Japan’s aero-engine specialist IHI Corporation sees opportunities to expand in the defence sector despite falling sales to the Japanese Ministry of Defense (MoD).
The company said on 30 November that while Japan’s continued reliance on foreign (mainly US-developed) aero-engines represents a risk for future growth, the MoD’s commitment to locally source a powerplant for its next-generation F-X fighter aircraft is a major opportunity.
IHI said that in fiscal year 2019 declining sales to the MoD of engines and related services contributed to its Aero Engine, Space & Defense business division registering a 2% year-on-year decline in revenue to JPY480.8 billion (USD4.6 billion), or 35% of total sales.
Japanese company IHI is aiming to develop its XF9-1 engine to meet the propulsion requirements of Japan’s next-generation F-X fighter aircraft (pictured). (Japanese MoD)
The division’s profits fell by 13% to JPY40.3 billion, mainly due to the impact of Covid-19 on its commercial aerospace business, while orders in the year for both commercial and defence-related engines declined to JPY420.1 billion.
IHI said that the impact of Covid-19 will continue to affect its business for the foreseeable future and that further risks are related to “downward pressure on expenditure for domestically made defence equipment due to increased transnational procurement between governments”.
IHI’s plans for growth have also been affected by Covid-19-related delays to the development of a new production and maintenance centre in Saitama Prefecture near Tokyo. The JPY25 billion facility was previously scheduled to be completed this year but has reportedly been delayed.