Abu Dhabi’s defence industry has grown at an impressive pace in recent years, bolstered in large part by the expansion of its local manufacturing capabilities. Several leading global players have partnered with the emirate to establish facilities locally, a demonstration of the success of the country’s offset programme, and ensuring a steady, long-term supply of high-demand defence products. These efforts are part of a wider GCC strategy to maintain regional security at a time of increasing tensions across the MENA region.
According to a June 2014 report in Defense News, the UAE is home to the most defence manufacturing companies in the region, in the areas of shipbuilding, unmanned systems, aviation and land systems, with more than 80 companies based in Abu Dhabi, Dubai and Ras Al Khaimah – of which 15 are government-owned. Growth has been led in large part by the Tawazun Economic Council (TEC), established in 1992 as the UAE Offset Programme Bureau, and responsible for implementing the offset programme, under which foreign defence players doing business in the emirate are required to subcontract some of their operations to domestic companies.
Tawazun Holding, a strategic investment company with a mandate to develop the emirate’s industrial manufacturing sector, including aerospace and defence, munitions and technology, has operated under the TEC’s umbrella since its establishment in 2007, while the TEC was rebranded under its current name in May 2012. More than 40 joint venture (JV) companies have been launched under the stewardship of the TEC to date, including four listed companies: Oasis, Tabreed, Abu Dhabi Ship Building and Asmak.
In December 2014 Mubadala Development Company, Tawazun Holding and EAIG launched the Emirates Defence Industries Company (EDIC), an integrated national defence services and manufacturing platform. EDIC offers the regional defence market a one-stop shop for a wide range of products and services. As of January 2015, EDIC featured 11 companies: three from Mubadala, three from Tawazun and five from EAIG (see analysis). Several more are being considered for EDIC integration in a second phase.
Within the defence manufacturing segment, Nimr Automotive is one of the more high-profile EDIC assets, as a major domestic private player that produces multi-purpose armoured vehicles, including 4x4 and 6x6 armoured vehicles – the first military hardware to be built entirely in the UAE. Strong foreign and domestic demand has seen the company pen deals with the UAE Armed Forces and others in Lebanon, Libya and Jordan.
Other notable manufacturers include Burkan Munitions Systems, a joint venture between Tawazun and Al Jaber Trading Establishment Group, which manufactures and tests a variety of ammunition and saw the establishment of the UAE’s first munitions factory, and Caracal Light Ammunitions, a fully owned Tawazun subsidiary that produces NATO-compatible bullets. The latter signed a five-year supply agreement with US firm Century Arms, North America’s largest surplus firearms importer, in February 2013. Tawazun’s second Caracal subsidiary, Caracal International, merged in November 2013 with Tawazun Advanced Defence Systems, which produces long-range precision rifles according to standards developed by Russia’s Tsar Cannon Group.
Tawazun Precision Industries manufactures industrial defence components and parts for Airbus A320 and A330 passenger jets, while the Abu Dhabi Autonomous Systems Investments Company produces unmanned air, land and sea vehicles and Tawazun Dynamics manufactures precision-guided air munitions systems.
The emirate’s strong track record in domestic defence manufacturing is expected to continue into 2015. Emirates Defence Technology plans to unveil its latest armoured vehicle prototype at the biennial International Defence Exhibit in February 2015, while Nimr Automotive announced in June 2014 that it had broken ground on a 37,000-sq-metre integrated facility, set to open in October 2015, which is expected to greatly improve manufacturing capacity and capabilities.
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