TEC (Tawazun Economic Council) Presentation DSMC Event July2012
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Transcript of TEC (Tawazun Economic Council) Presentation DSMC Event July2012
1
TAWAZUN ECOMONIC PROGRAM
INDUSTRIAL DEVELOPMENT UNIT
This presentation (“Presentation”) is for information purposes only. It should not be used for any other purposes. No warranty or representation is given as to the completeness
or accuracy of the information contained herein and no obligation to update that information is assumed. Recipients of this Presentation should form their own assessment of the
matters herein and should not rely on this Presentation. This Presentation is not an inducement to enter into any transaction. By receiving this Presentation you are deemed to
agree to the above and you confirm that you are a person of a type who may lawfully receive the Presentation.
2
OVERVIEW
3
Background
ESTABLISHMENT
CHAIR
AIM
RESULTS
The Program was established in early 1992 by the
Tawazun Economic Council (Previously known as the Offset Program Bureau)
Chaired by H.H. Mohammed bin Zayed Al Nahyan, Crown
Prince of Abu Dhabi, Deputy Supreme Commander of the
UAE Armed Forces
To drive economic and commercial value from the
country's extensive defense procurement program
By partnering with world-class players, the Program has
created several multi-million dollar economic and
industrial joint ventures
4
Objectives
• DEVELOP modern defense industry in UAE through building related industrial infra-
structure
• PROMOTE partnerships between the national and international industrial leaders to
facilitate modern technology transfer
• CREATE employment opportunities for UAE Nationals in specialized fields
5
HOW IT WORKS
6
Procurement process
7
Threshold “Based on contract value”
30% (MAX)
As input
contributions
70% (MIN)
As output
contributions
No obligation
(within 5 years)
GHQ contract
US$ 0-10M
GHQ contract
US$ 0-10M
8
Min. % required (Based on a study made on 2010)
60 %
of purchase
contract value
0
20
40
60
80
100
120
140
160
180
Austria UnitedKingdom
TheNetherlands
Norway South Africa Philippines Canada UAE Saudi Arabia
172
120 117
102 100 100 100
60
40
Avg
101
9
Duration and Milestones
5%
Upfront Grace period Fulfillment period (7 years)
10% 10% 15% 15% 20% 25%
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7
Determined by the complexity of the project
• Construction of facility
• Import of Machinery
• Export licenses
• Etc.
UPFRONT GRACE PERIOD
MORE PLANNING = MORE REWARDS!
10
Hybrid Model – Input and Output
INPUT CONTRIBUTIONS
(MAX. 30% OBLIGATION)
Industry Enablers Knowledge
Empowerment
Equity Contribution
INPUT VALUE
(Multiplier between 1.0 – 2.0)
OUTPUT - RESULTS GENERATED
(MIN. 70% OBLIGATION)
Net Profit /
Export Sales
Hiring UAE
Nationals
OUTPUT VALUE
(Multiplier between 2.0 – 5.0)
11
Hybrid Model – Input
INPUT CONTRIBUTIONS
(MAX. 30% OBLIGATION)
Industry Enablers Knowledge
Empowerment
Equity Contribution
INPUT VALUE
COMPONENTS OF INPUT VALUE
Transfer of
Technology
and
Know-How
Industry Enablers
Achieving Certification.
Setting up and implementation of management
system processes.
IP contribution. (Provision of license)
Start-up team. (Expertise by DCs)
Knowledge Empowerment
Establish JV specific apprenticeship program.
Develop industry specific local expertise,
based on and related to apprenticeship
program.
Facilitate scholarship program benefiting JVs.
Equity
Contribution
Cash Contribution.
In-kind: Current value of Machines.
12
Hybrid Model – Output
OUTPUT - RESULTS GENERATED
(MIN. 70% OBLIGATION)
Net Profit /
Export Sales
Hiring UAE
Nationals
OUTPUT VALUE
MAIN ACTIVITIES MULTIPLIER
Export % of Sales
Additional Multiplier
5% - 20% 1.5
21% - 50% 2.0
51% & above 3.0
BONUS ACTIVITIES MULTIPLIERS
% Nationals Total employees
Additional Multiplier
10% - 30% 1.0
31% - 70% 1.5
71% & above 2.0
13
Underperforming
5% 10% 10% 15% 15% 20% 25%
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7
Shortfall
8.5% Bank Guarantee
Unfulfilled obligation will be
rolled-over to
default account
Penalty will be wiped-out 50% 50%
14
Design Engineering
Defense
Industry
Manufacturing
System
Integration Manufacturing
Program
Management
Systems & Components
Land & Naval Systems
Munitions & Weapon Systems
Aerospace Systems Advanced Materials
Autonomous Systems
MRO Testing
Business Focus Areas
15
Land Systems
Advanced Armoring
systems
Aerospace
Aero Engine
Aero structure
Precision
Manufacturing
Precision machining
parts
Munitions
Guided Ammunition
Weapon systems Advanced Material
Armored Vehicles
Naval Systems
Ship building Systems
Other Technologies & systems
Oil & gas separator systems
Oil drilling rig
COMPONENTS
&
SYSTEMS
Business Focus Areas
16
Examples of accepted projects
Production and assembly of the 8x8 and 6x6 vehicles
76mm multirole modular system and guided ammunition
SAMOUM
Maintenance, repair and overhaul
AMMROC 8X8 Vehicles
Advanced Ammunition System
Short Range Air
Sefense System Anti Ship Missiles
Manufacturing 25/30 mm turrets Advanced Material
Metallic
Precision
Ammunition Manufacturing
Burkan Siham Al Khaleej Non-lethal
Ammunition Composite
Surface
Treatment
Autonomous System Shipyard Building
Etihad Ship Building
Remote Controlled Weapon Systems
Remote Controlled Weapon Systems Industrial Cooperation
17
THANK YOU!