THE EGYPTIAN ARMS INDUSTRY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05835438
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 30
• Document Creation Date: March 9, 2023
• Document Release Date: February 11, 2021
• Case Number: F-2020-00397
• Publication Date: September 1, 1985

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Directorate of
Intelligence
The Egyptian Arms
Industry
A Research Paper
SZt-f<
NESA 85-10191
September 1985
Copy 245
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Directorate of
Intelligence
''S'estet
The Egyptian Arms
Industry
A Research Paper
This paper was prepared by the
Office of Near Eastern and South Asian Analysis. It
was coordinated with the Directorate of
Operations.
Comments and queries are welcome and may be
directed to the Chief, Arab-Israeli Division, NESA,
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et
NESA 10191
September 1985
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leseret.
The Egyptian Arms
Industry
Key Judgments
Information available
as of 1 May 1985
was used in this report.
Egypt is the only Middle Eastern state other than Israel with a significant
arms production capability. Unlike Israel, Egypt's defense industry lacks
the modern technological base and manufacturing infrastructure necessary
to design and produce its own advanced tanks, aircraft, or missiles. Current
production is limited to assembling French- and Brazilian-designed aircraft
and to copying many of the Soviet weapons supplied to Egypt before 1975.
Egypt is unlikely to realize its goal of achieving self-sufficiency in modern
arms production by the mid-1990s because of weak military planning and
budgeting systems, inefficient work habits, shortages of skilled manage-
ment and labor, continued dependence on foreign technology, and an
inability to compete successfully in the international arms market.
Institutional factors play an important role in delaying further develop-
ment of the arms industry:
� The lack of a coherent and centralized planning, programing, and
budgeting process means weapons production and procurement decisions
are influenced as much by the personalities, contacts, and gratuities of
the services' "old-boy" networks as they are by any long-range require-
ments or projected capabilities shortfalls.
� The lack of a marketing organization denies the defense sector the kind
of information it needs to develop and market more exportable weapons.
Social and cultural factors also constrain arms industry modernization:
unwillingness to accept responsibility,
illiteracy, and limited English-language capability among managers and
workers preclude the rapid introduction of new technologies and produc-
tion processes to the defense sector.
� Neither Egypt nor its foreign partners appears willing to undertake the
costly and time-consuming reeducation and training programs necessary
to address these skills shortcomings.
III
�STeret--
NESA 85-10191
September 1985
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Egypt's foreign partners are likely to deny it the technology necessary to
independently design and produce modern weapons because:
� They want to maintain their market shares, reduce competition, and limit
unauthorized technology transfers to third parties.
� They are likely to be deterred by the limited prospects of recouping the
heavy capital investments required to provide the necessary technology to
Egypt.
Despite these shortcomings, the military production sector provides several
important benefits to Egypt's economy:
� Much-needed employment opportunities for Egyptian scientists and
engineers, as well as for larger numbers of semiskilled and unskilled
workers.
� The production of civil and military goods and services that Egypt
otherwise would be forced to procure from outside sources at higher cost.
� Foreign exchange earned through arms exports.
The United States will benefit over the long term as Egypt moves to
strengthen its defense production sector:
� There will be greater potential for Western influence as Egyptian
managers are introduced to new skills and production processes to
replace the old Soviet ones.
� Continued acquisition of Western weapons and technology will reduce
Egypt's interest in obtaining spare parts and new equipment from the
USSR.
�Srcret�, iv
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--Strern.t_
Contents
Page
Key Judgments
Defense Industry Organization and Decisionmaking
Arms Production Goals: Still Unattained
iii
1
1
Constraints to Success 3
Attitudes Toward Work 3
Excess Labor, Illiteracy, and Skills Shortages 4
Dependence on Foreign Technology 4
France 5
North Korea and China 5
United Kingdom 5
Brazil 5
United States 5
Marketing Difficulties 6
Outlook 6
Implications for the United States
Appendixes
A.
Origins of Arms Industry 9
B.
Egyptian Military Factories 11
C.
The Arab Organization for Industrialization 19
V
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Egypt's Defense Industries
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vi
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(b)(3)
The EgyrtianArnisl
Industry
Egypt's 27 arms factories employ nearly 100,000
civilian workers in the manufacture or licensed assem-
bly of a wide variety of Western- and Soviet-designed
small arms, ammunition, artillery, vehicles, and air-
craft.' According to Egyptian officials, in 1984 these
factories provided about $350 million worth of goods
to the Egyptian armed forces and exported nearly
(b)(3) $200 million worth of arms, principally to Iraq
(b)(3)
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These accomplishments mask serious underlying
problems within the defense production sector. Over-
staffed, poorly managed, short of skilled personnel,
and overly dependent on foreign technology, Egypt's
defense industries are incapable of independently
developing and producing in quantity the modern
arms desired by the Egyptian armed forces.
Defense Industry Organization and Decisionmaking
The arms industry is organized in a relatively
straightforward manner under the Defense Ministry,
although we believe planning and decisionmaking
probably depend as much on personal contacts as on
organizational relationships. The Minister of Defense
and War Production provides overall direction and
makes final decisions on administration, operation,
programs, plans, and budgets. Daily administration
and operation of the defense industry probably reside
with two other officials. The Minister of State for
War Production oversees the 15 factories of the
ammunition and armaments sector, while the chair-
man of the Arab Organization for Industrialization
(AO') administers the 12 factories of the aerospace
sector.
'Appendixes A to C describe in detail the history, organization, and
capabilities of Egypt's defense production sector. Shipbuilding and
chemical/biological weapons are not discussed in this paper. The
Defense Ministry uses civilian shipyards�both foreign and domes-
tic�for ship overhaul, maintenance, repair, and construction rather
than operate its own facilities. The chemical and biological warfare
production facilities are operated independently from the defense
production sector
1
In early 1984 Defense Minister Abu Ghazala formed
a War Production Authority Board to consolidate and
coordinate armaments production requirements and
scheduling among the services and with the Defense
Ministry staff. Chaired by the Minister of State for
War Production, its members include the command-
ers of the Air Force and Air Defense Force and the
chairman of the Defense Ministry's Armaments Au-
thority. The board so far appears to have accom-
plished
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uncoordinated strategy for procuring and producing
arms because of the military "old-boy" network and
the Defense Ministry's lack of a sophisticated and
coherent planning, programing, and budgeting sys-
tem. Under the "old-boy" system, programs succeed
or fail more on the basis of who sponsors them than on
their merits, and institutional coordinating mecha-
nisms such as the War Production Authority Board
are ignored in favor of direct meetings with well-
placed associates or decisionmakers
Arms Production Goals: Still Unattained
Egyptian goals for the arms industry have remained
remarkably consistent despite disagreements over pri-
orities and changes of personnel. On the basis of our
analysis of Defense Ministry documents and official
pronouncements, we believe that these goals are:
� Self-sufficiency in the production of modern arms
and ammunition. Egypt intends to expand and
update with US and French assistance its existing
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The Egyptian Defense Industry
Ministry of Defense and War Production
(Defense Minister, Service Chiefs, and Staff Armaments Authorities)�
Higher Committee for Armament a
Arab Organization for
Industrialization (AOI)
Chairman, AOI
A01 Electronics Factory
A01 Helicopters Factory
Hulwan Engine Factory
Hulwan Aircraft Factory
Propeller Factory
A01 Training Institute
Sakr Factory 333
Kader Factory 72 Ammunition
ABDCo
ABECo
AAV
A10
Abu Qir
Shubra
Al Ma'sarah
Engine factory
Hulwan 909
'Probably defunct
306432 9-65
Arms factories
Abu Zdbal 100
Al Ma'adi 54
Hulwan 999
factories
Heliopolis 81
Hulwan
arms production base that was established by the
British, West Germans, Swiss, and Soviets in the
1950s and 1960s. The Defense Ministry believes
licensing, coassembly, and coproduction agree-
ments that phase in final manufacturing capabili-
ties are the policies most likely to achieve this goal.
