Under pressure of competition, Embraer aims at defense area
Folha de S. Paulo
Pushed by the operations in the competition, Embraer starts today the expansion of its defense area. The São Paulo company will announce the purchase of the radar division of Orbisat, the first acquisition since it created the subsidiary Embraer Defesa e Segurança (Defense and Security), in the end of 2010. The sales of the defense equipment, concentrated on airplanes, totaled R$ 1.2 billion (US$ 681.8 million) in the portfolio of Embraer last year. With the purchase of Orbisat and the negotiation for the control of the electronics company Atech, Embraer aims to diversify its portfolio of military and security products.
Orbisat makes aerial surveillance radars and remote sensing systems. Its line of products such as satellite TV receivers will be kept by the previous owners. Folha found out Embraer has paid nearly R$ 30 million (US$ 17.7 million). The company already works for the Armed Forces and it has a surveillance radar ready, Saber, developed together with the Army, for the purpose of equipping the frontier control system. The R$ 10 billion (US$ 5.9 billion) project should be implemented in the coming years, and thus, Embraer positions itself to fight for it. The Navy also has a similar plan. Besides, Embraer intends to use the radar as part of an anti-aircraft defense system to be offered the Army as well. In the 2014 FIFA World Cup and the 2016 Olympics, the stadiums need, in view of international rules, be protected by air defense batteries against any terrorist threats.
The move of Embraer, whose diversification plans include studies to build a bullet train, has a reason. Since last year, when new laws promoted the legal structure for the national military industry, the sector witnessed its greatest operations since the military dictatorship. The European aerospace giant EADS, through its defense arm called Cassidian, joined the Brazilian contractor Odebrecht, and the first target of the duo is the acquisition of Mectron, a missile manufacturer. Odebrecht already has a billion dollar subcontract of the program of submarines of the Navy as it was chosen by the French DCNS to build a new shipyard. The new conventional submarine will have four units assembled in Brazil and it will work as the basis for a model of nuclear propulsion.