Poland and Turkey : Top Countries for Finmeccanica
The international presence of Finmeccanica has grown constantly in recent years as a result of strategic acquisitions, targeted investments and international alliances. Today Finmeccanica is a multinational and multicultural group, with a workforce of about 67,000 employees in around 50 countries, headquartered in Italy and with a strong worldwide presence.
International development is then a key driver for Finmeccanica and the Group is trying to evolve its commercial and market approach following a “country based strategy”, able to fulfill customer requirements not only “selling a product”, but also supporting domestic industrial development, export policies and institutional relationships with a win-win approach.
Transfer of technology , business activities delocalization, strategic partnership and long term agreements: these are the new strategic/commercial leverages Finmeccanica is implementing on top priority countries.
Poland and Turkey are indeed Finmeccanica “top countries”, where such new international business model has been exploited in the past years and is already bringing up significant results.
Poland is one of the fastest growing countries in EU and in NATO alliance and intends to continue to invest in the fields of Aerospace and Defense. For Finmeccanica, no other countries in Europe, except Italy and UK, have a similar amount of business opportunities. At Farnborough 2012, Finmeccanica officially announced that Poland became the fourth of its Domestic Countries.
Turkey, due to the strong economic expansion of the last decade, combined with the strong political impetus towards the highest possible degree of independence, changed its market status of simple export solution for Finmeccanica products, becoming an industrial partner for a local production, in order to be able to meet the domestic demand and to develop joint products to be used for export markets. The actual close cooperation between the Group companies and their Turkish counterparts has led to a solid industrial partnership, from the defense and safety sectors to programs for civil applications.
Poland and Turkey : A New Business Model for Finmeccanica
Finmeccanica relationship with Poland and Turkey dates back to many years ago.
SELEX ES Elektronik Turkey, a company established under Turkish law owned by Selex ES (originally named Selex Komunykasion A.S ), has been in operation since 1989 in military communications, defence electronics sectors and in lighting production (Sirio Panel), employing 50 people in its industrial site
In 1991 ATR delivered its first regional aircraft to Polish Airlines and in the following 10 years several important contracts have been awarded in the Electronic for Defense and Defense Systems segment.
But what is extremely significant for both countries is that Finmeccanica traditional commercial approach has evolved during the years to a strategic collaboration involving partnership business model with local industry.
This is the case of helicopters segment.
In Poland, since 1996, AgustaWestland has developed a fruitful relationship with PZL-Swidnik S.A., where the production of AW109 and AW119 fuselages and tail booms were commenced. This activity was enlarged in 1998, for the development and production of fuselages for the AW139 and structures for the AW101. In 2010 AgustaWestland became the major shareholder of PZL-Swidnik S.A., which has almost 60 years of tradition in both the commercial and military helicopter market and is the only Polish Original Helicopter Manufacturer with decades of experience in design, development and production of helicopters. The Company, with around 3200 employees, is the biggest aviation manufacturer in Poland and one of the biggest employers in Lubelszczyzna.
In a comparable way, in Turkey (where Finmeccanica already recorded significant commercial successes with over 270 helicopters sold), the Undersecretary for Defense Industry (SSM) awarded in 2008 to the industrial group made by the local TAI (prime contractor), AgustaWestland (major sub-contractor) and Aselsan (sub-contractor), the ATAK program for the supply to the Turkish Army of attack and tactical reconnaissance helicopters.
Both industrial operations underline a new business approach, whose purposes and results are already tangible.
The employment and technological base of PZL Swidnik will greatly benefit when the AW149 production line will be launched. This new medium lift military helicopter, proposed to the Polish Armed Forces in the frame of the current helicopter tender, represents the state-of-the-art of the rotary wing technology and will be entirely produced, assembled and tested in Poland. AgustaWestland expect a very significant export market for this 8.5 tons helicopter because it answers a growing demand for the next generation, affordable, multi-purpose medium helicopters.
Through PZL Swidnik, AgustaWestland, is also developing the SW-4 RUAS (Rotorcraft Unmanned Air System).The new product, presented at Kielce during 2012 MSPO International Defence Industry Exhibition, will contribute to increase Poland role in the aeronautic advanced technologies field and at the same time to confirm AgustaWestland worldwide leadership in the vertical lift segment, whose commercial opportunity and potential grow in the future are extremely interesting.
The Turkish ATAK program envisages the construction in Turkey of 60 helicopters T129, a twin-engine attack model co-developed on the basis of the AW129. This programme offers important industrial benefits for the Turkish defence sector, since it involves also a number of small and medium-sized local companies, and fully meets Finmeccanica strategy of industrially consolidating its presence in the country: this strategy is based on the idea of seizing the important business opportunities that may arise in terms of export, especially to those countries where Turkey claims preferential political and economic relations, such as in the Caspian Sea, the Caucasus and others.
Poland and Turkey : A Strong Example of Institutional Collaboration
Another significant commonality of Finmeccanica relationship with Poland and Turkey can be found in the strong commitment and involvement of Institutions.