� Increased arms exports. This is both a goal in itself
and part of the strategy to achieve arms self-
sufficiency. Egypt plans to use reexport agreements
for coproduced weapons as the best method to
increase its share of the international arms market.
inistry of War Production
(Minister of State forWar Production)
National Authority for War Production
(War Production Authority Board)
Metal forging/
pressing factories
Hulwan 9
Hulwan 63
Hulwan 360
Electronics factory
Banha 144
Chemical/explosives factories
Aba Za'bal 18/90 Qaha 270
� Reduced civil and military unemployment. This was
a major reason President Nasir established the first
defense industries in the 1950s. Future arms copro-
duction and assembly agreements will require that a
greater share of the assembly and production be
performed in Egypt to increase defense-sector
employment.
� Reduced civil-sector imports. This is another goal
from the Nasir period. We believe Egyptian officials
will use the military's National Service Projects
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Financial Aspects of the Arms Industry
The financial dimensions of Egypt's arms industry
are murky. Output of the military production enter-
prises is excluded from official tabulations of nation-
al income and product, and even the operating ex-
penses of these public-sector companies are excluded
from the government's budget. Moreover, military
exports and imports are not included in official
Egyptian balance-of-payments statistics.
Although the lack of data prevents confirmation, we
suspect that the net impact of the public-sector
military enterprises on Egypt's operating budget and
the economy is only moderately negative. Substantial
financial allocations for these industries are balanced
by the goods and services they provide the Egyptian
military, which otherwise would be forced to procure
everything from bullets to batteries from foreign
suppliers. These enterprises also produce some civil-
ian products that from personal observation appear to
be of higher quality than those produced in nonmili-
tary Egyptian factories.
The military production enterprises are also signifi-
cant earners of foreign exchange. We estimate Egyp-
tian military exports totaled about $500 million in
1984 and may have reached $1 billion in 1982 when
Egypt provided a large quantity of arms and ammu-
nition to Iraq. These exports, however, include sales
of Soviet equipment from Egyptian inventories as
well as new production by military enterprises. We
suspect that the military has used a large share of
these earnings for purchases of non-US weapons,
turning funds over to the Central Bank only when
foreign exchange is insufficient impor-
(b)(3) tant defense-related obligations.
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Organization to broker deals with foreign firms to
utilize the defense sector's civil production capabili-
ties to manufacture the vehicles, home appliances,
ti
electronics, and building materials Eavo otherwise
would have to import
3
Constraints to Success
We believe Egypt's failure to reach the ambitious
goals it set for its arms industry is due in large part to
two policy decisions that undercut the industry at
critical points in the past:
� Nasir purchased large quantities of Soviet arms in
the 1960s to quickly match Israeli capabilities rath-
er than await the uncertain results of Egypt's costly
arms development efforts. This decision virtually
shut down the arms industry and led to the cancella-
tion of the most promising aeronautical research
and development programs.
� President Sadat signed a peace treaty with Israel in
1979, which stalled the arms industry just as signifi-
cant Arab-funded development was beginning. The
treaty led Saudi Arabia, Kuwait, Qatar, and the
United Arab Emirates to withdraw financing from
Egypt's newly created Pan-Arab arms production
program, the Arab Organization for Industrializa-
tion, and to close their markets to Egyptian arms
exports.
These decisions only partly explain Egypt's failure to
develop a modern, self-sufficient defense industry. We
believe other factors, such as cultural attitudes toward
work, excess manpower, shortages of skills and experi-
ence, dependence on foreign technology, and the
failure to grasp basic marketing concepts have been,
and will continue to be, key factors affectin the
success or failure of the arms industry
Attitudes Toward Work
US officials report that a combination of low pay,
long hours, poor working conditions, and a fatalistic
"if God wills it" attitude leads Egyptian workers to
perform only the minimum necessary work. This
results in low productivity, industrial accidents, equip-
ment breakdowns, and the production of shoddy,
substandard items with a reputation among foreign
purchasers for poor quality. In addition to hindering
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arms exports, this reputation has led the Egyptians
themselves to prefer mre exnensive but better quality
(b)(3) foreign-produced arms
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Egyptian productivity also is hurt by the belief that an
academic degree is a better measure of worth than
job-related training or work experience
academic titles and degrees, rather
than productivity, are used to justify positions and
salaries at the Banha electronics factory. We believe
the practice is widespread in Egyptian industry. The
focus on education over experience reinforces the
attitude among managers, supervisors, and techni-
cians that theory is superior to practice and that only
those who lack education need perform hands-on
work. US officials report that this leads management
personnel to become aloof and critical in their deal-
ings with subordinates, always willing to expound
theories but generally unwilling (and unable) to dem-
onstrate how things should be done. We believe it also
facilitates an avoidance of responsibility because each
manager passes problems on to the next higher, and
supposedly better educated, layer for decision.
Excess Labor, Illiteracy, and Skills Shortages
Long the employer of last resort for Egypt's unskilled
workers and college graduates, the Egyptian Govern-
ment has burdened factories in both the civil and
defense sectors with excess employees. As a result, US
officials report most Egyptian arms factories appear
overstaffed, often with at least twice as many employ-
ees as comparable Western plants.' In addition, many
of these excess employees serve no productive func-
tion. For example, a US official estimated that about
10 percent of each factory's staff consists of messen-
gers, errand boys, and tea servers. These excess
employees consume resources that could be used to
create the smaller, more highly specialized work force
that modern production processes require.
We believe that a high level of worker illiteracy will
retard efforts to modernize the arms industry because
costly and time-consuming retraining will be required
before introducing or changing production processes.
Although several workers are assigned to each job, only one
usually is present. The others are working at jobs in other factories,
on vacation, sick, or "in training." All are paid.
