Defence sector in focus ahead of Idex and Navdex in Abu Dhabi next week
Local, regional and international companies from the defence sector will be in the capital next week to showcase their latest technology as the industry looks to shake off two years of lower spending following the oil price slump.
Budgets in the region are expected to recover by 2019, according to consultancy IHS Jane’s, due to growing instability in the region.
The Middle East was the fastest-growing region in terms of defence spending between 2012 and 2014 but the near-halving of oil prices since mid-2014 dented military expenditure, the consultancy said.
The UAE ranked 14th globally with a US$19 billion defence budget last year, according to Jane’s. The UAE does not publish its defence budget.
The International Defence Exhibition and Conference (Idex) taking place in Abu Dhabi next week will feature a record number of participating local companies as the UAE beefs up its defence industry.
“The biggest participation is from the local companies, which represent a 17 per cent increase from 2015,” said Staff Major General Pilot Faris Al Mazrouei, the chairman of the higher committee organising Idex and Navdex, at a press conference.
About 125 local companies will occupy the biggest wing in the 13th edition of the biennial exhibition, which is being held alongside the fourth edition of Naval Defence Exhibition (Navdex), organisers said on Wednesday.
The biggest exhibiting company is Emirates Defence Industries Company (Edic), which is a joint venture between Mubadala Development and Tawazun Holding.
A total of 1,235 companies will take part, a 3 per cent increase on 2015. And in a 10 per cent increase on 2015, 57 countries, will be represented. Participating companies include Boeing, Lockheed Martin, Northrop Grumman, Raytheon, and Russia’s Rostec. More than 100,000 visitors are expected to descend on the Abu Dhabi National Exhibition Centre (Adnec), with the size of the event having expanded by 5 per cent to more than 53,500 square metres.
The last edition of Idex, in 2015, attracted more than 100,000 visitors and 1,200 companies, with more than Dh18.3bn of deals signed during the event.
The UAE is bolstering its local defence industry through an offsets programme and by awarding them an increasing number of contracts to help diversify the economy away from its dependence on oil.
Mubadala, Tawazun Holding and Emirates Advanced Investment Group agreed in 2014 to combine their defence services businesses into Edic to help develop the local defence industry.
Edic provides manufacturing, training, mapping, logistics, technology development and communications as well as maintenance, repair and operations services for air, land and sea platforms.
The UAE’s attempts to carve up a local defence industry is being emulated elsewhere in the Gulf, with Saudi Arabia setting its eye on having a local sector of its own.
Saudi Arabia’s 190bn Saudi riyal military budget (Dh186.06bn) for this year is 7 per cent lower than last year’s 205bn riyal actual expenditure.
Still, Saudi Arabia last year was the fifth biggest defence spender in the world, according to IHS Jane’s.
Saudi Arabia’s deputy crown prince Mohammed bin Salman told Al Arabiya TV in April the country planned to set up by the end of this year a holding company for the military industries that will be owned by the government and later floated in the kingdom.
Only 2 per cent of the kingdom’s defence spending is within its borders but that will rise to between 30 and 50 per cent, he said, without giving a timeline.
Follow The National’s Business section on Twitter
Updated: February 15, 2017 04:00 AM