Italian defence firm eyes BRIC to tackle market squeeze

Italian defence and aerospace major Finmeccanica has sought to balance out receding defence budgets in the US and Europe by expanding its footprint in BRIC countries - Brazil, Russia, India and China - where military spending is on an upward spiral. Rahul Singh reports.

Italian defence and aerospace major Finmeccanica has sought to balance out receding defence budgets in the US and Europe by expanding its footprint in BRIC countries - Brazil, Russia, India and China - where military spending is on an upward spiral.

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Finmeccanica chairman PF Guarguaglini said the changing dynamics of defence spending in US and Europe had lent fresh urgency to spread wings in the greener BRIC pastures - India alone is poised to spend more than $100 billion (Rs 4,50,000 crore) on modernising its military over the next 10 years.

Guarguaglini said Brazil, Russia and China were projected to spend $85 billion (Rs 3,82,500 crore) on military procurements in 2015, more than double their combined defence spending of $42 billion (Rs 1,89,000 crore) in 2010.

Finmeccanica won contracts worth more than $32 billion (Rs 1,47,500 crore) in 2010, with the US, the UK and Italy accounting for 60% of its order book. However, industry estimates show Washington's defence spendings will drop 7.4% in 2015 compared to last year, while UK's purchasing power will crash, in the corresponding period, by 27.1%. Italy and Germany will record negative growth rates too.

AgustaWestland, part of the Finmeccanica group, signed a $835 million (Rs 3,760 crore) contract with India last year to supply 12 AW101 VVIP helicopters to the Indian Air Force.

(The writer is in Paris at the invitation of Finmeccanica)