by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.
Not content to remain idle, RUAG has expanded the scope of its defense operations with a new focus on cybersecurity.
Over the past year, the company has initiated a strategy that will rapidly expand its presence in the growing cybersecurity market. As part of this effort, RUAG established a dedicated Cyber Security business unit and plans to invest “multiple millions of Swiss francs over the next few years.”
Another prong of its cybersecurity plan is to add operations in this market segment. The firm did just that in late 2016 with the purchase of Clearswift in the U.K. The addition of this unit complements and expands RUAG’s existing portfolio of products and services.
The addition of cybersecurity as a focus further diversifies RUAG. Over the past decade, RUAG has grown from being primarily a supporter of the Swiss military to a multifaceted supplier in international aerospace markets, with an emphasis on space systems.
In 2015, the company added to its space systems portfolio with the purchase of Patria’s Space operations. The Finnish company has been very successful and active in various satellite programs of the European Space Agency (ESA), such as the Earth observation satellites Sentinel-2, Earthcare, and Swarm, and the Gaia space telescope. The addition further expands RUAG’s European footprint while enhancing its product portfolio in the area of commercial space electronics.
In addition to space, RUAG has matured its aerospace operations. Based in Emmen, Switzerland, the Aviation division operates from numerous sites in Europe as well as the U.S. and Australia. These facilities specialize in military maintenance, repair, and overhaul, as well as business aviation and special mission aircraft.
The MRO of aging military aircraft is a key part of the company’s strategy. It is focusing on such platforms as the Northrop F-5 Tiger, around 600 of which are still in service with Switzerland’s Air Force and other air forces throughout the world. In addition, the company is working on two key programs for the Swiss military, WE89 and Upgrade 25. The WE89 program involves the modernization of the Swiss Air Force’s TH89 Super Puma transport helicopters. The Upgrade 25 program focuses on the F/A-18. With its upgrade acumen proven, the company is looking to leverage its expertise as it seeks to expand its MRO business worldwide.
In an era of declining defense budgets, this could be an excellent move as countries look to save on costs while still maintaining a viable air force. RUAG brings a strong ability to support engines, airframes, systems, and software. Although it is weak in military avionics, the company will likely hunt for a partner to handle that aspect. The company’s teaming with Turkey’s Aselsan Elektronik is a recent example of this strategy.
As it looks ahead, the company is focusing on a three-pronged strategy: combine military and civil applications, focus on core businesses, and seek international growth. This is a bedrock strategy that should serve the firm well in this mercurial economic age.
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