DUBAI — Ahmed Bin Adi is the chief executive officer of Al Tail Technical Services, which is a subsidiary of the Emirates Defense Industries Corp. Al Taif is the principal land-based systems logistics, maintenance, repair and overhaul services provider for the United Arab Emirates' land-based systems and air-defense platforms.
The company was launched by Mubadala in late 2006, and operates in close collaboration with the General Headquarters (GHQ) of the UAE armed forces.
Bin Adi comes from a military background in land systems maintenance. He is a mechanical engineering graduate from Pennsylvania State University, with a masters in engineering systems management from the American University of Sharjah and is currently finishing his doctorate at the University of Sharjah in engineering management.
- Contracted with the UAE Amred Forces to provide land based systems MRO support for 20 years
- Contract is valued at over $1.08 Billion
- 1000 employees with over 250 UAE nationals employed
Tell us about Al Taif and the idea behind Al Taif?
Ahmad Bin Adi: Al Taif is one of the major initiatives by the government of Abu Dhabi represented by Mubadala and General Headquarters of the armed forces to try the outsourcing concept in the military. So the idea started off regarding how the private sector can take part in the services provided by the military or by GHQ. So the whole thing started as a concept with baselining of the needs of the customer. And eventually the end result of that is we identified opportunities for some of the activities to be transferred from the military to the private sector.
When were some of the UAE military activities transferred to private sector companies such as yours?
Ahmad Bin Adi: Between 2003 and 2006, eventually the outcome of that study was a statement of work of the responsibilities to be transferred or outsourced from the military to the private sector. During that time, Mubadala, in order to build local capabilities, elected not to go directly between the military and international players or prime vendors to provide the service. They decided to establish something in the middle which is Al Taif, right now to be the contracting body with the GHQ, and then Al Taif by itself. contract whoever is going to win the project and provide the service and build the capabilities from scratch.
So eventually, the first seven years, in 2006 Al Taif signed a 20-year contract with the armed forces to provide MRO services to the land systems, technical training, supply chain management, R&D research and development in engineering, and IT support. All these things were provided by Al Taif. And during that time, nationalization was a key aspect to build the local capability of Al Taif, And transfering the know-how from our strategic partner or the prime vendor which is in this case Dancor [PH], and American company to Al Taif so that eventually we are less reliant on their support and we provide the support ourselves in due time.
How has Al Taif found this transition, where you're developing national capabilities from various strategic partners and then transferring that into servicing the armed forces. How has that been going in the last 10 years?
Ahmad Bin Adi: What happened is before we started everything, there was a plan that was proposed between Mubadala and the customer. And that plan was developed into phases of how the whole responsibility moved from the armed forces to Al Taif. eventually going through these phases. So establishing the company needed both the a customer and the company needed to understand exactly what is going on, build all the policies and procedures to conduct the business, and make sure that once the responsibility is transferred, it is basically risk-free.
And we have a team of almost 100 people, a core team understanding the business, building policies and procedures, developing the transition plan of responsibilities between the customer and Al Taif. And eventually we moved in the second year into a transition phase, which is four months, followed by eight months of an initial operating phase to test everything. and make sure that Al Taif replaced the customer in conducting the same services.
Can you go into more detail for the pricing?
Ahmad Bin Adi:Pricing was already declared in the original contract. The first seven years was about 1.6 billion AED [UAE dirham]. And in 2014, Al Taif signed a five-year amendment to the contract that is worth about 2.4 billion AED.
Of the first seven years of your initial contract, has it shown that it has been of more value than dealing with direct international players?
Ahmad Bin Adi: Sure. One of the ideas of building Al Taif is actually to develop the concept of [moving] from military to industrial. And one of the things that Al Taif envisioned is aligned with the Abu Dhabi 2030, where we diversify the income, building capabilities in multi-sectors. And one of them is the defense sector. And eventually that whole idea evolved into Emirates Defense Industries as a cluster or as a holder of the defense industries. So 10 years ago, we started as individual efforts.
And at that time even these companies, the 16 companies now under EDIC, were under different shareholders but now under one shareholder you can unify the vision, the mission, the targets, objectives, and offer better service to the end client, which is GHQ.
In 2012, the GHQ streamlined its own logistics format. Did the privatization of the military logistics industry go in parallel with the military's new program?
Ahmad Bin Adi: Actually when GHQ announced the joint logistics program in 2012, the effort started during the establishment and the contract between Al Taif and the GHQ. We were part of that concept. So when we designed the cold concept of Al Taif, it was built to serve the newly established joint logistics program that GHQ was heading toward. So right now, basically Al Taif was set up to plug into the whole joint of this service or concept.
