DUBAI - Airbus parent EADS is in talks over investment in its European manufacturing business with Abu Dhabi’s Mubadala Development Co, its CEO said on Sunday, as the pair signed two production accords.“We are discussing with Mubadala investment in Europe in our fields of activities,” Louis Gallois told reporters at Dubai Airshow.
Gallois said discussions with Mubadala, an investment agency of the Abu Dhabi government, are about investment in the civilian field, without going into further detail.
“I cannot be more precise,” he said.
The European aerospace group is already working with Mubadala on a planned composites plant in the UAE, expected to be operational in the fourth quarter of 2010.
The plant, called Strata, will provide parts for Airbus aircraft and the empennage for ATR Regional Aircraft - a joint venture between EADS and Italian air and defence company Finmeccanica.
Mubadala is expected to officially launch the aerospace components maker this week at the airshow. Initial contracts with partners total more than $2 billion, the company has said.
Mubadala said on Sunday its subsidiary Mubadala Aerospace has signed two deals to produce wing panels for Airbus SAS’s wide-body planes at the Strata plant from 2011.
Strata will be the sole provider for these components globally, Mubadala said.
Gallois said EADS is working to deepen its involvement with Arab companies in manufacturing and increase the range of product it supplies to the region.
EADS is interested in setting up joint ventures in the Gulf to manufacture at lower cost some parts for the group’s products, he said.
“Clearly it (the Gulf) is a key region for us,” he said.
EADS is the main contractor for a border surveillance project in Saudi Arabia covering 9,000 kilometres.
The kingdom is also the biggest customer for the Eurofighter Typhoon jet outside Europe. It has 72 jets on order in a deal worth almost $10 billion.
The Eurofighter is being built by a consortium of Alenia Aeronautica, BAE Systems and EADS.
Gallois said EADS will be “much more open to technology transfer than the Americans” as it grows its footprint in the region.
Western defence contractors have increasingly been looking to the Middle East as governments at home cut back defence budgets.
Middle East spending on military kit is expected to surpass $100 billion by 2014, led by Saudi Arabia and the UAE, according to consultancy Frost & Sullivan.