Nexter Joins Swedish Armored Vehicle Contest
By pierre tran
Published: 10 Mar 2010 11:17
Paris - Nexter has teamed with Volvo to offer its Véhicule Blindé Infanterie de Combat (VBCI) fighting vehicle in Sweden's competition for new armored vehicles, Chairman Philippe Burtin of the French land systems company said March 10.
"We made an offer this week," Burtin said, during a press conference on the company's 2009 results. Sweden is looking for industrial offset of 100 percent of the contract value, with a base option of 113 units, he said.
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The vehicle proposed to the Swedish forces will be an adaptation of the VBCI being delivered to the French Army, with about 80 percent commonality to the basic version.
Nexter will go up against BAE Systems' Hagglunds and Patria of Finland, both viewed as the front-runners in the contest.
The Swedish bid is one of many prospects Nexter has in its sights as the company seeks to lift exports to about a third of its annual sales, up from the current 18 percent.
Burtin said he met British procurement minister Quentin Davies about 10 days ago and discussed the VBCI as a contender for the utility vehicle portion of Britain's Future Rapid Effects System program. "That interests us," Burtin said.
Nexter has also submitted the Aravis protected vehicle to Canada, which is looking to buy 300 tactical armored patrol vehicles. Canadian law requires 100 percent of offset in that acquisition.
"A network of alliances" with local partners underpins Nexter's export drive, with the VBCI and Caesar truck-mounted 155mm artillery system as the spearhead products.
Demonstrations of the VBCI are planned in the Arabian Gulf and Saudi Arabia later this year.
Nexter has teamed with an undisclosed Indian industrial group based in Mumbai that specializes in electromechanical systems to offer the Caesar to the India Army. A transfer of technology would be delivered to allow local assembly of the guns, as the Indian government wants to develop a domestic industrial base.
Sales talks on the Caesar are also being held with Malaysia, militaries in the Middle East and South America. Saudi Arabia, which already has bought the Caesar, last year ordered a fresh batch of guns worth 82 million euros ($112 million).
Qatar and Colombia are potential clients for secondhand Leclerc battle tanks.
Nexter signed in December with the Barcelona-based company GTD to form the Ibersystems de Defensa joint venture, which will pitch the VBCI for Spain's tender for 300 troop carriers. The local partner holds 20 percent of the joint venture. In that competition, Nexter faces local incumbent General Dynamics' Santa Barbara, the Frecchia from Italian combine Iveco-Oto Melara, the Boxer from German consortium Artec and the AMV from Patria.
Export wins are needed to ensure growth as the last VBCI is due to be delivered to the French Army around 2014. The mega-export contracts of the 1990s are over, Burtin said, but foreign sales of the VBCI for 500 million to 1 billion euros a year are "attainable."
The export market is fiercely competitive, with the presence of Chinese giant Norinco in the Middle East, as well as players from India and South Korea. Nexter needs to find the "right balance" in technology, services and the right price to compete against such actors, he said.
Nexter has built and is testing a demonstrator for the véhicule blindé multirole - the planned successor to the present VAB troop carrier - due to be selected in 2012 and delivered in 2015. The company has reached agreement with Thales and Safran to form a joint venture to bid for the architect's mandate in the French Army's Scorpion modernization program, Burtin said.
On the issue of consolidating the European land sector, Burtin said, "Nexter is ready."
A key factor will be the industrial project, he said. "What can we do together?" he asked. Any plan had to make sense in industrial, commercial and labor terms. The restructuring was part of the "road map" ministers had handed him and constituted a priority, he said.
Nexter reported a 2009 net profit of 141 million euros ($192 million), up 42 percent on the 99 million euros posted in the previous year. Sales rose 53 percent to 887 million euros, up from 579 million.
The underlying operating profit margin was 12.5 percent of sales. New orders totaled 1.29 billion euros, giving an order backlog of 2.5 billion euros, or three years of work.
The return on capital employed was 53 percent, up from 46 percent.
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