Al Ain-based aircraft parts maker Strata sets $2bn sales target as it reveals expansion plans
Strata, the aircraft parts maker owned by Mubadala, is planning to generate sales of up to US$2 billion by 2023 through expanding its operations in the UAE and setting up plants in the United States and Europe, the company’s chief executive officer said.
The Al Ain-based company, which began delivery last month of its first parts for the Boeing Dreamliner, has commitments from Boeing and Airbus up to 2030 worth about $7.5bn, Badr Al Olama told reporters on the sidelines of Meed’s Abu Dhabi Conference.
“By the middle of 2022-23, we want to be top three worldwide [company], with respect to making aircraft parts,” said Mr Al Olama. “To become a top three, [it is] somewhere between $1 billion-$2bn of annual sales.”
The firm, which was set up to create an aerospace industry in the emirate of Abu Dhabi, is seeking to break even by 2017 and to generate Dh1 billion in revenue by 2020. This year revenue is expected to cross Dh300 million, he added.
Abu Dhabi, which generates most of its income from oil and gas sales, is setting up an industrial base in the emirate to diversify its economy away from energy in line with vision 2030 and to create jobs for Emiratis.
Strata said in November vertical fin ribs for Boeing were headed for the US company’s facilities in Everett, Washington. The part supports the aircraft’s vertical fin and helps to ensure that weight is evenly distributed.
In April 2012, Boeing and Mubadala reached an agreement to assign Strata to supply the vertical fin for the 787 Dreamliner.
Currently Strata, which has about 650 employees working in plant one, plans to set up a second plant to produce two to three products starting in 2017. The new plant, which will generate another 600 jobs, will be three times bigger and have more automation compared to manual work in the first plant, Mr Al Olama said.
Strata is looking for existing and new projects to produce aircraft parts in the United States and Europe to be close to Boeing and Airbus.
“We are building an aerospace industry for Abu Dhabi, not necessarily in Abu Dhabi,” said Mr Al Olama.
“We have an appetite to do something in the US and something in Europe. We want to integrate ourselves to that secure supply chain. It is more to be catered towards when they [Boeing and Airbus] develop new aircraft. We should be in the right position for that by either setting up a facility or looking for somebody who is willing to partner with us in the US.”
Strata is focusing only on producing the wing part and the tail, Mr Al Olama said.
“We try to keep it consistent because we want to be a centre of excellence for these parts,” he said.
Industrial companies in Abu Dhabi are being encouraged to expand their operations through the Industrial Development Bureau (IDB), which was created in 2013 by Abu Dhabi’s Department for Economic Development (DED) to galvanise the industrial sector in Abu Dhabi.
Despite the drop in oil prices, the IDB is forging ahead with plants to invigorate the industrial sector, which is growing steadily.
“In the current environment of lower oil prices, low growth patterns in emerging markets and continued weakness in developed markets, especially the news out of Japan, I want to share a more positive dimension,” said Ayman Al Makkawy, director general of IDB.
“We would be encouraged that the emirate of Abu Dhabi grew its non-oil industrial manufacturing sector by 9 per cent last year, more than double the average GDP growth in Abu Dhabi. Of course when global economy recovers, we are confident we will be positioned to capture new growth as well.”
The IDB has identified 13 industrial sectors to help foster growth of the non-oil industry in the emirate and it is implementing its strategy by setting up industrial parks for industries such as petrochemicals, metal, food among others.
Follow The National’s Business section on Twitter
Published: December 8, 2014 04:00 AM