IDEX 2017

Strategy for regional growth [IDEX17D4]

22 February 2017

Building on a presence in the region going back some 40 years, Leonardo (Stand 06-A03) is looking to further grow its business with and within the GCC states. At the same time, the company has reaffirmed its commitment to building ties with local industry partners.

The establishment of Leonardo at the start of 2016 saw previously separate Finmeccanica companies brought under a common corporate identity, and reflected the move to a single company organisation addressing the aerospace, defence and security markets. Now split into seven operating divisions, the company can trace its heritage in the region through the successes of such famous names as AgustaWestland, OTO Melara and Alenia Aermacchi.

Despite the drop in oil/gas revenues, Leonardo remains confident that defence and security spending will hold up in the region. “There is a perceived threat against which the GCC countries want to be equipped, and be ready to face,” Umberto Panetta, the company’s senior vice president for global market development, told the Jane’s IDEX Show Daily. “The governments have announced that, notwithstanding the decrease in revenues from the oil and gas sector, they would like to stick to their commitment to invest in defence, and new equipment.

“That’s why, for the future, we continue to see the Middle East as an important market for Leonardo.” He added: “We have been [through Leonardo’s predecessor companies] active in the Middle East since the 1970s, for us the market is very important for defence, security and government customers.”

The company scored two major wins in 2016. Leonardo’s biggest success has come in Kuwait, which last year placed a contract for 28 Eurofighter Typhoon aircraft through the company; Leonardo has a 21 per cent stake in the Eurofighter consortium and led commercial negotiations with Kuwait. The company will also be major subcontractor to Fincantieri for the supply of the combat systems for seven new warships ordered for the Qatari Emiri Naval Forces. These comprise four corvettes, two offshore patrol vessels and a landing platform dock ship.

According to Panetta, Leonardo sees good prospects going forward for its aircraft, helicopter, and naval and land defence electronics products. At the same time, it is positioning its Security and Information Systems Division to address the growing needs of the cyber-security market. “Further to our traditional systems and equipment, we have been working on new products and solutions such as cyber security,” he said. “It will be one of our engines for growth.

“The cyber threat is perceived as an increasing threat, and the UAE and the other GCC countries want to be ready to face and defeat that type of threat. We are ready to provide solutions to fulfil that need.”

Defence procurement programmes have also provided the GCC nations with an opportunity to develop local industrial capability in aerospace and defence.

“When countries look at a potential supplier, they look more and more to a partner wishing not only to sell their product but to establish a relationship with a local company,” Panetta said.

“From a strategic point of view, they want to develop a domestic defence industrial technological base, and they expect foreign industry to help them on this develop path through the transfer not only of work packages but also transfer of know-how. [This] has become a critical success factor in the region.

“If you look at the Leonardo track record, we’ve always been able to present ourselves as partners, rather than simple suppliers. And we have been able in several countries to establish successful partnerships.”

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