LONDON — Undaunted by a potential slowdown in the British defense sector post the May 7 election, Raytheon UK CEO Richard Daniel says he is looking to export markets to help offset what could be a difficult time domestically.
"About half of my business is already export, but we are looking for further international growth and a lot of my team will be focused on overseas markets," he said Raytheon UK's CEO .
Cybersecurity, Paveway IV precision-guided bombs and special mission aircraft modifications opportunities are among upcoming export opportunities mentioned by Daniel in an interview on the eve of his first anniversary as the Raytheon UK boss.
Raytheon UK generates revenues of around £400 million (US $595 million) a year. It's a business covering four main activities: including weapons; intelligence, surveillance and reconnaissance; special mission aircraft modifications; and most recently cyber.
Despite the threat of a slowdown over the next 12 months, local or so there are still opportunities exist, locally , Daniel said.
The British executive said he is focusing here on a growing cyber presence, securing an identification-friend-or-foe (IFF) deal and contracts to replenish weapons used against Islamic State militants in Iraq to help keep the company moving forward on the home front over the coming months.
"Domestically it's going to be a difficult time, and my worry is how much indecision there will be as a result of going through the strategic defense and security review," Daniel said. "People will naturally hold off, it's going to slow down some of the big decisions, it's going to be a difficult time." said
Howard Wheeldon of Wheeldon Strategic Advisory said says he is more worried about the long-term problems than any indecision caused by the security review SDSR process itself.
"I am less concerned with the short term scene in defense than the longer term," he said. "The immediate outlook is manageable, but the longer-term outlook will adversely impact on all those engaged in the sector." he said.
The company is entering the potential slowdown in good shape, though having ended last year winning significant new business, most notably in the shape of a £70 million geospatial intelligence deal for the UK Joint Forces Intelligence Group.
One decision unlikely to get caught in any post-election uncertainty is the selection of a contractor to update the British military's IFF identification friend or foe capabilities.
NATO alliance members have a hard date of the end of the decade to move to the new Mode 5 IFF standard of preventing blue-on-blue attacks.
Raytheon is the incumbent supplier in the UK, and securing the deal is a key focus this year for the company and its competition partner, Thales
The Raytheon-Thales team is vying with Selex to win a deal to equip aircraft, warships, vehicles and other platforms with a system that will likely provide the winner with support opportunities running through to 2040.
The company has also recently secured some small cybersecurity contracts with the government here, although Daniel declined to discuss those.
Raytheon is targeting cyber as a potentially big play here given strong domestic demand and strong support of the UK government in building specialist skills and exports in the sector.
The company recently opened a £3 million cyber innovation center nearby Britain's GCHQ intelligence gathering center in Cheltenham to spearhead its domestic and export work in the sector.
Seedcorn money is already being invested in British small- and medium-sized enterprises (SMEs) British companies to mature cyber technologies Raytheon has an interest in.
"In cyber, as in other sectors, we are trying to get over the message that we are not just a storefront for the US," he said. "We are building intellectual property in the UK, we are investing here for the long- term, and we are looking at developing long-term partnerships particularly in the SME community." he said.
Wheeldon said Raytheon UK's policy of long-term investment in a diverse range of technology should continue to reap benefits.
"That investment particularly in complex weapon development has already secured excellent long-term business from Britain," he said. "In my view, because of its diverse range of investment here, it should outpace its rivals in terms of filling UK domestic requirement and meeting export potential." he said.
Daniel said, however, though that where appropriate, they still reach back to the US, where they have real depth of expertise to augment UK technology.
"We have put together an ecosystem of small- and medium-sized companies, large companies and academia in the UK who we are working with. The intent is to grow the cyber capabilities here and I would expect to see north of a 100 people based at our Gloucester facility. In the near- to mid-term, we see it as really driving UK and export opportunities," he said.
The cyber center is part of a wider investment plan at the company, which is seeing the special mission modification center at Broughton, North Wales, expanded, all manufacturing moved to the Glenrothes site in Scotland, and the technical center at Harlow moved to a larger modern site across town from the current facility.
Email: achuter@defensenews.com
Andrew Chuter is the United Kingdom correspondent for Defense News.
