IDEX 2015 Abu Dhabi (UAE)

[Al Bhatti]

February 21, 2015

UAE partners with European firm to launch new missile systems

UAE defence companies and MBDA, a European missile maker, are jointly launching three new missile defence systems for the Middle East market at the International Defence Exhibition in Abu Dhabi.

The three joint initiatives together cost about €100 million (Dh418m) to develop, and comprise a ship-based missile system, a mobile ground-to-air defence system and a coastal defence battery.

The market for defence products in the region is expected to remain fairly robust, despite the pressure on budgets because of weaker oil prices, said Florent Duleux, the Middle East vice president for MBDA.

“Budgets in the region may be revised in the coming year, however the instability in the region and emerging threats mean that countries will have to stay focused on security,” Mr Duleux said. “I think the threats remain too strong at the moment for any major cutting of defence budgets.”

MBDA is a joint venture between BAE Systems in the UK, Airbus in France (each with 37.5 per cent) and Italy’s Finmeccanica (which owns the remaining 25 per cent of the venture).

The company vies with America’s Raytheon for the top spot in worldwide missile exports, excluding closed markets in the US and Russia.

The joint venture had total sales last year of €4 billion, of which €2.5bn were exported outside Europe, and half of its exports were to countries in the Middle East. Mr Duleux said MBDA expects exports to increase this year and next, driven by the Middle East.

Two of MBDA’s new missile programmes have been jointly developed at Abu Dhabi’s Al Fattan shipyard with the oilfield services firm Siham Al Khaleej, and the system will be marketed soon to naval defence buyers in the region, Mr Duleux said.

One is called the Sea Spear and is based on the Brimstone missile system, which is designed to have a firing capability against fast, smaller incoming seaborne attack craft, which are familiar in Arabian Gulf waters.

The other joint programme at Al Fattan is a coastal battery anti-ship system based on MBDA’s Marte missile. This is already in the inventory of the UAE armed forces and will be marketed jointly in the region shortly.

Mr Duleux said MBDA is also launching an air defence system with Nimr Automotive, the armoured vehicle division of Tawazun Group, which merged into the Emirates Defence Industries Company in December.

This is a system based on the Mistral 3 missile and is the “ultimate layer of defence”, Mr Duleux said, which means it is for short-range defence against aircraft that have eluded the longer range defence systems.

Buyers in at least three GCC countries already have expressed interest in the new integrated products, Mr Duleux said.

UAE partners with European firm to launch new missile systems | The National

 

[Al Bhatti]

February 21, 2015

Idex opens with bigger show of hardware and exhibitors

Mena region countries will be shopping this week for military hardware at the Middle East’s biggest defence exhibition, which takes place against a backdrop of falling oil revenues and the threats posed by ISIL militants and the Houthi movement in Yemen.

Everything from drones and fighter jets to guided missile systems will be on display at the International Defence Exhibition and Conference (Idex) in the capital from today, to counter such threats.

A total of 1,154 international and local exhibitors are at Idex this year, up from 1,112 in 2013, organisers said.

Forty-two countries have pavilions.

At the previous biennial event, about 80,000 visitors flocked to the arms expo.

Ivor Ichikowitz, the founder and executive chairman of Paramount Group, which is participating at Idex, said: “Africa and the Middle East are facing very similar threats from the likes of ISIL and Boko Haram to Al Shabaab. In the face of this growing global terrorism, defence budgets are being carefully scrutinised.”

Arabian Gulf countries, such as Saudi Arabia and UAE, that have amassed enough financial reserves will be able to ride out the tide of ebbing oil prices, according to analysts.

“With these reserves they will try to go through the storm,” said Pieter Wezeman, the senior researcher at the Stockholm International Peace Research Institute (Sipri). “They don’t have to start cutting defence budgets immediately. They can wait and see what happens in the oil price in the next few years.”

It comes as no surprise then that defence spending in the Mena region is expected to touch US$150 billion this year from $148bn in 2014 and $136bn in 2013, according to defence consultancy IHS Jane’s. Such spending has grown by an average of 10 per cent a year between 2012 and last year, according to IHS Jane’s.

