…outstanding offset commitments added up to $90bn worldwide from 2011-2013…”—AvascentLONDON, UK – On August 11, London-based publication “Countertrade and Offset” (CTO) reported on the increasing importance of offset contracts as a “C-suite agenda item,” when pursuing international defense sales.Competitive offset packages worth up to several billion dollars often contain both direct offsets, in the form of defense-sector programs, as well as indirect offsets, e.g. those aimed at simply benefiting the economy of the purchasing country. Poland, South Korea, and India are all examples of nations who consider offset agreements an essential component of any defense deals. While McKinsey & Company has published a general insight report on the industry addressing this subject, Avascent is cited as having “produced a more focused report. (The company) says that it has calculated that outstanding offset commitments added up to $90bn worldwide from 2011-2013.” Meanwhile, as countries develop their indigenous production capabilities, regional competitors can easily close out opportunities for U.S. and European defense firms, especially when these firms fail to demonstrate an effective offset management plan.
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