Toulouse-based Latécoère says it is making progress with its plan to increase competitiveness and reduce exposure to the US dollar.
The aerostructures and cabling specialist hopes to have the broad outlines of a three-year plan to set up a low-cost manufacturing facility for simple parts in North Africa in place this year, and plans to encourage several of its own suppliers to establish themselves nearby, creating an aerospace park.
Discussions are well under way, but "we're hesitating between Morocco and Tunisia," says chief executive François Bertrand, explaining that the two countries' close cultural links, common language and relative proximity to southwest France are all factors in the choice of North Africa, where the company already has a presence.
The project will require a "global" investment of around euro 100 million ($154 million), Bertrand says.
For 2007, revenue was up 13% to euro 489 million and net profit fell 6.3% to euro 18 million owing to higher finance charges annual sales are expected to reach around euro 1.5 billion by 2010, as Latécoère takes over Airbus's Saint Nazaire ville and Méaulte sites.
The company is discussing dollar-based contracts with Airbus for work on the A350 XWB, chief financial officer Jean-Jacques Pignères says. Latécoère will seek to minimise its own exposure through dollar-based contracts with its own suppliers, as well as by negotiating hedging coverage for the deals.
The company launched "Objectif 2009" - a plan to increase competitiveness in the face of the weak dollar and to invest in new composite technologies, at the end of 2006.
The company says around 40% of its 2007 sales were exposed to the US dollar. This proportion is expected to decrease slightly in 2008.
Dollar exposure has fallen from around 55% of sales a few years ago thanks to increased purchasing in dollars, Pignères says, and the company is continuing to push for more and more dollar-based contracts with suppliers.
Source: Flight International
