At DSEI, Defense Contractors Settle Into New Fiscal Reality

LONDON — The Defense Systems and Equipment International exhibition is billed as the largest international showcase of military arms in the world, but as the event opens on Sept. 10, the defense industry finds itself plagued by an ongoing downturn in defense spending and overshadowed by political controversy over Syria.

Industry officials expressed a sense of resignation to the fact that military budgets continue to shrink. Nonetheless, attending DSEI affords companies the chance to see and be seen by potential customers, create partnerships with other companies and branch out into new markets.

“Relationships are hugely important, and in an environment where … the budgets are not growing any more, it creates a more competitive environment,” said Sandy McKenzie, a partner in the McLean Partnership, a London-based consulting group. “Any opportunity to be seen as a cut above the others is really important."

“Certainly in recent years, we’ve seen far less uniforms here, but I think there’s still obviously a good deal of business going on, and there’s still a good buzz and atmosphere at this point,” he added.

Over 1,500 exhibitors from more than 50 countries are attending the conference, showing off everything from massive tanks and ships to tiny unmanned aerial vehicles and innovative technologies for medical and disaster relief applications.

One insider said the number of exhibitors in attendance seems to have fallen a bit, especially in the U.S. pavilion.

DSEI opens amid domestic and international concerns that the United States may once again enter into a foreign conflict, this time in Syria. While defense contractors will be focused on closing business deals and highlighting their newest products, the conference itself has come under fire.

The Huffington Post U.K. reported that numerous politicians in the United Kingdom’s parliament have criticized DSEI officials for allowing the Russian State Technologies Corp., or Rostec, to attend the show. Rostec’s export wing has supplied arms to Syria, making deliveries even after the start of the country’s civil war.

Demonstrators from all over Europe have gathered at DSEI’s venue, the Excel London Exhibition and Convention Centre, to protest the proliferation of lethal arms to Syria and “anywhere where these weapons are going,” said Daniel Gardonyi, a Hungarian native and resident of London who considers himself part of the Occupy movement.

Protests have been ongoing since Sunday, with some demonstrators camping out in tents near the conference’s entrance, Gardonyi told National Defense Sept. 9.

Other protesters have already been arrested for blocking traffic in an attempt to keep weapons, equipment and vehicles from being transported into the exhibit hall, he said. “Even a couple of old ladies kept a tank from going in for a half hour.”

But for some vendors, the crisis in Syria presents a need for new military technologies. An example is Billerica, Mass.-based Bruker  Corp.'s new Unmanned Mission Avionics Test Helicopter, which can detect chemical warfare agents.

Sebastian Meyer-Plath, the president of the company’s detection division, said the countries surrounding Syria will increasingly need such technologies in order to identify whether chemical agents from Syria are making their way into their borders. "The question is how quickly those countries will react with initiating urgent operation requirements. What we already see is there is sharp increase in demand from Turkey,” he said. 

Topics: Business Trends, Defense Department, DOD Budget, DOD Policy, International