16 Sep 13. Poland’s major armament and military equipment manufacturers will be consolidated into a single entity in a bid to restructure and overhaul the country’s defense industry, Prime Minister Donald Tusk announced. “The Polish Armaments Group, which will comprise all key companies active in the Polish defense industry, is currently being established,” Tusk said during a visit to local armored vehicle producer Wojskowe Zaklady Mechaniczne Siemianowice, reported Polish news agency PAP. Under the plan, the new group will integrate major state-owned defense manufacturers such as Huta Stalowa Wola, Wojskowe Zaklady Remontowo-Produkcyjne, which comprises 11 state-owned defense companies, and the Polish Defense Holding (PHO) into one group. PHO, which is Poland’s largest defense industry player, consists of some 40 entities and has a workforce of close to 10,000. Until May, PHO operated under the brand of Bumar Group, and it rebranded itself to lead the consolidation efforts of Poland’s fragmented defense industry, according to statements by senior company representatives. That expected consolidation did not occur, Tusk said, and PHO will be integrated into the new defense group. The Polish Ministry of Treasury had originally planned to launch the holding’s initial public offering on the Warsaw Stock Exchange in 2015, but it is unclear how the latest developments will affect these plans. (Source: Defense News)

16 Sep 13. Thales chief laments group’s international market prowess. The head of Thales has sharply criticised the defence electronics group’s failure to win the international business it so badly needs to counter the cuts in western defence spending. Thales’s international growth has been stunted by its failure to grasp the importance of creating local partnerships abroad, said Jean-Bernard Lévy, the company’s chairman and chief executive. He said it was “absolutely mandatory” for Thales to expand internationally to counter the cuts in European defence spending, but that simply exporting its products from Europe was no longer an option. Thales has a strong presence in a handful of countries outside France, including the UK, where it provides London’s Underground with new signalling and the army with Watchkeeper, its latest unmanned reconnaissance aircraft. But the group, whose sales were €14.2bn last year, has done less well in expanding its footprint within countries in the faster growing markets of Asia and the Gulf.
“We cannot only look at these as places we want to ship and transport [our products] to; we need to be looked at as the local guy,” said Mr Lévy, who came to Thales late last year after having been chairman and CEO of Vivendi, the French telecommunications group.
Countries such as the UAE and India demand that defence companies invest in their economies by forming local partnerships, developing indigenous supply chains and sharing technology knowhow. Most large defence buyers outside the US and Europe now enshrine these demands in regulations, though the stringency of their enforcement varies. The economic benefits companies such as Thales promise in addition to their products have become increasingly important in deciding which bids win big international tenders for military equipment. Sometimes these so-called offset agreements even trump the importance of price and technological capability. In seeking to improve sales abroad, since Mr Lévy’s arrival in December, Thales is joining a crowded field. Almost all its competitors are looking to woo countries that have grown far more important for their portfolios since the end of the boom years of defence spending spurred by the wars in Iraq and Afghanistan. (Source: FT.com)

16 Sep 13. Israel Advances IMI Privatization Plan. After decades of discussion, the Israeli government is advancing a plan that, if approved, could result in the privatization of Israel Military Industries (IMI), the nation’s oldest defense firm. Under the plan approved Monday by