French military shipbuilder Naval Group, formerly known as DCNS, is bullish about sales in the Middle East and North Africa as it signs a joint venture agreement with Saudi Arabia, finalises a UAE deal and delivers vessels to Egypt.
Saudi Arabian Military Industries and Naval Group on Sunday signed an agreement to build warships for the first time as the Saudi Arabia seeks to build its homegrown defence industry, Andreas Schwer, chief executive of Sami, said at a press conference. The companies plan to sign the final contract for the deal later this year, he said without giving the size of investment.
State-owned Sami will hold a 51 per cent stake in the JV with the Naval Group to manufacture corvettes, frigates and submarines in Saudi Arabia, one of the biggest military spenders in the wider Mena region, where Naval Group had supplied seven frigates between 1985 and 1994.
Naval Group is also finalising an agreement for two Gowind corvettes in the UAE, which also includes an option for two more vessels, its chief executive Herve Guillou earlier told The National, in Abu Dhabi, where the company is participating in the International Defence Exhibition and Conference (Idex).
The deal in partnership with Abu Dhabi Ship Building was first announced by French President Emmanuel Macron at the end of a two-day visit to the country in 2017.
“We are now finalising the discussions to conclude the agreement – of course always with a local partnership,” said Mr Guillou. “We are contemplating a progressive transfer of technology to the shipyard and to enable them … to take the lead in building and integration in the mid-term future.”
Alongside local production, Sami expects its French JV partner transfer technology to enable Saudi Arabia to build in the long-term, warships by themselves in the framework of this JV, Mr Schwer noted.
Naval Group has been active globally and this month signed a long-delayed A$50 billion (Dh131.17bn) deal to supply 12 Scorpène-class submarines to Australia, beating Japan's Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Thyssenkrupp of Germany. It is also supplying its ships to countries ranging from Brazil to Malaysia.
After delivering two Gowind corvettes, Naval Group is building two more vessels in Egypt. It is also in discussion for a deal for two more, the executive said. The corvettes ordered in 2014 are being built in Alexandria Shipyard in Egypt, which is part of the technology transfer deal signed with Cairo.
“We have closed the technical specifications [of the agreement] and we now have a clear direction from the highest political decision-makers [for the two more corvette options],” Mr Guillou said.
The pivot to the Middle East is part of the company's plans to expand its global business, which contributed to 35 per cent of annual sales of €3.7bn (Dh15.35bn) in 2017.
The company aims to have an even split between domestic and international sales in the next three to five years as French naval needs are not big enough for the volumes produced by the group.
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Idex 2019: Defence expo opens in Abu Dhabi - in pictures:
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"France alone cannot afford the continuity of development programmes to keep the competency in the engineering teams or in the production teams," said Mr Guillou.
"It is also important in terms of volumes to keep very competitive offers and we see in Europe that the countries that do not export have always a higher price than what we have thanks to the volumes we generate export-wise."
Mr Guillou expects Asia to account for 20 to 25 per cent of total international sales in 10 years as an increasing number of Asian nations aspire to expand their military capabilities.
"Today it is clear that the growth potential of Asia is extremely large because you have a lot of emerging countries that will create new markets," he said. "The biggest one is India of course, which has huge potential.
"But you have also Indonesia, Vietnam, Philippines. and these countries are really just starting."
Other ongoing deals the French company is pursuing include a potential agreement for three Scorpène-class submarines in Poland and four expeditionary submarines in the Netherlands.
Naval Group is also in the process of creating a joint venture with Fincantieri of Italy. The deal that has been in the works since 2016 aims to create a global competitor in the face of rising competition from countries such as China and Russia. The tie-up will help the two companies co-operate on research and development, secure procurement, deliver joint programmes and bid internationally to increase their global market share.
“There is growth and opportunity in Europe," Mr Guillou said. "Even if there is very good growth in Europe, none of the European countries alone are able to ensure the continuity of the industrial technology base and therefore we are looking very proactively to capturing part of the growth of the market outside Europe. This is essential for us.”
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
The five pillars of Islam
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Killing of Qassem Suleimani
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
The National's picks
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