Finmeccanica is developing its strategy in Poland together with Italian Institutions and Italian MoD, underlining to the main Polish stakeholders (Government, Parliament, Ministers and Armed Forces) that being Poland one of its Domestic Countries means that the Group and its Operating Companies are investing in the Country, looking to reinforce the local industrial presence, ensuring a technological growth to the Polish industrial base that will consequently bring more business opportunities and jobs creation for the local qualified engineers, technicians and workforce, and a general economic growth for the entire Country.
Moreover, today the Polish MoD (and the Domestic Industry), that traditionally has had a limited participation to western multi-national programs, appears very much interested in developing partnerships through GtoG.
At the same time the Italian MoD is perceived as a very qualified partner capable of supporting the entry of Poland to the big multinational military programs, including NATO programs. This is an asset (and a mean of doing business) that Finmeccanica intends to exploit more and more in the near future.
Based also on such deep involvement of Institutions, Finmeccanica has been able to establish strategic agreements with local partners and domestic players, such as Polish Defense Holding (the former Bumar) in the field of Defense Electronics and Defense Systems, to fulfill national requirements and at the same time to expand the joint activities in the international market.
The strong link with Poland defense institutions allows today Finmeccanica to promote more effectively its major products and solutions in the defense sector, as :
Advanced trainer aircraft, where Finmeccanica is an international leader proposing on the market the M-346 aircraft, already chosen by Singapore and Israeli Air Forces;
turrets for armored vehicles and operated weapon station (through Oto Melara, worldwide leader in the field);
air defense systems (through MBDA, who has a significant participation at the MEADS trinational program and is producing the Aster missile currently used in Italy, France, UK);
radar and electro-optics systems for land, naval and air applications;
UAV systems where Finmeccanica, thanks to the capabilities offered by its companies Selex ES and Alenia Aermacchi, is able to provide a comprehensive range of solutions from mini/micro UAVs up to MALE UAV including payloads and ground control stations.
Another relevant area for Finmeccanica, driven by a deep institutional support, is the Space domain.
Currently the Polish MoD is negotiating with the Italian MoD its participation in the Cosmo Skymed II Generation Program. This partnership will open the door to a wider industrial partnership between the national industries that will allow Poland to acquire a primary capability in the field of earth observation value added services.
In summary the excellent relationships between Italian and Polish Governments and Ministries of Defence, the business opportunities for the entire Group and the solid industrial base make Poland a Top Priority Country for Finmeccanica, that will play an important role to develop its International strategy, counting on strategic industrial assets and key collaborations agreements.
In Turkey, thanks to the agreements in place between the two MoD’s and the sound preferential relationship with the Underscretary for Defense Industry (SSM), Finmeccanica is evaluating all collaboration opportunities with industry regarding large-scale programmes aimed mainly at modernizing the country’s armed forces and building large infrastructures for national security.
In such scenario, OTO Melara is in constant relationship with Turkish shipyards for the integration of its armament for the main naval programs (MILGEM and LST).
MBDA interacts with several Turkish companies to support as “Prime” the promotion of the consortium EUROSAM about the program T-LORAMIDS (Turkish Long Range Air and Missiles Defense System).
Numerous forms of partnership and collaboration existing in Finmeccanica are moving forward in the same direction in other business segment. To mention just the most well-known examples, we have:
the ATR 72 in ASW configuration for Alenia Aermacchi, in collaboration with the local TAI. In 2012 the two companies signed an industrial collaboration agreement aimed to support mutual export business
the ATC segment in the Defence & Security Electronics sector, which boasts a consolidated relationship with the Turkish authority, thanks to the activities that Selex ES has carried forward to completely upgrade and expand the country’s air (SMART program) and harbour (VTS program) traffic control centres.
The National network of public communication for security and emergency, which sees again Selex ES open to participate with local industry for TETRA system.
the Göktürk 1 programme in the Space sector to build and launch an Earth observation satellite, with Telespazio as “Prime Contractor”, responsible for the ground segment to be constructed in Turkey and the launch of the satellite.
Poland and Turkey : A Glance at the Future….
The above brief review of Finmeccanica relationship with Poland and Turkey clearly underlines what means “top countries” for an international Aerospace & Defence group and how commercial relationship could evolve to an “higher level” form of industrial and institutional partnership.
Looking at the future, Italy and Finmeccanica foresees significant mutual benefits from its relationship with the two countries and a successful country strategy to be developed and implemented again worldwide, wherever convenient.
Hopefully the two business models could merge, leveraging the profitable link among the Institutions, to the point of sharing commercial opportunities and have for instance Poland to buy ATAK T129 and Turkey to collaborate with PZL-Swidnik S.A in new high technology initiatives in the rotary wing sector.
In this frame of possible future cooperation between Poland and Turkey, Finmeccanica could act as a catalyst facilitating the identification of common business opportunities and joint investments in defence and therefore further contributing to the technological and industrial growth of those countries in aerospace, security and defence sector.
