The recent Langkawi International Maritime & Aerospace exhibition (LIMA) was notably different from many of its pre-COVID forebears because important contracts were signed. The event has always been interesting to attend but had acquired a reputation of lacking in substance with plenty of MoUs being initialled and competitions started – but rarely was a major deal concluded.
Thankfully for the capability development of the Malaysian Armed Forces (Angkatan Tentera Malaysia) this time three acquisitions of real significance were announced:
- The purchase of 18 FA/50A Block 20 light attack aircraft from Korea Aerospace Industries. These highly capable combat jets look like a small F-16 – which is hardly surprising given they were codeveloped with Lockheed Martin – and have gained considerable export success as well as service with the ROKAF. Malaysia will receive the same version as Poland, which has ordered 48 of them, and these will be equipped with Raytheon’s new PhantomStrike AESA radar.
EDGE stand at LIMA ’23. (EDGE photo)
They will have a number of additional capabilities such as air-to-air refuelling and the ability to deliver a variety of advanced weapons, including beyond visual range missiles. Deliveries will begin in 2026, with 14 aircraft assembled in Malaysia under an industrial cooperation program. It is likely that a second tranche of 18 will be ordered, though the timing is uncertain.
- Contract signature for the purchase of two highly specialised Maritime Patrol Aircraft from Leonardo. These twin turboprops are based on a baseline ATR-72 600 airframe and have been modified to carry a broad range of sensors and weapons combined with onboard processing.
Citing customer confidentiality, Leonardo has not disclosed the precise performance details saying only: “They will also be equipped with a flexible mission system, advanced sensors and a complete communications suite for Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C4ISR) missions over land and sea.
“The sensors and mission systems will be able to operate in stand-alone and net-centric modes, enabling the collection, processing and sharing of strategic data among operators, while providing complete situational awareness about the operational scenario.”
- Contract signature for the purchase of three ANKA surveillance drones from Turkish supplier TAI. These are medium altitude long endurance (MALE) UAVs that – along with the ATR MPAs will be a welcome boost to Malaysia’s maritime surveillance capabilities.
The combined value of these orders exceeds US $1 billion – actually not bad for a country that has a small and fluctuating defence budget. However, much more still needs to be done, particularly regarding a number of stalled naval acquisitions.
It is not as if Malaysia is in a benign environment. China’s aggressive behaviour in the South China Sea is a constant worry, as are acts of piracy, illegal fishing and people smuggling. To that can be added enduring concerns about armed incursions by Islamic extremists from the southern Philippines. If that isn’t enough, the country is also legally responsible for monitoring a lot of ocean, including shipping passing through one of the world’s busiest choke points, the Malacca Straits.
In the past, defence procurement has been a mess, characterised by the announcement of ambitious acquisitions only for these to be dramatically scaled back, cancelled, or just allowed to fizzle out with no contracts ever being signed. The root causes of this unhappy situation were a mix of corruption, budgetary uncertainty, opaque decision making and shifting priorities. One shudders to think of the amounts of money companies have wasted over the years chasing phantom opportunities.
However, an important change in the political landscape occurred in November 2022 with the election of the inspiration figure and reformist Anwar Ibrahim elected to power after almost two decades of turmoil and persecution, including imprisonment under trumped up charges. An example of triumph in the face of adversity, he has promised to stamp out corruption – and the positive effects of that might already be being felt.
There is now a better chance that money will actually be spent on equipment for the armed forces rather than being siphoned off into private bank accounts – though the longevity of his minority government is uncertain.
The industrial mix on display at LIMA was also a reflection of a rapidly changing environment. Previously, Russian companies were a significant presence. In 2023 they were completely absent, which is hardly a surprise since they have nothing left to sell. The brutal invasion of Ukraine is proving to be an absolute disaster for Russia, not only in terms of lives lost and equipment destroyed but also for reputational damage.
Speaking a week later at the Shangri-La Dialogue in Singapore, UK Defence Secretary Ben Wallace urged regional nations to return all of their Russian military equipment because it doesn’t work properly. He made the point in a light hearted way, but it is clear that western systems in almost all cases have proven to be far better than those supplied by Moscow and it is now likely that a number of nations are suffering from buyer’s regret.
In any case, the destruction of so much Russian equipment at the hands of Ukrainian defenders means that they are out of the export game for at least a decade as their factories struggle to resupply their own drastically depleted forces with inferior hardware. It will take a while for the full impact of this to flow through to the global marketplace but it looks likely that Russia will plummet from the world’s second largest arms exporter to being unable to sell anything of significance.
On the other hand, there were several new players at LIMA, most significantly EDGE from the United Arab Emirates. This company is emerging as something of a disruptor and as a recent entrant into the export domain has the benefit of a very modern production base, an agile approach to the market and an adaptor of Industry 4.0. The company was created in November 2019 to bring together a number of individual entities – some of them with a substantial history – under a single umbrella. This is using a French engineering approach that roughly translates as “rather than trying to harness 1,000 mice, just use a single horse.”
Speaking with Rodrigo Torres, President and Group CFO, he explained:
“The strategic technology pillar of EDGE is threefold. The first is autonomy – and that is for land, sea and air. The second is smart weapons such as missiles and guided glide bombs. The third is electronic warfare (EW). These areas are very important for us in terms of technology and R&D.”
Mr Rodrigo highlighted the acquisition of Estonian company Milrem, which is a world leader in the development of Uncrewed Ground Vehicles (UGV) that fit perfectly with the EDGE portfolio. The difference between Milrem and a multitude of other developers is they have a proven, in-production system that has an existing NATO customer base.
He said the purchase was part of the EDGE strategy of growing the international part of the business now that the phase of consolidating activities in the UAE has been completed. The highest marketing priorities for the company are Latin America, Africa and Southeast Asia – though the company has ongoing activities in the Middle East and Europe.
He emphasised that his preferred business model is to develop local partnerships, be they in Malaysia, Singapore or Brazil and that they could be potential suppliers to the rest of the group. He mentioned Malaysia in particular as a key regional strategic partner and explained that the government-to-government relationship with the UAE is excellent and also that the two countries share strong trading links.
Overall, this LIMA had a positive feel to it despite – or perhaps because of – the absence of Russians. The international business community, as well as the Malaysian Armed Forces, must be hoping that this trend continues far into the future.
(Disclaimer: the LIMA organisers provided accommodation for the writer. He would particularly like to thank Adam Thomas and all the staff at the media centre for their assistance)
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