Arms exports (2/4): France, she will take advantage of its good image in Peru?

Michel Cabirol

The Tribune offers a series of new industrial land conquest of French armaments. Dassault Aviation and Thales eyeing modernization of 12 Mirage 2000 Peruvian while DCNS covets the modernization of four submarine U209.

And if Peru was one of the surprises of the French armament industry in the coming years. Of course, this Andean country of 30.5 million people do not have the same potential as Indonesia but France now has a good image in the Peruvian presidency. President Ollanta Humala, a former military considered francophile, has already received three times by François Hollande (November 2012, October 2013 and July 2014). While French soldiers marched in Lima to the Peruvian national holiday on July 28, the tenant of the Elysee must go to turn Peru beginning in 2015.

In March 2013, Foreign Minister Laurent Fabius reminded that Peru was "well disposed towards France." A Paris to seize his chance finally in a high-growth countries. With an estimated more than $ 200 billion in 2013 and an average annual GDP growth rate of 6% between 2002 and 2012, Peru is considered, according to the IMF, as a neo-emerge in the region.

 Room for improvement for France 

In 2012, Lima represented only 0.06% of the foreign trade of France and is the 94th of its clients and the 76th of his suppliers. Only 65 French companies are present in Peru and Paris is only the 16th investor (1.5% of the stock of direct investment abroad). "Our economic relations are still insufficient, given the opportunities offered by this fast-growing countries," stressed in February the former chairman of the Foreign Affairs Committee of the Senate, Jean-Louis Carrère.

Paris therefore has a great room for improvement. Even in the field of armaments although Cassidian (ADS) has succeeded in April a coup by signing an order in April of approximately 150 million euros on the sale of Peruvian first satellite observation of the Earth. Over the period 2009-2013, the arms industry tricolor exported 182.7 million euros materials to Peru with peaks in 2009 (97.4 million) and 2012 (72.2 million thanks to the sale of 16 MM40 Exocet missiles and launch systems for four Italian Lupo frigates signed in December 2012).

 2013 a bad year 

In 2013, the French groups have drawn a blank in Peru almost (3.6 million of arms sales). Expected time, control of satellite observation could not be reached last year between France and Peru because of the difficulty in Paris to draw up a contract between governments, Bercy is not favorable to this type guarantee of the French State. The contract will be implemented this year. "It's imminent," says one to the Tribune. In addition, Airbus Helicopters (AH) pushed into a corner Mil, well established commercially in Peru, but the Russian manufacturer has finally managed to pull the end of December after two years of negotiations a contract 24 Mi-171CH face Cougar ($ 500 million).

AH was, it seems, 30% more expensive to buy and had no niche of fast delivery, in a close case. However, the manufacturer Marignane was cheaper than Mil for supporting devices. What équilibrait much the bill taking into account the cost of ownership (purchase, support, maintenance ... equipment throughout their use). But this argument is still struggling to be heard in many countries. This is also partly why Airbus Helicopters took the decision to produce Cougar Romania.

 Modernization of Mirage 2000 and the German submarine 

Two big issues for a few months mobilizing the sales teams of Dassault Aviation, Thales and MBDA missile one hand, and DCNS other. Two cases of major equipment modernization of the Peruvian armed forces: 12 Mirage 2000C and B, whose email has been somewhat modernized in 2009 (EUR 100 million) and four German submarines of the type U209. Two complicated to complete records. Especially Peru wishes to conclude contracts between governments in the image of one signed for the purchase of an observation satellite.

On the Mirage 2000 purchased from France in 1982 and delivered in 1985, "the hardest part is to bring together the needs of the customer within the financial envelope," says one to the Tribune. Dassault Aviation and Thales proposed a modernization of Indian type in Lima to limit costs, that is to say without the air-ground dimension. Because it would require additional studies, raise the price of the transaction and finally depart from the proposal made ​​by Sagem AASM bombs sell.

Or Lima would transform its Mirage 2000 Mirage 2000-5 at a cost of $ 25 million per unit (a total of $ 300 million), according to the local press, while the French offer was 30 million device. Finally, Israel has meanwhile proposed a modernization of 15 million dollars. But Peru would lose the guarantee of the French State. To be continued.

 Submarines, a contract for 500 million euros? 

Like the satellite contract signed between France and Peru, Lima asked Berlin the opportunity to sign a contract for government to government. Reportedly, Germany refused this type of contract. So, DCNS working on a tender on the project of modernization of four small submarine U209 kind. A command that was originally estimated at € 500 million but could be revised downwards to adpater budget Peruvians. Especially since President Ollanta Humala wants before leaving in 2016 to launch a tender for the acquisition of new submarines.

DCNS, which has already modernized German submarine in Latin America (Brazil), is willing to work with the Peruvian group FIMA for the contract. Peruvians are also interested in cooperation with Brazil. "This could allow Peru to modernize its shipbuilding industry, decrypts it does in Paris. The French industrial challenge is to adapt the Peruvian budget."

 MBDA, Airbus Helicopters, Nexter ... on the ranks in Peru 

Other campaigns are underway for French industry. The missile MBDA is working on a project to equip the frigates Lupo of the Peruvian Navy with Mistral and VL-Mica (Air Defence) missiles. Peru also like a second batch of Exocet. For its part, offers its Nexter Caesar and his canon 105mm self-propelled artillery systems. Thales is meanwhile promoting its system PR4G radio.

Furthermore, Lima launched a tender for the acquisition of a research vessel (about 100 million dollars). A campaign might be interested in the small yard in Les Sables d'Olonne, OCEA. Finally, Airbus Helicopters believes that Peru has ordered 5 EC145 in 2012 for the national police, has needs for heavy Super Puma helicopters capable of operating at high altitudes.

 A State contract to State 

The contract between governments on satellite observation signed with Peru is a novelty for France and, especially, advanced to win export contracts. It "bind our two countries well but it will be accompanied by three intergovernmental agreements, explained in October 2013 the Delegate General for Armaments (DGA), Laurent Collet-Billon. Our goal is to build a framework that approaches the Foreign military Sales to the US military, because the majority of customers now require action - that is to say a warranty. - strong state "

In July, the UMP senator of the Gironde, Xavier Pintat, pointed out that the French government had "agreed to implement an innovative legal structure, which has given satisfaction to the Peruvian government by granting the guarantee operation of public power ". In any case, the Defence Minister, Jean-Yves Le Drian, y holds "particularly", according to sources familiar with the matter. "It is a tool to dig and which is relevant in the long term," says one in Paris.

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