x Abu Dhabi, UAEFriday 28 July 2017

Mubadala aircraft 'made in the UAE'

The strategic investment arm of the Abu Dhabi Government plans to build new business aircraft in the emirate.

Piaggio has a backlog of more than $626m for the P180 Avanti.
Piaggio has a backlog of more than $626m for the P180 Avanti.

Mubadala Development, the strategic investment arm of the Abu Dhabi Government, is planning to use its stake in an Italian aircraft maker to build a new business aircraft in the emirate. The plan, for the second half of next decade, would mark one of the most ambitious entries into aircraft manufacturing in 50 years - since the Brazilian government launched Embraer - and make the Emirates the first Arab country to design and build an aircraft from scratch. It would also mark an evolution for Mubadala, from investing in aerospace firms, to producing specialised aircraft parts, to becoming a full manufacturer. "We have ambitions to become an original equipment manufacturer with a target of 2016 to 2018," said Homaid al Shemmari, the associate director of Mubadala's aerospace business that represents about 10 per cent of the company's asset base. Mubadala wants to use its 31.5 per cent stake in Piaggio Aero Industries, based in the northern Italian coastal city of Genoa, to acquire the required knowledge and capabilities, Mr al Shemmari added. Mubadala owns stakes in various aviation companies covering manufacturing, maintenance and flight training. Its investment strategy has largely focused on diversifying the Abu Dhabi economy and providing opportunities for the national workforce through energy, high-value and capital-intensive industries. Through its new Strata Manufacturing business in Al Ain, Mubadala has received US$2 billion (Dh7.34bn) of initial contracts to produce aircraft parts made of composite materials for various European aerospace firms. It aims to increase its role in the industry and become a Tier 1 supplier," Given the aspirations of Abu Dhabi, we would probably be doing something new," he said, adding that "there is definitely a specific segment that we are targeting", but not disclosing further details. Piaggio's best known product is the P180 Avanti II, a turboprop business jet that seats up to nine people. The company has more than $626 million in backlog orders for the 183 Avanti and Avanti II aircraft. It is the second time the emirate has been linked with aircraft making. In 2005, news agencies reported that Abu Dhabi interests including GAMCO - now called Abu Dhabi Aircraft Technologies, after being acquired by Mubadala - and the Offset Programme Bureau were in talks with Farnborough Aircraft, of the UK, to locally manufacture the Kestrel, a small single-propeller plane. The plans never materialised. "It was probably a bit too early for Abu Dhabi to be involved in this," said Mr al Shemmari, who was familiar with the plans but not directly involved. "2016 is the earliest for us, since there are so many things you have to build before we get to that point." The most important element is Strata, which will initially comprise 21,600 square metres of manufacturing space and expand to 60,000 square metres in later phases, representing an investment of about $500m. Strata is being seen as the anchor tenant in the aerospace cluster being developed at Al Ain International Airport by Abu Dhabi Airports Company (ADAC), where it is hoped small to medium-sized aerospace firms in Europe and North America will relocate because of lower operating costs. At the Paris Air Show this week, ADAC signed the first tenants for the cluster - due to open late next year - from Germany, Switzerland and the UK. Mubadala plans to announce further partnerships with industry players in the coming months to bolster its design and engineering capabilities, Mr al Shemmari said. It first invested in Piaggio in 2006, saying at the time that the deal made sense as a pure investment, and also "to explore potential synergies that both Piaggio and Mubadala can leverage". Other shareholders include the Tata Group of India and a private investor group led by the Ferrari and Di Mase families. Piaggio has been planning a new aircraft for several years, which may be a jet version of its Avanti II turboprop, in a project that could cost a reported $1bn. But the new aircraft would most probably be made in Genoa, according to recent statements by the Piaggio chief executive, Alberto Galassi. igale@thenational.ae