Strata, the aerospace manufacturing subsidiary of Mubadala Investment Company, is looking to diversify into the health technology market, as the COVID-19 pandemic boosts demand for medical equipment.
According to reports, the organization is engaged in negotiations with potential partners on seven to eight projects to manufacture of personal protective equipment and medical consumables.
It aims to add more high-tech manufacturing capabilities to the UAE and a decision on new investment in health technology is likely to be made within three to six months.
Strata is the largest manufacturer of advanced composite aircraft parts in the area and one of the mainstays of Abu Dhabi ‘s economic diversification efforts.
Founded by Mubadala in Al Ain ten years ago to place the UAE in the global aerospace supply chain, the company has billion-dollar contracts with the likes of Boeing, Airbus, Italy’s Leonardo and Switzerland’s Pilatus Aircraft.
However, the global aviation industry is now devastated by the pandemic, forcing airlines to ground flights that have sent ripples through the global supply chain as demand for travel declined. As a result, Strata reported a 40% drop in its aircraft parts order book.
In order to create new revenue sources, the company is looking to move into other markets outside the aerospace market. The management expects the development of PPE to begin as the demand for medical equipment increases due to the spread of the virus.
Strata started manufacturing N95 masks in conjunction with Honeywell in May, securing enough orders across the country to keep them busy until the end of the year.
It is reported that Strata’s pivot to health technology is “in line with the government directive and push to bring some of these capabilities to the UAE.”
Strata has taken a variety of other steps to secure its company in the midst of the health crisis.
The aerospace company is also, allegedly, in negotiations with local banks to restructure its debt. However, he declined to address the scale or tenor of the loans, as the talks are still underway.
It has set up a cash-preservation task force to ensure that it has enough money to handle the tough time. It involves halting capital spending on non-essential projects and decreasing the operational costs by renegotiating contracts such as servicing or logistics.
But Strata has not cut any jobs since the outbreak started and does not seem to have any plans to do so as part of its cash-preservation drive. Alternatively, it provided the workers with the expertise needed to produce PPE, with the help of Honeywell.
More than half of Strata ‘s workforce is Emiratis, of which 86% are women. Currently, it works below 30% of its capacity to maintain social distances during each shift.
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