Dubai Airshow 2021:

Halcon, Embraer to collaborate on weapons expansion for Super Tucano

16th Nov: Emirati defence conglomerate Edge announced on 15 November that its munitions subsidiary Halcon was collaborating with Brazilian aircraft manufacturer Embraer to integrate its weapons systems on to the A-29 Super Tucano light attack aircraft. Edge CEO and Managing Director Faisal Al Bannai said in a release, “Embraer's intention to work closely alongside Halcon in the development of weapon systems for the A-29 Super Tucano reflects the confidence placed in the UAE company's ability to deliver on what has been agreed upon, and underlines Halcon's position as a weapons manufacturer and supplier of choice internationally.”

Already a Janes customer? Read more here.

Edge targeting unmanned systems as growth path continues 

15th Nov: The United Arab Emirates' defence industrial conglomerate Edge is preparing for a significant expansion in the global defence marketplace in the coming years, as the company has been rapidly developing new products and taking them to market and reaching USD5 billion in revenues, Chief Executive Officer (CEO) and Managing Director H.E. Faisal Al Bannai has told Janes. “There is a whole spectrum of products when it comes to autonomous capabilities, the various drones that we have launched [in] the tactical drones segment. There is the whole segment of smart weapons that we've launched. In total, we've announced over 20 new products and that we have under development probably 40 key products. I think the kind of portfolio between autonomous [systems], smart weapon, or electronic warfare that we are growing says a lot for a company that didn't have these products two years ago,” Al Bannai told Janes.

Already a Janes customer? Read more here.

Altadrea, Teledyne FLIR announce teaming agreement

15th Nov: Saudi Arabia's Altadrea Manufacturing Company (TMC) and Teledyne FLIR announced on 14 November that they had signed a memorandum of understanding (MoU) to support research and development, as well as strategic co-operation between the two companies. TMC CEO Ayoub bin Fawzi Ayoub bin Sabri said, “The MoU with Teledyne FLIR is a major step forward and it is aligned with the strategic aim of the Saudi General Authority of Military Industries, under Vision 2030 to localise the military industry by more than 50% and increase competitiveness in the sector. It will also add value to the Saudi military industry by strengthening local industrial and defence capabilities and facilitating a transfer of technical knowledge to the Kingdom.”

Already a Janes customer? Read more here.

IAI launches USV, EO/IR projects with Edge 

18th Nov: Israel Aerospace Industries (IAI) announced on 18 November that it had signed two agreements with Emirati defence conglomerate Edge at the Dubai Airshow covering unmanned surface vessels (USVs) and electro-optic/infrared (EO/IR) system maintenance.The first agreement covers the development of a new USV between IAI and Abu Dhabi Ship Building (ADSB), with ADSB to be responsible for platform design, control system and payload integration, and concept of operations development. IAI will develop the autonomous control system and integrate payloads to the control system units according to mission requirements. 

Already a Janes customer? Read more here.

Industry Movements:

Leonardo discusses disposals with potential buyers

11th Nov: Leonardo is pursuing disposals to help offset the cost of a large acquisition and avoid ballooning its debt, according to the Italian defence and aerospace company. “We are working on them,” Leonardo CEO Alessandro Profumo told analysts on 5 November. “We have ongoing talks with offerors. As soon as we have something discussed within the board [of directors], we will have an official communication on that.” When Leonardo announced in April that it would buy a 25.1% stake in German defence sensor manufacturer Hensoldt for EUR606 million (USD702.6 million) in cash, it indicated that disposals would help it maintain a “solid capital structure”. The Hensoldt transaction is expected to close by year-end. 

Already a Janes customer? Read more here.

Dynetics buys prototyping firm Spire

10th Nov: Dynetics, a subsidiary of US government technology provider Leidos, recently acquired Spire Advanced Technology Holdings to expand its “rapid prototyping and advanced manufacturing” capabilities, according to a Dynetics spokesperson. Leidos paid approximately USD36 million for Spire, which is based in Colorado and has about 100 employees. In the third quarter of 2021, “we added a small strategic acquisition to our Dynetics subsidiary to accelerate some of its growth opportunities”, Leidos chairman and CEO Roger Krone told analysts on 2 November, without naming the acquired company. 

Already a Janes customer? Read more here.

Australia launches defence industry agency 

26th Nov: The Australian Department of Defence (DoD) launched on 26 November a new agency to support local firms' entrance and expansion in the country's defence market. The Office of Defence Industry Support (ODIS) replaces the Centre for Defence Industry Capability (CDIC), which was established in December 2016. ODIS advertises itself as a “one-stop shop” for small and medium-sized enterprises (SMEs) that do business with the DoD.

Already a Janes customer? Read more here.

QinetiQ reports ‘unsuccessful acquisition activity' 

19th Nov: QinetiQ Group conducted an “unsuccessful acquisition activity” in the first half of fiscal year (FY) 2022, according to the UK-based defence contractor. QinetiQ did not identify its acquisition target; however, it reported that it incurred GBP4.1 million (USD5.5 million) in costs for the activity. “It was a very big focus earlier in the year for us,” chief financial officer David Smith said on 11 November. Despite the unrealised purchase, QinetiQ remains committed to pursuing mergers and acquisitions (M&A) “in a number of geographies”, especially in the United States, Smith told analysts.

Already a Janes customer? Read more here.

GE to become aviation-focused firm

10th Nov: General Electric (GE) plans to narrow its portfolio to aircraft engines by spinning off its energy and healthcare businesses, the US conglomerate announced on 9 November. By dividing GE into three separate publicly traded companies, “each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees”, GE chairman and chief executive officer H Lawrence Culp Jr said. Each of the three companies will have an “investment-grade balance sheet” and access to capital markets, enabling each to operate and succeed on its own, said GE chief financial officer Carolina Dybeck Happe.

Already a Janes customer? Read more here.

Rheinmetall to buy assets of drone firm EMT

25th Nov: German conglomerate Rheinmetall Group plans to expand its defence technology offering by acquiring the operating activities, personnel, and real estate of EMT, a financially struggling Bavarian business that makes unmanned aerial vehicles for reconnaissance missions, Rheinmetall announced on 23 November. “The transaction reflects Rheinmetall's strategy of expanding its portfolio of systems and equipment to meet the complete needs of its military customers,” Rheinmetall said. “At the same time, this approach ensures that important defence technology capabilities will be maintained in Germany.” EMT's products include the newly developed Luna Next Generation (NG) UAV, which the German Bundeswehr is starting to use. The fixed-wing, catapult-launched Luna NG has more range and payload capacity than the original Luna, which the Bundeswehr has flown in operations since 2000.

Already a Janes customer? Read more here.

Northrop Grumman to invest in quantum computing lab

17th Nov: Northrop Grumman plans to invest in a quantum computing laboratory with Virginia Tech University, according to the chief executive of the US defence contractor. The investment will be formally announced on 17 November and will involve Virginia Tech's new Innovation Campus in Northern Virginia, Northrop Grumman chairman, CEO, and president Kathy Warden said at the Washington-based Brookings Institution on 15 November. While quantum computing is still in its infancy, proponents say it has the potential to solve unsolvable complex problems. According to a Northrop Grumman website, quantum computers could be up to 100 million times faster than traditional computers.

Already a Janes customer? Read more here.

International Affairs:

US introduces trade bans on more Chinese firms

25th Nov: The US government has included 12 more Chinese firms to its trading blacklist over their alleged involvement in developing technologies for the Chinese military and supporting Pakistan's nuclear activities. The US Department of Commerce (DoC) said on 24 November that the firms were added to its Entity List, inclusion on which prohibits the identified entities from involvement in the export, re-export, or in-country transfer of US dual-use technologies. It said some of the Chinese firms were included in the list as part of the DoC's drive to “prevent US emerging technologies from being used for [China's] quantum computing efforts that support military applications”.

Already a Janes customer? Read more here.

India lifts trade ban on Leonardo 

15th Nov: The Indian Ministry of Defence (MoD) has revoked a long-standing defence-trade ban on Leonardo. A notice issued by the MoD on 12 November confirms that the Italian firm has been removed from its trading blacklist. The ban was introduced in 2014 over allegations of corruption linked to India's terminated contract to procure 12 AgustaWestland AW101 helicopters for the Indian Air Force's VIP transport requirement. The suspension had previously applied to AgustaWestland International UK and its parent group Leonardo. The MoD notice shows that both entities have now been removed from a list of firms that are “suspended from doing business with the MoD”.

