* UAE is building local defence industry
* Local firms awarded most contracts at defence expo
By Stanley Carvalho & Mahmoud Habboush
ABU DHABI, Feb 24 The UAE's defence industry is
in its infancy but local firms scooped major deals at the
region's largest military expo, as the oil exporter builds a
manufacturing base to diversify its economy.
Local firms won 75 percent of the nearly $4 billion
contracts awarded during the five-day expo, and international
companies wanting to clinch deals will have to promote the local
defence sector, said officials at the International Defence
Exhibition & Conference (IDEX), which ended on Thursday.
UAE, an OPEC member and the world's third-largest exporter
of oil, is investing billions of dollars in infrastructure, real
estate, tourism and industry as part of the sheikhdom's economic
"We think we have the right infrastructure for the military
industry, and we are planning to maximize the utility that we
have," Mohammed al-Bowardi, secretary general of Abu Dhabi's
Executive Council, the emirate's top administrative body, told
Abu Dhabi aspires to become a regional aerospace hub, while
neighbouring Dubai, the Middle East trade and tourism capital,
aims to become an aviation and logistics centre.
State-owned Mubadala has signed cooperation agreements with
several Western majors, including Boeing (BA.N), EADS EAD.PA,
Lockheed Martin (LMT.N), Northrop Grumman (NOC.N), and Sikorsky,
a unit of United Technologies Corp (UTX.N). It has also invested
in Switzerland's SR Technics [SRTHD.UL], which maintains and
The Advanced Military Maintenance, Repair & Overhaul Centre
(AMMROC), a unit of Mubadala, was set up last year to service
planes and helicopters of the UAE Armed Forces and is part of
Mubadala Aerospace's goal to develop a domestic aerospace
"The UAE is building an aerospace industry from scratch,"
said Homaid al Shemmari, executive director for business
development at Mubadala Aerospace, adding it planned to invest
$500 million through 2015 for manufacturing components and
eventually develop primary aircraft structures.
Abu Dhabi Ship Building has already built capabilities in
construction, repair and refit of military and commercial
vessels at its local shipyard in cooperation with CMN of France.
Other smaller firms are involved in manufacturing small guns and
"If you are a partner company with local firms, it helps to
gain an edge in winning or losing contracts," said Simon Keith,
managing director of BAE Systems (BAES.L) for Middle East,
Africa & Asia.
The UK firm has partnered UAE firms in sharing technical
expertise and training and plans to launch new programmes soon,
International firms will be sought for advanced military
equipment, but they need to be involved locally in technology
transfer and joint ventures, said Eric Trappier, executive vice
president for international business at Dassault Systemes
The French firm won a 112 million dirhams deal this week to
upgrade armaments and software on the UAE's Mirage fleet. It is
eyeing a $10 billion deal to supply Rafale fighter jets to the
Investment firm Tawazun Holding, part of the UAE Offsets is
another firm focused on developing defence manufacturing and
technological capability in the UAE.
As the UAE continues to pump billions of dollars in buying
arms and developing indigenous defence capabilities, the message
to foreign firms is clear. "Strong alliances with big names
helps local companies in winning contracts," said Major General
Obeid al Ketbi, IDEX spokesman.
"We are placing big efforts on manufacturing locally through
joint ventures with international firms who invest with our
The following were among the local firms that won deals:
- UAE's Emiraje Systems won a $550 million deal, the biggest
at the show, to implement C41 command and control systems.
- UAE's International Golden Group won five contracts valued
at $427 million to purchase guns, armoured vehicles and
weaponry systems for the Armed Forces.
- Abu Dhabi Aircraft Technologies was awarded a $270 million
contract to upgrade and arm 23 Sikorsky's Black Hawk
- Abu Dhabi Ship BuildingADSB.AD was awarded a $218
million contract for purchasing RAM missiles for the UAE Armed
(Reporting by Stanley Carvalho & Mahmoud Habboush)