March 18, 2013
Two years after formally establishing its defense and security unit, Embraer has brought in $1.056 billion in revenue, posting 24% growth over last year.
And in the next eight years, the company is setting continually high expectations of double-digit growth, says Luiz Carlos Aguiar, the division’s chief executive officer. The company is continuing its effort to capture Brazilian defense contracts and to establish itself as a systems integrator for countries that do not already have an entrenched industrial base.
Aguiar is brash about winning the U.S. Air Force’s Light Air Support contract to supply the Afghan air force with A-29 Super Tucanos, in which the company is teamed with Sierra Nevada. He brushes off the suggestion made by rival Beechcraft’s supporters in Congress who argue that the Air Force’s selection would harm the U.S. industrial base. Beechcraft, which recently emerged from bankruptcy, has fired more than 500 employees in the U.S. and transferred units to Mexico, while Embraer is bringing more jobs to the U.S., according to Aguiar.
In addition to challenging one of its competitors in the business jet market, Embraer is preparing to go head-to-head against Lockheed Martin’s sales of C-130s by creating a new generation of slightly larger cargo haulers that double as refueling tankers.
The KC-390 is expected to complete its critical design review this week, positioning the company for sales to the Brazilian air force and abroad, particularly to countries outside the U.S.
Aguiar reiterated comments made to Aviation Week earlier this year that Embraer forecasts a potential market of 700 aircraft and $50 billion that the company could compete for as militaries replace aging airlifters.
In addition to those large contracts and efforts to refurbish a series of fighter jets for the Brazilian air force and foreign military fleets, Embraer is branching out into new markets. In January, it started work on the first phase of Sisfron, a potential $6 billion contract to build a virtual fence around Brazil’s nearly 17,000-km (10,600-mi.) border against the threat of narco-trafficking and to secure its oil reserves.
The contract’s first phase is worth about $404 million and includes the monitoring of 650 km of border between Paraguay and Bolivia. The pilot project primarily involves sensors, says Marcus Tollendal, director of business development, and is managed by the Brazilian army. But in the future, the project is expected to include patrols from UAVs and potentially satellites.
Embraer is in a partnership with other suppliers to build UAVs. But that project is currently held up as the Brazilian government helps to develop regulations for how UAVs should be used within Brazil’s borders, says Chief Operating Officer Eduardo Bonini Santos Pinto.