Already a Janes customer? Read more here.

Seoul pursues whole-of-government export strategy 

3rd Nov: South Korea's Defense Acquisition Program Administration (DAPA) is devising a new defence export strategy geared towards meeting evolving market conditions, the agency said on 2 November. The so-called K-Defense Globalization Strategy has been drafted through a series of surveys and assessments, and is geared towards boosting South Korea's defence export profile. The strategy is being implemented by the Korea Research Institute for Defense Technology Planning and Advancement (KRIT), an agency under DAPA.

Already a Janes customer? Read more here.

Edge builds collaboration with French industry

22nd Nov: The United Arab Emirates' (UAE's) defence industrial conglomerate Edge announced on 22 November that the firm had signed a memorandum of understanding (MoU) with French aerospace and defence industry association Groupement des Industries Françaises Aéronautiques et Spatiales (GIFAS) during the recent Dubai Airshow. Vice president of Strategic Programs & Corporate Development at Edge, Reda Nidhakou, said in a statement that, “This agreement is a key step towards more knowledge sharing and technology collaborations between EDGE and French-based small and medium enterprises (SMEs). We look forward to working closely with GIFAS to drive an innovative future for the defence and aerospace sectors in both our countries.”

Already a Janes customer? Read more here.

China Shipbuilding secures CNY100 billion credit line

4th Nov: The China State Shipbuilding Corporation (CSSC) has signed a CNY100 billion (USD15.7 billion) financing deal with one of the country's biggest banks. CSSC said the funding will support its expansion in areas including research and development (R&D) and exports.The financing agreement was signed by CSSC and the China Construction Bank on 3 November in Beijing. CSSC said the arrangement will provide it with long-term funding support across a range of activities such as supply-chain support, international business, credit provision, technology development, research projects, and upskilling workers. CSSC indicated that the funding will be available across its commercial and military shipbuilding portfolios. 

Already a Janes customer? Read more here.

UK to probe Parker's bid for Meggitt

19th Oct: UK Secretary of State at the Department of Business, Energy and Industrial Strategy (BEIS) Kwasi Kwarteng has directed the Competition and Markets Authority (CMA) to assess whether Parker Hannifin Corporation's proposed acquisition of Meggitt raises national security concerns, the department announced on 18 October. The CMA will have until 18 March 2022 to finish its work and report its findings to Kwarteng, the BEIS said. While Kwarteng did not say what national security concerns might exist, Parker is headquartered in the United States and Meggitt is based in the United Kingdom.

Already a Janes customer? Read more here.

President Xi calls for accelerated development of military technologies 

28th Oct: Chinese President Xi Jinping has urged the country's defence-industrial base to ‘step up' efforts to develop new military technologies and advanced weaponry. The drive is needed, he said, to enable the People's Liberation Army (PLA) to achieve its modernisation milestones later this decade. Speaking at a conference on military equipment and weapons in Beijing on 26 October, Xi claimed China achieved “leapfrog development” in military technologies during the country's 13th Five Year Plan (FYP), which ended in 2020. This progress served as the “material and technological underpinning for the country's strategic capabilities”, said Xi in comments published by the official Xinhua news agency.

Already a Janes customer? Read more here.

Peraton divests engineering unit

11th Oct: US government technology provider Peraton has spun off its systems engineering, integration, and support services (SES) business as a standalone company, Peraton announced on 30 September. “The separation of the SES business and Peraton enables each company to independently focus its core capabilities to meet the mission needs of its respective defence and intelligence community customers,” Peraton said. Like Peraton, SES is owned by US private equity firm Veritas Capital. Damian DiPippa, who was previously president of Peraton's Systems Engineering sector, will lead SES, which plans to rename itself.

Already a Janes customer? Read more here.

DAPA boosts financial support for local firms 

20th Oct: South Korea's Defense Acquisition Program Administration (DAPA) has outlined plans to enhance support for local defence firms hit by the Covid-19 pandemic. DAPA said on 19 October that it will allocate KRW435 billion (USD370 million) to “help the defence industry overcome a worsening business environment” because of the Covid-19 pandemic. The funding is available as soft loans over 10 years. The new allocation takes the total value of DAPA loans for local defence firms in 2021 to KRW723 billion, nearly four times the amount in 2020. Small businesses can borrow the funding at 0.3%, while larger companies must pay up to 1.5% in interest.

Already a Janes customer? Read more here.

Australia issues tender for destroyer sustainment 

25th Oct: The Australian Department of Defence (DoD) has issued a tender in support of a project to provide through-life sustainment for the Royal Australian Navy's (RAN's) three Hobart-class destroyers. The request for tender for the ‘destroyer capability life cycle manager' (CLCM) was issued on 25 October. The vessels will be the first major RAN platform to be appointed a CLCM. The core role of the CLCM will be to manage the sustainment of the Hobart-class destroyers and to support a programme to provide capability enhancement. The latter project will progress through a programme known as Sea 4000 Phase 6, which has a value of up to AUD5 billion (USD3.7 billion).

Already a Janes customer? Read more here.

Industry Movements:

General Dynamics, Raytheon post Q3 gains

28th Oct: Revenue at General Dynamics totalled USD9.6 billion in the third quarter of 2021, up 1.5% from the same period last year, the US defence and aerospace company announced on 27 October. Revenue gains in the Aerospace and Marine Systems segments of 4.6% and 9.6%, respectively, more than offset declines of 3.1% at Combat Systems and 4% at Technologies, General Dynamics said. Net earnings at General Dynamics grew 3.1% to USD860 million in the third quarter. Sales at Raytheon Technologies Corporation rose 10% to USD16.2 billion in the third quarter fuelled by continued defence growth and the continued recovery of commercial aviation, the US company announced on 26 October. At Raytheon's business segments, sales grew 7% at Collins Aerospace, 35% at Pratt & Whitney, and 5% at Raytheon Missiles & Defense. Sales were flat at Raytheon Intelligence & Space.

Already a Janes customer? Read more here.

Ultra Electronics shareholders back Cobham takeover 

5th Oct: Shareholders of UK-based Ultra Electronics voted on 4 October to approve Cobham Group's GBP2.6 billion (USD3.5 billion) takeover offer. The proposed acquisition by Cobham, which is based in the United Kingdom but owned by US private equity firm Advent International, still requires regulatory approval. UK Secretary of State for Business Kwasi Kwarteng has directed his country's Competition and Markets Authority (CMA) to review the deal by 18 January, citing potential “national security concerns”. Cobham revealed its interest in Ultra in June, saying the combination would create a “global defence electronics champion”. It aims to complete the acquisition in the first quarter of 2022.

Already a Janes customer? Read more here.

Airbus to pay USD1.04 million to settle overbilling case 

6th Oct: Airbus US Space & Defense Inc, formerly Airbus Defense and Space Inc (ADSI), has agreed to pay USD1.04 million to resolve allegations that it violated the False Claims Act by overcharging various US federal agencies, including the navy, the US Department of Justice (DoJ) announced on 4 October. “Government contractors have a responsibility to bill the government both accurately and transparently,” said Brian Boynton, acting assistant attorney general of the DoJ's civil division. “Companies that knowingly inflate their costs or otherwise improperly bill the government will be held accountable.” 

Already a Janes customer? Read more here.

Embraer, Fokker eye joint projects 

19th Oct: Brazil's Embraer and the Netherlands' Fokker Services and Fokker Techniek have agreed to explore opportunities to work together in the defence, commercial, and support markets, according to the three aviation companies. Potential areas of collaboration in defence include meeting specific end-user requirements for Embraer's C-390 Millennium transport plane, modifying aircraft to perform specialised missions, and repairing aircraft. The three companies formalised their relationship by signing a memorandum of understanding (MoU) in the Netherlands on 18 October.

Already a Janes customer? Read more here.

CAES buys radar expert CEI

04th Oct: US defence electronics company CAES has bolstered its radar expertise by acquiring Colorado Engineering Inc (CEI) of Colorado Springs, Colorado, CAES announced on 1 October. Founded in 2003, CEI has helped the US Department of Defense develop sense-and-avoid radar for unmanned aircraft to prevent collisions. It has also worked with the US Navy to upgrade the radar on the Lockheed Martin F-35 Lightning II Joint Strike Fighter to produce wide-area, high-definition imagery. The acquisition followed an announcement in May that the two companies had formed a strategic alliance to jointly develop technology for communication systems, datalinks, electronic warfare systems, missile seekers, and radar systems.

