Growing Gulf defence and security spending creates opportunities for small and medium suppliers

However, the growing expenditure on Defence and Security in the region also creates opportunities for a broad range of small to medium enterprises (SMEs).

Recent market context
It has been reported that the Arab Gulf Cooperation Council (AGCC) states of: United Arab Emirates; Oman; Saudi Arabia; Bahrain; Qatar; and Kuwait, have undertaken Defence and Security related expenditure of some $277 billion over the past eight years.

These figures were produced by a significant commitment to new military platforms over the last decade, including such purchases as the UAE's acquisition of 80 Lockheed Martin F-16 Fighters and the $776m Baynunnah Corvette programme, a collaboration between Abu Dhabi Ship Building and a French design company for six 88-metre light multi-role vessels.

The AGCC Defence expenditure in 2003 alone was reported at some $25.4 billion with a ratio of such expenditure to gross domestic product (GDP) the highest in the world.

The opportunity for SMEs
While the Gulf States will undoubtedly continue to allocate a significant proportion of their defence spending to the purchase of major platforms and systems, there is also a noteworthy shift in emphasis toward ensuring the sustainability, and enhancing the supportability, of existing assets. It is recognised that the use of new technologies and computer power to enhance existing systems through a series equipment upgrades will allow maximisation of Defence resources. Similarly, the "smarter" utilisation of resources via the implementation of specific software applications and management systems is an opportunity to enhance military capability at a relatively small cost.

The shifting security situation is having an impact on the procurement priorities of all countries, including the AGCC States. With internal as well as external security issues being considered, the need for specialist technologies, training, equipment, accoutrements and logistics support is recognised as a priority to combat perceived current and future threats.

These issues open up an extensive range of opportunities for the small to medium niche players in Defence and related industries. The smaller industry players often have the ability and flexibility to attract customer attention with their innovative products and services and generally operate on a more cost-effective basis than the major companies.

How do SMEs enter the market?
In order for a company to gain a foothold in the Gulf market they must clearly have a product or service which is in demand and can be differentiated from its competitors in some way. However, one factor is all important. That factor is "market presence" and it includes the ability to react rapidly to customer demands; the ability to build relationships at the local level; and the ability to draw upon a diverse local network of contacts and referrals. To achieve this presence can be a costly affair, but for companies serious about making it in the Gulf marketplace, it is essential.

One company, the Australian Team for Logistics Administration & Sales (ATLAS) is dedicated to assisting small to medium enterprises into the Gulf market. The ATLAS executives and principals have collectively over 80 years experience in the Gulf region and have operated at the highest levels of Defence and Commercial organisations. ATLAS does not only assist Australian organisations, but can provide services to any company seeking to enter, or enhance their position in, the Gulf market.