In our latest tea with emerge85, we speak to Badr Al Olama, CEO of Strata.
By Afshin Molavi | March 27, 2017
emerge85 lab co-director Afshin Molavi speaks to Badr Al Olama, CEO of Strata, a high-tech aircraft composites manufacturer based in the emirate of Abu Dhabi. Strata competes at a global level in an industry dominated by Western firms. With a $7.5bn backlog of orders, it has emerged as a consequential player in the global supply chains of Boeing and Airbus, and Al Olama has set his sights even higher.
Al Ain is not the sort of place you would associate with a high-tech manufacturing revolution, but something akin to that is taking place in the modestly-sized Emirati city best known for its lush greenery and date palm oases. Tucked away in an aerospace industrial park amid a dusty plain, a high-tech aircraft parts manufacturer is making waves in an industry still dominated by Western firms. Strata, a subsidiary of the Abu Dhabi-based Mubadala Development Company, has won plaudits in the industry and, more importantly, substantive contracts: A robust $7.5bn backlog of deals from the likes of Boeing and Airbus.
With a specialty in composite aero-structures, Strata manufactures components for key aircraft such as the Airbus A330, A380, A350-900, and the Boeing 777 and 787. The company’s manufacturing facility is mostly staffed by UAE nationals, including a large number of women, and the firm focuses heavily on training a new generation of Emirati aerospace professionals.
In addition to direct sales to aircraft makers, Strata also provides structures for key global subcontractors. This makes it an unlikely entrant into the global supply chain for the $400bn annual aircraft manufacturing industry. Quite an achievement for a firm that only began production in 2010.
A small table in the overflow seating area of Baker and Spice, a bustling café in Dubai’s upscale Jumeirah neighbourhood.
Badr: White Bud Silver Needle
Afshin: Organic Golden Yunnan
“No tea for me, not yet at least,” Al Olama said as we sat down at Baker and Spice in Dubai. “First, I need a coffee,” he said, removing his sunglasses to show bloodshot eyes bleary from lack of sleep. “It has been a busy time, a very busy time.”
In addition to running Strata at a time of high-speed growth – the company bagged two new contracts at the recent Farnborough International Air Show, and also announced a strategic partnership with Indian firm Reliance Industries – Al Olama has also taken on a leadership role in the upcoming United Nations-backed Global Manufacturing and Industrialisation Summit. The event is scheduled to take place in Abu Dhabi from March 27-30, 2017.
After two coffees, he settled on a White Bud Silver Needle, a Chinese tea described on the menu as “unique, delicate, and rare”. It is harvested in Fujian province, and “handpicked on spring days”. I opted for the Organic Golden Yunnan, a black Chinese tea “made exclusively from golden shoots”. It tasted like a refined English breakfast tea with a kick, a good choice as it was morning – and I had not just gulped two cups of coffee.
“Growing up in Dubai, we drank the milky, sweet tea, like the Indian tea. [We had it] in the mornings, usually from a mug,” he said. “That gave you a rush of caffeine, and, even more, sugar.” In the afternoons, he said, the favourite was a red tea in a small glass, known as an estekan.
Al Olama is a dedicated green tea drinker when he flies. “I don’t eat on airplanes. I just drink green tea.” He reflected on the smell of tea versus the smell of coffee, saying, “Coffee is one of the few drinks that smells better than it tastes.”
From that observation flowed a stream of thoughts in a spirited and wide-ranging discussion that also included Mishaal Al Gergawi, co-director of the emerge85 Lab. Mishaal quipped that Strata was “the Google of Al Ain”, and we held forth with Al Olama on the future of technology and society, as well as the ideas of the Fourth Industrial Revolution, the importance of education and government keeping pace with technology, and the upcoming manufacturing summit, to name just a few. We began, though, with the sceptics.
Handling the sceptics
There were many sceptics when we started down this path of high-tech manufacturing for airplanes. The UAE carriers had certainly bought many planes, but we were not part of the supply chain. We live in an environment where there is no tradition of high-tech manufacturing companies. So, there were many sceptics in those early years.
We also live in a dusty world, a lot of sand. We live in a very hot world, and some of the material needs to be stored at minus 18 degrees in a freezer.
And in the first five years, we managed to grow from a company with a $1bn commitment from Airbus to one with a $7.5bn commitment from both Airbus and Boeing. I think we proved the sceptics wrong. The fact is we were doing something right, and we were able to deliver something of value, and I feel this is only the beginning.
“I don’t have the technology of the West or the low cost of the East”
I say this in the nicest of ways. I don’t have the technology of the West and I don’t have the low cost of the East. I am stuck somewhere in the middle. And when I am talking to my customers, I have to have an identity. I need to adopt a low-cost environment, and be able to say that I am low cost. Right? I am lower cost than the West, but I am not as low cost as the East. So I need to adapt to a low cost environment.
And then the next thing I need to do is adapt to a high-tech environment. We need to be bleeding edge [defined as the most advanced stage of a technology], so I can have the full value stream that I can offer to customers over the next five years.
The Fourth Industrial Revolution
Editor’s note: Much of our conversation revolved around the Fourth Industrial Revolution. The concept, which was introduced by Klaus Schwab, chairman of the World Economic Forum, holds that a “fusion of technologies” is “blurring the lines between the physical, digital, and biological spheres”. In the landmark work, Schwab argues that “we stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”
I have been thinking a lot about the Fourth Industrial Revolution, and especially about how to think about it. Here’s one way: Think of the wind turbine. Imagine you use the wind turbine and you connect it through the internet with the Weather Channel. So the Weather Channel sends information to the wind turbine, that the wind is coming from a certain direction, and then it rotates itself.
