2/21/24, 6:00 PM UAE eyes regional edge on arms exports

Author

Albert Vidal Ribe

@albert_vidal_

ABOUT ALBERT ➤

M I L I TA R Y B A L A N C E B LO G | 14th November 2023

UAE eyes regional

edge on arms
exports
The United Arab Emirates set up EDGE in 2019 to
revitalise efforts to strengthen its defence-industrial
base. The company has created numerous
partnerships and other ties abroad to help secure
access to defence technology and markets.

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2/21/24, 6:00 PM UAE eyes regional edge on arms exports

This blog post was first published on the Military Balance+ on 15 November
2023

The Gulf has witnessed numerous governmental efforts to create local

defence-industrial capacities that have yielded limited returns on the
billions of dollars invested. The United Arab Emirates (UAE), after resetting
its approach a few years ago, is looking to break from the past through a
strategy of international partnering and mergers and acquisitions.

EDGE, the Emirati company set up in 2019 with a portfolio of 20 products

and a USD60 million order book, now offers around 110 products and says
its order backlog has reached USD10 billion. About a quarter of the order
book comes from abroad. EDGE has given itself the veneer of building
something new and now is trying to show its inroads in the defence-
industrial market are robust.

Different direction
Gulf states such as Qatar, Saudi Arabia and the UAE – some of the biggest
importers of Western weapons – largely relied on offset agreements to
foster their domestic arms industry. But for all the effort, the home-grown
businesses showed little success in building on such agreements to become
credible arms firms. The UAE set up the Emirates Defence Industries
Company (EDIC) about a decade ago, but made little progress before the
business was folded into EDGE.

EDGE set out to avoid the missteps of preceding companies and is

leveraging the benefits of scale, which allow it to, among others, reduce
fixed costs and streamline processes. The company has also tried to focus
its efforts on a few critical technologies to avoid spreading itself too thinly.
EDGE said it is prioritising work in autonomous, smart weapons and
electronic warfare. Among the 14 new products the company launched in
February this year, 11 were based on uninhabited and autonomous
technology. That is not to say EDGE does not have grander ambitions. Its
maritime arm, Abu Dhabi Ship Building, has come up with a new corvette
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2/21/24, 6:00 PM UAE eyes regional edge on arms exports

design, and this shows the desire to produce more complex naval platforms
than the Falaj 3 offshore patrol vessel it is working on with ST Engineering.

The Emirati government also adjusted its course to create a better

environment for EDGE to succeed. Tawazun Council, an authority which
previously managed the UAE’s defence offsets and which has strong ties
with EDGE, was put in charge of defence acquisitions for the UAE.
Tawazun’s expanded responsibility and its emphasis on defence offsets
have given EDGE a greater ability to secure technology transfers from
defence partners. When the UAE agreed to acquire South Korea’s
Cheongung II air-defence system in January 2022, the deal included a
commitment for the two sides to collaborate on defence technologies and
co-develop weapons systems. It is still uncertain, though, if the partnership
will yield more concrete returns than past technology partnerships the Gulf
has seen.

Going global
EDGE has cast the net widely to build up its defence industrial expertise.
The company set up its first international office in Brasilia in April. In
recent months, EDGE signed agreements with the Brazilian navy to co-
invest in long-range anti-ship missile development, with the marines to
work on autonomous vehicles and with the air force to collaborate on
uninhabited systems and smart weapons. EDGE also struck partnerships
with various local Brazilian companies in various areas, including turbine
engines, non-lethal technologies and cybersecurity.

EDGE has pursued similar strategies in India. The company’s Al Tariq unit
signed a deal with Bharat Dynamics to produce precision-guided munitions
in India. EDGE and Hindustan Aeronautics Limited agreed to co-design and
co-develop missile systems and uninhabited aerial vehicles. In Turkiye,
EDGE partnered with SAHA, an association representing over 1,000 Turkish
defence companies. The UAE company struck arrangements elsewhere in
2023, including with Bulgaria, Egypt, Indonesia and Malaysia. This month,
EDGE took a 52% shareholding in Switzerland’s ANAVIA, which works on
vertical take-off and landing systems. Notwithstanding these advances,
EDGE has had setbacks too. In September 2020, for instance, India’s
Defence Ministry scrapped a contract with EDGE’s subsidiary Caracal for
93,000 rifles to produce them locally in India.

Edging forward
The UAE’s efforts still pale in comparison with Turkiye’s and South Korea’s,
but EDGE’s trajectory looks more promising than some of its forerunners.

The company still has ample levers to pull. EDGE has been the focus of
Emirati defence industrial consolidation, and there is more room for
action. Candidates for integration include Aquila Aerospace, Al Seer
Marine, Calidus, Houbara Defence and Security, IGG, Marakeb

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Technologies, Paramount Group and STREIT Group.

The UAE government has bought heavily from EDGE to help turn the firm
into a success. The country’s armed forces have an acquisition of USD2.4bn
worth of drones and missiles from Halcon, a USD1.1bn deal with subsidiary
Earth for a tactical communications and data-link system, as well as a
USD350m loitering munitions contract from ADASI.

The UAE used the locally hosted IDEX defence show in February to
illustrate EDGE’s momentum, disclosing AED18.64bn (USD5.1bn) in
domestic and export deals, including a deal to build corvettes for the
Angolan navy. At the upcoming Dubai Airshow, which will take place 13–17
November, EDGE is likely to use the event to build on its recent successes.

Author

Albert Vidal Ribe

@albert_vidal_

ABOUT ALBERT ➤

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