p until fifteen years ago, private industries in the UAE were a rare occurrence. The majority of the nation's industrial base centered around the upstream and downstream links of petroleum, which naturally led to comparisons of a one product economy.

Fortunately, the years since 1985 have seen private and government initiative grow on the industrial front. While government backed complexes such as Dubal, Ducab and the Abu Dhabi Fertiliser Factory continue to be the biggest players, smaller private investments are beginning to make their presence felt. More so in the value added products markets and certain areas of manufacturing.

One of largest of these is the garments and textiles industry. Originally focused in the Sharjah industrial areas, the garments industry has now taken the Jebel Ali Free Zone (JAFZ) as its new heartland. The chief attractions of JAFZ, said one industrialist, is the 100 per cent foreign ownership, combined with the relatively hassle free environment and close proximity to the city of Dubai.

Arguably the biggest such firm in the textiles industry here is Wardah Textiles. With a turnover of some US$72 million, this family-run venture is the first such firm to have completely shifted over from grey textiles to a pure denim manufacturing outfit. 'When we began the firm in September 1991, textiles were the big thing,' explains Dr IA Khan, director of Wardah. 'Later on we saw the opportunity in denim which is when the decision to shift production was made.'

Today, the decision to shift is paying off, with the company producing some two million meters of denim every year from its three, state of the art, units spread over 100,000 square meters of the JAFZ. 'Around 95 per cent of our production goes out as exports,' explains MP Nagarajan, general manager of the firm. 'Our main markets for these are the US, Canada and Europe.' In fact, says Dr. Khan, the company was set up as an export oriented firm right from the planning, which would explain the high export growth.

But it is not all pink in the denim markets. Quite to the contrary, some would say the markets are as downright blue as the denim itself. 'The denim market is probably the toughest in the (textile) world,' says Dr. Khan. 'It requires quality to compete at the top levels. It also has the highest rejection level of any textile. If the material does not match the quality required, it is rejected automatically.'

Naturally, the largest of all its export markets is the US. as Khan explains, the US markets alone absorb some 35 million meters every month, in addition to a local production of some 15 million. Competition however, has stiffened with the entry of the Chinese. 'The Chinese take some 28 per cent of the US imports,' says Dr. Khan. 'Although their quality is very low, they are much cheaper and it is difficult to match them on pricing. In effect, you could say that they are dumping their products into the market.'

Not least of the worries in a market like this is also the overheads, which are much higher than those of Chinese or other Asian manufacturers. For one, the 700 odd multinational employees require a higher remuneration and manufacturing costs are higher in the UAE. The cost of the ingredients too is higher since they have to be of a specific quality. For Wardah Textiles, the other worry must be the size of the investment they made. The fully automated 3 unit base is estimated to have cost approximately US$ 100 million. And since the gestation period for such projects is quite long, and break even periods are very dependent on the shape of the international markets.

In the garment industry, another of the worries is the quota imposed on a single nation's exports into a country. The danger for the UAE, say industry experts, is when firms use the UAE simply to transship their garments using the UAE tag. That way, the country's quota is filled up without the economy benefiting in any tangible way. Preventing that, while encouraging real manufacturing, will be one of the challenges facing the government planners.

In the meantime, despite the competition, Wardah for one seem to have their handles firmly in control. The size of the orders is such that they have no room for expansion, nor any plans to do so at this stage. 'If the quality is constant,' says Dr. Khan, 'you can succeed. And although the textile industry as a whole has been going through a lean patch over the last five years, denim still survives.' As long as that remains the case, it seems that the blues are unlikely to descend on denim manufacturers.