Gulf in line to become defence exporter

The GCC could become a major player in the global defence manufacturing field in the next decade, the executive chairman of Paramount Group told Arabian Business.

The Gulf, which is ramping up its defence spending amid increasing tensions in the region, is also set to become the world’s largest buyer of defence equipment, said Ivor Ichikowitz, who heads up South Africa-based defence and aerospace firm Paramount.

“In ten years time I think this region will not only be the biggest consumer of defence equipment but I also think it will be one of the most important manufacturers,” he said.

“I think it will be an important manufacturer not just of other people’s technology but also as new generations of engineers are being trained and technology is transferred I think it will become a huge manufacturer of its own technology and a number of major international players will start using this as their global regional manufacturing base,” he added.

Gulf states are investing billions of dollars in aviation, manufacturing and tourism in a bid to diversify their economies away from oil.

Abu Dhabi-based Mubadala Aerospace wants to become one of the world’s top suppliers to the aerospace industry.

Mubadala subsidiary Strata supplies wing parts A330-340 to Airbus from a factory in Al Ain while Mubadala Aerospace signed a US$1bn contact last year to build carbon-composite structures for Boeing, marking the first direct outsourcing deal for composites production in the Arab world.

On the defence side, the UAE already manufactures a vital part on the Eurofighter Typhoon, the fighter jet that the country is considering purchasing. Local defence firm Tawazun produces vehicles and rifles and is currently marketing them to overseas customers. Another Mubadala subsidiary, AMMROC, offers maintenance, repair and overhaul services to a variety of military and civil aircraft.

Industries that require vast amounts of funding, such as radar and advanced communications capability, will be an area of big focus, said Ichikowitz.

“I think that there will be a significant emergence of land forces equipment capability – the kind of equipment that that Paramount produces – and this region will become a very important supplier for,” he said.

“I also see a big opportunity to develop high-tech industries that are very capital intensive and capabilities that need meaningful investment. UAV capabilities, advanced communications capability, radar capabilities, sensing capability – the kind of stuff that the US, Europe and South Africa doesn’t have the capital to invest in,” he added.