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Brazil could be the possible option for EADS to increase its International Business

The European Aeronautics Defense and Space Company (EADS) reported that impending budget cuts in Europe might push it to increase its international business with places such as Brazil, India and Saudi Arabia amongst the favorites for the planned increased international investments. The company reported that it would be seeking to build meaningful relationships with the said countries as it ventures out for increased investments.

 

EADS head of defense and security, Stefan Zoller said the impending implementation of Austerity measures in Europe is posing a serious risk for the aviation industry given the fact that most European governments will be cutting down their overall spending in a move targeted at reducing their budget deficits. That the resultant cuts will affect the industry is no news, Zoller said, adding that what the industry needed are measures to mitigate the effects and increased international growth through investments in places with money certainly comes as a viable option, reiterated Zoller.

 

He believes that Brazil amongst the others present such places “where there is money,” as he put it. According to the company, the markets it found most viable for expansion of their business include Brazil that had a military spending increase of about 23% and India that had a defense budget increase of 6%. On the other hand, estimates have placed the Middle East’s spending in defense at a staggering $100 billion by the year 2014.

 

As such, EADS will be hoping for increased opportunities in terms of security contracts in Brazil ahead of the 2014 World Cup and the 2016 Olympics to be held in the country, whereas in India, there are opportunities for huge military aircraft orders and the Middle East might be viable in border security deals in Saudi Arabia.

 

Thus, for the long run, EADS is planning to accrue much of its revenue from these international markets such as Brazil, with the budget cuts being behind the motivation to accelerate the long planned international investments increase. Zoller reiterate the company’s plan to increase its international presence in such markets but the plans had been slowed, however, with the pending cuts, he reiterated his belief for a radical shift that focuses on international expansion.

 

He further said that doing business with Brazil and the other markets had become urgent, rather than just being a matter of getting export orders. According to Zoller, export orders are increasingly being overtaken by JVs and partnerships that enable client customer develop an industrial foundation.

 

18 July 2010.