Abu Dhabi Ship Building (ADSB), which is part of defence conglomerate Edge Group, expects more orders for military vessels in the coming years as countries increase defence spending amid simmering geopolitical tensions.
On the back of this expansion, the company aims to more than double its revenue within the next two to three years, ADSB chief executive David Massey told The National.
“We currently have orders to build 16 large vessels, four Falaj class missile boats for the UAE Navy, three corvettes for the Angolan Navy, and eight missile boats for the Kuwait Navy as well as one other vessel,” Mr Massey said.
The contract with Kuwait Navy for the supply of vessels is worth Dh7 billion ($1.9 billion), while the Angola deal, first announced in 2023 during International Defence Exhibition (Idex), is valued at more than $1 billion.
The Abu Dhabi company also has orders to build about 100 composite patrol boats from customers, with new announcements expected from other countries in the coming years.
“We will surely be announcing another order from Africa, and we expect further significant orders, both domestic and for export, in the next two to three years,” Mr Massey said, without revealing details on the total size of the orders or the countries that will be involved in the deal.
The company’s total order book currently stands at about Dh13.5 billion, the highest in its history.
Abu Dhabi Ship Building's complex - in pictures
ADSB, listed on Abu Dhabi Securities Exchange, manufactures corvettes, offshore patrol vessels and fast patrol boats. It also offers a full range of services including maintenance, repair and refit, upgrade and conversion of vessels.
Earlier this month, the company celebrated its 30th anniversary, with officials from the UAE and Kuwait navy attending as the company continues to focus on new export orders to boost growth.
“Every military shipbuilder in the world has seen an uptick in its order book over the last few years. That's the result of 30 years of lack of investment in naval assets being reversed. So yes, we've done very well in terms of our order book and we expect that to continue for the next foreseeable future,” Mr Massey said.
Globally, countries are boosting military spending amid a rise in geopolitical tension, with the continuing Russia-Ukraine war now in its fifth year and continuing tension between the US and Iran.
World military expenditure reached $2.7 trillion in 2024, an increase of 9.4 per cent in from 2023 and the steepest year on year rise since at least the end of the cold war, according to Sweden-based think tank Stockholm International Peace Research Institute (Sipri).
Military spending increased in all world regions, with rapid growth in both Europe and the Middle East, Sipri said.
“When ADSB was established, initially, it did repair and maintenance. Then it built some landing craft, which were actually for the Kuwait Navy, one of our first export customers," Mr Massey said.
"Then it built the Baynunah class vessels, which are currently the core of the fighting strength of the UAE Navy and then we were fortunate to win the export order for Angola and the order for four Falaj class missile boats for the UAE Navy and recently the Kuwait order.”
Vessels for UAE Navy
The National was given access to ADSB’s 333,000 square metre shipyard in Musaffah where the company is building naval vessels to deliver to the UAE Navy and international customers.
Among the vessels that are being built at the shipyard include new Falaj 3 class patrol boats. The 62-metre vessel has a 76 millimetre gun as well as a radar mast and missile system.
“The 3D radar can track 200 targets at the same time and the missile systems can engage up to perhaps as far as 200km away,” Mr Massey said.
“The main gun has a rate of fire of over 120 rounds a minute, if necessary in defensive mode and the vessel has a range of defensive surface to air missile systems and electronic welfare systems and ecosystems.”
The company was awarded a Dh3.5 billion contract to build four Falaj 3 class fast patrol vessels for the UAE Navy in 2021.
“This vessel [is on par with] other military vessels across the globe and has the same combat system as any sophisticated Nato [The North Atlantic Treaty Organisation] quality vessel.”
Big revenue target
ADSB, which reported a revenue of Dh1.4 billion last year, aims to more than double its revenue to Dh3 billion in the next two to three years.
“Our revenue growth has been quite substantial. Five years ago, our revenue was Dh250 million ... They will grow over the next two to three years to over Dh3 billion on the back of new export contracts and domestic demand as well.”
Currently, 70 per cent of its annual revenue comes from export orders, with the remaining from the UAE Navy. The company contributes 10 per cent to Edge Group’s total revenue.
It employs 1,500 people and plans to recruit 400 more this year amid more orders.
ADSB is also looking to construct a new shipyard to build larger vessels "up to frigate size" and increase its capacity in the next five to ten years, Mr Massey said.
“The reason for that is that the Mussaffah channel is too narrow and too shallow to accommodate large vessels.”
Supply chain
The company has a strong relationship with several manufacturers for the supply of equipment and has not faced any supply chain issues.
“Our primary suppliers are a number of European OEMs (original equipment manufacturers), specifically Leonardo and MBDA," Mr Massey said.
“Leonardo makes combat systems, weapon systems, MBDA missiles. So we rely on relationships with about a dozen key OEM suppliers, and then we have literally thousands of other suppliers for steel, paint, cabling, etc.”