Secret
On the basis of reports from
survey teams, personal observation, and official state-
ments from the Egyptian Defense Ministry, we esti-
mate that worker illiteracy could be as high as 75
percent in some of the arms and ammunition plants
and at least 50 percent in the AOI's aircraft plants.
Egyptian managers are
more involved in making working-level decisions than
engaging in long-range planning like their Western
counterparts. In addition, a highly stratified manage-
ment style denies production management experience
and authority to the lower management layers
Another shortcoming that is likely to become increas-
ingly critical is the low level of English-language skills
among managers and workers. This slows the absorp-
tion of new equipment and technology because addi-
tional time and resources are required to ensure full
comprehension of written manuals and production
processes. We believe this lack of English-language
skill and a shortage of qualified translators also
explain why Egyptian managers are less well read on
mana ement techniques than their Western counter-
Dependence on Foreign Technology
Egypt's efforts to become self-sufficient in the produc-
tion of modern arms�particularly in the aerospace
sector�ironically have increased, rather than de-
creased, its dependence on foreign technology. Unlike
a decade ago, Egypt now relies on countries other
than the Soviet Union for technology to produce its
advanced weapons. Almost all of this technology is
French, but North Korea, China, the United King-
dom, Brazil, and the United States also have impor-
tant roles or potential roles.
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France. France became Egypt's primary source for
arms production technology after the British with-
drew from the AOI in 1979 under pressure from the
Arabs after Egypt signed its peace treaty with Israel.
The French offered, and Egypt accepted, facilities to
assemble under license Alpha Jet and Mirage 2000
aircraft, Gazelle helicopters, and related avionics and
engine component subassemblies. The French also
provided technical assistance to help Egypt reverse-
engineer the Soviet SA-7, RPG-7, and AT-3 weapons,
as well as work on development of a mobile antiair-
craft weapon system that would utilize Egypt's
reverse-engineered 23-mm gun, the "23rd of July."
Even though the Egyptians now operate their own
subassembly and assembly lines for the Alpha Jet and
Gazelle, the French still control either critical tech-
nologies or key steps in the assembly process. French
technicians, for example, continue to supervise assem-
bly operations, and they also perform all quality-
control inspections required before final acceptance.
Critical components such as avionics, inertial naviga-
tion systems, engine compressor blades, and graphite
composites are all made in France, as are many of the
airframe components critical for maintaining struc-
tural integrity. French propulsion and electronics
technology also has been critical to improving the
performance of Egypt's reverse-engineered SA-7 (the
"Sakr Eye") and the mobile 23-mm antiaircraft gun.
We doubt France will supply Egypt the capability to
produce any of the critical items it supplies until
either the technology is no longer up to date or is
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North Korea and China. Egypt appears to rely on
North Korea and China for production assistance on
four reverse-engineered weapons: the 130- and 122-
mm guns, the 122-mm multiple rocket launcher and
rocket, and the 23-mm antiaircraft gun.
North Korean and
Chinese factory technicians and occasional visiting
technical delegations have been actively assisting
these programs since at least the early 1980s. We
believe the North Koreans and Chinese have been
assisting the Egyptians to overcome casting, forging,
5
and assembly problems on the 130-, 122-, and 23-mm
guns and ammunition and on case fabrication and
fuzing problems with the 122-mm rocket. The Egyp-
tians probably rely on the Chinese and Koreans more
because of foreign policy considerations and a desire
to maintain arms technology diversity than to obtain
specific technical capabilities.
United Kingdom. Egypt depends on the United King-
dom for production assistance on the advanced Swing-
fire antitank guided missile and for development
assistance on one of the competing prototype D-30
self-propelled howitzers. With the Swingfire program
winding down and the self-propelled howitzer pro-
gram far from production, we anticipate that Egypt
will be dependent for the near term on UK firms only
for the technology to produce lasers and night sights
at the AOI optronics factory.
Brazil. Egypt is rapidly becoming dependent on Bra-
zil for the components and technology to assemble
and produce the Brazilian Tucano trainer. Because
Egypt's Tucano production lines are not scheduled to
be completed at the AOI Kader and Hulwan engine
factories until at least 1987, Egypt until then will be
as dependent on Brazil for Tucano parts, assemblies,
and production technology as it is now on France for
Alpha Jet and Gazelle components.
United States. The projected programs to coproduce
US weapons�many of which we doubt for economic
reasons will ever go forward�also would create a
total dependence on the United States for production
technology and critical components. Like the French,
the United States also would retain control of sensi-
tive technologies to prevent unauthorized access or
transfer to competitors or hostile powers. Thus, some
electronic components on AN/TPS-59 and -63 radars
would have to be controlled, as would selected avion-
ics, composites, and engine production technologies
for the F-16 and F-20 aircraft. Egypt likewise would
have to accept less than complete technology transfer
if it was still determined to coproduce an M-1�type
tank or improved TOW antitank guided missile.
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Marketing Difficulties
plan for
a defense industry sustained by arms exports will fail
as much from marketing difficulties as from cultural,
technical, and managerial problems. Among the most
serious marketing-related problems are:
� Obsolete defense production equipment and technol-
ogy.
thus cannot produce
the kinds of modern weapons that sell best in the
highly competitive international arms market.
� A reputation for poor quality. Afghan insurgents,
the Iraqis, and the Sudanese all have complained�
sometimes publicly�about the poor quality arms
they have received from Egypt.
� A history of falling behind production schedules.
The Franco-Egyptian "Sakr Eye" improved SA-7
missile is already two years behind schedule, and
optimistic Egyptian forecasts for producing several
thousand missiles in 1985 are unrealistic.
� A weak economy that constrains Egypt from offer-
ing prospective customers the favorable credit and
financing routinely provided by Soviet and Western
arms exporters.
� A continued dependence on foreign technology that
permits the sources of this technology�usually
other arms exporters�to determine which of their
weapons Egypt can export.
� Inadequate market research and a failure to develop
a comprehensive marketing plan for Egyptian arms
exports.
either know who their prospec-
tive customers are or why they continue to have so
little success in the international arms market.
Outlook
In our judgment, Egypt will continue efforts to create
a modern, self-sustaining defense industry despite the
economic burden and foreign dependence this will
entail. As a consequence, Egypt will continue to spend
more money to assemble or manufacture foreign-
designed weapons than it would if it purchased them
outright. We also anticipate Egypt will continue
heavy expenditures to design and build its own proto-
type weapons or to reverse-engineer Soviet equipment
even though both have limited sales potential. We
further believe Egypt will continue its efforts to
become the center of a Pan-Arab arms industry, even
though Egypt's isolation in the Arab world as a result
of its peace treaty with Israel effectively precludes its
access to the required Arab markets and capital.