Interviewer: Now we have passed the first initial seven years. And now from 2014, we are continuing with the 13-year remaining part of the contract. And Within all this period, the United Emirates armed forces has been going through serious developments, engagements and operations. How has Al Taif seen that and how has it amended or fixed its way through to adapt to that?
Ahmad Bin Adi: The beauty of our relationship with GHQ is that it's very dynamic, . It is very flexible. And how We built the contract to flexibly is that we built the flexibility to adapt to the customer’s needs. So every year, how we work and how we perform in response to the customer’s needs is we agree with the customer on an annual basis on the annual service plan. And the customer basically every year can revisit that annual service plan, add to it, modify it, and Al Taif is very flexible to provide the service. And over the seven years with our experience in providing and serving the customer, we can anticipate. We can plan even ahead. We developed a three-year plan in anticipation that where the first year is a concrete plan that is going to be for the next year.
How does it work between Al Taif and the customer? Does Al Taif have embedded operators with the customer or does Al Taif bring the customer and teach them? or with a new?
Ahmad Bin Adi: No, part of the outsourcing concept was that GHQ retains the services that they believe they have to perform and outsources the services that they can give to the private sector. And during that time, what happened is they created the mechanism, how the customer forecasts the workload. and load the prime vendor which is Al Taif in this case. So every year, we will sit with the customer in advance, six months before the year starts. We develop the forecast and what is the anticipated workload. We translate that into hours required to support different platforms and eventually all the spare parts associated, perform all that work. And that translates to hundreds and thousands of hours that Al Taif provides in delivering this annual service plan.
Eventually we have our technical staff that we recruited more than eight years ago and we keep adding to it in order to perform this annual service plan on an annual basis.
The UAE armed forces has a mixed bag of equipment. when we are talking about the armed forces. So how is that expertise working? And can you give us an idea also what has Al Taif developed from within its own ranks and added to these different platforms?
Ahmad Bin Adi: Dealing with multinational systems could be challenging at some point but the engineering concept is the same. The difference is in the logistics support of these systems. But when it comes to the know-how, an engine is an engine. A transmission is a transmission. The electrical components more or less are similar. The GHQ did a good job pulling the specs from the beginning to unify a lot of the equipment, supply chain, some of the equipments even though you have a French tank and a Russian armored personnel vehicle. Some of the equipment is similar in multiple vehicles regardless.
We start with basic electrical mechanical skills training. And then based on that, once they become specialized with further training. And that is the career progression of a technician and a mechanic whether it is in the armed forces or Al Taif.
Al Taif is really right now performing work that used to be done by the armed forces. So it makes sense to follow their career progression when it comes to developing the technician and the mechanic in order to perform the work. Al Taif is participating and providing training to the enlisted, to the multinationals who join the national service.
We are a piece of the whole concept of providing the national service for the young Emiratis.
How about the R&D side of things? Has Al Taif managed to evolve these?
Ahmad Bin Adi: Sure. I mean we did not start from scratch in the R&D. When I served in the military, the military had R&D capabilities. Especially with the platforms and the different needs, a lot of the platforms get upgraded and retrofitted throughout the service of the vehicle. So what happened is we built core capabilities as Al Taif in order to support the mission of the armed forces. And we started that more than 10 years ago. And as the needs evolved and developed, we added these capabilities. And one of the latest additions that we have is we created about four years ago a calibration lab in order to support, do in-house calibration of all the equipment, tools, testing equipment, and all these things.
And I can probably say that our lab recently received the ISO 17025 as an accredited lab providing that service.
We created a failure analysis lab, oil analysis lab. We have integration labs, simulation labs, all these things in support of the customer's needs. So R&D started providing the core services but it is evolving to do more in-house in support of the customer's requirements.
With the capabilities that you have developed and engaged in and supported the armed forces with locally, is it in the plans for Al Taif to be working for the clients around the GCC or international clients?
We have a contract with the air defense, maintaining some of their equipment, too. Air defense is are close to land systems more than aviation. So that is why it makes sense for Al Taif to go and support the Air Force in certain kinds of maintenance in more equipment for their needs. At the same time, we have a contract supporting NIMR or Amarok, in doing some of the things that they, as a mandate from our shareholders.
We were approached by other GCC countries to duplicate the Taif concept in their countries. Many visited our facilities to look at our concept and look at how we succeeded in outsourcing some of the activities from the military to the private sector. Saudi Arabia is looking closely at our concept, Kuwait is still; Qatar mainly.