Singapore: The second largest US defence contractor, Boeing Co., hopes to increase its international military business by as much as 10% annually for the next five years, helped by demand from Asia.
“Asia is critical and important to Boeing,” said Joe Song, vice-president of Boeing’s international business development in Asia. “We’re hoping for 5-10% per year in the next five years.”
Boeing is competing against contractors such as Lockheed Martin Corp. to boost sales in Asia as regional governments spend more on defence.
India has invited bids to buy 126 fighter jets, worth asmuch as $11 billion (Rs43,890 crore), to replace aging Russian fighters, and suppliers are teaming up with local companies such as the Tata group and Hindustan Aeronautics Ltd to participate.
“We work with a lot of suppliers both commercial and military to have a large presence in Asia,” Song said in an interview while attending the Singapore Airshow on Monday. “You can’t just come in, sell and leave. You have to be seen as part of the economy. That’s the key to success.”
Boeing’s international business has almost doubled in the past five years to account for 13% of sales from defence operations, Song said.
More than half of that comes from the Asia-Pacific region, he said.
“If you look at the defence budgets planned for the next five years, there’ll be like 5-8% growth in a lot of countries and double-digit growth in some,” Song added.
Boeing is ready to submit its bid for India’s jet fighter contract in a few weeks, Song said.
India’s military equipment imports are expected to increase 12-fold to $30 billion by 2012, according to the Associated Chambers of Commerce and Industry of India, an industry group.
India intends to purchase multirole fighter jets, 1.55mm howitzers, helicopters and long-range maritime spy aircraft, according to the association.
The nation is the world’s second largest buyer of conventional weapons, Ernst and Young Global Ltd said in a report released last week.
Boeing is also negotiating with the South Korean government to sell 20 more F-15K fighter jets in the next few months, Song said.
South Korea said in May it will review the bid, which may be worth about 2.3 trillion won ($2.4 billion).
The nation’s air force ordered 40 F-15Ks in 2002 with engines made by General Electric Co., the world’s biggest maker of jet engines.
Singapore has ordered 24 F-15SG jets from Boeing since 2005. In October it ordered 12 of the jets including options for eight.