Already a Janes customer? Read more here.

Lockheed Martin's purchase of Aerojet Rocketdyne delayed to Q1 2022

27th Oct: Lockheed Martin, which had expected to finish its acquisition of propulsion manufacturer Aerojet Rocketdyne in the fourth quarter of 2021, disclosed on 26 October that it forecasts it will complete the transaction in the first quarter of 2022. The US defence contractor did not give a specific reason for the delay; however, it indicated that the USD4.4 billion deal remains in the regulatory approval process. The Federal Trade Commission is leading the US government's multi-agency review of the proposed acquisition. Lockheed Martin unveiled the deal in December 2020, saying it wants to bring the propulsion provider in-house to make designing and building missiles and rockets more efficient. Critics, including Raytheon Technologies, contend that the combination could make it difficult for Lockheed Martin's competitors to buy Aerojet Rocketdyne products.

Already a Janes customer? Read more here.

Babcock finishes selling Frazer-Nash Consultancy to KBR

22nd Oct: UK-based Babcock International Group has completed the previously announced sale of its Frazer-Nash Consultancy to fellow engineering company KBR for approximately GBP293 million (USD404.2 million), Babcock said on 21 October. Babcock first disclosed the transaction in August, saying the divestiture would help reduce its debt. Meanwhile, US-based KBR will expand its international advisory capabilities by obtaining Frazer-Nash, which operates mainly in the UK and Australia. Frazer-Nash serves government and industry customers in defence and other sectors. Its defence engineering expertise spans areas such as air, land, and naval systems; command, control, communications, computers, intelligence, surveillance, target acquisition, and reconnaissance; space defence; and weapons.

Already a Janes customer? Read more here.

AM General's interest in acquisitions grows

25th Oct: AM General plans to put greater emphasis on buying or partnering with other companies to help fuel its growth, according to the new chief executive officer (CEO) of the US ground vehicle manufacturer. US private equity firm KPS Capital Partners, which acquired AM General a year ago, has a dedicated fund to support acquisitions and joint ventures by the companies it owns, said Jim Cannon, who became AM General's CEO on 20 September. AM General is exploring how to tap into that fund. “The sky's the limit there,” Cannon told Janes on 21 October.

Already a Janes customer? Read more here.

Ultra Electronics sets shareholder vote on Cobham's takeover bid

9th Sep: Ultra Electronics has asked its shareholders to vote on 4 October on Cobham Group's offer to acquire the publicly traded company, Ultra announced on 8 September. Ultra's board of directors approved the proposed GBP2.6 billion (USD3.6 billion) transaction in mid-August. However, UK Business Secretary Kwasi Kwarteng has directed his country's Competition and Markets Authority (CMA) to review the proposed deal by 18 January, citing potential “national security concerns”. The acquisition requires UK government approval.

Already a Janes customer? Read more here.

International Affairs:

Morocco increases defence budget with more procurement expected 

28th Oct: Morocco's draft 2022 budget was presented to the country's Finance and Economic Development Committee on 25 October, with the defence budget increasing by 4.77% on the 2021 defence budget. Janes analysis of the Moroccan budget for the National Defence Administration and Royal Moroccan Armed Forces (RMAF) shows that Morocco's core defence budget is rising by 6.07% from MAD47.44 billion (USD5.17 billion) to MAD50.32 billion, driven largely by personnel spending increasing by 7.77% to MAD37.76 billion. Additional investment in the military from other sources is bringing the overall total defence expenditure to MAD63.04 billion, a 4.77% increase on 2021's budget. Overall spending is anticipated to be 17.62% of government expenditure in 2022, down from 18.15%.

Already a Janes customer? Read more here.

South Korea aims high on defence exports 

5th Oct: South Korea's Defense Acquisition Program Administration (DAPA) is aiming to position the country as one of the world's top exporters within a few years. DAPA told Janes that its ambition is supported by new investment in military technologies, efforts to restructure the country's defence industrial base, and a strategy to prioritise ‘exportability'. DAPA also said that South Korea's defence exports in 2020 are estimated by the administration to have reached KRW1.7 trillion (USD1.43 billion), the same value as 2019. In the next few years DAPA is aiming much higher, it said. 

Already a Janes customer? Read more here.

India, US to form industrial working group 

4th Oct: India and the United States are to establish a new forum to deepen defence technology and industrial co-operation. The plan to set up the Indo-US Industrial Security Joint Working Group was announced on 1 October, following five days of bilateral defence industry talks in New Delhi. India's Ministry of Defence (MoD) said the proposed joint working group will seek to align “policies and procedures” in India and the US to “allow the defence industries to collaborate on cutting-edge defence technologies”. The MoD added that the working group will also support the introduction of a “road map” through which India and the US will implement the ‘Industrial Security Annex' (ISA) that they signed in December 2019.

Already a Janes customer? Read more here.

Taiwan progresses ‘special' funding plan as relations with Beijing deteriorate

6th Oct: Taiwan's Ministry of National Defense (MND) has advanced its plan to allocate TWD240 billion (USD8.6 billion) in additional military funding to enhance the island's sea and air combat capability. The MND submitted its funding plan for approval to the island's Legislative Yuan on 4 October. The proposal was approved by the Executive Yuan in September. The funding plan was submitted on the same day that the MND announced that nearly 150 Chinese People's Liberation Army (PLA) aircraft had been deployed near Taiwan since 1 October: the date Beijing celebrated the 72nd anniversary of the founding of the People's Republic of China.

Already a Janes customer? Read more here.

Update: North Korea promotes new five-year military plan amid heightening tensions with Seoul

7th Oct: North Korea's launch in late September of a claimed hypersonic missile shone light on the country's five-year plan to develop ‘defence science and weapon systems'. While few details have been released about the plan, Pyongyang's Korean Central News Agency (KCNA) said the hypersonic missile – named Hwasong-8 – is one of the plan's “five top-priority tasks”. The disclosure came during a period of heightened tensions with South Korea, with both countries announcing and progressing plans to develop several new missile systems.

Already a Janes customer? Read more here.

Government Licensing:

Indonesia increases amount of foreign defence loans approved for 2021

02nd Aug: The Indonesian Ministry of Finance (MoF) has granted approval for the country's armed forces (Tentara Nasional Indonesia: TNI) and defence ministry to obtain up to USD5.8 billion in foreign loans for fiscal year 2021. Permissions to source foreign loans have been approved for a total of 31 procurements, upgrades, and maintenance programmes across all three services of the TNI, according to documents and circulars that have been provided to Janes by Indonesian government sources. The approvals have been granted after consultations with the Ministry of Defence (MoD) and the Ministry of National Development Planning (Kementerian Perencanaan Pembangunan Nasional: BAPPENAS).

Janes Analysis: Indonesia's increasing reliance on foreign financing for its military modernisation programmes is driven in part by relatively limited government funding for such activities. Although the country's defence budget expanded swiftly in both 2020 and 2021, it remains only 10% larger in real terms than its previous peak of USD8.8 billion in 2016, despite its substantial military acquisition plans.

Already a Janes customer? Read more here.

Israeli defence budget moves forward with government agreement 

04th Aug: Israel's ministries of defence and finance reached an agreement together with Prime Minister Naftali Bennett on a new annual defence budget for 2022, worth ILS58 billion (USD17.95 billion) net, the bureau of Defence Minister Benny Gantz announced on 28 July. The development comes after the Israel Defense Forces (IDF) and the Ministry of Defense (MoD) relied on a continuation budget in 2020 and 2021. The last time that Israel approved a new defence budget was in 2019, totalling ILS55.5 billion, and the Ministry of Finance has also conducted several ad hoc cash injections during the continuation budget years, to maintain the budget's real value relative to the 2019 budget.

Janes Analysis: Israel has been able to support many of its procurement initiatives through the MoU with the US, which allows a Foreign Military Financing grant of USD3.3 billion per year. Of this amount, USD795.3 million is being converted into shekels in 2021 for procurement of Israeli-made equipment, with this figure set to decline to USD785.3 million in 2022. 

Already a Janes customer? Read more here.

