Kevin Massengill of Raytheon.
Kevin Massengill of Raytheon.

Raytheon targets region for defence sales



Raytheon, the US aerospace and defence giant, aims to take advantage of opportunities in the Middle East as the UAE and other Gulf states build capabilities for cyber-security, missile defence and command and control data systems.

The company believes it has an opportunity to upgrade or replace the UAE's battery of Hawk defensive missiles and is optimistic about providing systems or missiles on many of the Gulf's naval fleets, said Kevin Massengill, the Raytheon vice president and regional executive for the MENA region.

Mr Massengill said modern militaries were tasked with processing and analysing enormous amounts of data from various sources, including radar and unmanned systems.

The data involved was so extensive, he said, it was measured in "petabytes". A single petabyte contains information so dense that if it was played on an iPod as a song it would last for 32 years.

"The question is, how do you move that data at effectively the speed of light and then display that data on dashboard that is intelligible for decision makers?" Mr Massengill said in a technology demonstration on Thursday at the Centre of Excellence for Applied Research and Training in Abu Dhabi, the commercial arm for the Higher Colleges of Technology (HCT).

Such command and control systems are being evaluated by the region's navies and air forces, including an air battle management initiative in the UAE that has drawn the interest of the world's largest aerospace firms.

Raytheon is also hoping to provide systems that not only transmit data but also protect them with cyber-security products.

Mr Massengill said the cyber-attack on Iran's Bushehr nuclear power plant in September illustrated the vulnerabilities of some national critical facilities. "This is an area of real interest for the UAE Government and for us," he said.

In 2008, Raytheon signed a deal with the UAE worth up to US$3.8 billion (Dh13.95bn) for the Patriot missile defence shield, with the first deliveries expected in mid-2012. The contract was a major coup for the US company, representing its first new order for the missiles since 1999.

The agreement has created a host of follow-on partnerships and opportunities that mean Raytheon becomes a key educational and industrial partner to the UAE's, and in particular Abu Dhabi's, development plans.

It is working with HCT to develop science curriculums and generate interest in aerospace engineering in the UAE and is likely to create new industrial ventures in the UAE to satisfy offset requirements.

It has formed partnerships with the UAE-based Global Aerospace Logistics (GAL) and Lockheed Martin, which also makes Patriot missiles, for a facility to maintain the missiles in-country.

Lockheed and Raytheon also hope to sell the UAE a $7bn upper-atmosphere missile defence system called THAAD next year, Lockheed officials say.

The UAE's existing missile defence programme, composed of Hawk missiles supplied by Raytheon in the late 1980s, could be upgraded or replaced with surface-launched advanced medium-range air-to-air missiles, called SLAMRAAM.

Another area of growth is expected to be in Raytheon's naval unit, with opportunities in further sales of its torpedoes, close-in weapons systems and command and control systems, Mr Massengill said.

"We are in constant discussions with the region's navies, coastguards, critical infrastructure folks," he said. The company is in a good position to equip the region with battle-management systems, as well as its suite of offensive and defensive weapons "on almost everything that floats", he said.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Directors: Anthony Russo, Joe Russo

Starring: Robert Downey Jr, Chris Evans, Scarlett Johansson, Chris Hemsworth, Josh Brolin

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Fixtures and results:

Wed, Aug 29:

  • Malaysia bt Hong Kong by 3 wickets
  • Oman bt Nepal by 7 wickets
  • UAE bt Singapore by 215 runs

Thu, Aug 30: 

  • UAE bt Nepal by 78 runs
  • Hong Kong bt Singapore by 5 wickets
  • Oman bt Malaysia by 2 wickets

Sat, Sep 1: UAE v Hong Kong; Oman v Singapore; Malaysia v Nepal

Sun, Sep 2: Hong Kong v Oman; Malaysia v UAE; Nepal v Singapore

Tue, Sep 4: Malaysia v Singapore; UAE v Oman; Nepal v Hong Kong

Thu, Sep 6: Final

Europe’s rearming plan
  • Suspend strict budget rules to allow member countries to step up defence spending
  • Create new "instrument" providing €150 billion of loans to member countries for defence investment
  • Use the existing EU budget to direct more funds towards defence-related investment
  • Engage the bloc's European Investment Bank to drop limits on lending to defence firms
  • Create a savings and investments union to help companies access capital
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Treaty of Peace in Perpetuity Agreed Upon by the Chiefs of the Arabian Coast on Behalf of Themselves, Their Heirs and Successors Under the Mediation of the Resident of the Persian Gulf, 1853
(This treaty gave the region the name “Trucial States”.)


We, whose seals are hereunto affixed, Sheikh Sultan bin Suggar, Chief of Rassool-Kheimah, Sheikh Saeed bin Tahnoon, Chief of Aboo Dhebbee, Sheikh Saeed bin Buyte, Chief of Debay, Sheikh Hamid bin Rashed, Chief of Ejman, Sheikh Abdoola bin Rashed, Chief of Umm-ool-Keiweyn, having experienced for a series of years the benefits and advantages resulting from a maritime truce contracted amongst ourselves under the mediation of the Resident in the Persian Gulf and renewed from time to time up to the present period, and being fully impressed, therefore, with a sense of evil consequence formerly arising, from the prosecution of our feuds at sea, whereby our subjects and dependants were prevented from carrying on the pearl fishery in security, and were exposed to interruption and molestation when passing on their lawful occasions, accordingly, we, as aforesaid have determined, for ourselves, our heirs and successors, to conclude together a lasting and inviolable peace from this time forth in perpetuity.

Taken from Britain and Saudi Arabia, 1925-1939: the Imperial Oasis, by Clive Leatherdale

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