We believe foreign assistance over the next decade
will permit Egypt to address�but not necessarily
overcome�shortcomings in such critical areas as
industrial production processes, electronics and avion-
ics manufacturing, composites fabrication, and metals
forging, casting, and bonding. Foreign governments
and firms, however, are unlikely to provide the kinds
of technology or key manufacturing processes that
will permit Egypt to independently produce its own
weapons. We believe West European firms will be
interested in maintaining Egypt's dependence primar-
ily to retain their market shares and to forestall
Egyptian competition with their exports.
Despite these constraints, we expect Egypt to continue
to base its arms industry on Western weapons and
technology. We anticipate that Egyptian military
leaders will continue to prefer technologically ad-
vanced Western weapons to less sophisticated Soviet
arms. We believe Egypt would consider substantial
Soviet or Warsaw Pact defense production assistance
only if Western nations deny Egypt�perhaps as a
result of another conflict with Israel�continued ac-
cess to the kinds of production technology and weap-
ons it now receives.
Finally, we believe Egyptian work attitudes and short-
ages of critical skills and experience will continue to
retard development of the defense sector. In our
judgment, neither Egypt nor its foreign partners will
be willing to invest in the expensive, long-term em-
ployee education and development programs neces-
sary to overcome these problems.
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Implications for the United States
The United States should benefit over the long term
as Egypt moves to strengthen its arms industry:
� There will be greater potential for Western influ-
ence at the working level in Egyptian ministries and
factories as Western civil and military managers
and technicians introduce Western organization
management philosophies to their Egyptian
counterparts.
� Egyptian production of modern Western weapons
provides tangible evidence of the benefits of partici-
pation in the Middle East peace process and of
being at peace with Israel.
� The Egyptian military is likely to become more self-
confident and assured of its capabilities against its
radical neighbors as domestically produced, modern
Western weapons increasingly supplant obsolete So-
viet systems.
� Egypt's interest in obtaining spare parts and equip-
ment from the Soviet Union will lessen as domesti-
cally produced Western weapons are integrated into
the armed forces.
� Egypt's acquisition of Western weapons and their
associated production facilities and logistic organi-
zations will enhance Cairo's capabilities to support
US military operations in Southwest Asia and the
Middle East.
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Appendix A
Origins of Arms Industry
The Nasir government established Egypt's first mod-
ern arms factories in 1954 with the objectives of
aiding full employment and economic development
and achieving self-sufficiency in arms. Nasir's arms
production program involved an across-the-board ef-
fort to manufacture as many types of Western arms in
as many turnkey plants as possible. Ammunition
factories were the first priority, followed by aircraft
production at the Hulwan complex, armored vehicle
production at the Kader Factory, and finally surface-
to-surface missile production at Heliopolis. Despite
claims of arms self-sufficiency, Egypt recognized its
dependence on Western aerospace technology only
after West German scientists in Egypt ended their
work on advanced aircraft and surface-to-surface
missiles and withdrew shortly before the 1967 Arab-
Israeli war. This overdependence, in addition to ineffi-
ciency, bad planning, overcapacity, incompetent mar-
keting, and lack of coordination with the military,
finally led Nasir to abolish the Ministry of War
Production and declare that the arms plants were to
manufacture civilian goods under the auspices of the
Ministry of Industry.
President Sadat restored the Ministry of War Produc-
tion in 1971. He initiated new arms and ammunition
licensing agreements with Britain and France to
supplement Moscow's agreement in December 1970
to permit licensed production of Soviet weapons.
Sadat's decision, following the 1973 Arab-Israeli war,
to use the arms industry to provide employment for a
peacetime military and obtain needed foreign ex-
change through arms sales was the impetus that led to
the formation of the Arab Organization for Industri-
alization (A0I) in 1975. Opportunities for sales to
Arab states dried up when Egypt signed its peace
treaty with Israel in 1979. The Iran-Iraq war and
Western willingness to assist Egypt in producing arms
to replace its inventory of aging Soviet weapons
continue to nurture the belief among Egyptian offi-
cials that Egypt may yet become the arms supplier to
the Arab world
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Appendix B
Egyptian Military Factories
The Egyptian Ministry of Defense operates some 15
military factories in and around Cairo and Alexan-
dria. Operating under the auspices of the Minister of
State for War Production and under the nominal
control of a National Authority for War Production,
these factories supply arms and ammunition to the
Egyptian military and for export. A catalog produced
by the National Authority shows these factories orga-
nized into six groups: arms, ammunition, chemicals
and explosives, metal forging and pressings, engines,
and electronics.
Arms Factories
The Al Ma'adi Company for Engineering Industries
(Military Factory [MF] 54) produces small arms,
machineguns, and edged weapons for the military and
sporting arms and surgical instruments for the civil
sector
the factory is underutilized and over-
manned. Even factory officials admit they are capable
of producing four times their current annual level of
50,000 AKM ("Misr") rifles.
the factory produces ac-
ceptable quality weapons despite operating Soviet-
designed machines built to Polish specifications that
process materials manufactured under Czechoslovak,
French, Polish, and Soviet standards. the
factory will continue to encounter resistance to its
products from foreign customers unless its estimated
6,000 workers take more pride in their work and
produce better quality weapons.
The Abu Za'bal Company for Engineering Industries
(MF 100) is Egypt's most modern arms factory. The
plant's approximately 2,000 workers assemble Egypt's
reverse-engineered Soviet 23-mm ZU-23M antiair-
craft gun (the "23rd of July") and 122-mm D-30
howitzers and also are working on a prototype of the
North Korean version of the Chinese 130-mm M-59-
1 M gun. The factory has been involved with the
105-mm gun upgrade program for Egypt's T-54/55
tanks, production of 115-mm gun barrels for the T-62
upgrade project, the US/UK 122-mm D-30 self-
propelled howitzer competitive prototype development
11
Heavy machinery used in the manufacture gligun
tubes at Abu Za'bal Factory 100.
program, and the competition between the French
firms Dassault ("Sinai 23") and Thompson-CSF
("Nile 23") to develop a mobile air defense system
that uses the "23rd of July" 23-mm gun.
US industrial survey teams and reliable sources of the
complex report the factory is neat, clean, and orderly
by Egyptian standards. They also report it is equipped
with numerous good-quality Czechoslovak, East Ger-
man, Swiss, and Yugoslav machine tools. Production
management concepts have been described as outdat-
ed but proven, while the plant management has been
characterized as one that sets realistic objectives to
achieve quality production.
the factory is dependent on foreign
technical assistance and that some products have a
reputation for poor aualitv
the factory working on the 130-mm gun, and at least
a half dozen Chinese technicians assisting in the
manufacture and assembly of the 23-mm antiaircraft
gun. All specialty steels must be imported, a depen-
dence that sometimes leads to production bottlenecks.
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(b)(1)
(b)(3)
The plant also suffers from a lack of forging, heat
treatment, barrel straightening, and testing facilities.
Finally, that management's posi-
tive, production-oriented attitude is offset by its inex-
perience, its lack of expertise and technical know-how,
and the traditionally lackadaisical Egyptian attitude
(b)(3) toward industrial safety.