Technology Updates:

Japan proposes air-launched Type 12 missile for F-2 fighters 

16th Aug: The Japanese Ministry of Defense (MoD) plans to meet its requirement for air-launched long-range anti-ship missile (LRASM) capability through the development of the Mitsubishi Heavy Industries (MHI) Type 12 Surface-to-Ship Missile (SSM) system. A spokesperson from the MoD told Janes on 12 August that it plans to install a modified version of the Type 12 weapon onto MHI F-2 multirole fighter aircraft operated by the Japan Air Self-Defense Force (JASDF). This follows an MoD decision – announced early August – to scrap plans to fit Lockheed Martin's AGM-158C LRASM onto the JASDF's Mitsubishi-Boeing F-15J/DJ Eagle fighter as part of a proposed broader upgrade for that aircraft.

Janes Analysis: Earlier this year, the MoD in Tokyo also announced plans to begin mass production of an extended-range version of the MHI-developed ASM-3 supersonic, air-launched, anti-ship missile. The new missile is named ASM-3A and is expected to be deployed on the F-2 and Japan's future F-X fighter aircraft.

Already a Janes customer? Read more here.

South Korea draws up plans for Ulsan-class Batch IV frigates

05th Aug: South Korea's Defense Acquisition Program Administration (DAPA) has drawn up plans to equip the Republic of Korea Navy (RoKN) with Ulsan-class Batch IV frigates. Initial plans for the programme were discussed as part of DAPA's 138th Defence Business Management Committee meeting held on 4 August. According to a media release from the agency, the Ulsan-class Batch IV frigates will be equipped with improved anti-aircraft capabilities when compared with its predecessors, and feature substantial use of domestically developed technologies. The vessels will replace the RoKN's fleet of older combatants and are expected to come into service between 23 and 32 years from the present day. The project is expected to cost the South Korean government about KRW3.51 trillion (USD3 billion), but there were no details on the number of hulls expected.

Already a Janes customer? Read more here.

Australia, US formalise co-operation on Precision Strike Missile programme 

13th Aug: Australia and the United States have signed an agreement to formalise co-operation on precision-strike capability. The Australian Department of Defence (DoD) said on 12 August that the recently signed memorandum of understanding (MOU) facilitates Australian Army participation in the US Army's Precision Strike Missile (PrSM) system. Under the accord, Australia has contributed USD54 million to the PrSM project, with a commitment, said the DoD, to “increase the lethality, range and target engagement of the baseline missile in development”. Major General Simon Stuart, head of land capability in the Australian Army, said the agreement supports PrSM development under Increment 2 of the programme aimed at incorporating technologies allowing ships and air-defence systems to be engaged with the system. 

Already a Janes customer? Read more here.

Industry Movements:

UK to probe Cobham's bid for Ultra Electronics

20th Aug: UK Business Secretary Kwasi Kwarteng has directed his country's Competition and Markets Authority (CMA) to review Cobham Group's proposed acquisition of Ultra Electronics, citing potential “national security concerns” about the deal, the UK government announced on 19 August. The CMA will have until 18 January to complete its work and report its findings to Kwarteng, according to the Department of Business, Energy, and Industrial Strategy (BEIS). The secretary will then decide whether to clear the merger with or without conditions or instruct the CMA to conduct a more in-depth “Phase 2” investigation.Kwarteng did not say what national security concerns he might have. However, while Cobham and Ultra are both based in the United Kingdom, Cobham is owned by US private equity firm Advent International. Advent has raised eyebrows by divesting several Cobham businesses since it acquired the company in January 2020.

Already a Janes customer? Read more here.

Babcock to sell Frazer-Nash Consultancy to KBR 

16th Aug: UK-based Babcock International Group has agreed to sell its Frazer-Nash Consultancy to fellow engineering company KBR of the United States for GBP293 million (USD405.1 million) to reduce its debt, Babcock announced on 13 August. KBR said that buying the Babcock subsidiary will expand its international advisory capabilities. Frazer-Nash serves government and industry customers in defence and other sectors, and operates mainly in the UK and Australia. Its defence engineering expertise spans such areas as air, land, and naval systems; C4ISTAR; space defence; and weapons. “Frazer-Nash is highly complementary with KBR's global priorities with minimal overlap because of its geographic footprint,” KBR said.

Already a Janes customer? Read more here.

Parker Hannifin moves to buy Meggitt 

03rd Aug: US-based Parker Hannifin Corporation has agreed to acquire fellow motion and control system provider Meggitt plc of the United Kingdom for GBP6.3 billion (USD8.8 billion) in cash, nearly doubling the size of its Aerospace Systems segment and diversifying its offerings to customers, according to a joint announcement. “We strongly believe Parker is the right home for Meggitt,” Parker chairman and CEO Tom Williams said on 2 August. “Together, we can better serve our customers through innovation, accelerated R&D, and a complementary portfolio of aerospace and defence technologies.”

Janes Analysis: Besides scrutinising the Parker-Meggitt deal, BEIS is closely monitoring Cobham Group's proposed purchase of UK-based Ultra Electronics for GBP2.6 billion, which Ultra announced on 23 July. Although Cobham is based in the UK, it is owned by US private equity firm Advent International.

Already a Janes customer? Read more here.

Serco buys naval firm Clemaco 

13th Aug: UK-based government services provider Serco Group has expanded its defence portfolio by acquiring Clemaco, which maintains ships for the Belgian Navy, according to a recent Serco announcement. “The combination of the skills, experience, and knowledge of Clemaco with Serco's global expertise and capability will provide added value for existing Serco and Clemaco customers, including in particular the Belgian Ministry of Defence,” Serco Europe CEO Gaetan Descl´ee said on 2 July. By joining a larger company, Clemaco, which was previously family owned, will gain “the certainty of continuity and stability of operations and further development of the business”, Clemaco CEO Frank Verdonck said. Rear Admiral Jan De Beurme, commander of the Belgian Navy, also endorsed the acquisition, noting that Serco and Clemaco have worked together for years.

Already a Janes customer? Read more here.

L3Harris to divest Electron Devices business

04th Aug: US-based L3Harris Technologies has agreed to sell its Electron Devices business to US private equity firm Arlington Capital Partners for USD185 million as part of its portfolio reshaping effort, L3Harris announced on 3 August. Electron Devices makes radio-frequency amplification products for the defence, intelligence, industrial, and medical sectors. Its travelling wave tubes are used in communication satellites, ground broadcast stations, guidance systems, and military aircraft radars. Electron Devices has more than 800 employees at three facilities in Folsom and Torrance, California, and Williamsport, Pennsylvania. Arlington plans to turn the business into a standalone company called Stellant Systems, but keep its leadership.

Already a Janes customer? Read more here.

Lockheed Martin eyes ties with more tech firms

10th Aug: Lockheed Martin is exploring potential co-operation arrangements with about a dozen leading technology companies to enhance its expertise in such areas as semiconductors and telecommunications, according to the US defence contractor's top executive. “I doubt that we're going to be acquiring any of those 10 or 12 major corporations, but we're going to strive to work with them to get the capabilities, the [intellectual property], and the collaboration that will make us even better,” said Jim Taiclet, Lockheed Martin's chairman, president, and CEO. In March Lockheed Martin announced a “strategic interest agreement” with Omnispace to explore jointly developing a space-based 5G wireless communications network. “You don't necessarily need to buy companies to work with them,” Taiclet said at Lockheed Martin's virtual investor event on 5 August.

Already a Janes customer? Read more here.

Virgin Orbit to go public

24th Aug: Small satellite-launch firm Virgin Orbit plans to become a publicly held company and use part of the proceeds to boost its rocket production rate, the US-based business announced on 23 August. The transaction, which is expected to raise up to USD483 million in cash, will also help Virgin Orbit grow its other offerings, such as satellite-enabled communications and Earth observation, the company said. Virgin Orbit intends to change its ownership status by merging with special purpose acquisition company NextGen Acquisition Corporation II, which is publicly traded. After the combination is completed by the year-end, Virgin Orbit's shares will be listed on the Nasdaq stock exchange under the ‘VORB' ticker symbol.

Already a Janes customer? Read more here.

International Affairs:

Danish MoD seeks better Arctic capabilities 

17TH Aug: The Danish Ministry of Defence (MoD) wants to upgrade its capabilities in unmanned aircraft and spacebased communications and surveillance to enhance its ability to operate in the Arctic, according to the MoD's new defence industrial strategy. Advances in energy storage and transport, materials, and multidomain command-and-control would also help Danish forces conduct missions in the remote, rugged polar region, where maritime traffic is increasing, the strategy document says. In addition to defending Greenland, Denmark's military performs many civilian functions for the vast island territory, including search and rescue, environmental disaster response, and vaccine distribution.

