Sao Paulo (dpa) – Having successfully launched itself on the world market for regional airplanes, Brazilian aircraft company Embraer now wants to conquer new markets in the military sector.
At the moment, defence sector business acounts for seven per cent of the Empresa Brasileira de Aeronautica company’s turnover. But several military projects are projected to lead what is now the world’s fourth-biggest plane manufacturer into new dimensions.A supersonic jet fighter, equipped with the latest electronics made in Europe, is to lead the way.Embraer’s first customer is to be the Brazilian government, which aims to become independent of any possible arms embargoes imposed by the United States.“We regard ourselves as being the technological and industrial branch of the Brazilian air force,” Embraer chief executive Mauricio Botelho told the Varig airlines in-flight magazine Icaro Brasil.Washington is prepared to deliver such U.S. jet fighters like the F-16 to Brazil. But the export versions of such planes are, for security reasons, “downgraded”. Russia can’t be considered as a partner because the computer software is in Russian.What remains are the Europeans – above all the French, who have already sold to Brazil the aircraft carrier “Foch”.In 1999, French airplane companies Dassault Aviation – maker of the “Mirage” jet fighter – and Aerospatiale Matra, along with jet engine manufacturer SNECMA and defence electronics supplier Thomson-CSF acquired 20 per cent of Embraer’s voting rights.“This is an alliance aimed at developing business opportunities, especially in the defence sector,” Botelho said. The name of the future Brazilian jet fighter gives away the game of guessing its origins: “Mirage 2000 BR”.The jet fighters are to be built in a new plant in Gaviao Peixoto, in the state of Sao Paulo. Beforehand, however, the Brazilian government must lay down the financial groundwork.A Dassault spokesman said his company is “optimistic about the future of the programme in Brazil”, a country he described as being a “natural market for Dassault”.Embraer is also looking toward France and Europe for other potential projects, among them surveillance and interceptor planes based on the regional jet ERJ145, as well as a light-weight fighter plane called ALX.“We have interesting radar and flight technology to offer,” notes the giant European aerospace consortium EADS, to which Aerospatiale Matra belongs. EADS also has a stake in Dassault.Embraer meanwhile is keeping busy in the civilian sector. Last year, it boosted its production rate for its regional jets at its Jao Jose plant from 12 to 16 planes per month. This year, output will be raised to 20 per month.The company now boasts firm orders and options for 800 such jets worth 23 billion dollars. Using this success in the 38- to 50-passenger plane sector as a foundation, Embraer is now pushing ahead in the 70- to 108-seat category to compete against Airbus and Boeing.This has become possible because Embraer has quadrupled its productivity since the company’s privatisation in 1995 – and because it enjoys export subsidies.This came the same time that once-powerful competitors like Saab (Sweden), Daimler subsidiary Fokker and Spanish plane company CASA quit the field of regional jets after suffering severe losses during the 1990s.By contrast, Embraer reached the profit zone in 1998 and now lays claim to a 45 per cent stake of the world market for regional jets. In the first half of 2000, the company with its 9,800 employees posted pre-tax profits of 210 million Reals (125 million dollars), amid a 62 per cent rise in turnover to 2.2 billion Reals.But amid the success, some dark clouds are gathering for Brazil’s biggest exporter. After a four-year dispute between Brazil and Canada over Rio’s support for the airplane industry, the World Trade Organisation has set its sights against the Brazilian export-subsidies programme “Proex”.On December 12, the WTO conceded to Canada the right to impose trade sanctions against Brazil worth 344.2 million Canadian dollars (240 million U.S. dollars) because of the Proex programme.“Brazil is prepared to offer compensation,” Paulo Fernando Dias Feres, head of the Brazilian foreign ministry’s trade promotion office, told deutsche presse-agentur dpa. But the country is not going to let Canada dictate the rules. “There could be a trade war,” he warned.
