An Abu Dhabi arms manufacturer is targeting growth across the Gulf region after securing a Dh1 billion (US$272.2 million) credit facility to expand its ammunition testing facilities.
Burkan Munitions Systems' package of guarantees and letters of credit, arranged by First Gulf Bank, is part of a 15-year agreement under which Burkan will fulfil the ammunition needs of the UAE's military.
"We're hoping that once the requirement is fulfilled and the capabilities are running, we'll be able to export to the other GCC countries," said Saeed al Mansouri, the company's chief executive and general manager. "There's a potential for the GCC [to have an] international ammunition type," he added. "It would give us an honour to serve all the region."
Burkan is a subsidiary of the UAE's Offset Programme Bureau, an element of the country's oil diversification efforts that is mandated to set up joint ventures.
The UAE has sought to develop its defence industry amid an increase in arms spending in the region. In 2009, the Emirates purchased about $18 billion worth of US military equipment, according to a US congressional report.
Burkan's output includes artillery shells and rockets.
Mr al Mansouri said Burkan would be able to offer testing facilities for other products such as body armour and smoke grenades to UAE companies.
"In order to start research and development and trying to do your own design, you'll require a testing and evaluation centre to enhance the current products and … produce or modify some of those products," Mr al Mansouri said.
Riad Kahwaji, the chief executive of the Institute for Near Eastern and Gulf Military Analysis, sees prospects for Burkan beyond the UAE. "If they provide the same quality at competitive prices, I don't see a reason why the Saudi Arabian or Kuwaiti military wouldn't buy from the UAE," he said.
While larger calibre ammunition is tested less frequently than pistol and rifle rounds used by the infantry and security forces, it is also more expensive, Mr Kahwaji said.
"We have a very modern military here in the region, which are always striving to be the best and they have a great number of training exercises every year, [so] they need quite a lot of ammo for their troops."
A regional ammunition manufacturer has so far been absent from the Gulf, Mr Kahwaji said, although there are munitions manufacturers in Jordan, Egypt and Iran.
Regional expansion would bring Burkan into competition with them and a number of western munitions manufacturers, he added.