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By Shane McGinley
Strata, the manufacturing division of Abu Dhabi's state-owned Mubadala Aerospace, may open a plant in Morocco to support its production deals with European customers and will likely start operations in the United States within five years, its chief executive said on Tuesday.
In late 2015, the manufacturer began a one-year feasibility study to evaluate whether to expand into the U.S. as part of its ambition to produce larger, more complex components for American clients such as Boeing, according to a Bloomberg report.
Strata chief executive Badr Al Olama told Zawya in an interview on Tuesday that the U.S. move was “absolutely” still on the horizon and when asked for a timeline he said it would be “probably within the next five years”.
“We started off manufacturing simple parts and we are going to more complex parts. As you go into more complex parts it requires you to rethink about how you are going to do the manufacturing of it,” he said. “If it is a very large part is doesn’t make any sense for you to manufacture it here as the logistic costs of bringing in materials and shipping it out puts you at a disadvantage.”
At last July’s Farnborough Airshow, Strata signed a $1 billion deal with European plane maker Airbus to produce parts for its A320 and A350-900 aircraft. As a result, Al Olama said his firm was also considering opening a production plant in North Africa to service Airbus and other European clients.
“We are looking at somewhere closer to Europe, I have mentioned Morocco,” he said, declining to provide more details.
Founded in 2009, Strata expects to break even in 2018, a senior executive told Reuters in December 2016.
Al Olama declined to discuss Strata’s financial results ahead of their release this month. The company’s annual revenue was 400 million dirhams ($108 million) in 2015 and it aims to more than double this to 1 billion dirhams by 2020, Abu Dhabi daily The National reported in October 2016.
Strata started producing aircraft components in Abu Dhabi in 2010 and this year it broke ground at its second plant in Al Ain, with production expected to start in 2020.
Despite increasingly protectionist political attitudes in Europe and the U.S., such as President Donald Trump’s ‘American First’ policy on jobs and manufacturing deals, Al Olama said he did not see them as a major challenge and that he is focused on developing Strata into one of the top three aerospace manufacturers in the world.
“Will Strata stay in the UAE and remain with just facilities in the UAE? That doesn’t make any sense,” Al Olama said.
“Different parts of the world offer different disadvantages and advantages. When I was speaking about Morocco and speaking about the U.S. I was talking about the grand ambition to become a top three (manufacturer), where you would capitalise on what each area offers to give the ultimate solution to the customer.”
© Zawya 2017