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(3)
(b)(1)
(b)(3)
(b)(3)
The Hulwan Company for Machine Tools (MF 999)
and its 2,000 employees produce 60-, 82-, and 120-
mm mortars and also manufacture barrels and assem-
blies for the Egyptian "23rd of July" 23-mm antiair-
craft gun. It also produces machine tools, lathes, and
punching machines for the civil sector.
the factory
is capable of quality precision machining and is
willing to produce an order for as few as five items.
the factory trains about
1,500 students each year. Major problems are poor
housekeeping, excess labor, and overcapacity.
Ammunition Factories
Abu Qir Company for Engineering Industries (MF 10)
produces pressure caps, gas masks, and filters for the
military and cookware and aluminum pots for the civil
sector.
the factory is capable of producing 500,000 rounds of
7.62 X 54-mm ammunition daily
the factory was overstaffed with 4,000
employees and that this large work force directly
contributed to management's inability to accurately
estimate production costs.
Shubra Company for Engineering Industries (MF 27)
produces 50-caliber, 7.62 X 39-, 9-, 12.7-, and
14.5-mm ammunition.
the plant is capable of producing 1.5
million rounds of 7.62 X 39-mm ammunition daily,
with an approximate 20-percent reject rate. He esti-
mates 50- caliber production probably does not exceed
35,000 rounds per day. A plant brochure shows civil-
sector production limited to electric motors and
switches. Reports of poor safety practices among the
plant's estimated 5,000 employees were confirmed in
June 1984 when a worker's carelessly discarded ciga-
rette caused an explosion that destro ed Shubra's
black powder storage facility.
Al Ma'sarah Company for Engineering Industries
(MF 45) produces the 23-mm ammunition for Egypt's
reverse-engineered "23rd of July" 23-mm antiaircraft
gun
the plant is capable of producing 150,000 to
200,000 rounds of 23-mm ammunition monthly. Be-
sides production of 23-, 30-, 37-, and 40-mm antiair-
craft rounds, fuzes, and primers for the military, the
factory manufactures nails, screws, ball bearin s and
utility company meters for the civil sector
the factory
is clean and well maintained by Egyptian
standards and is equipped with many East European�
manufactured lathes, drilling machines, and numeri-
cally controlled machine tools.
The Heliopolis Company for Chemical Industries
(MF 81) produces mortar, tank, antiaircraft, and
general artillery ammunition in calibers from 57 mm
to 155 mm. Other items include: antitank mines;
smoke grenades; detonators, fuzes, and blasting caps;
gas masks and filters; rubber coatings for tank road
wheels; aircraft bombs up to 2,000 kg; and napalm
bombs. Civil-sector production is mostly paints, chem-
ical fillers, and explosives
approxi-
mately 4,000 employees worked in what by Egyptian
standards was a modern, clean, and safe facility. The
factory's longtime director evidently had created a
small welfare empire, with workers receiving good
wages, full medical care, and subsidized food and
housing. the plant's production
capability to be up to 1,500 artillery rounds per day,
even on the line manufacturing the US-designed
105-mm tank round. The 130-mm line, however, was
12
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...'..S"Pc.�.
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
capable of only 500 rounds daily. X-ray quality-
control procedures were described as adequate, al-
though not to US standards.
The Hulwan Company for Engineering Industries
(MF 99) is Egypt's principal manufacturer of mortar
shells, shell casings, bomb casings, and associated
metallic parts. It also produces fire extinguishers,
regulators, pistons, gun parts, and gasoline pumps for
the civil sector.
the factory sold nearly $90 million
worth of military equipment in 1983, and it anticipat-
ed that sales of some 300,000 "items" would bring in
over $100 million by the end of 1984.
plans were under way to double produc-
tion in 1985
who have visited the facility report that
housekeeping is uniformly poor and that the factory
uses primarily old equipment and obsolete, but prov-
en, manufacturing methods. the
factory's production rate is good, despite quality
assurance problems caused by shortages of trained
metals engineers, technicians, and middle-level pro-
duction managers. The factory's managers indicated
it employed about 7,000 workers. Personality conflicts
between managers and with the management of Heli-
opolis Factory 81 also affected production quantity
and quality.
the Defense Ministry's Arma-
ments Authority has taken action to circumvent some
of these problems. For example, the factory has been
authorized to procure US tungsten penetrators for use
in the Egyptian-produced US 105-mm tank round
because a similar penetrator could not be successfully
or economically produced in Egypt. More significant-
ly, another
13
Display of ammunition manufactured by Hulwan
Factory 99
supply the plant with some 30,000 122-mm artillery
casings.
this
particular agreement reflects the Armaments Author-
ity's doubts about the plant's ability to produce either
the quantity or quality of shell casings needed to
support Egypt's arms sales to Iraq.
Chemical and Explosives Production Factories
The Abu Za'bal Company for Specialized Chemicals
(MF 18) employs 3,000 workers to manufacture
single- and double-base powders, dynamite and other
explosives, mortar charges, solvents, and extruded and
cast double-base rocket propellants. We believe the
plant also may have formerly produced napalm.
old, limited-capacity
equipment appeared responsible for restricting pro-
duction primarily to small-quantity propellant lot
sizes.
Adjacent to MF 18 is the recently completed Abu
Za'bal MF 90. This facility was constructed specifi-
cally to supply the triple-base propellant for the US-
designed 105-mm tank round produced by Heliopolis
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
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it possessed advanced physical, chemi-
cal, and calibration laboratories and was similar in
configuration and management procedures to US
facilities. He also described the work force as compe-
tent and knowledgeable.
Qaha Company for Chemical Industries (MF 270)
produces primers, blasting caps, dry batteries, and
tracers, flares, and other pyrotechnics. The facility
also appears to be Egypt's most poorly laid out, badly
maintained, inefficient, and unsafe military factory.
equipment breakdowns are common because most of
the machinery in use dates back to the late 1940s
only the plant's limited production
kept the accident rate down, since the machinery was
poorly maintained and the factory littered with trash.
Production capability was 180,000 to 240,000 primers
and 50,000 to 100,000 tracer units per eight-hour
shift.
Metal Forging/Metal Pressings Factories
The Hulwan Company for Ferrous Products (MF 9),
recently modernized with new equipment, provides
general and precision cast iron and steel forgings for
diesel engines, automobile crankcases, and gun car-
riages.
military business represented only a
small part of the 25,000 tons cast in 1983. This
probably indicates the facility has not yet broadened
its output into the more specialized steels now in
demand by the other arms factories.
The companion to the iron foundries is the Hulwan
Company for Nonferrous Products (MF 63). Al-
though its equipment is old,
the company still
retains its reputation for expert, well-crafted copper,
brass, and aluminum extrusions.
Refrigerators, stoves, cutting charges, and metallic
mine components are the major civil and military
products made by the Hulwan Company for Metallic
Apparatuses (MF 360).
