Israeli defence company Elbit Systems is shrugging off concerns that world defence spending will decline in the wake of the credit crisis and says demand will increase for its specialist products, which include unmanned platforms and intelligence systems.

Chief executive Joseph Ackermann said at the show yesterday that the drawdown of US forces in Iraq, rather than causing a fall in the defence budget, would "provide the opportunity for a systems upgrade" across the services as money is diverted to command, control, communications, computers, surveillance and intelligence (C4SI) and electro-optics systems. It also expects increased spending in these areas in its other big markets of Europe, Brazil, South Korea, Turkey, India and Australia. "Our relevant business is set to grow," he says.

Ackermann also says Elbit is ready to play a part in any further consolidation of the Israeli defence industry, if the government goes ahead with its privatisation of nationalised concerns Israel Aerospace Industries, Israel Military Industries and Rafael. Elbit represents a third of Israeli defence spending (up from 17% in 2000) and this could further grow after it purchased a 19% stake today - with an option to buy all remaining shares in two years time - in private company Mikal.

Mikal's products include armoured fighting vehicles, optronic equipment and artillery. "The next step is when the [state-owned industry] is taken private and we will then play a big role," says Ackermann.

The USA represents Elbit's biggest market and a recent partnership with General Dynamics will see it offering its unmanned air vehicles to the military. "We want to bring our unmanned systems technologies to the US," says Ackermann. "We believe there is a significant need for another player in the market."

Elbit is keen to look at buying more businesses in the USA, where its US-based subsidiary has revenues of more than $900 million a year. "We are looking at organic growth and strategic acquisitions in areas including C4SI, UAVs and services and support," says Ackermann. "We are on the way to becoming a trusted global provider."

Source: Flight Daily News

Topics