Strata Manufacturing will make a major investment this year in an Al Ain plant for larger and more complex aircraft parts, creating up to 500 jobs, a move that will delay profitability, which it had been expected to reach this year, the company’s deputy chief executive said.
“We’ve established a vision and we are delivering it,” said Ismail Ali Abdullah, who added that with the contract wins from Boeing and Airbus at last summer’s big international air show at Farnborough, in the United Kingdom, Strata’s order book is now is at a record US$7.5 billion, enough work to take both the new and planned plants through to 2035 at least.
Indeed, with other orders Strata has won from Italy’s Leonardo (formerly Finmeccanica), Facc Austria, Sabca Belgium and Sweden’s Saab, the company requires outside help to keep up while it undergoes expansion.
“Today, my hands are 100 per cent full and we need to outsource some of the work packages,” said Mr Abdullah, on the sidelines of the Global Manfacturing and Industrialisation Summit (GMIS) in Abu Dhabi, adding that two of Strata’s 10 work packages are currently outsourced.
As well as the planned new 60,000 square metres plant in Al Ain, where Strata has an existing 30,000 square metres facility, the company is also scouting locations to expand in Morocco or another North African location, as well as in North America.
The Al Ain expansion marks a move to a new level of skills and a much higher production level, Scott Fancher, Boeing’s head of development worldwide told The National.
“Not too many years ago [Boeing’s contract with Strata] started as building a handful of parts, fairly simple parts,” said Mr Fancher.
The new plant, which is expected to break ground next year and be completed in 2020, will run two new production lines, one of which will be to build 50 per cent of Boeing’s requirements for vertical tail fins for its mid-size, wide-body 787 Dreamliner.
“What Strata is doing for us now is a foothold, they’re demonstrating their ability to be a great supplier,” said Mr Fancher. “The next step is to go up the food chain to more complex structures, which is what this vertical fin represents ... If they are successful in bringing that online – not if, but when – then they’ll be a first-tier aerospace manufacturer.”
The Strata plan to achieve tier-one manufacturer status is a central part of the UAE’s aerospace project, which leverages the “hub and spoke” business model of the country’s two main airlines, Emirates and Etihad Airways, to build complementary manufacturing and service facilities, mainly focused on the Nibras Aerospace Park in Al Ain, where the aim is to create 10,000 jobs over the next decade.
Mubadala Development, Abu Dhabi’s strategic investment company, which owns Strata, is expected to report today that aerospace showed steady financial progress last year. Mr Abdullah said revenue targets have been “stretched” now that new business has been won, although achieving financial break-even will now not be achieved until after 2018 instead of this year, as previously forecast.
Strata started manufacturing 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 the expanded facility also represents a step up for Airbus, with a contract to make horizontal tail planes for the A320.
The UAE dominates airline traffic growth in the region and the aerospace strategy is built on a sound assessment of the market, Mr Fancher said.
“Eight per cent of the world’s population is within eight hours’ flying time [of the UAE] and the geography is not going to change,” he said. “At the same time, airline traffic growth is running at 2 per cent above world GDP growth year-on-year ... The market is here, it’s really just a question of whether Mubadala/Strata continue to perform and all indications are that they will.”
Boeing and Strata also announced this week at GMIS joint venture R&D projects that will entail training Strata workers in facilities in the US and Russia, and today are expected to announce their first joint engineering projects for the UAE.
amcauley@thenational.ae
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