ABU DHABI — At this year's International Defence Exhibition, United Arab Emirates-based defense companies received the lion's share of the contract awards announced by the country's armed forces.
Of a total of 33 contracts worth $4.99 billion, Emirates-based companies received 21 worth $3.81 billion, French companies received deals worth $1.0325 billion, and US companies came in third with $676 million, including a $618 million order for two Boeing C-17s.
Many of the contracts went to joint-venture partnerships between UAE and foreign firms. This is no coincidence, said IDEX spokesman Maj. Gen. Obeid al-Kitbi.
"We have a clear strategy to establish strong relationships with specified companies in this field and set up joint ventures with companies to achieve our goals," al-Kitbi said. "Based on the vision set out by the Deputy Supreme Commander Sheikh Mohammed Bin Zayed, our industry is getting stronger and we are investing in the future to have a strong industrial base in the UAE."
Abu Dhabi's Nimr Automotive this year received a $330 million order for five variants of their AJBAN four-wheel-drive4x4 vehicles plus upgrades to 500 Nimr vehicles currently in service with UAE armed forces across the country.
Based on South African designs, the Nimr vehicles are an example of a successful joint venture. In 2013, UAE ordered 1,800 vehicles from Nimr, which also notched sales that year to Libya and Lebanon, while deals for and manufacturing were made in Algeria and Jordan. [I DON'T UNDERSTAND THIS SENTENCE. WERE THE TRUCKS SOLD TO LIBYA AND LEBANON MADE IN ALGERIA AND JORDAN? OR SOMETHING ELSE?]
Another example is Tawazun Dynamics, which makes the Al Tariq air-to-ground precision guided weapon. A partnership between the UAE heavy hitter Tawazun and South Africa's Denel , the company this year received a $416 million contract to supply precision-guided ammunition. to the armed forces. As well, UAE firms Milipol International and the International Golden Group both have partnerships with international companies to provide munitions and howitzers.
Meanwhile, AMMROC, a joint venture between Lockheed, Sikorsky and Emirates Defence Industries Co.,mpany has signed deals worth over $620 million this year. [THIS YEAR?]
Giving contracts to companies with a foot in the UAE "provides more opportunities for research-and-development funding that is unburdened by export restrictions and accumulate to become a formula for success," said aerospace and defense expert Aleksander Jovovic, with Washington-, D.C.-based Avascent.
"Companies that are hungry for research-and-development funding and have no export restrictions that are ready to export and open up foreign markets are going to be a good partner, but if any of those three points are more difficult it would turn customers like the UAE away," Jovovic said. "When you look at what those guys have, they don't normally have a large export base while compared to other countries where it would be a worry to give away intellectual property rights."
The magic formula, he said, is to create with someone else in your industry but not create competition.
Jovovic added that while those with insufficient internal R&D funding, few export restrictions and a keen desire to export due typically due to lean domestic markets can prove to be strong partners, the question remains: for the UAE and others is always: Do those partners bring the best technology or can those foundations be made best-in-class with additional investment?
"As usual, the likely answer is sometimes yes but often no. Then the question is whether that 'sovereign' [UAE] control over the technology is important enough to sacrifice some operational to include lack of interoperability with allies or technological capabilities," he said.
Email: amustafa@defensenews.com
Awad Mustafa was a Middle East and Africa correspondent for Defense News.
