DSEi: Defense Firms Flock to London Full of Optimism, and Angst
LONDON — Some companies that consistently attend the Defense and Security Equipment International trade show say that the exhibition seems busier this year. The show floor, with more than 1,300 exhibitors, is more crowded than ever, attendees say, despite growing nervousness in the industry about the future of the arms business.
“Things are slow throughout the world,” says Greg Twiner, business development manager at TAE Group, an engineering firm in Australia that builds enclosures for electronics on the Joint Strike Fighter.
Pressure on the U.S. market has created apprehension around the globe. Twiner breaks it down this way: If the U.S. government slowns down spending, it causes companies to curtail investments. Though the economy in Australia seems to be on solid footing, defense opportunities there aren’t substantial enough for firms such as TAE to ignore the rest of the world. Australian companies must rely on exports to survive, “and that’s not happening,” Twiner says. “A lot of companies have gone bust.”
Large U.S. and European defense contractor representives say they are encouraged by the talks of potential sales, even if they are not inking deals this week at DSEi.
Anne-Claude Buatois, communications representative for France’s Renault Trucks, says that her company has entertained more international delegates than it did at the last DSEi show in 2009.
Hindustan Aeronautics Limited has joined the fray of American and European companies pitching attack helicopters and has built prototypes of a light combat chopper for the Indian Air Force.
And Spectra Engineered Fabrics says it expects no hiccups in its business delivering protective clothing to customers in its home country of Turkey and throughout the Middle East.
Many small businesses in the United States and United Kingdom, where the economic gloom may be the heaviest, are trying to push their way into the defense industry.
LS Design is a small business in Wales that recently landed its first defense contract working with General Dynamics on a radio system upgrade. The company’s business manager Paul Driscoll used to work with giant Textron and has witnessed the blows delivered to both the defense and civilian markets.
“There was enormous growth and then literally overnight, it dropped right through the floor,” says Driscoll, adding that companies from various sectors are crossing over to find any business they can.
LS Design is making its first appearance at DSEi. It has been a worthwhile experience so far that has resulted in a number of serious inquiries, Driscoll says.
Colorado’s Genesis 3 Engineering also rented space at the show for the first time. Vice president of business development Britt Ham and colleagues came to DSEi in 2009 to walk the floor and decide if they wanted to reserve a booth at this year’s exhibition. They went on to pick an advantageous spot just inside an entrance to one of the halls.
The aerospace engineering outfit, which employs 30, has been around for more than a decade and used to serve mostly commercial clients. Then the economy soured in 2007 and today the majority of the company’s work is for military applications. The exposure to the European market at DSEi “will have been a great investment for us,” Ham says. “In the U.S., you tend to see a lot of the same people. Now we’ve got a whole different list of people.”
Some of those people have shown interest in taking the company’s retractable cameras designed for aircraft and installing them on ships, he says.
Smaller companies such as Ham’s are interested to see where they fit into the changing defense landscape.
It appears to be this optimism paired with anxiety that have brought so many companies to London this year in hopes of snagging a new customer or deal. “We’ll just have to tighten our belts, run harder and try to pick races we have a chance in,” Twiner says.
For small businesses, all it takes is one good customer, Driscoll says.
Topics: Business Trends, Business Development, Doing Business with the Government, Partnering, Defense Contracting