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UAE's EDIC Looks Beyond Local Assembly Partnerships

November 12, 2015 (Photo Credit: Zayed Al Absi/NIMR)

DUBAI, United Arab Emirates — Eleven months after its establishment, the Emirates Defence Industries Co. (EDIC) is looking to develop, strengthen and deepen relationships with its international partners through increased value in the United Arab Emirates beyond local assembly, its chairman told Defense News in an exclusive interview.

Homaid Al Shemmari, chief executive and chairman of EDIC, said his company, which has 16 UAE military manufacturers under its umbrella, is focused on localizing, manufacturing, servicing and testing core elements of its supply chain.

"We seek future partnerships that are mutually beneficial," Al Shemmari said. "We hope to benefit from localization, knowledge transfer and capability building, while our partners will benefit from enhanced technological resources and expertise from a centralized hub of world-class products and services."

Al Shemmari said the changing geopolitical and security environments require new defense capabilities.

"Armed forces across the world must adapt to new challenges while also facing budget restrains from their governments. The reality is that everyone wants more value from their defense expenditures," he said.

EDIC was founded Dec. 2, 2014. Over the last year, the company has been working through integrating the different companies under its mandate.

"They came from three different owners and many have joint venture partners, so this process is complex and takes time," Al Shemmari said. "During this process, we have been focused on maintaining the integrity and continuity of these businesses as they change owner so that service and quality levels are maintained."

The company is now one of the largest in the Arabian Gulf region, comprising 10,000 personnel employed in manufacturing and services across air, land and sea platforms.

Al Shemmari's goal is "to develop existing partnerships and identify new commercial ventures, bringing new products and services to the UAE."

"In essence, we are a hub that can facilitate the UAE's relationships with international OEMs (original equipment manufacturers), ensuring that our businesses and operations are strategically aligned with the needs of GHQ (the UAE armed forces' General Headquarters)," he said.

According to Theodore Karasik, a Gulf-based senior adviser for Gulf State Analytics, EDIC will be able to achieve its mandate and goals.

"This Abu Dhabi-based entity is clearly coming online at the perfect time to take advantage of technological advances, including robotics, to a new, higher standard while developing offsets that benefit the UAE's economic growth into the future," Karasik said.

Karasik added that the localization of EDIC's objectives is a key attribute.

"EDIC is focused on the UAE's long-term feasibility as a major exporting hub and not just a logistical two-way hub in the global supply chain. In other words, EDIC's localization strategy is to project outwards to foreign buyers," he said.

UK-based independent Gulf military analyst Matthew Hedges said that the UAE intends to foster the development of a knowledge economy for its national defense industry, but he foresees three main challenges.

"Firstly, due to the limited pool of Emiratis, how does the UAE attract the best candidates to work for them? Secondly, to be the best they have to learn from the best, which may mean more Emirati students studying abroad at world-leading institutions and returning with this knowledge so they can continue to educate fellow Emiratis; and thirdly, once within the system ... how do they retain personnel and stop them from entering the private sector?" Hedges said.

"To be able to fully operate and run a world-leading defense industry, the UAE will also have to promote the education and cooperation of expatriates residing in the UAE to contribute to the wider good. Key to this will be the connection between EDIC and the UAE's educational institutions," he said.

According to Hedges, it is strategically important for EDIC to maintain close industrial ties with world-leading firms.

"EDIC can only learn from their experience and knowledge," he said. "There does have to be a mutual understanding between the partners as to what each other is bringing to the table and how they can mutually benefit, Masdar [an eco-city in development] is a great example of this with international firms contracting the institute to undertake research to further their own capabilities.

"It is a show of confidence in the UAE ability."


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