According to Mr Ichikowitz, the defence budgets of GCC countries now accounts for about 83 per cent of overall military spending in the Middle East.

Saudi Arabia, which was among the world’s top four military spenders in 2013 with $67bn, according to Sipri, will remain so despite the oil price slump.

Saudi military spending in 2013 was equal to 9.3 per cent of its GDP, while the UAE ranked 15th globally, with $19bn worth of military spending.

“The Saudi government seems content with riding out a period of lower energy revenues and it certainly has the reserves to be able to do that,” said Craig Caffrey, a senior analyst for defence budgets at IHS Jane’s.

“Saudi Arabia has only reduced defence and security spending once in the past 15 years, so recent history certainly suggests that the budget is resilient to short term oil price shocks.”

The US is seeking to allocate $8.8bn of its 2016 budget to fight ISIL and help Iraq, while Iraq is expected to spend 20 per cent of its 2015 budget on defence.

“In Iraq, you see an increased requirement for both conventional and counter-insurgency systems and equipment, to include tactical gear and small arms, armoured and combat vehicles, and various ground support platforms – such as reconnaissance and attack aircraft,” said Aleksandar Jovovic, principal at the aerospace and defence consultancy Avascent.

“Elsewhere, for instance in the Emirati case, the primary tools are higher-end systems, so the UAE is likely to spend more on servicing and spares for their F-16s, as well as on precision-guided ammunition and other ordnance.”

Iraq, which had the biggest regional increase in military spending in 2013, according to Sipri, will have a hard time managing its resources to fight ISIL as it lacks enough financial cushion, unlike Saudi Arabia and the UAE, analysts said.

“The reduced income will have no impact on the mission to fight ISIL,” said Mustafa Alani, the senior adviser for the Geneva-based Gulf Research Center. “Money will be spent in this field without hesitation because it is a real threat and a strategic threat.”

The threat in the region from Iran has receded with the diplomatic push to strike a deal on a nuclear disarmament programme by June 30.

Meanwhile, William Cohen, the chairman and chief executive of Cohen Group and a former US defence secretary, said that Arabian Gulf states are now playing a more decisive and role in the region’s security.

The involvement of Saudi Arabia and the UAE joining the US and its allies in bombing ISIL positions in Syria is a case in point. “I think change comes about through adversary,” Mr Cohen said.

“I think this will push Gulf states to find ways to share more technology, techniques, and tactics and become a more effective force operating on a consensual basis.”

Idex opens with bigger show of hardware and exhibitors | The National

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February 16, 2015

The UAE has integrated its defence industry assets under one entity called Emirates Defence Industries Company to create 'synergies and cost effectiveness'

Defence industry landscape shifting amid uncertain oil outlook

Even as a slump in oil revenue threatens to rein in defence spending in the Middle East, the UAE’s leading firms in the sector are collaborating to market their products, systems and technology to military customers across the region.

The defence consultancy IHS Jane said in December that the high dependency of the Gulf countries on energy revenue would impact defence spending in those countries, especially with oil prices ebbing below US$65 per barrel.

Saudi Arabia ranked seventh in the world in defence spending last year with $48.45 billion while the UAE ranked sixteenth with $15bn spent, according to IHS Jane’s annual defence budgets review.

The UAE has integrated its defence industry assets under one entity called Emirates Defence Industries Company (Edic) to create “synergies and cost effectiveness”. Edic is made up of 11 companies worth Dh3.2bn and accounting for 4,800 workers, that were formerly the subsidiaries of Mubadala, Tawazun and Emirates Advanced Investment Group (EAIG), including Al Taif Technical Services, Tawazun Dynamics and Global Aerospace Logistics.

After the completion of the first stage of the merger last month, the second is under way, with a further four companies to be integrated.

“The second phase will involve four companies. We are working on the final details. There may be another phase at a later stage, a third one,” said Homaid Al Shemmari, the Edic chairman, yesterday. He did not disclose the firms’ names but said they included “companies in services, aviation, and some defence capabilities companies”.

