Aerospace giants eye Asia partners
By Lara Parpan
SINGAPORE (AFP): American and European aerospace giants are pursuing with renewed vigor ventures with their smaller but tech- savvy Asian counterparts and talks with Asian governments keen on resuming defense modernization.
After a two-year economic malaise, Asian countries are gradually taking on stalled defense plans, albeit on modest levels, with major defense contractors brimming with optimism for future programs.
"We are seeing now that some programs that were delayed for a while are restarting. We start with more intensive cooperation as we did in the past," said Jean-Paul Gut, international marketing manager of the European Aeronautic, Defense and Space (EADS) company, a consortium of French, German and Spanish firms.
Among the most promising markets are South Korea, Singapore, Taiwan and Australia, officials and experts have said.
"(South) Korea is a leading example," said Lockheed Martin president for Asia Pacific Bob Young.
Young and Gut were among top aerospace officials in Singapore last week for the region's premier airshow Asian Aerospace 2000, where some US$3.5 billion worth of contracts were announced -- nearly triple the figure at the last show two years ago when Asia bore the brunt of a financial crisis.
Adding to the bullishness is Lockheed Martin's joint bid with France's Rafale Group and Aerospatiale Matra for a stake in Korean Aerospace Industries group, which was formed from the merger of the aerospace divisions of Samsung, Daewoo and Hyundai.
Aerospatiale Matra is one of the companies integrated into EADS, which also includes DaimlerChrysler Aerospace and Compania Aeronautica Espanola SA.
French group Thomson-CSF and Samsung Electronics Co. have a 50-50 joint venture to make parts for indigenous South Korean ground-to-air missiles, the first ever transfer of non-American missile-related technology to Seoul.
Singapore's state-owned ST Aerospace recently launched a partnership with Boeing Airplane Services for conversions of Boeing 757 freighters, and with Lockheed Martin for support and upgrading services for F16 fighter jets and C31 planes.
Even troubled Indonesian aircraft builder PT Industri Pesawat Terbang Nusantara (IPTN) is actively seeking foreign partners and funding in its bid to become a leading Asian company in aircraft design, development and manufacturing of small to medium-sized civilian and military transport aircraft.
"The foreign companies, however, are more looking to see what the government does in terms of (political) stability," said IPTN President S. Paramajuda.
But on defense procurements, Young downplayed any arms build- up in the region, even as governments try to work around national budgets to boost military spending.
"There is no arms build-up here so I don't see any huge sales," Young told AFP, adding that Lockheed Martin expects the annual two billion-dollar revenue from Asia-Pacific to remain steady over the next few years.
"I think it'll be a pretty stable region really," he said, singling out China-Taiwan tension as among immediate security concerns in Asia.
Tensions have flared ahead of Taiwan's national elections next month, with China threatening force if Taiwan persists in rejecting reunification.
Other flashpoints in the region remain, such as North Korea's militarism and tensions in the Korean Peninsula, Indonesia's fragile political situation, the six-way claim over the Spratly islands in the South China Sea and Kashmir, disputed by India and Pakistan.
Industry journal Aviation Week said Asia-Pacific's 22 percent share of world arms imports before 1997 "may remain generally unchanged into the millennium."