PARIS --- It has become commonplace to say that Western defense players are facing increasingly sharp competition from newcomers on the market. After decades as a major weapons importer, the United Arab Emirates seems to emerge as one of these key new competitors, with notable successes met by its recently-established defense conglomerate EDGE. Which markets is Abu Dhabi managing to address, and how is the small federation doing so?
With each passing defense show, a new player is making a mark in the industry. EDGE Group, the Emirati defense industrial conglomerate established in 2019, has managed to capture the spotlight at every event, be it through the presentation of sometimes futuristic-looking products, or through the announcement of new contracts with unexpected customers or partnerships with established firms.
This ambitious competitor is now asserting its export ambitions, having made major efforts to transform itself from national equipment supplier for the UAE forces to serious global competitor. In 2022, the company recorded $1.5bn in exports (at the time, a 500% year-over-year increase), representing 30% of the total order intake. That same year, the firm re-organized its structure so as to better perform on export markets, as reported by the French confidential publication Intelligence Online, through the creation of a new dedicated department.
Up to now, EDGE has tended to focus on low-entry cost projects such as swarming drones, as noted by the Middle East Institute senior fellow Bilal Saab in Shephard Media. Yet, the group is present in an impressive array of segments: from small weapons to ship-building, to missiles and missile defense systems, UAVs and counter-UAV systems, armored vehicles, electronic warfare and cyber solutions…
The Emirati journey towards the establishment of a national defense industry has proven to be quite effective. As expressed by EDGE’s International Business Director Miles Chambers in an interview with Flight Global, “we have moved beyond the UAE being a recipient of technology transfer, to the UAE being the one transferring the technology.”
Let us dive into some of these successes and outline the reasons why some Western players should indeed worry about their traditional markets.
Several export successes already booked
The most impressive example of export success came just last February, when the company’s naval subsidiary Abu Dhabi Ship Building (ADSB) announced a $1bn deal –EDGE’s largest-ever export contract– for the construction of four BR71 Mk II corvettes for the Angolan Navy.
Moving away from the naval business, but still in Africa, EDGE firmed a strategic partnership with the Tanzanian military, another example of the yet-to-explore market potential for the conglomerate on the continent.
Looking towards Asia, EDGE was present at Indo Defence 2022, with CEO Mansour AlMulla speaking about “the strategic importance of the Indonesian market” to the company. India is yet another important market prospect for the Emirati conglomerate.
EDGE’s subsidiary Al Tariq, which was developed out of a JV forged between the sovereign fund Tawazun and the South-African Denel Dynamics, signed two MoUs with Indian partners in 2023: one with Bharat Dynamics for the joint production of Al Tariq munitions in India, and another one with HAL for the integration of the munitions onto the latter’s fixed wing platforms (notably Tejas).
Sources have also indicated that Al Tariq would help HAL marketing its LCA to MENA countries, opening further export possibilities for its precision guided munitions in the region. The MENA region, and the Gulf in particular, is a natural market for EDGE, which partook in the inaugural Riyadh World Defense Show in 2022, with its Executive Chairman Faisal Al Bannai saying that “Saudi Arabia is a key strategic market for the company.”
EDGE has partnered with Saudi Arabian Military Industries (SAMI) in the past: in 2021, its subsidiary NIMR signed an agreement with SAMI for the production of military vehicles in Saudi Arabia.
Rio de Janeiro as future Latin-America powerhouse
EDGE also just took part in LAAD Defence & Security 2023 in Rio de Janeiro, where several announcements were made about future cooperation with Brazilian entities. The rapprochement was originally initiated at a very political level under Bolsonaro, notably through the former President’s son Eduardo Bolsonaro and Marcos Degaut, ex-Secretary for Defense Products at the Brazilian Ministry of Defense, who then became head of EDGE Brazil.
#BeyondPossibilities: Reliable, versatile, and accurate precision-guided munitions.
Pioneering the technologies that prevent tomorrow’s threats, on land, in air, and at sea.#LAAD2023 pic.twitter.com/9tUDNyqVCO— EDGE (@_edgegroup) April 14, 2023
Asked about how a stronger presence of EDGE in Brazil would benefit the country, Degaut said that while “companies from several countries” had a “predatory bias”, citing the USA, Italy, or Egypt, the UAE do not. The latest news from Brazil shows that the arrival of Lula instead of Bolsonaro did not put an end to these good prospects, as demonstrated by the visit paid by the current Brazilian Minister of Defense José Lucio to EDGE’s booth at the LAAD fair on April 11th.
Besides proposing convincing solutions from a technological standpoint at lower prices (or at least, so does EDGE’s advertisement goes), the Emirati player benefits from its political positioning, and its openness to technology transfers and support to the emergence of defense industrial players on its export markets.
This success does not come without, challenges, however: EDGE now needs to build up its production capacity, which is not yet tailored for large-scale production, and strengthen its supply chain, factoring in the integration of foreign suppliers. All this, while retaining its freshly acquired IP… and keep putting efforts into the development of new skills and technological knowledge.
All in all, there is still a long way to go for EDGE to become the major defense player it wants to be; still, legacy Western firms should look out for this new competitor, especially in emerging countries. Markets long perceived as secured may well end up succumbing to Emirati charms…
About the Author: Tim Maxwell is a defense and security researcher who wishes to express his views on the evolution of military technologies and their impact on contemporary warfare.
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