Engine Factory
The Hulwan Company for Diesel Industry (MF 909)
is Egypt's major producer of civil and military diesel
engines, diesel-electric generators, and air compres-
sors.
the plant is capable of producing 3,000
engines per year, although in 1982 it only produced
2,000, half of which were for the military.
Electronics Factory
The Banha Company for Electronics Industries (MF
144) and its "Al Nasr" civil component assemble
small radio transmitters and receivers, printed circuit
boards, and other small electronic components.
Banha's 2,500 employees include 300 engineers, all
of whom speak fluent English, and about 400 techni-
cians, only about a third of whom speak any English
at all. Pay and benefits are about a third higher for
Banha employees than for other, comparable civil
electronics factories. Banha also has sought to develop
its own work force through a technical training
program, and it is one of the few Egyptian defense-
related firms that employs women on a production
line.
Egyptian management practices and low worker moti-
vation hamper production at Banha.
low employee motiva-
tion was evident through poor housekeeping and
14
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Workers assembling connonents at the Banha
Electronics Factory 144.
unsafe worker practices. Quality-control procedures
did not appear clearly defined, and the factory's poor
documentation practices required the Army to per-
form its own quality-control inspection before accept-
ing Banha's products
another reason for the quality-control problem was
the lack of a system to provide backups for absent
workers
Despite these problems and a lack of environmentally
controlled facilities, we believe Banha has the poten-
tial to expand production beyond its present assembly
of small radio transceivers. Banha's managers and
employees are intelligent and generally well educated,
and they appear willing to learn new production
methods and to adopt new management styles. We
also believe Banha would complement the AOI's
electronics factory if the Defense Ministry rational-
ized military electronics production by assigning the
telecommunications and radar sector to Banha and
avionics production to the AOI.
15
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O-4
Table 1
Major Products of Egypt's Military Factories Af/
Abu Za'bal Al Ma'adi Hulwan Hulwan Heliopolis Shubra Abu Qir Al Ma'sarah
Engineering Engineering Machine Engineering Chemical Engineering Engineering Engineering
(100) (54) Tools (99) (81) (27) (10) (45)
(999)
Arms
Daggers, knives, axes X
Flare gun X
Flamethrower X
Hulwan 9-mm pistol X
Misr (AKM) rifle X
7.62 x 39 mm
Suez light machinegun X
7.62 x 39 mm
Port Said submachinegun X
9-mm P.B.
Aswan medium machinegun X
7.62 x 54 mm
60-mm light mortar X
82-mm light mortar X
120-mm heavy mortar X
23-mm AA gun (ZU-23M) X
122-mm SP howitzer X
122-mm D-30 howitzer X
130-mm gun (M-59-I M) X
Ammunition
.303 ball
X
7.62 x 39 mm
X
7.62 x 51 mm
X
7.62 x 54 mm
X
9-mm P.B. and blank
X
.5" API/APIT
X
12.7-mm API/APIT
I4.5-mm API/APIT
X
X
20-mm AA HEI (Hispano
Oerlikon)
X
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Abu Za'bal Al Ma'adi Hulwan Hulwan Heliopolis Shubra Abu Qir Al Ma'sarah
Engineering Engineering Machine Engineering Chemical Engineering Engineering Engineering
(100) (54) Tools (99) (81) (27) (10) (45)
(999)
XProtective equipment
co Gas masks
23-mm ZU AA HEIT
X
30-mm AA HET (Hispano)
X
37-mm AA HEIT
X
40-mm AA (Bofors)
X
57-mm AA/AP/HE
X
60-mm HE mortar X
81-mm HE mortar X
82-mm HE/IL mortar X
85-mm HE/AA/AP
X
100-mm HE/AA/AP
X
105-mm HEAT/APFSDS-T
115 HE/Sabot
X
120-mm HE mortar
X
I22-mm HE (H-38/D-30)
X
122-mm (BM-21) rocket
with launcher
X
130-mm HE (M-46)
155-mm HE
Shell casings, mortar shells,
metallic parts
Plastic and metal
AP/AT mines
X
Detonators, fuzes, blasting caps
Smoke grenades/explosive
charges
Artillery/rocket fuzes
Percussion caps and primers
Handgrenades
X
Filters
X
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Table 1
Major Products of Egypt's Military Factories (continued)
Abu Za'bal Qaha Hulwan Hulwan Banha Hulwan Hulwan
Chemical Chemical Nonferrous Ferrous Electronics Diesel Metallic
(18, 90) (270) (63) (9) (144) (909) (360)
Chemicals and explosives
Single-base powders X
Double-base powders X
Mortar charges X
Extruded and cast double-base X
rocket propellant
Explosives
Flares, pyrotechnics X
Primer caps, tracer tubes X
Dry batteries X
Metals fabrication
Rods, wires, cable X
Castings X
Crankcases
Gun carriages
x
x
Metallic pressings
Cutting charges
X
Metallic mine components X
Field service equipment
Diesel engines
Diesel generators
X
X
Pumps, compressors X
Electronics
Radios X
Switchboards X
Mine detectors X
Printed circuit boards X
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S et
Appendix C
The Arab Organization
for Industrialization
The Arab Organization for Industrialization (A0I)
was established on 29 April 1975 when Saudi Arabia,
Kuwait, Qatar, and the United Arab Emirates provid-
ed nearly $2 billion to underwrite a Pan-Arab arms
development organization based in Egypt. In return
for this funding, Egypt was responsible for providing
some 16,000 workers in five former military factories
to serve as the production base, and for obtaining and
managing new joint ventures with Western firms. The
AOI promptly negotiated a series of coproduction
agreements with Western firms, and four joint-
venture companies (Arab-American Vehicles, Arab-
British Dynamics, Arab-British Engines, and Arab-
British Helico ters) were established by the end of
1978
Egypt's peace treaty with Israel not only ended Arab
funding for the AOI but also led to successful Saudi
pressure on the British to withdraw from the Lynx
helicopter assembly program with Arab-British Heli-
copters. British participation in other AOI ventures
continued, however, and French participation in the
A01 increased in the late 1970s with contracts to
assemble Alpha Jet trainers, jet engines, and electron-
ics. Despite the Arab pullout, Egypt has continued the
A01 as a functioning entity, citing charter provisions
requiring unanimous consent to dissolve the organiza-
tion. According to the AOI, its original Arab funds
remain untouched in interest-bearing accounts, await-
ing the return of the original partners
Organization
Though nominally an independent, Pan-Arab organi-
zation, the AOI in reality is little more than the
aeronautical and high-technology side of the Defense
Ministry's military factory system.
The Arab-American Vehicles Factory (AAV), located
in the Almaza section of Cairo, produced its first
American Motors (now AMC-Renault) Jeep CJ vehi-
cle in December 1979. Although the plant is capable
of producing some 10,000 vehicles per year, it proba-
bly produces less than one-fourth of that number due
19
Inventory of Jeep vehicles at the Arab-American
Vehicles Factory
to limited military demand.
