As Western defense firms eye expansion in the UAE, local competition awaits

BEIRUT — As the Gulf region attracts more attention from eager defense companies the world over, it’s becoming apparent that direct competition with local firms can be a tough hill to climb. But local partnerships, on the other hand, offer a potentially lucrative way to new customers.

One of the latest Western firms to make the move is UAVOS, a US-based drone manufacturer that established a subsidiary in Dubai, United Arab Emirates in August to support the company’s growing regional presence.

In an interview with Breaking Defense, UAVOS Board Chair Vadim Tarasov said the company has partnered with local firms already and also plans to establish an research and development center.

“We are engaged with large UAE companies in business related to the defense and aircraft fields, and a major announcement will be made within the next month,” Tarasov said in a late September interview.

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Tarasov said his company’s main project is what’s known as HAPS, or High-Altitude Platform Station, a solar-powered stratospheric drone akin to Airbus’s Zephyr drone. UAVOS’s platform will be jointly produced with a UAE firm, and it will be Emirati intellectual property, Tarasov said.

Tarasov did not specify which Emirati firm will be the other part of the joint venture, but just about any Western company that wants to enter UAE market will have to cooperate with either Tawazun or EDGE. EDGE, a massive conglomerate of 25 entities, is a likely candidate because it’s already made significant investments in the UAV sector.

The UAVOS board chair told Breaking Defense that the company is also working with “another customer” in the UAE to develop Large MALE UAV (medium altitude long endurance drone).

When asked about competition with existing local drone programs, Tarasov said, “We are delivering capacity to produce certain types of UAVs, not to compete directly with existing products. We typically develop and deliver substantial systems to the market.”

He added that UAVOS never tried to compete head-to-head with local firms as it is working with them to develop new capacities and components for the next generation of unmanned aircraft.

Regarding the subsidiary, Tarasov said that it is still in its early stages but expected it to have 15 employees by the end of 2022. “R&D is one of the areas we will scale in the near future.”

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He added that essentially, as with many countries, it is easier to work with an existing subsidiary in the country, since the systems will be viewed directly and customized accordingly on the spot, even for customers beyond one nation’s borders.

“The Emirati entity is the right move that makes us closer to our partners in the region KSA, Oman, Qatar, Kuwait, and we target all other countries that are not sanctioned in the region,” Tarasov added hinting that the only red light is for Iran.

As Partnerships Bloom, Local Firms Grow Themselves

UAVOS is not the only company that is trying to join forces with UAE companies. Swedish-based Saab has launched research and development efforts for sensor technology in the UAE in multiple agreements announced during IDEX 2021.

The firm also signed an agreement with Tawazun Economic Council to enhance educational program Sustain and Enhance Emiratization in Defence and Security, or SEEDS. The firm unveiled during the same show its first product developed in the United Arab Emirates, which is Rugged Camera Module-Infrared, or RCAM-IR, a camera platform that can operate in harsh environments.

Also in 2021, US-based firm Quali announced it was joining forces with EDGE subsidiary Beacon Red to deliver cyber training and testing environments to Gulf Cooperation Council countries.

But these products will face competition as soon as local companies, especially EDGE subsidiaries, expand on their own. With local UAE policy meant to boost local defense production and to support indigenous capabilities, government deals with local EDGE companies are expected to be favored over foreign firms, unless the latter will offer something local IP option and mutual development of systems and programs in the UAE.

In the UAV sector in particular, EDGE told Breaking Defense in a statement that several of its indigenous projects had surpassed the planning and design phases and had gone into trials.

“EDGE has participated in a number of UAV trials to ensure the systems meet performance requirements for potential customers. The accuracy, power and guidance capabilities of the drones are being tested, as well as endurance, range and payload,” the company said. “The systems we have developed are being tested across multiple threat landscapes and we are pleased to report that they are performing very well.”

As far as the competition from foreign firms like UAVOS, EDGE said it didn’t view them as competitors at all but rather “potential collaborators.”

“There will be certain categories in which we compete, yet this is healthy for the industry,” the company said. “Our business model will focus on building collaborative opportunities. We will work with other industry participants where it serves our mutual interests, to redefine advanced technology synergies, create innovative opportunities, bring agility to adaptations, and offer faster speed to market.”

EDGE officials said that the conglomerate is investing extensively across key R&D domains and leveraging advanced technologies with the confidence that its UAVs will ultimately operate beyond current market environments — hinting they’re eyeing customers far beyond their geographic region.

“Similarly, we are making extensive use of our testing facilities and the region’s natural environment to ensure solution performance and reliability. The region has specific needs when it comes to its environment, therefore our UAVs work optimally in hot, humid and dusty weather. With that being said, we are looking to offer robust solutions for the global market that caters to a wide range of capabilities and diverse threats,” the officials added.

Regarding their main indigenous unmanned systems programs, the company updated Breaking Defense on the timeline of progress for these programs. Most of them have reached the testing phase and 2025 will witness the serial production of a number of Emirati drones. Here are some updates, according to EDGE:

• HUNTER-2S: The HUNTER 2-S, a tube-launched swarming drone system, is under development, with the first flight test set to commence in 2023 and production by 2025.
• QX: In the QX family of drones, QX-2 has made the most progress. It has participated in several customer trials, reaching the stage of rapid prototyping to continue testing various functionalities. It will be in production in the first quarter of 2023. Trials for QX-1, QX-3, and QX-4 are set to follow in later phases. QX-5 and QX-6 are currently under development. The QX (1-4) are kamikaze drones, whereby QX-1 is micro quadcopter UAV; QX-2 mini-UAV but has a bigger platform, QX-3 is a small UAV that can carry basically up to four guided munitions and the QX-4, which is a fixed-wing, vertical-takeoff-and-landing UAV.
• GARMOOSHA: The company said the vertical take-off drone made by subsidiary ADASI is ready for operation. During recent trials, GARMOOSHA completed multiple operational flights and successfully demonstrated its range of features including vertical takeoff and landing (VTOL) capabilities carrying a payload of 100kg at a range of 150km.
• REACH-S: The fixed-wing armed medium-altitude long-endurance (MALE)  REACH-S is progressing with its development milestones and is set to fly in the first quarter of 2023.

As the range of products develop, it sets the stage for fierce competition in coming years between fully domestic firms, international partnerships and the odd direct foreign deal.