Select Committee on Trade and Industry Written Evidence


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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