APPENDIX 21
Memorandum submitted by the Society of
British Aerospace (SBAC)
SBAC is the UK's national trade association
representing companies supplying civil air transport, aerospace
defence, homeland security and space markets. SBAC encompasses
the British Airports Group and the Industrial Space Committee.
Together with its regional partners, SBAC represents over 2,600
companies, assisting them in developing new business globally,
facilitating innovation and competitiveness and providing regulatory
services in technical standards and accreditation.
BACKGROUND
Brazil's aerospace sector comprises civil aviation,
military aviation and space sub-sectors. Aircraft, such as the
ERJ 145 50-seater jet and ERJ 135 37-seater jet, are manufactured
at Embraer, the former state-owned aerospace organisation which
was privatised in 1994.
Brazil does not build civilian aircraft jet
engines, and companies such as Rolls-Royce and General Electric
have established local subsidiaries to fulfil this role. Brazil
has a full range of servicing facilities for most locally-used
aeroplanes.
As regards military aviation, Embraer manufactures
the AMX fighter in conjunction with the Italians. Financing for
military aircraft is arranged through government grants. The Brazilian
forces also operate various foreign planes, including A4, F5,
Mirage and Xavante. The Navy operates Lynx helicopters, whilst
the army helicopter fleet is based on Aeropatiale and American
equipment. In line with government policy, local companies are
key players in military programmes.
Brazil has a complete space programme in that
it constructs rockets (at the Aeronautical Technical Centre) and
satellites (at the National Institute for Space Research or INPE)
and has a launch site (CLA). There has been some British commercial
involvement with INPE, considerable French activity with INPE,
and a joint project with China. Brazil is also familiar with Earth
Observation (eg. Mapping of the Amazon area by INPE as part of
environmental policy projection), and is part of the International
Space Station (ISS) project.
SBAC MEMBERS ACTIVE
IN THIS
MARKET
SBAC is aware of some members who currently
supply into Brazil of others who are considering accessing this
market.
Those companies that wish to fully enter this
market have found that local representation is necessary due to
the Brazilian focus on inward investment. Whilst, some UK primes
have had a local subsidiary in operation in this region for some
time, but this does pose a barrier to those wishing to access
the market for the first time particularly because such a major
step is not required in other emerging markets
There are a number of other influencing factors
which have a bearing on decisions to invest in this region, including
the distance to market, which results in additional expense during
the bidding phase. More generally, companies are tending to prefer
traditional Euorpean and North American markets which are better
known and are looking at other new markets including Japan, India
and China.
The overriding view of companies who have accessed
or examined the Brazilian market is that Embraer is primarily
focused on supporting inward investment.
8 January 2007
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