ABU DHABI, United Arab Emirates – The UAE’s ambitious diversification strategy is beginning to pay dividends. In back-to-back wins, Al Ain-based aircraft components supplier Strata Manufacturing — a subsidiary of Mubadala — scored a convincing one-two by winning orders from both Boeing and Airbus, with the latter contract worth an estimated $1 billion (Dh3.67 billion). With Boeing, the latest deal represents a continuation of a relationship that started in 2013.
The biggest takeaway for the UAE is not just in the value of the deals and the nature of the alliances struck with two aviation majors, but how it managed to create a set of credentials — and economies of scale — in an industry far removed from its core expertise in energy. By doing so, the UAE has also proved that a manufacturer-supplier need not always be part of a tightly-knit geographical cluster to make supply chains effective. An enterprise can easily be based here and supply some of the most advanced component requirements for vendors in the United States or Europe. And be as effective as any supplier based in those countries.
The Strata win also reaffirms the investments and hopes vested by the government, that an industrial economy can recreate the best practices it had adopted in the oil-and-gas sector over the decades in other verticals. And despite a relatively late entry, it can easily close the gap in technological prowess and skills knowhow.
It is still early days in the UAE’s makeover of its industrial base, but by being extremely selective about the spaces it wants to be in, the UAE can aspire for the high-margin, highly-defined niches. The economy is riding the next industrial wave with aplomb.