The National In-Country Value (ICV) Program, launched by the government of the United Arab Emirates, is a program designed to create economic benefits by moving government procurement expenditures as well as leading UAE-based national companies procurement to the local economy. The ICV Program as part of the ‘Projects of the 50’, has influenced supply chain and procurement decisions in UAE companies greatly. This blog will discuss the impact of ICV certification on supply chain and procurement decisions in UAE companies, and how it can benefit businesses.
Impact of ICV Certification on Supply Chain and Procurement Decisions
1. Increased Local Sourcing
One of the key objectives of the ICV Program is to make more use of local sources and to reduce dependence on imports. ICV-certified companies are more likely to prefer sourcing goods and services from local suppliers, in return which stimulates economic growth and provides job opportunities.
- In the first half of 2024, ICV certified companies spent AED 48 billion of local procurement and services, a qualitative increase from when it was AED 32 billion in the same period of 2023.
- In 2023, local spending for products and services by entities involved and joining the ICV Program grew to AED 67 billion at a growth rate of 26%.
2. Improved Competitiveness
The ICV certification helps UAE companies build their competitiveness by showing their commitment in supporting the UAE economy. ICV certification gives companies the competitive edge when they are considered for government tenders and contracts.
3. Efforts Toward Enhanced Emiratization
To receive ICV certification, companies are required to show their efforts to Emiratize their workforce. An ICV certified company can attract UAE nationals that may help to develop their talent and also create job opportunities.
- As of the first half of 2024, the number of Emiratis working for companies that receive the “National In Country value” certificate would stand at around 19,000 i.e. 40 % more than the first half of 2023.
4.Increased Investment in Research and Development
ICV certification is a way to encourage companies to focus on research and development, and this will contribute to innovation, and the creation of new products and services. An Advanced Technology & Sustainability bonus has been added to the National ICV Formula of the Industrial Technology Transformation Index (ITTI) to reward companies that invest in advanced technology and sustainability.
Table 1: ICV Strategic Impacts
| Strategic Impact | Description |
|---|---|
| Localization & Development | Strategic localization of supply chains and the development of new local industries and services |
| Foreign Investments | Stimulating and attracting foreign investments and diversifying the economy |
| Job Opportunities | Creating valuable job opportunities in the private sector |
| National GDP Growth | Contributing to the growth of national GDP |
| Research & Development | Enhance spending on R&D and advanced technology |
| Private Sector | Increase the private sector’s contribution to national GDP |
Benefits of ICV Certification for Businesses
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Access to Government Tenders and Contracts
Being ICV certified may allow a company to bid to the government tenders and contracts which will stimulate revenue and help grow the business.
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Improved Reputation
The ICV certification can help a company to enhance its reputation by proving its affinity to the UAE economy. It will help to attract new customers and keep strong relationships with the existing customers.
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Enhanced Supply Chain Resilience
The ICV certification can assist companies to create more resilient supply chains by bringing suppliers closer to the country and removing dependency on imports. That can reduce the downside risk related to supply chain disruptions.
FAQs
1. What is the National In Country Value (ICV) Program?
The National In Country Value (ICV) Program is a UAE government initiative that seeks to bring economic benefit by redirecting the government’s and leading national companies’ procurement expenditures to the UAE economy, through the industrial and services sector.
2. What is the effect of ICV certification on supply chain decisions?
The ICV certification encourages UAE companies to give special attention to local sourcing, resulting in the growth of a strong local supply base. This helps improve supply chain resilience, promote collaboration and innovation as well as sustainability and social responsibilities.
3. How does ICV certification benefit supply chain and procurement decisions?
The benefits of ICV certification for supply chain and procurement decisions include increasing local sourcing, promoting collaboration and innovation, promoting sustainability and responsibility, reducing procurement complexity, solidifying relationships with suppliers, and helping the country’s economic growth & diversification.
In conclusion, companies operating in the UAE, especially those who wish to compete in government tenders, and ADNOC projects MUST get the ICV certificate. The ICV certification process is quite complicated therefore by engaging a credible ICV certification service provider such as ICV Certificate UAE can guarantee a smooth and straightforward process. Companies that obtain an ICV certificate can prove to the UAE they are contributing to nation’s economy and gives them a competitive advantage in the bidding process. For expert guidance on ICV Certificate UAE, do contact ICV Certificate UAE today.
