IDEX: Local Firms Emerge as Big Winners at UAE Arms Show
ABU DHABI, United Arab Emirates — Every day at 2:30 p.m. in the press room here at the IDEX show, Maj. Gen. Obeid al Ketbi, spokesman for the armed forces of the United Arab Emirates, came out to announce that day's major deals.
More than perhaps in most years, the goods and services being acquired by the United Arab Emirates military came from local firms.
Since there were no major big-ticket contracts signed for fighter jets or other expensive hardware during this show, reporters peppered Al Ketbi with questions about this new trend.
"There are no quotas," he insisted when asked by a European reporter point blank if the UAE had a set amount of contracts it was giving out to local companies.
The government was looking for the best products, no matter where they came from, he said. He did note that many local firms had strategic partnerships including technology transfers with foreign companies, and that this was key to their success.
Abu Dhabi, more than any other of the emirates in the confederation, has tried to diversify its economy. In the defense realm, it is aggressively building up its local capacity through strategic partnerships, offsets, and the investment of its oil wealth into infrastructure.
The 50-50 partnership announced at the show between the local investment firm Abu Dhabi International Golden Group and the South African vehicle manufacturer Paramount is an example of how UAE firms want to do business, officials said.
Paramount is going to build military trucks for the Middle Eastern market at a facility here in Abu Dhabi. The local firm will invest $100 million in the project. Much of the labor will be performed by foreign skilled and unskilled workers brought over from South Asia. They will be paid considerably lower wages than the unionized workers who would build similar trucks in the United States or Europe.
Local firms also compete with each other, Al Ketbi said. Indeed, a joint venture of UAE companies earlier in the week unveiled a series of nine tactical wheeled vehicles that it will produce locally as well. On the final day of the show, the armed forces announced plans to buy 1,000 NIMR mine protected vehicles from a local joint venture. The deal is worth $92 million. NIMR is a partnership of two UAE companies, the state-owned Tawazun Group and the privately owned Bin Jabr Group. Bin Jabr was purchased by the Abu Dhabi-based Tawazun.
While U.S., British and German truck manufactures may ultimately lose some of their market to this emerging homegrown truck industry, component makers may still get a piece of the action. The NIMR vehicles feature U.S.-made Cummins engines and Allison transmissions.
IDEX this year lacked blockbuster deals. Lockheed Martin and the UAE government are still working out the details in the terminal high altitude area defense system designed to thwart ballistic missiles. An anticipated deal to buy 60 Dassault Rafale fifth-generation jet fighters also did not get done in time for the exhibition.
U.S companies received smaller contracts, mostly in the sensor field. Lockheed Martin did sign a deal to integrate sensor pods on the UAE's fleet of F/A-18 Super Hornets. FLIR Systems, partnering with United Kingdom-based underwater sensor specialist Sonardyne International, will work on a port security project. ATK will convert two of Jordan's CASA-235 military transport aircraft into surveillance and reconnaissance gunship. 3Di Technologies and Goodrich were also among the U.S sensor makers who scored contracts at the show.
U.S companies are partnering with local firms who know the lay of the land and can get their foot in the door to win major contracts. The International Golden Group, for example, has a host of U.S companies on its roster including FLIR and General Atomics, which will begin a push to market its Predator unmanned aerial vehicle in the Middle East. Aviation components maker Rockwell Collins also used the show to announce its plans to open an Abu Dhabi office.
A Russian official, meanwhile, said that nation had signed $12 billion in contracts with Middle Eastern nations during the show, according to Pravda, the Russian newspaper.
For other reports from the 2011 IDEX and NAVDEX exhibitions at Abu Dhabi, United Arab Emirates, visit:
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