E - Finmeccanica

F O C U S
9/2010 FINMECCANICA MAGAZINE
gards potential risks relating to political
instability and the local productive
formula, as well as the assessment of
comparative advantages. In this situation,
Italy can play a key role in removing
these difficulties through
agreements that lay the foundations
for a network of trust based on security,
commercial guarantees and technology
transfer that is sustainable,
feasible and therefore manageable. In
this regard, Italy is supporting a number
of objectives – individually, as part
of the EU and through NATO – including
multilateral regional security for
the area of the Mediterranean, ever
deeper economic and financial links
capable of distributing wealth more
evenly between the north and south
of the region and, finally, a strong
drive for cultural and social development
(modern education, especially
in rural areas, equal rights for women,
protection for children and much
more besides).
ing advantage across the board of the
Group’s skills and capabilities in order
to make the most of synergies, adopting
a structured and targeted approach
to a country that can serve as
the basis for a policy of assertiveness
and subsequent consolidation rooted
in local industry and, finally, focusing
all our attention on clients in order to
understand their needs and thus be
in a position to offer the most suitable
solutions, products and services.
In light of this, the Mediterranean
and North African regions represent
extremely interesting markets that
Finmeccanica has been courting for a
number of years, and in which the
Group has already established a significant
commercial and industrial
presence. These are areas that form
part of our strategy of selective international
growth, on a par with more
high-profile countries such as India,
Brazil and, for civil activities, China
Internationalisation strategies
Expansion in international markets is
one of the main strategic objectives
of the Finmeccanica Group. The
progress that has been made on this
front can be judged from the fact that
40% of Group revenues originate
from non-domestic clients (i.e. those
that are not Italian, British or American).
However, achieving growth in
international markets requires the
implementation of measures to keep
pace with ever greater competition,
and this necessity will only increase in
the future. For the Finmeccanica
Group, this involves continuous action
along four main strategic lines:
updating the product range to offer
innovative integrated solutions, takand
Russia. As we have already seen,
Italy is ideally placed geographically
to act as the region’s centre of gravity,
providing a hub for potential commercial
trade between North Africa
and Asia Minor, as well as offering access
to the Balkans. Today, and increasingly
in the future, the countries
of the Mediterranean will represent a
source of widening opportunity for
value creation that will be of mutual
benefit, not just for industrial returns,
but also for consolidating relationships
and cultural development.
The primary areas of business on
which we will be working and for
which we will propose our solutions
and products are therefore these
countries’ infrastructure modernisation
plans in the fields of transport,
energy, security and protection. It is
the GDP growth enjoyed by these
countries that makes these plans
feasible. In the past three years, the
Group has signed contracts worth
over EUR 4 billion in these countries,
mainly relating to helicopters, transport,
energy, security and space. The
key elements of Finmeccanica’s
strategy for approaching these areas
can be summarised in three points:
firstly, establish a Group presence in
the country, which can be used to
develop institutional relationships
that will allow the Group to be
recognised as a potential commercial,
industrial and technological
partner of choice; secondly, identify
and establish manufacturing/technological
partnerships with local
contacts; and, finally, take advantage
of developments in government-togovernment
relationships and thus
benefit from the support of the national
government.
Examples of three major achievements
• Libya. Using initial collaboration in
the area of maintenance and upgrading
work for commercial helicopters
as a starting point, Finmeccanica
has developed and agreed to
a joint venture with the relevant local
authorities (financial authorities
and those responsible for economic/industrial
development) extending
to the transport, energy
and security sectors as regards new
infrastructure and modernisation
projects involving not just Libya,
but also other African and Middle
Eastern countries. The Libyan authorities
will provide the necessary
financial resources for these projects,
in exchange for a commitment
that some of the industrial
activities required for the development
and construction of the infrastructure
will be based locally.
• Turkey. Finmeccanica, through
AgustaWestland, has signed an
agreement with the Turkish aerospace
industry for the joint development
of the T129 helicopter. This
agreement will also generate significant
benefits for AgustaWestland’s
Italian plants as regards
both engineering and production
activities. Under the agreement,
the Turkish industry will be responsible
for the promotion and sale of
the T129 on foreign markets, and
the Turkish Armed Forces have already
become the first customer to
purchase the helicopter. This collaboration
is opening up interesting
new prospects in the Turkish
market for AgustaWestland’s other
businesses.
• Algeria. The Group has already established
a foothold in the Algerian
market thanks to the sale of
AW101s and major power plants.
Other potential areas of development
include security and shipbuilding.
Taking advantage of the recovery
Overall, the current picture and future
outlook for the Finmeccanica
Group in the Mediterranean, North
African and Middle Eastern regions
confirm the success of the strategic
approach taken and the resulting development
of the business. The
Group has established itself as an authoritative
and preferred industrial
partner able to respond to critical
(defence and security) and infrastructural
requirements in the aerospace,
defence and security, transport and
energy sectors, adopting a strong position
in these countries as a result.
Each country requires that an industrial
presence be accompanied by
sufficient transfer of technology. For
the Finmeccanica Group, this means
setting up partnerships and/or other
forms of structural collaboration
with local entities, based on economic
returns on investment and ensuring
technological transfer. The strategy
is also consistent with the approach
taken by Italy as a whole,
which looks to offer itself as the leading
European governmental point of
contact for the region. The Group is
therefore able to take advantage of
support at the national government/institutional
level. Specific
measures to generate business are
also in place in other countries in the
region: this is true for Egypt, Israel
and Jordan, for which important initiatives
are underway that also involve
the Group’s subsidiary DRS.
The challenge for Finmeccanica is to
take advantage of the recovery after
a difficult period for the global economy,
especially as far as Western
economies are concerned, by strengthening
its standing in international
markets experiencing high rates of
growth, starting with those on its
doorstep that appear to have the
necessary resources for local industrial
development, while also bringing
benefits for the Group’s companies
and the sector as a whole.
Above: two mosques in central Istanbul.
Facing page: part of the Libyan desert
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