Already a Janes customer? Read more here.

KAI signs T-50TH deal with Thailand 

02nd Aug: Korea Aerospace Industries (KAI) has signed a contract with the Royal Thai Air Force (RTAF) to supply two T-50TH Golden Eagle lead-in fighter trainer aircraft, the company announced on 2 August. KAI said in a stock exchange filing that the deal, which includes a follow-up support package to facilitate localised aircraft operation and maintenance, is valued at USD78 million and that the aircraft will be delivered to the RTAF by the end of November 2023. The contract represents the fourth and final phase of the RTAF's T-50TH programme, taking the service's fleet to 14 aircraft. The RTAF ordered two batches of four and eight T-50TH aircraft in 2015 and 2017 for USD380 million, with eight of these aircraft having been delivered. Phase 3 was a USD52.5 million upgrade of these aircraft announced in 2019. The contract represents the fourth and final phase of the RTAF's T-50TH programme, taking the service's fleet to 14 aircraft. The RTAF ordered two batches of four and eight T-50TH aircraft in 2015 and 2017 for USD380 million, with eight of these aircraft having been delivered. Phase 3 was a USD52.5 million upgrade of these aircraft announced in 2019.

Already a Janes customer? Read more here.

US increases military assistance to Southeast Asia 

11th Aug: The US government has outlined a commitment to increase financial assistance to countries in Southeast Asia to support regional defence and security capability development. The intention reflects Washington's growing effort to counter China's assertiveness in Southeast Asia and is also being channelled through increased diplomatic ties: US Secretary of Defense Lloyd J Austin visited the region in late July, and Vice President Kamala Harris will do the same later this month. To support military capability development, the United States has requested for 2022 Foreign Military Financing (FMF) of USD129 million for Southeast Asian countries. In 2021 requested FMF for the region was nearly USD86 million, and in 2019 and 2020 the actual FMF for the region was USD101 million for each year.

Already a Janes customer? Read more here.

US approves Javelin sale to Thailand

02nd Aug: The US State Department has approved a potential sale of Raytheon/Lockheed Martin Javelin anti-tank missiles to Thailand for an estimated USD83.5 million, the US Defense Security Cooperation Agency (DCSA) announced on 30 July. The Foreign Military Sale (FMS), which is subject to US Congressional approval, includes 300 Javelin FGM-148 missiles, 50 launch units, and associated equipment and support. The DCSA said the Javelin will replace the Royal Thai Army's (RTA's) M40 series 106 mm recoilless rifle, which it acquired through US military aid in the Vietnam war era. It added that the proposed sale will allow the RTA to “modernise [its] light anti-tank capability and maintain its current force posture, as well as enhance interoperability with the US during operations and training exercises”. 

Already a Janes customer? Read more here.

Government Licensing

Biden orders review of defence industry competition – 12 Jul

US President Joe Biden has told the Pentagon to review the state of competition in the defence industrial base, including “areas where a lack of competition may be of concern and any recommendations for improving the solicitation process”, according to a new executive order. The order also calls for developing “a plan for avoiding contract terms in procurement agreements that make it challenging or impossible for the Department of Defense or service members to repair their own equipment, particularly in the field”. Already a Janes customer? Read more HERE.

Indonesia seeks foreign lender for T-50 lead-in fighter trainer programme – 21 Jul

The Indonesian Ministry of Defense (MOD) has begun a search for foreign lenders to fund the acquisition of six additional T-50i Golden Eagle airframes for its lead-in fighter trainer (LIFT) programme. An approval to obtain the foreign loan was approved by the country's finance ministry, after consulting with the Indonesian MOD and the Ministry of National Development Planning (Kementerian Perencanaan Pembangunan Nasional: BAPPENAS). A document provided to Janes by an industry source indicates that a limit of USD240 million has been set for this foreign loan allocation. Korea Aerospace Industries (KAI) disclosed in a financial regulatory filing on 16 July that it has secured a “contract” to supply the Indonesian Air Force (Tentara Nasional Indonesia – Angkatan Udara: TNI-AU) with the aircraft type. Janes Analysis: The procurement programme for additional T-50i trainers was established amid an anticipated need for greater training bandwidth. Already a Janes customer? Read more HERE.

GAMI reports increases in licensing as localisation remains sluggish – 14 Jul

Saudi Arabia's General Authority for Military Industries (GAMI) revealed in its first half 2021 report on 13 July that 99 companies had received licences to operate in the Kingdom's military sector by the end of the period, as localisation rates reached 8% of procurement by the end of 2020. Of the 99 companies, 29 had been issued with licences since the end of 2020. Overall, 85% of the 99 companies are Saudi-owned, 9% have mixed foreign and local ownership, and 6% and foreign-owned. Saudi Arabia liberalised foreign ownership in the defence sector in 2020 as part of an effort to attract foreign investment, as the government seeks to become a major regional hub for defence and manufacturing outputs. Janes Analysis: Attracting local companies into the defence manufacturing sector is an essential element of the country's efforts to increase localised production and will be an important part of the steps towards achieving the results of Vision 2030. As a result, the increase in licences issued for firms engaging in defence activities in the Kingdom is a vital part of the programme's success in bolstering the localisation levels. Already a Janes customer? Read more HERE.

International Affairs

India allocates USD9.5 billion for domestic procurement in 2021-22 – 20 Jul

The Indian Ministry of Defence (MoD) will allocate funding worth INR714.38 billion (USD9.5 billion) towards “domestic capital procurements” in fiscal year (FY) 2021–22, Ajay Bhatt, India's Minister of State for Defence, said in parliament on 19 July. In a parliamentary reply, Bhatt said the figure represents 64% of total defence capital acquisition funding for 2021–22, which he said totalled INR1.11 trillion. He added that in the past three fiscal years the MoD has signed 102 capital procurement contracts with Indian defence companies. In another reply, Bhatt said that since FY 2018-19 the MoD had approved 119 defence procurement contracts worth INR2.15 trillion. He indicated that the majority of these contracts supported domestic manufacturing programmes. Janes Analysis: India's figures for domestic capital procurements do not reflect the high proportion of underlying foreign components, systems, and technologies that are integrated onto ‘Indian-made' defence products and platforms such as the Tejas light combat aircraft programme. Indigenous content in this aircraft is currently about 60-70%. Already a Janes customer? Read more HERE.

Switzerland tweaks offset policy – 1 Jul

Switzerland has made several modest changes to its offset policy, which regulates the investment foreign companies must make in Swiss industry when selling military equipment to the European country, according to the Federal Office for Defence Equipment, which is also known as Armasuisse. The updated policy, which takes effect on 1 July, imposes an offset obligation on a foreign prime contractor that receives a contract worth at least CHF20 million (USD21.6 million). Such a threshold did not exist previously. The new threshold also applies to foreign subcontractors if their share of a contract exceeds 50% of the total value. Janes Analysis: Armasuisse unveiled the revised policy on 29 June, a day before Switzerland announced it would spend up to CHF8 billion to buy the F-35A fighter from US-based Lockheed Martin, and the Patriot missile defence system from US-based Raytheon Technologies. Already a Janes customer? Read more HERE.

China's defence exports stay strong despite dip in 2020, Janes data shows – 15 Aug

Newly compiled Janes data shows China's defence exports declined mildly in 2020, interrupting a period of solid growth since 2016. According to the data, China's international military sales in 2020 were equal to USD2.65 billion, a 4% decline on the figure in 2019. The decrease can almost certainly be attributed to the Covid-19 pandemic and resulting challenges related to marketing, production, supply chains, and logistics. The value of China's defence exports between 2016 and 2019 increased on average by 11% per year, growing from USD2.34 billion to USD2.76 billion. Janes Analysis: Beijing does not disclose any information about the value of its defence exports, although Chinese state media sometimes acknowledges that the sales effort has become an important part of the country's strategies to boost revenues and to expand its international profile. Already a Janes customer? Read more HERE.

