Mubadala Aerospace may invest in US, Morocco in one to five years, executive says

Mubadala wants its unit Strata to be a global player in aircraft manufacturing

Badr Al Olama is chairman of the Organising Committee for the Global Manufacturing & Industrialisation Summit and a senior executive at Mubadala Investment Company. Mona Al-Marzooqi / The National

Mubadala Investment Company, Abu Dhabi’s investment firm with around US$130 billion in assets, may invest in aerospace manufacturing in the US and North Africa to be close to its customers, Boeing and Airbus, who use aircraft parts made by its subsidiary Strata, a company official said on Sunday.

Potential investments in the next one to five years in the US and North Africa - particularly Morocco, given its proximity to Europe - come as Mubadala's aerospace unit seeks to turn Al Ain-based composite aerostructures manufacturing firm Strata into a global company, said Badr Al Olama, director of the Aerospace Business Unit at Mubadala.

“Do you think that Strata can be globally relevant and globally competitive by having one facility in Al Ain? Absolutely not,” said Mr Al Olama.

“As we grow from making smaller parts to medium sized parts, from [the] secondary level…to primary parts… it makes absolute sense to invest in the US because you would like to save on the logistics headache, [and] be closer to your suppliers.”

Mubadala is investing globally to help transfer technology to Abu Dhabi, where it is among the companies spearheading efforts to boost the contribution of the manufacturing sector in the emirate’s GDP.

Mubadala’s remit falls in line with the UAE’s overall efforts to diversify revenues away from oil, develop downstream industries and create high-skilled jobs for the local population.

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Mr Al Olama said Strata needs to have a global reach, but declined to say whether investments will come first to the US or North Africa. Investments in the US would focus on airframe of the aircraft, he said.

“You have to have a global footprint, you have to be able to distribute [with] access to technology that is low-cost, with co-proximity to your customers base and obviously Boeing being located in [the] US it is a no-brainer for us [to invest],” he said.

“[The timeline] is driven by the opportunities; whenever we zero in on the products that make sense to manufacture and supports Boeing…that’s the time that could be one or five [years]. Between both destinations, to be closer to the customer is going to be more important for Strata going forward.”

Strata started manufacturing operations in 2010 with product lines that have included wing and fin parts for the Airbus A330, A340 and A380 aircraft, as well as Boeing’s 777 and 787. The second production line in Strata's expanded facility in Al Ain also represents a step up for Airbus, with a contract to make horizontal tail planes for the A320.

Strata said in November it had completed delivery of its first set of A350-900 inboard flaps to Airbus and plans to ramp up production of these parts this year and in 2019.

Strata delivered 521 shipsets, consisting of more than 9,103 components in 2016, up by 20 per cent from 2015, its chief executive Ismail Abdulla said in March.

Strata’s order book is now at a record US$7.5 billion, enough work to take both the new and planned plants at Al Ain's facility through to 2035 at least, the chief executive said at the time.