Challenging Market for Greek Contractors

By Yasmin Tadjdeh
As the Greek economy sinks, defense contractors based in the region are facing a difficult market, members of the country’s industry said.

“Greece will only spend money in the foreseeable future in maintenance,” said Theodore Tsitouras, director of international sales and product solutions at Intracom Defense Electronics, a Koropi, Greece-based defense contractor. “I don’t really see a big market in Greece because the budget is basically controlled by the European Union and our lenders. They make the final decision about how much money we are spending, and usually this money is minimal.”

IDE specializes in tactical communications, telemetry systems, information security and hybrid power.

Greece has been in turmoil over the last several years as it faces mounting debt amid a faltering economy. Its depression stems in part from the United States’ stock market crash of 2008. Earlier this year Greece defaulted on loans from the International Monetary Fund and has since faced strict austerity measures.

The crisis has wreaked havoc on the nation’s defense companies, members of its industry told National Defense at a trade show in Washington, D.C.

“This right now is not a real market for defense because of the … defense cuts and all the budget restrictions,” said Nicholas Yannoulakis, business development director of Elfon Ltd., a Pallini, Greece-based defense contractor. “Most of the big companies are trying to survive on exports rather than imports.”

Elfon specializes in the manufacturing of wiring harnesses, cabling and electromechanical assemblies. Yannoulakis noted that 90 percent of his company’s products are sold internationally, many of them to the United States and Europe.

Greek companies want to sell internationally, but many find that the country’s economic situation is tarnishing their reputations, said Athanasios Kouimtzis, managing director of Alpha Systems, a Thessaloniki, Greece-based contractor that manufactures power transmission units, drive train assemblies and security systems for off-road military and heavy civil vehicles.

“Over the last four or five years … [we have needed] to spend a lot of energy to keep up with everybody in order to send a message that all this negative publicity is not affecting our business,” he said. “This is really bad what’s going on. [It’s] so negative.”

Kouimtzis said a Polish firm was recently ready to put in an order with his company but was told by its bank to postpone the deal because of Greece’s financial issues.

Yannoulakis said Greek defense companies have historically been trusted providers of equipment but the financial crisis is taking its toll.

“In general, we have never had problems with reliability as individual companies. Our customers traditionally trusted us and would come back for more orders,” he said. “Unfortunately, it’s the overall environment, the financial environment that puts question marks into how well we can do.”

Tsitouras noted that many Greek companies are interested in selling to the United States, but there are obstacles facing them. Principally, it likes foreign companies to have a strong manufacturing base within the United States, he said.

“The American market is a little bit unique,” he said. It’s difficult “for foreign companies to enter here. What I mean is that if you don’t have a company to [partner] with or if you don’t set up your own company here it’s almost impossible to sell.”

The U.S. market is the most demanding in the world, he added.

Compounding Greece’s financial disaster is an unprecedented border crisis as hundreds of thousands of refugees escape the bloody Syrian civil war and make their way through Greece toward Europe. The influx of refugees has yet to yield new contracts for border security equipment, those interviewed said.

Topics: Business Trends, International

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