Egypt sold about
1,000 Jeeps to Iraq in 1983 and that Defense Minister
Abu Ghazala anticipates completion of a sale to Iraq
of another 4,000 (worth some $40 million) by August
1986. all of these
vehicles have come from AAV's stockpile of nearly
10,000 unsold vehicles. We estimate local content in
the Jeeps is probably closer to 25 percent than the 50
percent claimed by the A01
Arab-British Dynamics Company (ABDCO), also lo-
cated at Almaza and adjacent to AOI's Sakr Factory,
produces only the British-designed, 1960s-generation
Swingfire antitank guided missile.
some 70 percent of the missile is
local content, including major components such as the
rocket motor and control unit. The hollow-charge
warhead, however, is made in the United Kingdom.
After a visit to the
appeared to be clean, well
managed, and equipped with modern numerically
controlled machine tools in several areas. At that time
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Final checkout and insertion of a Swing/ire anti-
tank guided missile into its launch canister at the
Arab-British Dynamics Company.
the plant's approximately 600 employees and 40
British technicians, advisers, and managers were in-
volved in producing some 200 missiles per month on a
second Egyptian contract for 65 launchers and 3,000
advanced Swingfire missiles.
ABDCO appears to have a North Korean connection.
AT-3 Sagger antitank guided missiles at the facility
in early 1984
This improved SA-2 missile, identified by ABDCO as
the "Early Bird," was displayed at the 1984 Cairo
International Arms Exhibition.
The Arab-British Engines Company (ABECO), locat-
ed at Hulwan, was created as a joint venture with
Rolls-Royce in 1978 to produce engines for the Lynx
helicopters that were to be assembled by AOI's Arab-
British Helicopters Factory. Despite the 30-percent
share Rolls-Royce retains in ABECO, the factory and
its approximately 400 employees now assemble, re-
pair, and overhaul the French Turbomeca Astazou
XIV-H engines used on Egypt's Gazelle helicopters. It
also repairs and overhauls the Soviet TV2-117A/B
and TV3-117A engines used on Egypt's MI-8 helicop-
ters. The AOI intends to develop the engine factory
into a major regional engine overhaul and repair
facility and has expressed an interest in developing
the capability to do work on the T55-L-1 1D (CH-47),
T56-A-15 (C-130), CT64-GE-820-4 (DHC-5 Buffalo),
Gnome H-1400-1 (Westland Sea King/Commando),
and the Turbomeca Makila I-A (Super Puma). We
believe, however, that extensive capital improvements,
particularly to the engine test cells, are necessary
before any of these other programs can be undertak-
en.
The AOI Helicopter Factory, formerly Arab-British
Helicopters, began in 1978 as a joint venture to
produce the Westland Lynx helicopter. The AOI sued
its former partner for breach of contract after the
British unilaterally withdrew under Saudi pressure in
1979. The factory later was completed with French
assistance, and today it assembles the Aerospatiale
SA-342L Gazelle helicopter at a rate of about two per
month, with a maximum capacity of about four per
month. The helicopters arrive in Egypt as kits with all
the major components already assembled. The
factory's position as a subcontracting final assembler
to Aerospatiale and the French Government ensures
French quality control of the final product and has
permitted the AOI to master fairly quickly the assem-
bly operation. The factory's first helicopter was ac-
cepted by the Egyptian Government in December
1983, a little more than six months after the first kit
arrived in Egypt.
The AOI Training Institute, also referred to as the
Arab Institute for Aerospace Technology, was created
in the early 1980s to provide technical and upgrade
training for AOI workers. The AOI has long-range
plans to convert the Institute from a simple technical
training facility into what it hopes will become a
major regional aerospace academic and research com-
plex.
AOI's Electronics Factory is colocated with the AOI
Kader Factory in Nasr City. Created in 1979 to
supply electronics components for AOI missiles and
rockets, the factory's 120 workers and 30 engineers
instead primarily have produced telecommunications
equipment. This light assembly operation produces
20
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.."Secrt.L.
Gazelle helicopter 7semblv at the 101
Helicopter Factory
field telephones, West German�designed television
sets, Yugoslav-designed switchboards and field tele-
phones, and Thompson-CSF and TRT radio altime-
ters and radios for Egypt's Alpha Jet trainers and
Gazelle helicopters. According to AOI officials, elec-
tronics sales to other AOI units and to the Egyptian
military reached $9 million in 1982-83, up $2 million
from the previous year.
he factory in 1983
was well equipped to produce single- and
double-layer printed circuit boards but was not yet
able to manufacture multilayer boards.
Arab International Optronics is a joint venture
formed in 1983 with the British firm United Scientific
Holdings. This AOI unit will begin the incremental
licensed manufacturing of optical instruments, sec-
ond-generation night-vision devices, and laser range-
finders once its pilot plant in the Cairo suburb of
Heliopolis is completed. AOI plans eventually to turn
this pilot plant into the research and development
facility for a larger main plant to be built nearby.
The Hulwan Aircraft Factory (formerly Military
Factory 36) is involved in the component assembly,
final assembly, and flight-testing of the French Alpha
Jet. It also will provide components and assemblies for
21
Alpha Jet assembly at the A01 Hulwan
Aircraft Factory.
the Brazilian Tucano trainer once assembly and man-
ufacturing begin at AOI's Kader Factory, and it has
been designated to assemble French Mirage 2000
fighters for the Egyptian Air Force. According to the
AOI, the factory employs some 3,500 personnel, of
whom 150 are graduate engineers. Aviation press
sources reported that this large work force is one of
the factory's greatest strengths, since most of it has
worked together for more than 20 years on Egyptian
aeronautical projects, including the design and proto-
type manufacture of two Egyptian military aircraft in(b)(i )
the late 1960s. In contrast to many Egyptian fac- (b)(3)
tories, the Hulwan
factory as neat, clean, well managed, and equipped
with many modern machine tools
The aircraft factory's major project since 1982 has
been the component and final assembly of the Alpha
Jet MS-1 trainer and MS-2 light attack aircraft.
Egypt's contract with France provided that 26 of the
30 MS-1 aircraft were to be built in Egypt, as were 11
of the 15 MS-2 aircraft. Egypt was to receive a 10-
percent offset on the MS-1 contract and a 30-percent
offset on the MS-2s. Major offset items have included
Egyptian manufacture of rudders, flaps, ailerons,
fuselage tail cones, engine exhaust pipes and bypass
ducts, and avionics racks for both Egyptian and
French Alpha Jets.
