Mubadala, EAIG and Tawazun form Emirates Defence Industries Company

Mubadala Development, Tawazun Holding and Emirates Advanced Investment Group (EAIG) have finalised the formation of Emirates Defence Industries Company (Edic) after signing an initial agreement in April to combine their defence services businesses.

Edic is set to help drive the UAE’s defence industry by providing manufacturing, training, mapping, logistics, technology development and communications as well as maintenance, repair and operations services for air, land and sea platforms.

“Edic will bring together the combined capabilities of the UAE’s defence industries into a single integrated platform to enhance value for our clients, shareholders, partners and other stakeholders,” said Homaid Al Shemmari, chairman of Edic. “We are positioning the sector for more growth.”

The company will provide national defence services and manufacturing, and comprises 11 companies from the subsidiaries of Mubadala and Tawazun and EAIG including Al Taif Technical Services, Tawazun Dynamics and Global Aerospace Logistics.

Several more industrial services subsidiaries of Mubadala and Tawazun are being considered for integration during the second phase, planned for early next year.

“The outcome from this process will be an integrated defence platform benefiting from improved alignment, performance and increased capacity, which is better positioned to serve the UAE Armed Forces and compete for business in the region,” said Mr Al Shemmari.

Each of these companies will look to benefit over the next few years as the UAE steps up its military spending. The overall budget is set to grow to Dh27.4 billion in 2018 from Dh25.1bn this year. Of this, spending on services and maintenance – which the new venture will be providing – is set to expand to Dh6.3bn in 2018 from Dh5.1bn this year.

Growth in the defence budgets of GCC countries has been particularly high over recent years, and now accounts for about 83 per cent of overall military spending in the Middle East, according to IHS Jane’s annual defence budgets review.

Defence spending across the Mena region last year grew 12.1 per cent to $120.6bn, making it the fastest-growing region in percentage terms in the world.

The report found that Saudi Arabia, Oman, Iraq and Bahrain all featured in the top five growth markets in percentage terms for 2013. Defence spending in the Mena region accounts for 7.8 per cent of worldwide expenditure, up from 5.2 per cent in 2008, according to IHS Jane’s.

Edic’s board is chaired by Mr Al Shemmari while Saif Al Hajeri is a board memer. Luc Vigneron has been appointed the chief executive.

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