By Tamara Walid
Mubadala Aerospace eyes production at new Abu Dhabi facility, sees Sikorsky deal.
Abu Dhabi's Mubadala Aerospace will start making Airbus parts at its new facility by fourth-quarter, sees a deal with Sikorsky imminent, and expects to conclude up to five financing deals this year.
The business, part of government-owned investment company Mubadala, will receive handover of the first phase of Strata, a composites aerostructures manufacturing facility, in mid-August, Executive Director Homaid al-Shemmari told Reuters on Sunday.
"We are on target by the beginning of the fourth-quarter to produce the first article to be delivered to Airbus," he said.
The parts will be flap-track fairings for A330s and A340s.
Mubadala had set aside an investment of $500 million until 2015 for the three phases of Strata, which will start by manufacturing components such as spoilers and flap-track fairings and eventually develop primary aircraft structures.
Abu Dhabi aspires to build itself into a regional aerospace hub, while neighbouring Dubai, the Middle East trade and tourism capital, aims to become an aviation and logistics centre, building what is planned to be the world's largest airport.
So far, Mubadala has signed work packages in the range of $2 billion and is in talks for additional deals, aiming to reach a target of $5 billion by 2020, Shemmari said.
Strata's first phase covers contracts with Airbus, Alenia Aeronautica, part of Finmeccanica, and FACC, he said.
In November, Mubadala and Boeing inked a deal to co-operate in activities including composite manufacturing, engineering, R&D, training and maintenance.
Phase two of Strata will include work for Boeing, after agreements on work packages materialise, said Shemmari, but did not give a timeframe for the start of phase two.
A joint venture deal between Mubadala and Sikorsky, a unit of United Technologies Corp, is close to completion and will pave the way for setting up a military maintenance, repair and overhaul (MRO) capability in the emirate, Shemmari said.
"The deal is almost closed so hopefully very soon we can announce the creation of the joint venture and the starting of the building of that capability," he said, adding that legal documents were being finalised.
Shemmari said Mubadala is servicing the United Arab Emirates' armed forces, but added: "The business case is so lucrative that we could be going after some of the NATO platforms in the region in Iraq and Afghanistan."
Eventually, the aim is to service military aircraft including Chinook, blackhawk, Apache, and F-16, he said.
"I think it will be a much more logical solution to come to Abu Dhabi from Iraq or Afghanistan or wherever in the Middle East and North Africa area instead of sending things back to the US or even to Europe," he said.
The Middle East is home to a fast-growing aviation industry that is defying the global slowdown but its MRO sector has some catching up to do and so should grow from $2.1 billion at present to at least $4.4 billion by 2019, a recent study showed.
Through its aerospace financing firm Sanad, Mubadala is eyeing deals to provide financing and maintenance.
"We are working on multiple deals and hoping we will close four or five of them before the end of this year," he said.
Sanad had signed a $100 million deal with Germany's Air Berlin for 12 spare engines and engine maintenance on Feb. 3.
Talks with potential partners for Strata are also underway.
"There are three, four different entities we are working with at the moment," said Shemmari, adding he hoped some would be finalised "very soon" while others closer to year's end. He declined to be more specific.
Mubadala owns a 70 percent stake in aircraft maintenance company SR Technics. (Reuters)