Collins Aerospace seeks to boost annual Middle East and Africa revenue beyond $1bn
The recently acquired unit of United Technologies derives nearly 55 per cent of its revenue from international sales
Collins Aerospace, the US plane parts maker acquired by United Technologies Corporation for $23 billion, expects its annual Middle East and Africa sales to top $1bn as it expands its reach in the region, buoyed by the take-over completed last year.
The company, formerly known as Rockwell Collins, is seeking to boost its presence in the UAE by partnering with local defence companies and working within the Tawazun Economic Programme, formerly known as the UAE Offset Programme, which creates additional economic value from the country’s extensive defence procurement activities, said Talel Kamel, vice president for the Middle East and Africa. He was speaking at the International Defence Exhibition and Conference (Idex) taking place in Abu Dhabi this week.
“We have also through Tawazun Economic offset programme engaged into partnerships about how we are going to increase our local footprint from the industrial point of view,” said Mr Kamel. “There is no avionics capability as such between Toulouse and Singapore and we would like to see if the region would have a hub for avionics in the UAE.”
Collins, which derives 55 per cent of its about $25bn in revenue from international sales, is a big supplier of parts to plane makers including Boeing and Airbus, with commercial sales globally accounting for 75 per cent of total income and the remainder from military deals.
In MEA, military sales account for around 30 per cent of its regional sales.
The company is ramping up its MEA sales pivot after the takeover boosted its presence to nine countries and 15 locations in the region.
“We are in the first three months of our acquisition and we are setting up aggressive growth targets for the company as a whole and the region,” said Mr Kamel.
In the UAE, the company has the biggest localised content in the region through its maintenance repair and overhaul (MRO) facility in Jebel Ali Free Zone (Jafza), which serves the country’s local airlines and other UTC products.
Collins Aerospace plans to invest more in the UAE, Mr Kamel said, declining to put a figure on the investment. The company also plans to start talks with state-owned Saudi Arabian Military Industries (Sami) on cooperating in the field of defence. The Saudi entity is tasked with localising at least 50 per cent of the kingdom's military spending by 2030.
Mr Kamel expects the recent agreement between Abu Dhabi’s Mubadala Investment Company and Sami to help foster greater cooperation in the defence sector to the benefit of companies such as Collins.
“We look at the growing collaboration between the UAE and KSA as very favourable and we like the fact that the two countries through Sami and Mubadala are encouraging companies such as ours to serve the UAE and KSA markets,” he said. He added that the agreement between the Abu Dhabi strategic investment firm Mubadala and Sami will help target the relevant capabilities that are going to be needed to grow the industrial footprint between the two countries.
Updated: February 20, 2019 03:01 PM