HELSINKI - Defense group Saab is hoping to significantly grow sales regionally, against a backdrop where Sweden and its Nordic and Baltic-rim neighbor states are upping their spending on defense and prioritizing procurements.
Saab is hoping to win more business outside Sweden, particularly in the Group's designated Nordic and Baltic Market Area (NBMA). The home market currently accounts for some 42 percent of the Group's total sales. Sales to other Nordic and Baltic-rim states represented around 8 percent of total sales in 2015.
The added focus on achieving growth in the region has seen Saab display a higher degree of interest in driving sales through strategic partnerships and selective acquisitions across the wider Baltic Sea area, including Poland, in recent months.
In the area of partnerships, Saab has signed a Memorandum of Understanding with Polska Grupa Zbrojeniowa (PGZ), Poland's biggest defense company.
The MoU covers cooperation in the planning and delivery of Polish naval programs, including surface ships and submarine construction for the Polish Navy and export customers.
"Saab sees the Polish market as very important and aims at developing an even stronger partnership. We share the same security challenges in the Baltic Sea. Together we can work to deepen defense project partnerships," said Gunnar Wieslander, the head of Saab Kockum.
Long-term, Saab is structurally well positioned to play a deeper supply-end role within the framework of ongoing Nordic defense-industrial collaboration. The ultimate rewards here are potentially lucrative contracts spinning off from joint multinational weapons systems purchase agreements.
The Group's order-books for the second half of 2016 shows that Saab is already benefiting from the dividend of higher military spending in the NBMA segment, and especially in the case of orders from the NATO-aligned Baltic states.
In the case of Baltic states Latvia, Lithuania and Estonia, the increased spending is directly connected to growing unease over Russia's more unpredictable behavior in the Baltic Sea region.
Lithuania has contracted Saab to deliver RBS 70 advanced simulators with delivery in 2018. Latvia, which is strengthening its short-range air-defense system, has ordered RBS 70 missiles from Saab with main delivery slated in 2017.