So, it rotates itself to get the maximum wind, and the right pattern, to optimise the energy generation. Right? So that is the fourth industrial revolution, in a sense, when everything is interconnected, and everything is automated such that there is no human invention in the process, and everything is more efficient.
The fourth industrial revolution is like the GPS in your car that is telling the car what path to take, where to go, how to avoid traffic, and you are not doing anything.
Fourth Industrial Revolution and aircraft manufacturing
We have to test every single part we make. When we test every single part, I have three outcomes, if you think about it: Good, bad, repair. Right? That’s it. The fourth industrial revolution for me is not ‘good, bad, repair’. It says, I see a trend, this person is making the same mistake. Right? And, again, the software is instructing a training module for this person to be updated in that area where he or she is always making the mistake. It is self-correcting.
Disruptions of the Fourth Industrial Revolution
Certainly, the West will lose manufacturing jobs; they will go East, and a few will go to Africa, Brazil, and all those areas. But the science behind the software will stay in Europe and the United States.
And once the fourth industrial revolution is fully adopted by everyone, the development will not go linear. It will go exponential. And nobody knows what is going to happen when it goes exponential.
Can governments keep up with technology?
I think a key issue for research institutes like emerge85 Lab is to study the basic question: Can governments catch up? Can they keep pace with technology? Think about the commercial drone. Right? The drone, when the drone started becoming a really hot thing and everybody was flying it around, governments were not quick enough to regulate it. One of the things we used to be told in law school was that the measure of civility in societies is how close their legal code is to the moral code.
Dubai is one of the fastest governments of all in reacting to technology, but even it will have a hard time catching up. And the risk behind that is governments might just ban things like the drone or other technologies they cannot regulate. So if you ban it, what happens is you are not going to adopt technology fast enough. But if you allow it, and you do not regulate it, it moves faster into unknown territory.
Can education keep up?
When I first got exposed to the fourth industrial revolution, I went to my boss. I told my boss, you know, a lot of IT people are graduating from UAE University and all the other universities. But they are looking at IT in the context of ERP, right, Enterprise Resource Planning, which is SAP and Oracle. They are not looking into IT in the full context of coding, cybersecurity, making a robot smart enough to be able to absorb predictive science and to make these decisions that we are talking about.
So the graduates who are coming out of university are looking into capturing information, and using a big database to make sense of it, and produce reports. It is not using IT in a sense of saying, I am capturing all this information; I am analysing it, and I am sticking out information that is allowing somebody to do something that adds value.
Today’s graduates are basically qualifying themselves for jobs that already exist, but what about future jobs?
And this is the fundamental problem because you need the government to start the re-skilling programme, so the government should be saying: We are launching an academy on IoT [Internet of Things]. This is something that I am trying to do with the manufacturing summit. We are saying this is a global initiative. Because this issue is not just a UAE education one, but it is a worldwide phenomenon.
I would like to see an IoT academy here in the UAE. Start re-skilling people. Then go into the education system and try to work with the minister of education and the minister of higher education and say, this is the trend around the world. How are we going to start introducing it to the universities? We have to be at the forefront.
Blurring lines between manufacturers and IT companies
Think about this for a moment. The IT companies of the world – the Googles, the IBMs – are trying to become manufacturers. The manufacturing companies of the world – the GEs, the Siemens – are trying to become IT companies.
So, for example, the GEs and the Siemens, they have always been doing turbines. They have always been doing trains. And they have always had the software in it. It was their software. The only difference is that they are trying to monetise the software and they are trying to say, this software can be used in your manufacturing environment. No longer only in my train. No longer only in my turbine.
The IT companies, because they don’t have an industrial domain, never built a train. They have never built a turbine. They are buying small startups that are manufacturers of trains, that are manufacturers of car parts, and they are trying to integrate so that they can incorporate the domain knowledge. So they can speak the language. It is just a very interesting world that is happening. You know, when you consider the two dynamics between the big manufacturers and the big IT companies.
China’s staggering size
On a recent visit to China, I was blown out of my mind. I have never seen what I saw in China. I mean not in terms of the fourth industrial revolution, just in terms of the sheer size of manufacturing. Think about the size of Dubai. That was just one zone. One zone! Only for manufacturing high-end chemicals. I was in this zone and I was driving besides restaurants, schools, apartments. The entire zone was focused on one sector: High-end chemicals. That is the world we are living in, and that is the competitive environment.
The Strata way
Strata has $7.5bn of backlog. How many companies that do what I do have $7.5 bn? Very few, one, two, maybe, maximum three. So, we are unique. The second aspect of it, because I am so small and because I am so new, I am able to adapt and be flexible enough to bring in new staff quickly, faster than anyone else. When you consider that half of my staff are UAE nationals, in my factory. Right? Probably 80% of them are on the shop floor, creating parts with their own hands. So they are the ones generating revenue. Nobody would have expected it.
And to make this work, I insist on discipline, creating the right work culture, like coming five minutes early to work, or leaving five minutes after work. You have to perform. If I call you on the weekends, if I call you away from your break, you have to come. If you are fasting and you want to do the night shift, all the way to 2am, and you are a young lady, you just have to do it. We need that kind of mindset. It needs to be ingrained very quickly.
The best thing about growing up in Dubai is that you grow up in a multinational community. We were soaking up all this information, all these cultures, all these different views.
I think for me specifically, seeing all these extraordinary developments in Dubai at such a fast pace and at world class standards gives me that drive to say: Ok, the world around me is moving very, very fast, so I need to move even faster.