OBG talks to Håkan Buskhe, President & CEO, Saab

Interview: Håkan Buskhe

What role will the ASEAN region play in the future of defence contracts in the aerospace sector?

HAKAN BUSKHE: The ASEAN region will play a very major role in large-scale defence contracts in the aerospace sector for virtually the same set of reasons that we have seen in Central Europe: old, depleted fleets; a need for next-generation aircraft which can be part of a comprehensive, data-linked, network-centred security environment; and the need for aircraft that are easy and affordable to maintain and operate.

As demand for defence contracts dwindles in Europe and the US, how would you characterise the level of competition in the ASEAN defence market?

BUSKHE: The European and US markets are undergoing a transformation. The Swedish and Saab proposition is especially attractive in those markets because our products tend to have lower acquisition costs and significantly lower life cycle costs. That said, the ASEAN market will be among the largest today. We see the ASEAN defence market as evolving from dependence on a small group of suppliers based on strategic relationships, to an interest in cutting-edge solutions that are customised to each country’s requirements.

Where do you see potential for long-term growth in Thailand’s defence market?

BUSKHE: We see long-term growth being driven by short-term demands, principally by meeting the immediate needs of Thai security both in aviation and the naval industry. There are significant acquisition programmes underway, propelled by the necessity to make deployment of troops much more efficient and intelligent. A good example is the entire Gripen package and the subsequent networking of the air defence system with the naval system. Growth will, therefore, come via the transition to a high-technology defence industry. At the same time, we see long-term growth being essentially driven by Thai companies. We believe that is important for the country and have already entered into a strategic partnership with AVIA Satcom, in which we have significant equity. We are transferring technology and know-how to the Thai company, as well as working together to develop future technologies.

In what ways has the shift to more value-oriented defence procurement impacted the region?

BUSKHE: The move to deriving and expecting greater value will ensure that there is greater emphasis on acquiring solutions that are customised to Thailand’s requirements rather than simply taking products off the shelf. Furthermore, this will drive the process of indigenisation and localisation as industrial cooperation programmes are given greater national support.

What benefits can relationships built on science technology transfer and industrial collaboration bring to defence contracts in the ASEAN region?

BUSKHE: They enable the creation of a strong domestic defence industry. This not only helps address national requirements, but also allows Thai companies to become partners in global programmes as they build up experience. We see this already happening in South Africa, Brazil and India where Saab is collaborating across a number of defence and civilian programmes.

There is also a large spillover from all defence programmes into the civilian domain. Technologies being developed for fighter aircraft invariably go beyond just defence deployment. Today, there are a host of technologies that we use in everyday life that started off as defence systems. It also gives countries the ability to choose their technology partners independent of their strategic necessity once domestic firms start becoming capable of developing their own products and solutions. We have seen that even the closest of strategic allies do not necessarily hand over the latest generation technology, no matter what the compulsion.

Our success in many regions is not merely because we transfer technology and know-how, but also enable countries to become co-developers of technology.