Idex 2017: Missile maker MBDA targets €1bn-plus sales in Middle East amid upgrades

Middle Eastern countries are getting rid of old systems and buying new ones because they are becoming obsolete, said Florent Duleux, the regional vice president of MBDA. Reem Mohammed / The National

The European missile maker MBDA expects to maintain at least €1 billion (Dh3.88bn) in annual sales in the Middle East, its biggest export market, as countries upgrade their missile systems, a company official said.

MBDA had over €3bn of orders from the Middle East in 2015, exceeding annual averages, said Florent Duleux, vice president Middle East. The 2016 figures have yet to be disclosed. In 2015, MBDA had a total turnover of €2.9bn and is aiming to reach €4bn in annual sales by 2020.

“They [Middle Eastern countries] are getting rid of old systems and buying new ones because they are becoming obsolete with the evolution of technology people have to reinvest in defence,” said Mr Duleux in an interview at the International Defence Exhibition and Conference in Abu Dhabi.

MBDA, which competes with the likes of Raytheon from the US, was formed in 2001 through a partnership between UK’s BAE Systems with a 37.5 per cent stake, Airbus with a 37.5 per cent stake and Italy’s Finmeccanica (since renamed Leonardo) with the remainder.​

Half of the company’s exports go to the Middle East and the other half is sold mainly in Asia.

Domestic sales, which are half of total sales, are concentrated in Germany, France, the UK, Italy and Spain.

The company did see an effect from lower oil prices on defence spending in the region, but is adjusting its prices to meet client needs.

“Oil prices has definitely an affect,” said Mr Duleux. “We address the need for high ratio of effectiveness versus afford­ability.”

The company is also increasingly cooperating with local companies to boost its sales.

It struck a deal to transfer technology to UAE company Siham Al Khaleej Technology to produce a weapon system called Siham3.

The company is also talking to Abu Dhabi-owned Emirates Defence Industries Company (Edic) and the emirate’s Tawazun Holding to have more partnerships with UAE companies.

“We are in constant discussion with Edic and Tawazun and hopefully we will able to announce sooner than later a symbolic, significant transfer of technology and systems to be built here in the UAE,” said Mr Duleux.

“Hopefully, next year we can announce something.”

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