“The management team will be very busy for the slim-lining of the business for the next year and a half,” Mr Al Shemmari said, adding that jobs losses could occur.

“Will there be job losses? Maybe, I am not saying we are actually doing it because of cost-cutting,” he said. “I’m hoping that the business will be sizeably bigger. I am hoping that we can rotate and assign people – without having to terminate a lot of people, especially UAE nationals.”

Edic, together with Mubadala and Tawazun, will exhibit at the International Defence Exhibition and Conference (Idex) in the capital next week. The combined marketing effort includes 29 companies promoting military hardware, vehicles and systems.

“By combining forces in the Edic platform, Mubadala and Tawazun are focused on enhancing performance and efficiency, increasing capacity and benefiting from economies of scale to better serve the armed forces of the UAE and the wider region,” said Mr Al Shemmari.

A total of 1,154 international and local exhibitors will attend Idex this year, up from 1,112 in 2013, organisers said. Forty-two countries will have pavilions. About 80,000 visitors attended Idex in 2013.

The US consultancy Avascent forecasts that defence spending in the Middle East’s will grow at roughly 5 per cent annually through 2020.

“Bearing in mind the increased threat of ISIL, coupled with a continued concern about Iranian intentions, defence spending will be unaffected by oil price fluctuations in the short to medium term,” said Aleksandar Jovovic, the principal at the aerospace and defence consultancy. “The leading Arab countries in the Gulf, notably KSA and UAE, have ample financial reserves, can afford to borrow if needed, and are unconcerned about a few years of modest budget deficits.”

On Saturday, Saudi Arabia’s King Salman appointed Mohamed Al Mady, who had been running Sabic, to head up the country’s General Organization for Military Industries, which works to develop military factories in the kingdom.

Defence industry landscape shifting amid uncertain oil outlook | The National

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February 15, 2015

The ADCOM SYSTEMS United 40 Drone on display during the 2013 version of the International Defence Exhibition Conference.

Drones to take centre stage at Idex

Drone makers are set to dominate next week’s global defence gathering in the capital as billions of dollars pour into designs for unmanned vehicles on land, air and sea.

The organisers of the International Defence Exhibition and Conference (Idex) have launched a dedicated exhibition for unmanned systems from around the world, in which 33 local and international companies will be participating.

“This will be the first year for the Unmanned Systems Exhibition [Umex]. In 2016 we will have a unique Umex conference, but this year we are part of Idex,” said Saeed Al Makhmasi, the Umex spokesman.

Unmanned systems operated automatically or through remote control are being put to an increasingly broad range of civil and military applications, from surveillance and attack to search and rescue or even delivering post.

“In the region, I expect to see growth in unmanned assets at the tactical and unit levels, using small and mini unmanned systems, as well as on the other side of the spectrum in the large unmanned assets with intelligence, surveillance, and reconnaissance missions,” said Aleksandar Jovovic, the principal at the aerospace and defence consultancy Avascent.

According to a study from Teal Group, spending on unmanned aerial vehicles will more than double over the next decade to more than US$11.6 billion. But it will not be just aerial drones on display in Abu Dhabi next week.

One Sharjah-based boat builder will be hoping to find buyers for its unmanned vessel, which it says can be put to a number of uses from chasing pirates to surveying the seabed.

“It can be used for several tasks from surveys to guarding assets. It also has antipiracy uses by extending the line of sight, or could be equipped with non-lethal deterrents,” said Basel Shuhaiber, a managing partner at Al Marakeb. The company will be exhibiting its 7-metre-long unmanned vessels at the show and has already conducted sea trials with potential customers.

Idex, which runs from February 22 to 26, is expected to host a total of 1,154 international and local exhibitors this year, up from 1,112 in 2013. Forty-two countries will have pavilions. About 80,000 visitors attended Idex in 2013.

Drones to take centre stage at Idex | The National





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Opening ceremony of IDEX 2015