial Gases Market study by MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2024–2030 at the national levels. As per the analysis, the market has been further classified as:

Based on Type:

• Nitrogen
• Oxygen
• Carbon Dioxide
• Hydrogen
• Argon
• Acetylene
• Others (Helium, Methane, Ammonia, etc.)

Carbon Dioxide holds a notable market share in the UAE Industrial Gases Market. Carbon dioxide is available in three different forms and can be utilized as solid, liquid, and gas, making it a suitable refrigerant and preferable for the industries of Electronics, F&B, Data Centres, etc. Along with this, carbon dioxide is extensively used as an inert gas within chemical processing units since it is one of the common feedstocks for the synthesis of various polymers. Moreover, the application of carbon dioxide within the metal industry due to its attributes, which provide hardness to casting molds further drives its demand.

Additionally, this gas is widely used within the agriculture greenhouse since it facilitates plant growth. Therefore, the growing focus on agriculture & setup of the various agricultural farms in the UAE would continue to enhance the carbon dioxide segment’s share in the forecast years.

Based on End User:

• Healthcare
• Chemicals
• Electronics
• Food & Beverage
• Metallurgy
• Oil & Gas
• Energy
• Others

The Oil & Gas industry captures a dominant market share in the UAE Industrial Gases Market. The oil & gas industries essentially need nitrogen since it helps in maintaining pressure, resulting in ensuring safety for onshore and onshore oil exploration. The oil wells need carbon dioxide since it helps ease the extraction of oil from bedrock, optimizing the oil yields. Thus, the usage of industrial gases within the oil & gas units to enhance oil recovery and improve safety is amplifying the UAE’s Industrial Gas market. Moreover, the UAE nation has the presence of higher oil and gas reserves. As per the ITA, the UAE is one of the largest oil producers with around 100 billion barrels of proven reserves. These units essentially need the industrial gas to conduct their production process, amplifying the market growth.

The UAE Industrial Gases Industry Recent Development:

• 2024: ADNOC Gas announced an investment of around USD 13 billion to leverage AI and other digital technologies to upgrade their domestic production unit and improve industrial gas yield.

Gain a Competitive Edge with Our The UAE Industrial Gases Market Report

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• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
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