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Thales Awaits Large Orders from U.K., India in 2005
Thales expects to sign orders with Britain for surveillance drones and with India for attack submarines early next year, as part of a series of large defense contracts that could total 2 billion euros ($2.6 billion), Thales sales and marketing director Jean-Paul Perrier said.

The executive gave a stout defense of Thales’ multidomestic strategy, which has come under criticism from rival EADS, as he outlined expected sales from foreign governments.

Thales has generated increased sales from acquired foreign companies, proof that the multidomestic strategy works, he said.

EADS executives say their international strategy, dubbed “transnational,” differs from Thales’ in that EADS seeks to avoid duplication by creating centers of excellence that serve the whole group.

Thales also is moving toward centers of excellence, Perrier said.

“Thales’ reorganization into six divisions has been very useful as it gives greater visibility on the profit centers in the group,” stock analyst Agnes Blazy of CIC Securities, here, said. “What the market is waiting with impatience for, is how the assets are used in each division.”

Perrier, also chief executive of the Thales International division, said British government spending cuts have resulted in some slippage in military programs. But Thales expects to sign a 1.2 billion euro contract for the British unmanned aerial reconnaissance vehicle program, dubbed Watchkeeper, around March or April, Perrier told journalists here.

A signing for a first batch of two Scorpene submarines for India, worth 1.2 billion euros, could take place in January or February, once an interministerial body ratifies the decision, Perrier said. The defense and finance ministries already have green-lighted the purchase of six submarines, he said.

The deal consists of three lots of two submarines, each tranche worth 1.2 billion euros.

A spokesman for Armaris, the Thales-DCN joint venture that is marketing the Scorpene, declined comment. Armaris will be the prime contractor for the technology transfer that will enable India to build the submarines locally.

Thales made an offer to the New Delhi government a year ago to transfer technology for local production of 126 Mirage 2000-5 fighters, but the government now may hold an international competition for the deal, he said.

In Britain, Perrier thought it likely a key “main gate” decision on the design of the Royal Navy’s two new large CVF aircraft carriers could slip from 2005 into 2006.

Thales is hoping Singapore will choose Dassault Aviation’s Rafale in the island’s competition for 20 fighters, and a decision could be made by February, Perrier said. “We have high hopes,” he said.

Thales provides the RBE radar and other electronics for the French-built Rafale, which is competing against the Boeing F-15 and Eurofighter Typhoon for the Singapore contract.

In total, Thales expects more than 10 billion euros in new orders in the next three years from foreign governments, led by an expected 6.6 billion euros of business in the United Kingdom.

A prospective 7 billion euro contract to supply a border surveillance system, called Miksa, to Saudi Arabia is still being discussed and remains a live prospect, despite pressure from the U.S. government on Saudi officials to grant contracts to American firms, he said.

French and Saudi ministers signed a preliminary agreement 10 years ago on supply of the system

Posted by Jehangir Unwalla @ 10:48 AM


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This blog focuses on current issues concerning defense and national security for the world's largest democracy - India. It is updated regularly providing readers with in-depth information on technology transfer, acquisitions, counter-terrorism, security and military collaboration and strategic dialogue between India and the United States. The site includes links to top defense policy & research institutes, think-tanks, military sites and research organizations.
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