Thursday, February 11, 2010

Singapore Airshow: New European, Indian Markets for ST Engineering

Defense News


Singapore Airshow: New European, Indian Markets for ST Engineering

By Wendell Minnick

SINGAPORE - ST Engineering is moving beyond its regular product lines of small arms and ammunition and pushing into the armored vehicle market and further developing its integrated systems capabilities, said Patrick Choy, ST Engineering's executive vice president for international marketing.

Choy said the company is integrating the capabilities of the four sectors into a single package for the customer. ST Engineering, with a turnover of $3.8 billion in 2008, is divided into four sectors: ST Aerospace, ST Electronics, ST Land Systems (ST Kinetics) and ST Marine.

"The customer wants integrated system solutions," he said. "We approach the market by harmonizing all of our business sectors."

The company has made new inroads into the European market for its armored vehicle line. ST Engineering secured its first armored vehicle sale from a NATO member country in December 2008 when ST Kinetics won a $250 million contract with the U.K. military for 100 "Warthog" tracked vehicles.

Also dubbed "the Beast," it is a development of ST Kinetic's Bronco All Terrain Tracked Carrier. The vehicle was chosen in response to the U.K.'s Urgent Operational Requirement for Afghanistan.

Europe has a long history of procuring ammunition, particularly 40mm, from ST Engineering, but this is the first major purchase by a NATO member of a vehicle from an Asian nation. "We've had our first success with a vehicle sale to the U.K," Choy said. "Traditionally, NATO countries have never bought any major hardware, especially armored vehicles, from Asia. So this has become a good reference point as to where we are as a company."

ST Engineering is now competing for the howitzer market in India with the FH 2000 155mm 52 caliber towed howitzer for India's towed gun requirement and the Pegasus 155mm 39 caliber lightweight howitzer for the ultra lightweight howitzer competition. ST Kinetics is also exploring the sale of the SAR 21 assault rifle to India.

"We did an analysis of where the defense market is going. And there are some conclusions we've drawn. The first one is in some of the major markets we see capital buys decreasing. A lot of countries are not making huge capital buys. For one the threat has changed, two the budgets have been cut and number three they feel that equipment they have is good enough."

Choy said many are moving away from large capital procurements because the threat is more asymmetrical and requires "more boots on the ground."

There will continue to be a need for new conventional weapons, but there is a lot more upgrading and retrofitting of older equipment to save costs as defense budgets decline. "They want more bang for the buck," Choy said. "This is an area that ST Engineering is looking at closely."

Connectivity and integration have also become important but "capital buys will continue to drop" and ST Engineering will be displaying new smart solutions for customer requirements.

ST Engineering is also looking at multi-tasking for platforms. The military is not just involved in traditional combat, he said. Military operations other than war (MOOTW), such as peacekeeping, humanitarian, civil defense and disaster relief are becoming more common.

"So how do we enhance the warfighters capability in that environment," Choy said. Citing the Bronco as an example, "the Bronco is not just for combat operations. It can easily be reconfigured for disaster relief."

At the Singapore Airshow, being held Feb. 2-7, the company will display both the Warthog and 8x8 TERREX armored infantry fighting vehicles for the first time. Also making its debut is the Trailblazer countermine vehicle.

The company will also be showing off its unmanned aerial vehicles (UAV), including the FanTail and Skyblade UAV systems.

Choy said ST Engineering has also developed the 40mm Soldier Parachute Aerial Reconnaissance Camera System (SPARCS) camera round for grenade launchers that allows troops to survey immediate areas in conflict zones.

ST Engineering announced Feb. 1 that ST Kinetics had been awarded a $41.6 million contract for the demilitarization of ammunition for an unidentified country in Africa.

"The contract involves the supply of specialized equipment and related services, such as training and operations assistance. The first delivery is scheduled to be completed in the second half of 2010, with the final delivery expected within the first half of 2012," said a press release issued for the airshow.

Ammunition demilitarization entails destroying the inbuilt capabilities of the ammunition through a series of processes such as disassembly, size reduction, melt-out of explosives and incineration of non-recyclable explosives.

"This is an important endorsement of our demilitarization services. We are pleased that the customer has shown confidence in our solution. We will continue to explore opportunities in demilitarization and work closely with our customers to value add to their operations," said Sew Chee Jhuen, president, ST Kinetics.