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http://online.wsj.com/article/SB10001424052748703786804576137480713921282.html
BANGALORE -- Eurocopter, the helicopter division of European Aeronautic Defence & Space Co. NV, will form an alliance with an Indian company to purchase helicopter parts for its global operations as the company attempts to use the low-cost engineering skills in the South Asian country for its operations worldwide.
Lutz Bertling, Eurocopter's president and chief executive, told Dow Jones Newswires that demand for military and civil helicopters continues to rise in Asia and Latin America, although the U.S. and Europe are yet to recover from the impact of the global credit crunch.
"Right now, we are in the selection phase for an industrial partner, which will be selected in the first half and we will soon work together for supplying helicopter components for the world market," Mr. Bertling said in an interview at the ongoing Aero India 2011.
Eurocopter, the world leader for non-military helicopters and the number two builder of military helicopters, is hoping increasing demand in emerging markets will help the company fight a slowdown in the larger markets of Europe and the U.S.
Mr. Bertling said revenue is expected to grow 3%-4% in 2011, but will improve significantly from 2012 onward. The company had a 6% growth in revenue in 2010 to €4.8 billion.
He said deliveries this year will be more or less the same as in 2010. Eurocopter delivered 527 helicopters last year, down from 558 in 2009.
Mr. Bertling said this year's revenue growth will be driven by higher sales of larger helicopters and the company's fast-growing services business that includes training, maintenance and overhaul of helicopters.
Mr. Bertling said Asia is the fastest-growing market currently for Eurocopter, especially in countries such as India, Malaysia, Vietnam, Indonesia and China.
"Latin America and Asia are two regions where due to [the] good shape of the economies and financial health of the governments, military orders will continue," he said. "In addition, in Asia there is lot of replacement needs."
He said governments in Europe are cutting military budgets but the military budget in the U.S. still remains high.
"Europe and U.S. are more at a standstill, kind of [a] stabilization I would say," he said, adding that the markets in U.S. and Europe haven't "really recovered from the global financial crisis."
Mr. Bertling said the civil helicopter market in India is expected to double to more than 500 helicopters by 2015, with Eurocopter capturing a major share of this growth. He claimed that the company, which mainly competes with U.S.-based Bell Helicopter in India, currently controls 40% of the market here.
The potential growth in India is likely to come from untapped segments such as emergency medical services, police, aerial work, border protection, oil and gas as well as the rising number of wealthy individuals in the country, he said.
Mr. Bertling said field trials for a potential deal to supply 197 light-utility helicopters to India have been completed and a decision on the supplier is expected to be taken by June.
Eurocopter's Fennec helicopter is competing with Russia's Kamov helicopter for the contract.
"The next step is the offset and then financial bids will be opened," he said.
Under current rules, foreign companies that receive import orders in excess of 3 billion rupees ($65.5 million) must draw at least 30% of that order from domestic suppliers or make a similar sized investment within India, in what is known as an offset.
The government has set the offset obligation for the 197-helicopters contract at 50% of the value of the deal.
BANGALORE -- Eurocopter, the helicopter division of European Aeronautic Defence & Space Co. NV, will form an alliance with an Indian company to purchase helicopter parts for its global operations as the company attempts to use the low-cost engineering skills in the South Asian country for its operations worldwide.
Lutz Bertling, Eurocopter's president and chief executive, told Dow Jones Newswires that demand for military and civil helicopters continues to rise in Asia and Latin America, although the U.S. and Europe are yet to recover from the impact of the global credit crunch.
"Right now, we are in the selection phase for an industrial partner, which will be selected in the first half and we will soon work together for supplying helicopter components for the world market," Mr. Bertling said in an interview at the ongoing Aero India 2011.
Eurocopter, the world leader for non-military helicopters and the number two builder of military helicopters, is hoping increasing demand in emerging markets will help the company fight a slowdown in the larger markets of Europe and the U.S.
Mr. Bertling said revenue is expected to grow 3%-4% in 2011, but will improve significantly from 2012 onward. The company had a 6% growth in revenue in 2010 to €4.8 billion.
He said deliveries this year will be more or less the same as in 2010. Eurocopter delivered 527 helicopters last year, down from 558 in 2009.
Mr. Bertling said this year's revenue growth will be driven by higher sales of larger helicopters and the company's fast-growing services business that includes training, maintenance and overhaul of helicopters.
Mr. Bertling said Asia is the fastest-growing market currently for Eurocopter, especially in countries such as India, Malaysia, Vietnam, Indonesia and China.
"Latin America and Asia are two regions where due to [the] good shape of the economies and financial health of the governments, military orders will continue," he said. "In addition, in Asia there is lot of replacement needs."
He said governments in Europe are cutting military budgets but the military budget in the U.S. still remains high.
"Europe and U.S. are more at a standstill, kind of [a] stabilization I would say," he said, adding that the markets in U.S. and Europe haven't "really recovered from the global financial crisis."
Mr. Bertling said the civil helicopter market in India is expected to double to more than 500 helicopters by 2015, with Eurocopter capturing a major share of this growth. He claimed that the company, which mainly competes with U.S.-based Bell Helicopter in India, currently controls 40% of the market here.
The potential growth in India is likely to come from untapped segments such as emergency medical services, police, aerial work, border protection, oil and gas as well as the rising number of wealthy individuals in the country, he said.
Mr. Bertling said field trials for a potential deal to supply 197 light-utility helicopters to India have been completed and a decision on the supplier is expected to be taken by June.
Eurocopter's Fennec helicopter is competing with Russia's Kamov helicopter for the contract.
"The next step is the offset and then financial bids will be opened," he said.
Under current rules, foreign companies that receive import orders in excess of 3 billion rupees ($65.5 million) must draw at least 30% of that order from domestic suppliers or make a similar sized investment within India, in what is known as an offset.
The government has set the offset obligation for the 197-helicopters contract at 50% of the value of the deal.
