Abu Dhabi, UAETuesday 25 June 2019

Italian shipbuilder Fincantieri in talks with UAE on potential €800m-plus deal

Exclusive: firm also in talks with Saudi Arabia and Kuwait about potential deals for their navies

Fincantieri is looking to increase its ties with the UAE and the wider region. Victor Besa / The National
Fincantieri is looking to increase its ties with the UAE and the wider region. Victor Besa / The National

Italian shipbuilder Fincantieri is in talks with the UAE for a potential naval deal that may top €800 million (Dh3.31 billion) as it seeks to boost international sales.

Fincantieri already has a joint venture with the UAE’s Al Fattan Industries that was formed in 2010 to design, produce and sell both civilian and naval vessels as part of a €400m deal for two vessels and one corvette to the UAE Navy, said Enrico Bonetti, senior vice president of international business for the naval vessels unit.

Enrico Bonetti, senior vice president at Fincantieri's naval vessels unit. Victor Besa / The National. 
Enrico Bonetti, senior vice president at Fincantieri's naval vessels unit. Victor Besa / The National.

The value of the new deal may be double the previous one, he said.

“We are providing to the UAE Navy a number of different proposals for programmes that are in their plans,” said Mr Bonetti. “We deem we have the technology in this area in the Gulf and we have the local partners.”

The Italian company is also in talks with Saudi Arabia, the UAE and Kuwait for potential deals for their navies, he said at the International Defence Exhibition and Conference taking place in Abu Dhabi this week.

Fincantieri’s UAE shipyard – the only in the Middle East – is one of 20 around the world that are helping the company boost its sales, 90 per cent of which are from international deals. The firm's revenue in 2017 rose 13 per cent to €5bn, while net profit more than doubled to €57m.

“We want to improve the supply chain and invest in local shipyards and to increase our relationship and extend this relationship to other local shipyards [in the UAE],” said Achille Fulfaro, vice president market development for the Middle East.

The company is also talking to state-owned Saudi Arabian Military Industries to offer its products, ranging from patrol vessels to aircraft carriers, with a potential local content, said Mr Bonetti. Sami has the task of helping to localise at least 50 per cent of military spending by 2030.

“We know there is a strong link between Saudi Arabia and the UAE and, of course, Saudi Arabia is looking for local content, too,” Mr Fulfaro said.

The company, which has also supplied vessels to Kuwait and Iraq, is talking to Kuwait about a range of further products, including corvettes.

Fincantieri is seeking to boost international sales as part of its push to have 2022 revenues increase by up to 50 per cent from 2017 figures. The company, which also builds cruise ships and vessels for the oil and gas sector, generates 25 per cent of its revenue from defence.

“The target of international sales is to focus on strategic countries linked to Italy,” said Mr Bonetti.

“Abu Dhabi was one of these and is still a strategic area for us. Of course, we developed a huge business in the US [and] then we have activities in Brazil. Saudi Arabia is one of the most interesting for us.”

The company is in the process of setting up a joint venture with French military shipbuilder the Naval Group, which is expected to happen by this spring, he said.

Fincantieri is also waiting for European Union approval to seal its potential acquisition of a 51 per cent stake in French shipyard STX.

Updated: February 19, 2019 04:28 PM