UAE’s Defense Specialist Expands Across Asia with New Ammunition Production Line in Indonesia

June 2024

The EDGE Group from the United Arab Emirates has announced a USD 27 million deal to provide Indonesian state-owned enterprise PT Pindad with an ammunition production line. This agreement marks another advancement in the Gulf defense conglomerate’s expansion into the Southeast Asian market. The agreement is a component of a Comprehensive Economic Partnership Agreement (CEPA) inked between the UAE and Indonesia in 2022, intending to elevate bilateral trade to USD 10 billion by 2030.

The agreement specifies that EDGE will provide a production line for 5.56x45mm and 7.62x51mm ammunition, which aligns with the Indonesian Ministry of Defence’s goal to enhance local job opportunities and manufacturing capabilities. The ammunition facility is set to commence production in 2026. However, the EDGE Group declined to disclose the facility’s anticipated production capacity.

However, an analyst at Gulf State Analytics noted that EDGE’s decision to establish a production line with the Indonesian company is uncommon compared to its previous international ventures. The UAE defense conglomerate has historically focused on localizing weapon system manufacturing and securing technology transfer from original equipment manufacturers rather than the reverse.

EDGE’s venture into Indonesia is not its initial move in the country. In 2022, EDGE subsidiary LAHAB inked a memorandum of understanding with Indonesia’s state-owned PT Dahana to facilitate collaboration in the manufacturing and production of various explosives. This agreement aims to leverage the existing capabilities of both companies and explore joint investments, including constructing a TNT plant at the Dahana Energetic Material Center (EMC) area in Subang.

(Source: Breaking Defense)

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