The United Arab Emirates’ EDGE Group announced it will supply Indonesian state-owned enterprise PT Pindad with an ammunition production line.

This announcement followed the signature of a US $27 million deal, which confirmed the Gulf defense’s firm expansion in the very competitive Asian market. In detail, the 2companies will open an ammunition facility in Indonesia for 5.56x45mm and 7.62x51mm ammunition and, as announced by EDGE, to meet “the Indonesian Ministry of Defence’s objective to increase local job creation and sovereign manufacturing capabilities.” In accordance with the official company statement, the inauguration of the production is scheduled to be in 2026 but its expected production rate has not been disclosed.

Despite its will to localize the manufacturing of weapon systems and secure technology transfer into its own country, the UAE proceeded with this deal as part of a Comprehensive Economic Partnership Agreement (CEPA) signed between the 2countries in 2022 aiming to boost bilateral trade to $10 billion by 2030. Under the latter, both countries agreed to strengthen cooperation and leverage the capabilities of both partners to build a range of interceptors, landing craft, and rigid-hull inflatable boats for Indonesia’s naval and coast guard requirements

The EDGE bold initiative is part of a broader plan which sees the company heading in Latin America and Asia noting their significantly positive margin in the defense market. The Indonesian market has the potential to be one of the leaders in defense expenditure, noting its fast-growing economy and its internal and potential external threats. Moreover, the Asian market can also provide EDGE with access to differing and complementary IP and technologies and strengthen its supply chain resilience through diversifying its network of partners.

This agreement is not the first between EDGE and an Indonesian company, in 2022 the company’s subsidiary LAHAB signed a memorandum of understanding with Indonesia’s state-owned PT Dahana to “pave the way for cooperation in the field of manufacturing, and the production of several types of explosives, capitalizing on the existing capabilities of both companies, and allowing them to explore joint investment in the construction of a TNT plant at the Dahana Energetic Material Center (EMC) area in Subang.”

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