January 21, 2013
AgustaWestland and Embraer are examining the potential of helicopter production in Brazil.
The two companies have signed a memorandum of understanding (MoU) looking at establishing a joint venture which could lead to the production of AgustaWestland’s helicopters in Brazil for both military and civil use.
Such a project would give the company a foothold into the Latin American market which is currently dominated by Eurocopter and Bell, while Sikorsky has also managed to enter the fold with sales of its military and civil products.
AgustaWestland sees strong potential for twin-engine medium-lift helicopters for the oil and gas support mission. Other market sectors, such as executive transport and military, show promising potential as well, according to the company. Partnership and production of the aircraft in Brazil is essential particularly if AgustaWestland wants to be successful in the rapidly growing oil and gas market or achieve sales with the Brazilian military. Current national legislation demands that any defense procurement worth over $5 million must have domestic content of around half, making Brazilian production and supply chain work essential in any military deal. At the same time, state-owned Petrobras looks more favorably at contractors who make use of Brazilian-sourced products.
Eurocopter has already undertaken a similar strategy by expanding the role of its Brazilian subsidiary, Helibras. For three decades the Itajuba, Minas Gerais-based subsidiary built light helicopters but is now producing 50 EC725 Caracal helicopter for all three branches of the Brazilian armed forces. The company has also received a MoU from local oil and gas operator Lider Aviação for 14 examples of the civilian version of the Caracal, the EC225 for use in the energy support mission. In Argentina, state-owned aircraft producer Fabrica Argentina de Aviones (FAdeA) is working with China’s Avicopter to produce the Z-11 light helicopter for the Argentina and Latin American market.
“This is an important step for Embraer as we continue expanding our business”, said Frederico Fleury Curado, Embraer President and CEO. “We are certain that the combined skills and competencies of Embraer and AgustaWestland will create great value for customers in the region.”
Bruno Spagnolini, CEO, AgustaWestland said “We are pleased to have signed this MoU with Embraer and look forward to working with them to establish a joint-venture company in Brazil to manufacture and market helicopters. Brazil is an important market for AgustaWestland and we believe having an industrial presence in this country will help us to further grow our business in one of the world’s fastest growing markets.”
The two partners aim at establishing the joint-venture within a few months once a final agreement has been reached and the relevant approvals have been obtained.