Dubai: Strata Manufacturing, the aircraft parts maker wholly owned by Mubadala Development Company, is expecting to record over Dh500 million in revenues in 2017 and is looking at establishing a new business division.
Esmail Abdullah, Strata’s chief executive officer, said the company is planning to establish a new facility in Al Ain to manufacture parts for engines. He expects the facility to be up and running by 2020, he told Gulf News in an interview.
“We want to establish a new division that is responsible for engine component manufacturing, and this is part of our diversification effort. The engine is a very interesting part for us. It is one of the most complex machines ever built, and the reliability of aircraft engines is amazing. We want to be doing those quality parts here in the UAE,” he said.
Abdullah said Strata is currently in discussions with engine manufacturers about possible supply deals, and that talks are still ongoing. He said he hoped to make an announcement on that sometime next year.
Currently, Strata manufactures parts for aircraft wings and tails, supplying those parts to manufacturers including Boeing and Airbus. Strata manufactures parts used on the Airbus A330, A350, and A380, as well as those used on Boeing’s 777 and 787 lines.
Financially speaking, Strata has long set a target to hit Dh1 billion in annual revenues by 2020, and though the CEO said the company was geared to achieve that, he said it was a challenging target.
“There are a lot of challenges in the industry. For example, the growth in aircraft deliveries, and the growth in passenger traffic are not as expected previously. This is a worldwide challenge, and airlines are feeling it, companies that manufacture aircraft are feeling it, but I’m confident that we’ll be able to achieve our targets,” he said.
Tough environment
And that was a point echoed by Badr Al Olama, who was appointed earlier this year as head of the aerospace sector for Mubadala Investment Company from his former position as CEO of Strata.
“The operating environment here is extremely tough, but it’s not any different than anywhere around the world. [Market demand for aircraft] is not where it used to be. It’s not moving at the same pace. [Airbus’] 330 has slowed down, 380 is slowing down, so in that aspect you have some challenges there, but the [Airbus] 350 is picking up, the [Boeing] 787 is picking up,” Al Olama said.
To counter that slowdown, Strata is looking at establishing manufacturing facilities at North Africa where costs are lower, and facilities in North America (both in the US and Canada) to be closer to its customers. Al Olama said Strata is in “very early stages” of talks with countries in both continents. The time horizon for those to be established is 5-7 years.
Strata currently has $7.5 billion worth of commitments from manufacturers that need to be discharged over the next years till 2030.
