01 Apr 12. The resignation of Swedish Defense Minister Sten Tolgfors has reopened scrutiny of the government’s relationship with Swedish-based industry, along with the government’s connection to the raging controversy around top secret plans to design and co-finance the construction of a weapons manufacturing facility in “black-listed” Saudi Arabia. More expressly, the spotlight has fallen on a government promise, made by Prime Minister Fredrik Reinfeldt’s center-right administration in 2007, to collaborate with industry to promote Swedish military exports, particularly in high-demand, emerging markets in Asia and the Middle East. The government’s promise to open export markets for Swedish contractors helped appease a defense sector hurting from the government’s new “more bang for the buck” policy introduced that same year. The initiative redirected procurement strategy away from home-grown weapon systems to off-the-shelf solutions available at a lower cost from international suppliers. On March 29, Tolgfors resigned amid revelations that the government had cut a secret deal with Saudi Arabia to build an anti-tank weapons factory in that Middle Eastern country. What that means for future exports, which are crucial to Swedish businesses, is unclear.
The estimated initial $400m capital value of the proposed Saudi weapons plant included direct Swedish involvement in its design, construction and outfitting. Moreover, the Swedish defense industry would have supplied all relevant production technologies and lines, as well as personnel training in what would have effectively been a turnkey project. (Source: Defense News)
05 Apr 12. Shares of Embraer (SAO:EMBR3.SA – News), the world’s
third-largest commercial planemaker, jumped to their highest level in nearly four years after President Dilma Rousseff announced a new package of tax cuts and subsidized loans to boost Brazilian manufacturers. Embraer’s stock rose 4 percent in midday Sao Paulo trading to 15.21 reais ($8.31) per share, its highest price since May 2008, which was the eve of the global financial crisis. With its payroll tax burden reduced to zero starting in the second half of 2012, Embraer stands to gain about $97m in profit this year, improving its net margin by 1.7 percentage points, according to Credit Suisse analyst Luiz Otavio Campos. Embraer’s profit margins slipped last year on a stronger local currency and rising labor costs, which have hampered several Brazilian industries. But analysts say the aircraft maker is better-positioned than other manufacturers in the country thanks to its dominance of the global market for regional jets and steady revenue from government defense contracts.
(Source: Reuters)
05 Apr 12. Gooch & Housego Plc (GHH.L: News ), a specialist manufacturer of optical components and systems, said that its trading for the first six months of the year was in line with revised management expectations. On February 21, the company had said that trading conditions have been more challenging than expected in its Industrial Laser market sector during the first four months of the financial year and that, as a result, profits for the year ending September 30 would be significantly below the Board’s original expectations. In the past few weeks since the February trading update, overall demand levels remain below the record levels of the last two years. This was despite further signs that confidence is returning to the Industrial Laser market, including the receipt of two significant orders for Q-switches from customers in the Far East. The company noted that demand from other market sectors, including telecommunications, aerospace & defence and life sciences, has been steady during the first half. Sales in these sectors remained broadly in line with original forecasts. In the past few weeks new orders totaling in excess of $7m have been received for aerospace & defence products and applications, it said. (Source: Google)
02 Apr 12. Curtiss-Wright