By Tim Hepher
ABU DHABI, April 17 (Reuters) - Abu Dhabi fund Mubadala’s aerospace division unveiled a $1 billion contract to build carbon-composite structures for Boeing, boosting the United Arab Emirates’ efforts to become a key manufacturer for the aerospace industry.
The 10 year deal calls for the Mubadala Aerospace to produce ribs, or strengthening components, for the tail section of the 777 mini-jumbo and the vertical part of the tail for the 787 Dreamliner, Boeing’s latest passenger jet.
It also marks the first time, Boeing said, of a direct outsourcing deal for composites production in the Arab world. Airline manufacturers are using more and more lightweight composite materials in their aircraft to boost fuel efficiencies.
“It’s ballpark about the same as our previous deals with Airbus and Alenia Aermacchi. The payments will be spread over time, according to deliveries,” Executive Director Homaid al-Shemmari told Reuters.
The move reflects a goal by Mubadala Aerospace, a unit of state fund Mubadala, to become one of the world’s top five suppliers to the aerospace industry, he said.
“Aerospace is one of the key factors that Mubadala is interested in. We are about 28 percent of their (Mubadala‘s) revenue and we are not backing out,” Shemmari said.
Its Strata subsidiary started delivering wing parts for the A330-340 to Airbus 18 months ago from a factory at Al Ain.
Strata will begin delivering the carbon-composite tail parts to Boeing in 2013, according to the deal finalised at an Abu Dhabi aerospace conference.
A newly signed strategic agreement also puts Strata in a position to be a future supplier of the vertical fin or stabilizer for the 787 Dreamliner, the companies said.
Abu Dhabi, capital of the United Arab Emirates, is investing billions of dollars in infrastructure, real estate and tourism to diversify its economy.
“One of the targets for us is to be a risk-sharing partner for the OEMs by 2020,” said Shemmari. “When they launch the new narrowbody we want to have the engineering capacity, the research and development capacity to participate in a serious manner in those programmes.”
Abu Dhabi accounts for more than half of the country’s economic output. The emirate hopes to lift its non-oil share of gross domestic product to 64 percent in 2030 from roughly 50 percent now.
Mubadala Aerospace owns a majority stake in SR Technics (SRT), the Swiss repair and overhaul firm. It also owns local repair company Abu Dhabi Aircraft Technologies (ADAT).
It holds a controlling stake in Italian business aircraft manufacturer Piaggio Aero along with India’s Tata Group and has partnerships with General Electric and Finmeccanica .
In Abu Dhabi its subsidiaries also include military repair company Ammroc, which it owns together with minority partners Lockheed Martin and Sikorsky.