European manufacturer courts ST Aero in bid to boost revenues and decrease dependence on Airbus airline business 

EADS is discussing a wide-ranging tie-up with Singapore Technologies Aerospace (ST Aero) in airborne systems and defence electronics.

The move is part of efforts by the pan-European aerospace conglomerate's Defence and Civil Systems unit to increase its Asia-Pacific presence and boost revenues to ease concern that the parent company is too reliant on Airbus.

"We have to look for more industrial co-operation in South-East Asia," says EADS Systems and Defence Electronics business unit head Stefan Zoller. He says the company is interested in recruiting ST Aero as a "technology hub" for Asia, partnering EADS in funding, developing and manufacturing new technologies and products for the Asian market. The arrangement would also give ST Aero greater access to the European market.

ST Aero will not comment on specific talks with EADS but says it is discussing potential new partnerships with several companies.

Zoller says EADS Defence and Civil Systems is expected to return to profitability this year and adds that the business will be expanded rapidly in the next couple of years.

"The company is far too small, and we have to invest far more to enlarge these activities," he says. "It is quite clear EADS suffers to some extent from being far too Airbus-orientated," says Zoller.

EADS aims to grow the contribution to total sales of its defence activities to 25-30% during the next five to 10 years, says co-chief executive Rainer Hertrich. This is to be achieved through a combination of mergers, acquisitions and investment in new technology.

European missile house MBDA is to co-develop a new missile programme with ST Aero. Chief executive Fabrice Bregier declines to specify what sort of weapon will be developed, but says it will be designed to meet Singapore's defence needs. MBDA, owned by BAE Systems, EADS and Finmeccanica, already has links with Singapore's DSO, the national laboratory, and arms technology agency, the DSTA.

Source: Flight International