�Strret--_
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(b)(3)
(b)(1)
(b)(3)
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Production of both
versions has averaged about 1.5 aircraft per month,
although that rate was recently slowed to just under
one per month to stretch out delivery of the final seven
aircraft to the last quarter of 1985. Egyptian officials
have expressed concern that the factory has no con-
tracts other than assembly work on the Tucano with
the Kader Factory to keep its large work force
gainfully employed until some planned Mirage 2000
work later in the decade
The Mirage 2000 deal with France involves an initial
purchase of 20 aircraft (four trainers and 16 fighters),
with delivery to begin no later than the last quarter of
1985. agreement
has been reached (but no contract yet signed) for an
additional purchase of 20 aircraft, and an option has
been retained for a further 20. Egypt has stated its
desire to assemble 16 of the first 40 aircraft, with at
least 10 percent of the aircraft's components assem-
bled in Egypt.
The Hulwan Engine Factory (formerly Military Fac-
tory 135) and its approximately 3,800 employees
assemble the French Turbomeca-Snecma Larzac
04-05 engine for the Alpha Jet. In addition, the
factory is preparing to assemble under license some
150 Pratt and Whitney (Canada) PT6A-25C turbo-
prop engines for the Brazilian Tucano trainer at a
planned rate of four per month. The factory also will
probably assemble the French Snecma M53-P2 en-
gine should Mirage 2000 assembly begin at the
Aircraft Factory later in the decade.
the Engine Factory
remains underutilized despite the expenditure of some
$1 million to upgrade tooling to produce the Larzac
engine the factory produces
gears, valves, brakes, turbine blades, diesel injectors,
and other parts for diesel engines in order to utilize its
spare capacity. Its extra personnel are involved in
conducting accident investigations for the Egyptian
Air Force, testing engines that have been overhauled
at the Air Force's overhaul facility at Hulwan, and
performing testing and analysis on foreign- and
domestic-manufactured engine components.
the Engine
Factory lacks the necessary experience, leadership,
equipment, capital, and access to financial resources
to produce or assemble a modern jet engine.
We believe the Factory for Helicopter Propellers is
the old Hulwan Machine Shops. This plant's approxi-
mately 300 workers manufacture rotor roots and rotor
blades and also rebuild gear boxes for Egypt's Soviet-
supplied tanks.
in 1984 the facility and its
equipment appeared old, yet well maintained.
The Kader Factory for Developed Industries (former-
ly Military Factory 72) is located in the Nasr City
area of Cairo. Its primary products until recently were
the Walid armored personnel carrier (APC), a copy of
the Soviet BTR-152 produced with Polish and East
German assistance, and the Gomhuria basic trainer
aircraft, a copy of a World War II German design.
The factory now is working on two new products, the
Fand (Panther) APC and assembly of the Brazilian
Tucano trainer
The Fand is an indigenously developed, four-wheeled
APC that was exhibited in prototype at the 1984
Cairo arms exposition. The status of its development
and production is uncertain. Like the Walid, the Fand
may have been designed more for export than to fill
an Egyptian Army requirement
The AOI signed a $181 million contract with Brazil in
December 1983 to assemble under license 120 EMB-
312 Tucano light attack trainers at the Kader Fac-
tory. Forty of these aircraft are for the Egyptian Air
Force, with the remainder to be sold to Iraq. The AOI
has a further option on 60 aircraft, only 20 of which
are to be sold to Iraq. In addition, the A01 obtained
nonexclusive sales rights for the Tucano in the Middle
East. The tentative production schedule at Kader calls
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The Fand armored personnel carrier developed
at the A01 Kader Factory.
for the provision of 10 Brazilian-manufactured planes
to Egypt no later than mid-1985, to be followed later
in the year by Egyptian assembly of aircraft from kits.
Egyptian assembly of complete aircraft is scheduled
for 1987, with the contract to be completed by 1989.
The Sakr Factory for Developed Industries, formerly
Military Factory 333, is located in the Almaza section
of Cairo near the Arab-American Vehicles plant and
Arab-British Dynamics. The factory emphasizes re-
search, development, and production of rockets, mis-
siles, and propellants.
products, often with foreign assistance. Its current
line is restricted to occasionally improved copies of old
Soviet weapons such as antitank grenades, 80-, 120-,
and 122-mm artillery rockets, the RPG-7, K-13
(Atoll) infrared air-to-air missile, and the SA-7. The
AOI claims, nevertheless, that Sakr made $116 mil-
lion in sales of these items to the Egyptian military in
1982-83, up $16 million from the previous year.
Foreign assistance has been critical to Sakr projects,
both for production processes, equipment, and sup-
plies and for assistance in reverse-engineering old
Soviet weapons.
Dynamit-Nobel supplies at least 15
percent of the propellants used in the Sakr-30 im-
proved 122-mm artillery rocket, while the West Ger-
23
man firm of Bayern Chemie casts the propellants for
both the Sakr-30 and the SA-7 Sakr Eye missile.
French and US firms have been involved in reverse-
engineering studies and prototype development of the
SA-7 Sakr Eye, K-13 Atoll, AT-3 Sagger antitank
guided missile, and the PG-7 Nader, Sakr's copy of
the Soviet RPG-7. Aerospace media report Romania
has provided machine tools to Sakr and has assisted in
the production of the RPG-7
Sakr is involved in four programs of interest to the
United States: improvement of the K-13 Atoll air-to-
air missile; retrofitting older Soviet-supplied SA-7
missiles; the development of the Sakr Eye reverse-
engineered SA-7; and research on a short-range bal-
listic missile.
the Air Force preferred new US AIM-9 Sidewinder
missiles over an improved K-13, while initial Army
support for using the missiles in a ground-launched
role (similar to the US Chaparral) snagged on ques-
tions of cost effectiveness and on the tantalizing
prospect of reverse-engineering Soviet SA-9 Gaskin
missiles that might be obtained from Iraq.
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Table 2
Major A01 Coproduction/Coassembly Projects
Program
Foreign Partner
AOI Factory
Status/Remarks
Jeep vehicles
United States/ France
Arab-American Vehicles
In production.
Swingfire ATGM
Improved SA-2
United Kingdom
North Korea
Arab-British Dynamics
Arab-British Dynamics
In final production run.
Protocol signed in 1983 for joint
production.
Gazelle helicopter
France
Helicopter Factory, Arab-British
Engines Company
In production.
Alpha Jet
France
Hulwan Aircraft Factory,
Hulwan Engine Factory,
Electronics Factory
In final production run.
Mirage 2000
France
Same as above
Negotiations continue for produc-
tion this decade.
Laser rangefinders/night sights
United Kingdom
Arab International Optronics
Factory and pilot plant under
construction.
Tucano
Brazil
Kader Factory, Hulwan Engine Production scheduled to begin late
Factory 1985.
Sakr Eye (SA-7)
France
Sakr Factory
Production scheduled to begin late
1985.
Ballistic missile
Sakr Factory
Under research and development.
Sakr's last major project also is its most interesting:
development of a short-range ballistic missile
Swiss firm of Oerlikon-Buehrle is developing a static
test stand for Sakr that is capable of testing solid fuel
engines for surface-to-surface missiles.
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