Italian defence firm Leonardo eyes Middle East sales exceeding $1.5bn

Exclusive: The region accounts for up to 10% of the company's order book

Abu Dhabi, U.A.E., February 17, 2019. INTERNATIONAL DEFENCE EXHIBITION AND CONFERENCE  2019 (IDEX) Day 1-- LEONARDO.  Interview of Lorenzo Mariani, Chief Commercial Officer, Leonardo.
Victor Besa/The National
Section:  NA
Reporter:  Dania Saadi
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Italian defence company Leonardo expects to boost its annual Middle East sales beyond $1.5bn as it pursues deals for its naval combat systems, cybersecurity and helicopters amid plans to buoy overall global revenue, its chief commercial officer said.

Leonardo, whose Middle East business accounts for up to 10 per cent of its total order book, is in talks with the UAE Navy to provide it with additional naval combat systems since the firm already provides such products to more than 20 vessels, Lorenzo Mariani told The National. He was speaking during the International Defence Exhibition and Conference (Idex) taking place in Abu Dhabi.

“In the UAE, we are capitalising on our long lasting contract with the Navy for further naval contracts for the combat systems,” said Mr Mariani.

“We are [also] using and exporting this experience [in cybersecurity] to propose to the UAE Armed Forces solutions that are compliant with their specific requirements. In doing that we are also fully opening our doors for collaboration with local industries.”

Leonardo exports over 80 per cent of its products and had a four-per cent drop in revenues to €11.53bn in 2017. It is expanding its footprint as it seeks to implement a plan to secure new orders of €70bn over 2018-2022 and post double digit profitability by 2020.

“We want to grow in our absolute term relying more on the export market,” said Mr Mariani.

In Saudi Arabia, Leonardo is in talks to sell helicopters and other aircraft with a view to localising content in collaboration with Saudi companies.

The Italian company is involved in the manufacture of the Eurofighter Typhoon jets, a project also involving the UK, Germany and Spain, who are seeking to secure a deal with Saudi Arabia, which already has a 72 jet fleet. Leonardo wants to collaborate with Saudi Arabian Military Industries, a state-owned company launched in 2017 as part of efforts to localise defence production.

“We are still engaged in maintenance and support [of the Saudi Eurofighter fleet] and of course we are seeking, together with our British colleagues, further sales of the Eurofighter. Everything is based on potential collaboration with Sami,” Mr Mariani said.

“The key point is how to really reach an industrial capability in the country in the shortest possible time.”

Leonardo is also pursuing a number of opportunities ranging from helicopters to cybersecurity in Egypt.

Globally, the firm is involved in a number of high-profile projects including MBDA, the missiles group that counts three European defence companies as shareholders:  Airbus (37.5%); BAE Systems (37.5%); and Leonardo (25%).

MBDA is part of a group of companies involved in a long delayed arms deal with Germany, involving Lockheed Martin of the US.

Germany selected the Medium Extended Air Defence System (Meads) built by Lockheed Martin and MBDA over Raytheon’s Patriot air and missile defence system in 2015, but the deal has faced some hiccups.

Mr Mariani expects the final contract to be concluded by 2020.