Georgia outlines defence procurement priorities – 26 Jul

The Georgian government has revealed its defence procurement priorities up to 2030, which include the acquisition of unmanned aerial vehicles (UAVs), new artillery systems, and a revitalisation of its defence housing infrastructure. At a ceremony for the release of the Action Plan of the Georgian Defence Forces 2020–30 on 22 July, Minister of Defence Juansher Burchuladze revealed that the country would be acquiring additional Javelin anti-tank missiles in 2021 from the United States. Negotiations are also under way with Polish and South African companies to establish joint ventures (JVs) in the country with the Ministry of Defence (MoD)-owned company Delta STC in 2022. The JVs would be established to manufacture small and large UAVs in country as part of efforts to bolster its intelligence, surveillance, target acquisition, and reconnaissance (ISTAR) capabilities. Janes Analysis: The modernisation of Georgia's military comes as the country is preparing to apply for full EU membership in 2024. Collaboration with partners in Europe and beyond are key to the country ensuring interoperability with allied forces, particularly as it aims to shed Soviet-era systems by 2030. Already a Janes customer? Read more HERE.

Technology Updates

Japan, UK pledge accelerated talks toward engine collaboration – 21 Jul

Japan and the United Kingdom have pledged to accelerate talks on the joint development of aero-engine technologies in support of the two countries' respective next-generation fighter aircraft programmes. The agreement was announced by the Japanese Ministry of Defense (MoD) on 20 July following a meeting in Tokyo between Japan's defence minister Nobuo Kishi and his visiting UK counterpart Ben Wallace. “The two ministers affirmed accelerated discussion to explore FX/FCAS collaboration at sub-system level, with a special focus on power and propulsion systems,” said the MoD in reference to Japan's F-X fighter programme and the UK's Future Combat Air System (FCAS). Janes Analysis: Should Japan and the United Kingdom conclude an agreement on aero-engines, the project will be led by the two countries' air propulsion specialists, Japan's IHI Corporation and the United Kingdom's Rolls-Royce. Already a Janes customer? Read more HERE.

MAKS 2021: Kazakh firm takes stake in Russian aircraft manufacturer – 23 Jul

Kazakhstan Aerospace Industries (KAI) has taken a 20% stake in Russian aircraft manufacturer Baikal-Engineering, the Kazakh government's Ministry of Industry and Infrastructure Development (MIID) announced on 22 July, with an agreement signed at the MAKS 2021 airshow in Zhukovsky near Moscow. Baikal-Engineering is a subsidiary business of Ural Civil Aviation Works and was established to develop the replacement for the venerable Antonov An-2 ‘Colt', which is widely used in regional aviation. First produced in 1947, Janes data shows that an estimated 67 are still in military service with countries including Mongolia, Guinea, and Ukraine. A further 260 aircraft built under licence in China are in service with China and North Korea. Janes Analysis: While a predominantly civil project, the need to revitalise short-range fixed-wing fleets in military forces, particularly with STOL capability, remains a key capability requirement for many nations. Relying on leased and contractor operated platforms may be an option for some countries on an as-needed basis, but for others that utilise such aircraft for humanitarian aid and disaster relief the chance to acquire newly designed aircraft that meet modern capabilities is important. Already a Janes customer? Read more HERE.

Lockheed Martin profit rises despite classified programme charge – 27 Jul

Lockheed Martin grew its net earnings by 11.6% to USD1.8 billion in the second quarter of 2021 despite recording a USD225 million charge for “performance issues” on a classified programme in its Aeronautics business segment, the US defence contractor announced on 26 July. While Lockheed Martin officials said they were not permitted to name the programme or describe its performance problems, they insisted that the effort continues to enjoy significant long-term potential based on independent reviews and reviews with the customer. “It's a development contract that we believe will be successful from a schedule and performance standpoint, and it, ultimately, will turn into a production programme,” chief financial officer Ken Possenriede told analysts. “We also believe there are additional opportunities out there. I'll assure you ... that there is still a very strong business case given these associated opportunities.” Already a Janes customer? Read more HERE.

Saab closes US camouflage factory – 22 Jul

Saab recently shuttered its camouflage netting factory in the United States because the facility had insufficient business, according to the Swedish defence and aerospace company. “The company exhausted every alternative before making this difficult decision,” Saab said in a statement on 21 July. “Should future opportunities arise in the US, Saab stands ready to support production from Sweden or reinstate US production.” The Saab Barracuda factory was located in the state of North Carolina and employed 39 people. It closed because it lost the US Army's Ultra-Lightweight Camouflage Net System (ULCANS) Increment I contract to a competitor and faced a lack of new opportunities in the US market, the company said. Janes Analysis: Saab's previously announced reorganisation took effect on 1 July. Saab eliminated its two service-oriented business areas and moved their activities into its four remaining business areas. Already a Janes customer? Read more HERE.

Industry Movements

Cobham makes bid for Ultra Electronics – 26 Jul

Cobham Group has submitted a non-binding offer to acquire fellow UK-based company Ultra Electronics for GBP2.6 billion (USD3.6 billion) in cash, Ultra announced on 23 July. Ultra said its board is “minded to recommend” the bid to its shareholders but first wants to resolve “other terms and arrangements”, including the establishment of unspecified national security safeguards. “Accordingly, the board will engage in discussions with Cobham to explore the proposal in further detail,” Ultra said. Ultra wants Cobham to firm up its bid by 20 August, although the “put up or shut up” deadline could be extended. Janes Analysis: Ultra generated revenue of GBP404.5 million in the first half of fiscal year (FY) 2021, down 2.1% overall from the same period in FY 2020 but up 4.7% organically, the company reported on 19 July. Its underlying operating profit totalled GBP62.2 million. Already a Janes customer? Read more HERE.

Huntington Ingalls to buy Alion Science and Technology – 7 Jul

US shipbuilder Huntington Ingalls Industries (HII) has agreed to acquire Alion Science and Technology for USD1.65 billion in cash to enhance its capabilities in such growing areas as artificial intelligence, big data, C5ISR, electronic warfare (EW), and training and simulation, HII announced on 6 July. Alion's technology will help HII's platforms meet the US Navy's (USN's) requirement for a more agile, connected, integrated, and protected force, according to the shipbuilder. “The future of the navy is going to be platforms plus, and we need to be engaged in the plus side of this to make it successful,” HII president and CEO Mike Petters told analysts. “The last thing we need to do is to continue to try to build the navy of the past.” Already a Janes customer? Read more HERE.

Artificial intelligence firms Shield AI, Heron Systems join forces – 26 Jul

Shield AI announced on 22 July that it has acquired Heron Systems, bringing together two US software companies that are developing artificial intelligence (AI) pilots for military aviation. “Together, Shield AI and Heron will accelerate the deployment of advanced AI pilots to legacy and future military aircraft – an urgent and necessary step towards achieving national security priorities and remaining credible in the face of sophisticated peer countries,” the announcement said. Heron Systems made headlines last year when its AI software defeated a human US Air Force F-16 pilot 5-0, as well as five other AI pilots, during the US Defense Advanced Research Projects Agency's (DARPA's) AlphaDogfight Trials. “Heron has developed the most advanced AI pilot for fighter aircraft in the United States,” Shield AI co-founder and CEO Ryan Tseng said. Janes Analysis: Shield AI raised USD90 million from US venture capital firm Point72 Ventures and other investors in February, saying it would use the money to integrate its Hivemind AI software into additional defence platforms beyond its Nova reconnaissance small UAS. Already a Janes customer? Read more HERE.

RENK finishes buying L3Harris propulsion business – 8 Jul

German transmission manufacturer RENK has completed its previously announced acquisition of L3Harris Technologies' Combat Propulsion System (CPS) business for USD400 million, RENK said on 6 July. Ted Trzesniowski, CPS' general manager, has been named CEO of the Muskegon, Michigan-based business, which is now called RENK America. RENK plans to retain L3Harris' nearly 400 employees, who make engines and transmissions for tracked and wheeled military vehicles. The then-CEO of RENK, Florian Hofbauer, said in March, when the transaction was unveiled, that the CPS acquisition would give his company a strong presence in the US armoured vehicle market and position it to play a significant role in the US Army's new Next-Generation Combat Vehicle programme. Already a Janes customer? Read more HERE.

