Hawk aircraft assembly line could play bigger role in Saudi Arabia

BAE Systems reported rising sales and profits in the first half of 2017 as it hopes for further orders for its Typhoon fighter jet to Gulf countries. (Reuters)
Updated 03 August 2017
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Hawk aircraft assembly line could play bigger role in Saudi Arabia

LONDON: A Hawk aircraft assembly line established by British defense giant BAE Systems could be used to bring more aircraft manufacturing to Saudi Arabia.
It comes as defense contractors seeking orders in the Kingdom come under increased pressure to contribute to Vision 2030, the economic diversification strategy being driven by Crown Prince Mohammed bin Salman, deputy premier and interior minister.
The world’s third-largest defense company is supplying its latest batch of 22 Hawk training jets to the Kingdom, under a deal agreed two years ago following an earlier order for 18 of the aircraft.
The final assembly of the planes, which are used to train fighter pilots, will be done in Saudi Arabia, with the first deliveries expected in the third quarter of the year.
“As part of the Hawk batch-two contract, we agreed to establish a final assembly line for Hawk in Saudi Arabia,” said BAE Systems’ international managing director, Guy Griffiths.
“I think it would be self-evident that having established that facility and built 22 Hawk aircraft through it, it would be a great shame if it wasn’t then used for final assembly of other aircraft.”
Saudi Arabia is investing heavily in developing its domestic defense industry as the ongoing war in Yemen drives military spending.
At the same time, the Kingdom aims to create skilled jobs in areas such as aeronautical manufacturing.
“This is all driven by Vision 2030,” said Griffiths. “In every negotiation that’s conducted, whether with us or other defense suppliers, a key component beyond the price and specifications of the product is what is the industrial, training, development and technology transfer contribution that goes with this order? It’s probably the most preeminent part of every negotiation.”
BAE Systems this year delivered the final four aircraft of the 72 planes under its Salam Typhoon program in Saudi Arabia.
It also has a Typhoon support program, and agreed an additional 20,000 flying hours under a contract amendment signed in April.
The company said it had also delivered the first two of 12 Typhoons on order to Oman. The remaining deliveries to Oman are scheduled for the second half of 2017 and 2018.
BAE Systems reported an 11 percent rise in first-half earnings of £945 million ($1.25 billion) on Wednesday, beating analyst estimates.
The earnings were the first to be presented by new Chief Executive Charles Woodburn, who took over from Ian King in July.
The former oil industry executive, who worked for Schlumberger for 15 years, served as chief operating officer at BAE Systems for more than a year before taking up his new role.
He said his leadership will be marked by “evolution, not revolution,” adding: “It’s clear we have the right strategy that harnesses our strengths, so we’ll continue to stay the course.”


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”