UAE’s Edic in talks with Saudi Arabia for defence sales as it boosts exports

Exclusive: Abu Dhabi defence company is bidding for a number of international contracts, an executive says

Abu Dhabi, United Arab Emirates, February 21, 2019.  ADEX Day 5.  Fahad Al Mheiri, EDIC Director of Business Development.
Victor Besa/The National
Section:  NA
Reporter:  Dania Al Saadi
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Emirates Defence Industries Company, which counts Mubadala Investment Company and Tawazun Holding as shareholders, is in talks with state-owned Saudi Arabian Military Industries to sell them products as it continues to seek international deals, an executive said.

Edic, which was formed in 2014, could also explore the possibility of having local content with Saudi Arabia at a later stage, Fahad AlMheiri, director of business development at Edic, told The National. Barij Dynamics, a unit of Edic, wants to sell its precision guidance kit product to Sami.

“This [guidance kit] is a product we have been producing for over three years and supplying to the UAE Air Force. We are keen to start exporting this production,” said Mr AlMheiri. “We hope our brothers in Saudi Arabia will be the first to receive this product. It would be the first export to Saudi Arabia by Edic/Barij Dynamics.”

The talks come after Sami and Abu Dhabi’s investment company Mubadala agreed on an aero and defence partnership last month, the first tie-up of its kind between the two countries in this sector.

Sami, which is owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is tasked with localising at least 50 per cent of the kingdom’s military spending by 2030 from about 2 per cent currently.

Mubadala's defence and aerospace portfolio includes plane parts maker Strata Manufacturing, Turbine Services & Solutions and Edic.

“A joint facility between the two countries could be discussed if it suits the need,” said Mr AlMheiri. “We have capabilities in the country today and what would make sense to me is for there not to be duplication [in Saudi Arabia].”

The two Edic companies that export products are defence vehicle manufacturer Nimr Automotive, its biggest unit in terms of a product portfolio for exports, and small arms manufacturer Edic Caracal International.

Edic exports to more than 15 countries.

Nimr, which has a joint venture facility in Algeria, is keen to expand its production in the North African country. “There is a possibility to export to other countries in North Africa in the future, but for now the focus is on Algeria’s requirements," he said.

Edic is also in discussions to sell more Nimr products globally, Mr AlMheiri said, without disclosing further details.

Edic Caracal, which also has a facility in Algeria, has opened an office in the United States to tap that market. “It is interesting for us to have a market over there and to use UAE IP-based product to be sold in the US,” he said.

Edic, which bought French company Manurhin, is not planning any acquisitions for the time being as it focuses on expanding its portfolio. Among Edic’s assets is German rifle maker Merkel.

“We were not planning to acquire this company [Manurhin],” said Mr AlMheiri. “It came organically through a need as we were looking to upgrade our small arms production capability.”

Despite its export ambitions, Edic Caracal expects to remain a major supplier to the UAE Armed Forces, which accounts for at least 95 per cent of its business.

“We understand the limitations of the [export] market. We understand the political limitations we have to make our way around them,” said Mr AlMheiri.

“Export is the cherry on top but the real focus is to support the local armed forces.”