Israel's SK Group, Plasan buy Greece's ELVO – 7 Jul

Israeli defence businesses SK Group and Plasan announced on 6 July that they have jointly acquired Greek military vehicle manufacturer ELVO, expanding their European footprint. The new owners plan to invest in ELVO by improving its infrastructure and technology and “recruiting highly skilled personnel for key positions”, said Orly Katsav, ELVO's chairwoman and SK's deputy chairwoman. ELVO, which was previously state-owned, builds both wheeled and tracked vehicles, and is also known as Hellenic Vehicle Industry. Dimitrios Angelopoulos, ELVO's general manager, said that SK's development, manufacturing, and marketing experience and Plasan's vehicle protection expertise will strengthen his company's presence in Europe and elsewhere. Janes Analysis: The acquisition announcement came a week before the 13 July start of the Defence Exhibition Athens (DEFEA) trade show, in which ELVO, Plasan, and SK are all scheduled to participate. Already a Janes customer? Read more HERE.

Defence Oversight

India's DRDO develops system to counter micro and mini UAVs – 30 Jul

Indian Minister of State for Defence Ajay Bhatt confirmed on 28 July that the government-run Defence Research and Development Organisation (DRDO) has developed a system designed to detect, track, and neutralise micro and mini unmanned aerial vehicles (UAVs). Janes Analysis: India's DRDO has been collaborating for years with public and private-sector companies as well as technical institutions to develop DEWs, including a 100 kW laser, to meet emerging security challenges in the region.

China passes ‘anti-sanctions' legislation – 11 Jun 2021

China's National People's Congress (NPC) has passed legislation to counter foreign sanctions including those recently introduced by Washington to stem the flow of US technologies and investments to the Chinese military-industrial complex. The move is the latest milestone in China's ‘decoupling' from the United States and its associated efforts to achieve self reliance in military technologies. The NPC said in a statement on 10 June that the new Anti Foreign Sanctions Law will “safeguard national sovereignty, security, and development interests, and protect the legitimate rights and interests of citizens and organisations of our country”.

Japan looks to enhance scrutiny of defence FDI – 23 Jun 2021

Japan is considering a move to further tighten regulations on foreign direct investment (FDI) in strategic-technology areas including defence. The potential move, which could be introduced within the next few months, is aimed at strengthening the protection of indigenous technologies. According to a government proposal, the new regulations would address loopholes in current FDI rules through which foreign investors can place technology-transfer demands on Japanese firms. Local news reports suggest that the proposal would enable the government to scrutinise any potential technology-transfer activity even after foreign firms have completed their investments. Countermeasures for non-compliance could include forcing foreign investors to sell off shares in Japanese companies.

International Affairs

Indonesia reveals USD125 billion military modernisation plan – 1 Jun 2021

A draft regulation from Indonesia’s presidential office has outlined the requirement for investment of USD125 billion in military modernisation through to the mid-2040s. The funding proposal is indicative of Indonesia’s military ambitions and its growing concerns about regional security. The draft regulation – entitled ‘Fulfilling the Defence and Security Equipment Needs of the Ministry of Defence and Indonesian Armed Forces (TNI) 2020-24’ – was issued recently but requires various approvals from ministries and the House of Representatives before enactment. The investment plan also highlights Indonesia’s continuing dependency on foreign loans.

Japan, Ukraine move towards defence equipment agreement – 3 Jun 2021

Japan and Ukraine are moving closer to finalising a defence equipment and technology agreement that will facilitate closer co-operation between the two countries, Janes understands. The potential alliance is regarded in Tokyo as part of wider efforts to expand defence industrial ties with a view to exports and joint research projects. Ukraine also views the arrangement as an export opportunity. The latest round of bilateral talks towards the defence agreement were held in Kiev on 1 June, led by Roman Mashovets, the deputy head of the Ukrainian presidential office, and Takashi Kurai, Japan's ambassador to Ukraine.

China, Russia outspend US on defence, US general says – 11 Jun 2021

The US Department of Defense (DoD) and the US Intelligence Community (IC) have concluded that China and Russia collectively spend more on defence than the United States does, according to Army General Mark Milley, chairman of the Joint Chiefs of Staff. “At an unclassified level, I would tell you that combined, the Russian and Chinese budgets exceed our budgets if all the cards are put on the table,” said Gen Milley. “Both governments do not put all their cards on the table when it comes to their budget. It's a very difficult thing to discern that which is being spent on their defence versus other priorities.”

Technology Updates

Thailand takes delivery of Norinco VN-16 AAVs – 2 Jun 2021

The Royal Thai Navy (RTN) has confirmed that it has taken delivery of an initial three Norinco-produced VN-16 amphibious assault vehicles (AAVs) from China. An RTN spokesperson confirmed the procurement on 1 June, stating that the three vehicles, which will be operated by the Royal Thai Marine Corps (RTMC), cost THB398.14 million (USD13 million). The spokesperson also said that the acquisition constituted the first phase of the RTMC's AAV procurement programme, indicating additional purchases of the VN-16.

Saab to integrate Varjo mixed-reality technology into Gripen E/F simulators – 8 Jun 2021

Saab's Head of Tactical Environment Simulation and Visualisation Stefan Furenbäck said in a statement, “We are finalising the basic functionalities in our own simulator so that we can use Varjo's XR-3 headsets in all our flight simulators. We've previously carried out smaller, independent prototype-like projects but now we're integrating them into our actual flight simulators.” A key aspect of this, according to Furenbäck, is that Varjo's technology had allowed pilots to be able to read text and see small details when using the technology, which had been a common concern with other simulator systems.

Japan reveals digital development plan for F-X fighter – 21 Jun 2021

The Japanese Ministry of Defense (MoD) has outlined a commitment to apply digital engineering techniques and technologies in the development of the country's next-generation F-X fighter aircraft. The MoD told Janes that the move to introduce such digital methods is part of a wider effort on the F-X programme to achieve enhancement in quality and efficiency across the design, development, production, and sustainment of the aircraft. The MoD said the effort is also aligned with modern fighter aircraft practices in countries such as the United States and the United Kingdom, from companies which are expected to be involved in the development of the F-X fighter.

Industry Movements

Thales, Atos form JV for big data, AI – 2 Jun 2021

French technology companies Atos and Thales have created a joint venture (JV) called Athea to provide big data and artificial intelligence (AI) capabilities to public and private sector clients in the defence, intelligence, and security communities, according to an Atos announcement. “The joint venture will pool the companies’ investments, expertise, and experience to respond quickly and efficiently to demand for innovation,” Atos said on 27 May. The JV will build on the work that Atos and Thales have done on the Artemis big data programme since 2017 for the French Ministry of Armed Forces. Applications already developed by Artemis perform tasks such as exploiting massive amounts of heterogeneous intelligence data and monitoring soldier health.

Chemring buys AI firm Cubica – 4 Jun 2021

UK-based Chemring Group has acquired artificial intelligence (AI) and data fusion company Cubica Technology, bolstering the capabilities of its Roke engineering business, Chemring announced on 3 June. Cubica “complements Roke's existing capabilities in cyber security, intelligence, and electronic warfare, offering customers a force multiplier for their missions”, Chemring said. Cubica's products include TensorGrid, which rapidly searches large amounts of imagery, and Omniscient, which fuses information from multiple sensors in real time. The small company mainly serves the defence and security sectors, and its clients include BAE Systems, Leonardo, and the UK Defence Science and Technology Laboratory (Dstl).

CAE forms joint venture with Indian tribal firm – 17 Jun 2021

CAE USA, a subsidiary of Canada-based simulation and training provider CAE, has partnered with American Indian tribally owned company Potawatomi Training to pursue contracts from the US Department of Defense and other US federal agencies, according to a recent announcement. CAE USA and Potawatomi Training, which is owned by the Wisconsin-based Forest County Potawatomi tribe, will co-ordinate their activities through a new joint venture (JV) called PTC Solutions JV, the 25 May announcement says. Potawatomi Training's small-business status will allow the JV to compete for contracts set aside for small businesses.

Cobham spins off electronics unit – 18 Jun 2021

UK-based defence and aerospace company Cobham Group has turned its electronics business, Cobham Advanced Electronic Solutions, into a standalone entity called CAES. “This new structure has empowered CAES's board and management team to implement a strategy to deliver improved operational performance and programme execution throughout the business,” CAES said on 17 June while announcing that former US Defense Secretary Mark Esper has joined its new board of directors. CAES (pronounced ‘Case‘) remains owned by US private equity firm Advent International, which acquired Cobham in January 2020.

