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Nexter Submitted Final Offer for Indian Artillery

March 23, 2016 (Photo Credit: Bertrand Guay/AFP via Getty Images)

 

PARIS — Nexter submitted on Feb. 15 its final bid in an Indian tender for a €1 billion ($1.1 billion) contract for 1,400 155mm towed cannons, Stéphane Mayer, chairman of the land armaments company, told a parliamentary committee.

“We submitted our final offer Feb. 15,” Mayer told the National Assembly defense committee on March 2. The competition, worth €1 billion and the largest for land weapons, will yield “the contract of the century for artillery,” he said.

Indian authorities have set final selection between the two bidders by the end of the year, to allow for exclusive negotiations, he said.

Nexter has teamed with local partner Larsen & Toubro to pitch its Trajan 155mm/52 caliber gun against Elbit Systems, partnered with Bharat Forge. 

The French state-owned company is also pitching its Caesar 155mm/52 caliber cannon in a second Indian tender for 800 truck-mounted guns, with a bid due in 2018, Mayer said. That Indian project compares to 77 units delivered to the French Army.

The Indian defense acquisition council approved in November 2014 a budget of $2.5 billion for 814 of truck-mounted artillery, dubbed mounted gun system.

“Experience has shown in India, patience is very much needed in general, and in defense in particular, and the delays are not rare,” Mayer said.

On the truck-mounted gun, Nexter has teamed with Larsen & Toubro and Ashok Leyland, with the latter for the truck chassis.  

For Qatar’s tender for 300 infantry fighting vehicles, Nexter has given demonstration trials with its véhicule blindé de combat et infanterie, with a heavier gun than the weapon fitted on the French Army VBCI, he said.

A 25

Nexter and BAE Systems are partners on the 50-50 joint venture, CTA International, which builds the 40mm cased telescoped cannon.

Nexter also has made pitches to Egypt, Mayer said, without further detail. The Middle East is a “consuming region” for defense equipment, he said.

“That is a euphemism,” said Member of Parliament Charles de La Verpillière.

Any order for the Army would follow Egypt’s recent moves on modernizing the Air Force and Navy, which are re-equipping with the Rafale fighter, a multimission frigate and four corvettes, with two more on option.

In Europe, the land weapons company last year sold cannons worth some €100 million to BAE, and expects a British requirement in 2018 for 300 to 400 infantry fighting vehicles, Mayer said. Nexter has given a demonstration for Norway, which is looking to order artillery, while Denmark and Finland also seek new cannons.

The company struck its first sale in Africa with a deal with Gabon, he said.

Nexter said October 2014 it signed a contract for 12 Aravis four-wheel drive vehicles armed with a 20mm gun.

On the difference in German and French arms export rules, the two governments are in talks on updating the 1972 Debré-Schmidt bilateral agreement on foreign sales, but that has been disappointing.

“I have to say the intergovernmental discussions —  necessarily long — have not so far led to amendments that meet our expectations,” Mayer said.

Those changes are seen as key as Nexter has formed a 50-50 joint venture with Krauss-Maffei Wegmann, to share technology to build a future tank for France and Germany by 2030 and cooperate in the pursuit of foreign markets, he said.

A convergence of policy on arms export control is vital to creating the European leader in land weapons, he said. The joint venture, with a temporary name of Honosthor, seeks to supply the same weapons to the French and German Army, and eventually other European armies.

Nexter is pursuing exports despite results that disappointed “many observers, including those inside the company,” he said.

Denmark last year picked the Piranha 5 troop carrier from Mowag, the Swiss unit of General Dynamics Europe Land Systems, beating offers from Nexter, BAE and other GDEL vehicles.

Nexter makes bids in many tenders, invests heavily in demonstration trials and builds prototypes, he said. The Ministry of Defense, Direction Générale de l’Armement procurement office, Joint Chiefs of Staff, and Army provided support in export campaigns but there seems to be lower priority for land weapons compared to air and naval deals.

Asked about a possible acquisition of the Thales TDA unit, which builds a 120

Nexter and KMW have formed working groups to discuss with the French and German defense ministries the requirements for a “completely new tank” to replace the Leclerc and Leopard 2 in service, he said. Nexter hopes to replace Rheinmetall to supply KMW on some equipment.

On the Scorpion modernization program for the French Army, there “have been some difficulties” that are normal for a project of such size, but the timetable would be observed, he said. Scorpion focuses on developing and building 1,600 Griffon troop carriers and 248 Jaguar combat vehicles.

Work on Scorpion makes up half of Nexter’s order book, he said. The company booked 2015 orders of €1 billion, sales of €1.07 billion compared to €1.04 billion in the previous year. Munitions account for €300 million of orders. 

On Philippe Burtin’s surprise departure in December as Nexter’s chairman, Mayer said that was due to Burtin’s reaching the statutory retirement age by the end of 2016, and instead of changing the statutes, Mayer was appointed to the top job.

Mayer can hold the post for five years, and a further five if  the mandate isrenewed, he said. That ensures there will be two co-presidents, Mayer and Frank Haun, at the head of the Nexter-KMW joint venture.

Burtin had worked on setting up the joint venture, and was asked to step down from the top job just before the deal completed in December. 

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