By Avascent Analytics team
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A quick look at the biggest stories of the week.
On October 20, Lithuania signed a technical agreement with Norway to procure the Norwegian Advanced Surface-to-Air Missile System (NASAMS). The sale includes both physical procurements and Norwegian assistance to Lithuania to develop mid-range air defense capabilities. Lithuania also intends to purchase NASAMS radars and fire control centers. The entire system, when completed and once Lithuania’s forces are properly trained, will be capable of aerial surveillance and control, early warning for ground units, and target destruction. The purchase is estimated to cost €100 million and is scheduled for delivery by 2020.
On October 22, BAE Systems won a contract to provide battle management systems for Denmark’s current fleet of 44 CV90 infantry fighting vehicles (IFV). The new systems will be tailored to fit each CV90 IFV variant, and the contract also calls for cooperation between BAE Systems and Danish industry. The motivation behind this upgrade appears to be a desire to improve the interoperability of the CV90s with other NATO allies. Avascent Analytics projects that the market for command and control systems in Denmark will grow significantly from 2016-2021 and be worth $2.2M on average. However, only about 8% of the market is still unawarded.
Italy’s Parliament continues to deliberate whether to fund the development of the Centauro II tank following a demonstration of the vehicle on October 26, having committed €160 million for the program in the 2016 budget. The Centauro II is the result of a joint venture between Leonardo and Iveco, and the Italian Army hopes to buy up to 150 vehicles. However, with a lagging economy and significant budget constraints, the timeline of the program is uncertain. The Centauro II is meant to operate as a tank destroyer that would be used in conjunction with new medium brigades within the Italian Army. According to Avascent Analytics’ data, the market for wheeled combat and support vehicles is growing at a rate of 8.9%, and will have an average annual value of $217.9M from 2016-2021. Additionally, 19.6% of the market is open and unaddressed.
On October 26, Saab and Polska Grupa Zbrojeniowa, Poland’s largest defense company, signed a Memorandum of Understanding (MoU) on Polish naval development, focusing on ship and submarine construction for the Polish Navy as well as export customers. The agreement increases the chance that Saab’s A26-class submarine is selected for Poland’s procurement requirement, particularly since diplomatic tensions between France and Poland have caused DCNS’s Scorpene-class to fall out of favor. The requirement, worth an estimated $2.5 billion, is expected to equip the Polish Navy with three submarines over the course of the next 15 years. Saab already provides Sea Giraffe radars and RBS15 Mk 3 missiles for the Polish Navy’s fast attack vessels, and Saab’s Double Eagle mine counter-measures (MCM) system was recently selected for the Navy’s new mine-hunting ship.
On October 27, the Canadian government officially released a request for proposals (RFP) for the design and outfitting of new surface combatant vessels to replace the Halifax-class frigates and Iroquois-class destroyers. The RFP was originally scheduled for release in September, but was pushed back so that the Department of National Defence could finalize details for the surface combatants with Irving Shipbuilding, which was selected as the primary contractor in 2015. Companies looking to bid will have until April 2017 to submit their designs. Contenders may include Lockheed Martin, DCNS, BAE Systems Surface Ships, ThyssenKrupp Marine Systems, Odense Maritime Technology, Alion-JJMA Corp, Fincantieri and Navantia. It remains unknown how many surface combatants the government will procure, but the new vessels are expected to enter service starting in mid-2020. Development costs are also unknown but rumored to be more than CAD 40 billion.
Based on an October 28 Facebook post by the Malaysian Ministry of Defence that was later deleted, Malaysia will allegedly sign a contract for its Navy’s Littoral Mission Ships (LMS) program with the State Administration for Science, Technology and Industry for National Defense (SASTIND) of China. No reason was given for the deletion of the post. The contract may be signed on November 5, when Malaysian Prime Minister Najib Razak visits China. The LMS is an important part of Malaysia’s “15-to-5” naval modernization plan, which will consolidate the number of ship classes in the Navy from, predictably, fifteen to five. According to the Chief of the Royal Malaysian Navy, the LMS is expected to accomplish 80% of the missions of the Littoral Combat Ship (an ongoing Malaysian Navy program based on the DCNS Gowind-class frigate) at 20% of the cost. It will also be the most numerous of the five classes, with 18 vessels planned. Malaysia’s military took a 13% cut in its 2017 budget, with the Navy taking a 28% hit. Considering the technical requirements of the LMS, the planned size of the class, and budget constraints, a cheaper Chinese ship is a likely option to fill the LMS role. Talks of Malaysia’s buying Chinese ships, such as the C28A corvette, have circulated for over a year. Some commentators characterized this as a blow to the U.S. Malaysia has been one of China’s strongest economic and strategic partners in Southeast Asia, maintaining good relations despite maritime disputes.
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