Brazil has long been known as the home of Embraer, which continues to vie for the rank of the world’s third-largest commercial aircraft producer behind Boeing and Airbus. Although the rest of the country’s aerospace and defense sector has tended to lag well behind the U.S. and Europe, the situation may be about to change.
As in the rest of the world, Brazil’s industry has been in a process of consolidation for several years. This has seen a number of smaller firms pulled in to become divisions of larger consortiums that have a significant footprint in more than one sector of the economy.
“The defense business here is now a game being played by a smaller number of larger players,” said one Brazilian defense analyst, speaking to AIN on condition of anonymity. “And the name of the game now is for these larger groupings of firms to develop active, working partnerships outside of Brazil.”
One of the most visible examples of this was the 2011 acquisition of the air-launched weapons maker Mectron by the Brazilian conglomerate Oderbrecht. The company, still using the Mectron label on its product line, now markets itself as Oderbrecht Defesa e Tecnologia.
Since the acquisition, the company has branched out beyond some of its traditional partnerships with South Africa’s missile maker Denel, and has made an agreement to produce under license the Russian-designed KBP Pantsir-S1 (NATO designator SA-22) short-range air defense system along with a group of Brazilian firms that will manufacture the major subsystem components. This project with Russia’s KBP illustrates the other trend now in the Brazilian aerospace industry: a push to find projects that the country’s firms can cooperatively improve on the design of and/or develop along with a foreign firm before manufacturing that product for both Brazil and third nations.
The highly diverse defense systems producer, Avibras, is involved in just such a project involving the re-engining of the MBDA Exocet missile, specifically the MM38, MM40 Block 2 and AM39. The program is supposed to start with the re-engining for Brazil of the MM40 Block 2 models and then later the AM39s, which will be used on the Brazilian Super Puma helicopters. Avibras and the Brazilian navy conducted a test firing last year using an Exocet with one of their rocket motors with the warhead section replaced by a telemetry unit from Mectron, which was also equally involved in the development.
One of the newer partnerships is the more recent link-up between Brazil’s Santos Lab (Hall 3 Stand C/D30) and the Boeing subsidiary Insitu. Both companies produce a line of small UAVs, some of which can be launched in the field by an individual soldier who pitches the vehicle into the air as if it were a paper aircraft as its propulsion system powers up.
However, a far bigger partnership revolves around the long-delayed tender for the planned FX-2 fighter, which has been under consideration in one form or another since 1997. The latest iteration has had three finalists–Sweden’s Saab Aerospace JAS-39E/F Gripen, the French Dassault Rafale and Boeing’s F/A-18E/F as the U.S. entry.
Designed to replace a fleet of aging air force fighters for the Brazilian air force (FAB), the FX-2 would see the procurement of 36 new aircraft to be license-produced in Brazil. The underlying assumption of the program has been with follow-on procurements the total number of whichever model is to be selected by the FAB would come to 120 aircraft.
The long-term goal of the FX-2 program was for Brazil’s own industry to be producing a fighter that could be sold outside of Brazil in addition to FAB’s own requirement. The difficulty is that the long-deferred program appears to be reaching breaking point for both the potential sellers and buyers.
Speaking off the record, executives with all three firms bidding for the program have complained of “Brazil fatigue” over how long the process continues to roll on without a decision being made. The validity of the commercial proposals that accompany each of the three companies’ bids, which include industrial participation and pricing agreements, have had to be repeatedly extended beyond each planned expiration period since 2009. The latest extension expires in September and bidders appear reluctant to go along with yet more political procrastination.
FAB is no less frustrated by the delays. The air force has completed its assessment of the three bids some time ago and has been waiting for the politicians and President Dilma Rousseff to make a decision.
Just prior to the April 2013 LAAD defense show in Rio de Janeiro, Brig. Gen. Carlos Baptista Júnior, the outgoing head of the FAB’s Comissão Coordenadora do Programa de Aeronave de Combate, which is responsible for administering the fighter procurement, gave a speech in which he warned that the endless delays of the FX-2 decision were beginning to compromise the force’s capability to carry out even its most basic missions.
According to the Brigadier General, the “focal point of the problem” that needs to be addressed by the FX-2 procurement is the FAB’s “diminishing operational capacity” and “not any other aspect.” In his view, too much attention has been paid to unfulfilled ambitions for transfer of technology to Brazil’s defense industry at the expense of achieving the final decision the FAB needs in order to refresh its fighter fleet.
Clearly, this procurement will be the most transformational of all in the history of Brazil’s aerospace sector. The question is if the decision will come too late for some of the anticipated benefits that this program is supposed to bring to Brazilian industry to be realized.
There are 20 Brazilian exhibitors here at the Paris Air Show, largely concentrated in Hall 3. In addition to Embraer, the focal point of the South American country’s presence this week is the Brazilian Defense and Security Industries Association (ABIMDE).