Patria unveils reorganization – 18 Jun 2021

Patria Group is replacing five business units with four new ones to achieve efficiency and better serve its customers, the Finnish defence and aerospace company announced on17 June. Under the new structure, the Finland Division will focus on managing accounts for the Finnish Defence Forces, while the Global Division will do the same for non-Finland customers. The Operations unit will oversee the Air, Land, and System & Integration production lines. The Portfolio unit will be responsible for six product and service lines – C5ISTAR, Fleet Availability, Life Cycle Management, Mission Capability, New Products and Services, and Training & User Support.

Defence Oversight

Australia reviews definition of local defence company 

07th June: The Australian Department of Defence (DoD) is reviewing the definition of the term ‘Australian defence company' as part of wider efforts to strengthen the way it engages with local industry. The move is a reflection of local industry concerns about the continuing dominance of foreign-owned subsidiaries amid a military modernisation programme budgeted by the government at AUD270 billion (USD209 billion). A spokesperson from the DoD told Janes that the review of the definition is intended to enhance the country's defence industrial participation policy, the Australian Industry Capability (AIC) programme, and related moves to update defence contracting guidelines. 

China passes ‘anti-sanctions' legislation 

11th June: China's National People's Congress (NPC) has passed legislation to counter foreign sanctions including those recently introduced by Washington to stem the flow of US technologies and investments to the Chinese military-industrial complex. The move is the latest milestone in China's ‘decoupling' from the United States and its associated efforts to achieve self reliance in military technologies. The NPC said in a statement on 10 June that the new Anti Foreign Sanctions Law will “safeguard national sovereignty, security, and development interests, and protect the legitimate rights and interests of citizens and organisations of our country”. 

Japan looks to enhance scrutiny of defence FDI 

23rd June: Japan is considering a move to further tighten regulations on foreign direct investment (FDI) in strategic-technology areas including defence. The potential move, which could be introduced within the next few months, is aimed at strengthening the protection of indigenous technologies. According to a government proposal, the new regulations would address loopholes in current FDI rules through which foreign investors can place technology-transfer demands on Japanese firms. Local news reports suggest that the proposal would enable the government to scrutinise any potential technology-transfer activity even after foreign firms have completed their investments. Countermeasures for non-compliance could include forcing foreign investors to sell off shares in Japanese companies. 

International Affairs

Indonesia reveals USD125 billion military modernisation plan 

01st June: A draft regulation from Indonesia’s presidential office has outlined the requirement for investment of USD125 billion in military modernisation through to the mid-2040s. The funding proposal is indicative of Indonesia’s military ambitions and its growing concerns about regional security. The draft regulation – entitled ‘Fulfilling the Defence and Security Equipment Needs of the Ministry of Defence and Indonesian Armed Forces (TNI) 2020-24’ – was issued recently but requires various approvals from ministries and the House of Representatives before enactment. The investment plan also highlights Indonesia’s continuing dependency on foreign loans. 

Japan, Ukraine move towards defence equipment agreement 

03rd June: Japan and Ukraine are moving closer to finalising a defence equipment and technology agreement that will facilitate closer co-operation between the two countries, Janes understands. The potential alliance is regarded in Tokyo as part of wider efforts to expand defence industrial ties with a view to exports and joint research projects. Ukraine also views the arrangement as an export opportunity. The latest round of bilateral talks towards the defence agreement were held in Kiev on 1 June, led by Roman Mashovets, the deputy head of the Ukrainian presidential office, and Takashi Kurai, Japan's ambassador to Ukraine. 

China, Russia outspend US on defence, US general says 

11th June: The US Department of Defense (DoD) and the US Intelligence Community (IC) have concluded that China and Russia collectively spend more on defence than the United States does, according to Army General Mark Milley, chairman of the Joint Chiefs of Staff. “At an unclassified level, I would tell you that combined, the Russian and Chinese budgets exceed our budgets if all the cards are put on the table,” said Gen Milley. “Both governments do not put all their cards on the table when it comes to their budget. It's a very difficult thing to discern that which is being spent on their defence versus other priorities.” 

Technology Updates

Thailand takes delivery of Norinco VN-16 AAVs 

02nd June: The Royal Thai Navy (RTN) has confirmed that it has taken delivery of an initial three Norinco-produced VN-16 amphibious assault vehicles (AAVs) from China. An RTN spokesperson confirmed the procurement on 1 June, stating that the three vehicles, which will be operated by the Royal Thai Marine Corps (RTMC), cost THB398.14 million (USD13 million). The spokesperson also said that the acquisition constituted the first phase of the RTMC's AAV procurement programme, indicating additional purchases of the VN-16.

Saab to integrate Varjo mixed-reality technology into Gripen E/F simulators 

08th June: Saab's Head of Tactical Environment Simulation and Visualisation Stefan Furenbäck said in a statement, “We are finalising the basic functionalities in our own simulator so that we can use Varjo's XR-3 headsets in all our flight simulators. We've previously carried out smaller, independent prototype-like projects but now we're integrating them into our actual flight simulators.” A key aspect of this, according to Furenbäck, is that Varjo's technology had allowed pilots to be able to read text and see small details when using the technology, which had been a common concern with other simulator systems. 

Japan reveals digital development plan for F-X fighter 

21st June: The Japanese Ministry of Defense (MoD) has outlined a commitment to apply digital engineering techniques and technologies in the development of the country's next-generation F-X fighter aircraft. The MoD told Janes that the move to introduce such digital methods is part of a wider effort on the F-X programme to achieve enhancement in quality and efficiency across the design, development, production, and sustainment of the aircraft. The MoD said the effort is also aligned with modern fighter aircraft practices in countries such as the United States and the United Kingdom, from companies which are expected to be involved in the development of the F-X fighter.

Industry Movements

Thales, Atos form JV for big data, AI 

02nd June: French technology companies Atos and Thales have created a joint venture (JV) called Athea to provide big data and artificial intelligence (AI) capabilities to public and private sector clients in the defence, intelligence, and security communities, according to an Atos announcement. “The joint venture will pool the companies’ investments, expertise, and experience to respond quickly and efficiently to demand for innovation,” Atos said on 27 May. The JV will build on the work that Atos and Thales have done on the Artemis big data programme since 2017 for the French Ministry of Armed Forces. Applications already developed by Artemis perform tasks such as exploiting massive amounts of heterogeneous intelligence data and monitoring soldier health. 

Chemring buys AI firm Cubica 

04th June: UK-based Chemring Group has acquired artificial intelligence (AI) and data fusion company Cubica Technology, bolstering the capabilities of its Roke engineering business, Chemring announced on 3 June. Cubica “complements Roke's existing capabilities in cyber security, intelligence, and electronic warfare, offering customers a force multiplier for their missions”, Chemring said. Cubica's products include TensorGrid, which rapidly searches large amounts of imagery, and Omniscient, which fuses information from multiple sensors in real time. The small company mainly serves the defence and security sectors, and its clients include BAE Systems, Leonardo, and the UK Defence Science and Technology Laboratory (Dstl). 

CAE forms joint venture with Indian tribal firm 

17th June: CAE USA, a subsidiary of Canada-based simulation and training provider CAE, has partnered with American Indian tribally owned company Potawatomi Training to pursue contracts from the US Department of Defense and other US federal agencies, according to a recent announcement. CAE USA and Potawatomi Training, which is owned by the Wisconsin-based Forest County Potawatomi tribe, will co-ordinate their activities through a new joint venture (JV) called PTC Solutions JV, the 25 May announcement says. Potawatomi Training's small-business status will allow the JV to compete for contracts set aside for small businesses. 

Cobham spins off electronics unit 

18th June: UK-based defence and aerospace company Cobham Group has turned its electronics business, Cobham Advanced Electronic Solutions, into a standalone entity called CAES. “This new structure has empowered CAES's board and management team to implement a strategy to deliver improved operational performance and programme execution throughout the business,” CAES said on 17 June while announcing that former US Defense Secretary Mark Esper has joined its new board of directors. CAES (pronounced ‘Case‘) remains owned by US private equity firm Advent International, which acquired Cobham in January 2020. 

Patria unveils reorganization 

18th June: Patria Group is replacing five business units with four new ones to achieve efficiency and better serve its customers, the Finnish defence and aerospace company announced on17 June. Under the new structure, the Finland Division will focus on managing accounts for the Finnish Defence Forces, while the Global Division will do the same for non-Finland customers. The Operations unit will oversee the Air, Land, and System & Integration production lines. The Portfolio unit will be responsible for six product and service lines – C5ISTAR, Fleet Availability, Life Cycle Management, Mission Capability, New Products and Services, and Training & User Support.