JOE COOPER, British commercial office in Andalusia

1 Enero 2010

‘‘BRITISH COMPANIES ARE VERY INTERESTED IN COLLABORATING WITH ANDALUSIA IN THE FIELD OF COMPOSITES AND UAvS’’

With a track record of more than 20 years in Andalusia, the Uk Trade and Investment Office has become a fundamental tool to foster relations between British and Andalusian companies in different fields, including the aeronautical sector. Its director, Joe Cooper, analyses in this interview the major potential of the British aeronautical industry, the structure of the sector in the United kingdom and the possibilities offered by the British market for Andalusian firms in terms of new contracts and diversification of their portfolio of customers.

What is the UK Trade and Investment Office? What are its functions and what activities does it carry out in Andalusia for the aeronautical sector?

The UK Trade and Investment Office is an entity which has been working in Andalusia for more than 20 years now, since the 1992 Expo. Basically, it forms part of a wider network of UK Trade and Investment Offices throughout Spain with offices in Madrid, the British Consulate-General, Barcelona, Bilbao and Seville, which is responsible for Andalusia as a whole. At the same time, it forms part of a peninsular trade network together with the British Embassy in Lisbon, and a system at a global level which has its centre of operations in London and offices in different regions of the United Kingdom and throughout the world.

Our basic function is to foster commercial relations between British and Andalusian companies through two lines of activity. One aspect is the promotion of British exports to Andalusia, involving responses to enquiries from British firms who wish to export their services to the region and preparation of reports with market information and contacts for potential importers and suppliers who may be interested in their products. Although we charge for this service, it is very complete, detailed and useful and its cost is subsidised. We also offer this service for both Spain and Portugal at a national and regional level, as is the case of Andalusia.

The UK Trade and Investment Office for Andalusia also organises visits and events in various key sectors to foster relations between British and Andalusian firms. This has already been done in the aeronautical sector and the renewable energy sector, with various conferences being held in Seville to provide information regarding the British sector in question and the latest initiatives and projects on the British market which may be of interest to Andalusia. We also organise trade missions and business trips to the United Kingdom, as was the case with the aeronautical sector for the Farnborough Air Show, during which we organised the visit by the company Sacesa. In this respect we also organise ''Meet the Buyers'' held in clusters or with companies of the different geographic zones which make up the British aeronautical industry. We have also organised trade missions by British firms to Spain in the sector of Unmanned Aircraft Systems. In general, we carry out activities for all the major sectors present in Andalusia, although we focus our efforts on those of the most importance or interest to companies in both the United Kingdom and Andalusia, such as renewable energy, aeronautics, ICT and biotechnology.

The other fundamental aspect of our work is to foster Spanish and Andalusian investment in the United Kingdom, through direct investments by companies who wish to establish themselves in our country or investments to foster collaboration through RDI programmes between firms and entities from both countries. Up until now we have not carried out many actions in this area for the Andalusian aeronautical sector. However, we are working to increase this line of work as there are certain sub-sectors such as composites and UAS in which British firms have highly advanced technology and are interested in collaborating with Andalusian firms, now that Andalusia has become the second most important Spanish aeronautical centre after significant growth in terms of companies, turnover and exports in recent years.

You are familiar with the aeronautical industry in the United Kingdom. What are the most important strategic sectors or those with the most significant development in the British industry?How are the sector and the firms which are currently carrying out these activities structured?

The British aeronautical industry is one of the most important at a European and international level, possibly the second most important in the world after the United States. It has more than 100 years of history, dating back to the early 20th century with the founding of the first aircraft manufacturing plant in Belfast, Northern Ireland by the Short Brothers. These brothers purchased a license for the first aircraft designed by the Wright Brothers and started manufacturing the world’s first mass-produced aircraft. This plant is still functioning today and is owned by the Canadian aircraft manufacturer Bombardier.

It is accordingly an industry with a long and illustrious history, with major milestones over the course of its 100 years of existence such as the launch in the 1950s of the first commercial jet airliner, the Comet, ahead of the models by Airbus and Boeing, and the Harrier and Eurofighter aircraft, which have signified a turning point in the military sector. The British aeronautical sector currently employs more than 150,000 workers, 50,000 of which are located outside the United Kingdom. It has a turnover of 22 billion euros in the UK, and another 9 billion euros overseas through the different branches and offices of British firms located overseas. It is an industry with significant experience in nearly all the different areas of the aeronautical sector, with renowned expertise in certain sub-sectors such as wing manufacture, for which the United Kingdom is considered to be the leading worldwide manufacturer for both military and civil aircraft.

The country’s two most important centres are located at Filton, very close to Bristol, where EADS has the facilities for the manufacture of its military models and work is currently being carried out on the wings for the A400M. The other main facilities are located at Broughton in Chester, which is the manufacturing centre for the wings of large commercial airliners. These two plants are world leaders in their field, particularly in relation to the use of composites to reduce the weight of aircraft wings, which also has an effect on fuel consumption. The other major area of the British aeronautical sector is aircraft propulsion and engines, with Rolls-Royce being practically the number one company at a worldwide level for jet engines and turboprop systems and the leading supplier for the majority of models by Airbus, Boeing, Embraer and Bombardier ahead of other major firms in the sector such as General Electric and Pratt & Whitney.

This British company also works in the aeronautical sector on other military programmes such as the Eurofighter and the Eurocopter, which are equipped with Rolls-Royce motors, and the A400M, for which the company heads the consortium responsible for building the propulsion systems. Other important sub-sectors include structure manufacture, headed by the company BAE Systems; avionics, with important companies in the south-west of England and near Birmingham; and communication systems and interior fitting of aircraft, with the firm Martin-Baker supplying seating systems for various Airbus models. Also important is the sub-sector of landing gear, with the company Messier-Dowty; and aerial refuelling, with the British company Flight Refuelling Ltd. being the leading manufacturer of one of the most commonly used aerial refuelling systems, the "probe and drogue" system.

Does the United Kingdom have business clusters within the aeronautical industry, as in the case of Andalusia and other zones of Europe? What fundamental differences are there between the British and Spanish aeronautical sectors?

Until recently there was a nationwide association in the United Kingdom called the Society of British Aerospace Companies (SBAC) which grouped together companies in the aeronautical sector, but this has recently merged with the Defence and Security sectors to give rise to Aerospace Defence Security (ADS), which has its headquarters in London.

This is similar to what has occurred in Spain with the Spanish Association of Aerospace Industries (ATECMA), which has now become the Spanish Association of Defence, Aeronautics and Space Technologies (TEDAE) to embrace all the companies in sectors related with the aeronautical and aerospace industry. At a regional scale, the British aeronautical industry is also structured in large business clusters, as in the case of Spain and Andalusia. In total there are seven such clusters distributed throughout the country: ADS Scotland, created in 2005; Northern Defence Industry, with more than 200 companies in northern England; Northwest Aerospace Alliance, which includes more than 1,000 associated companies in the heart of the British Aerospace industry; Midlands Aerospace Alliance, which includes the cities of Birmingham and Derby, the latter being the headquarters of Rolls Royce; Aerospace Wales, with more than 100 aeronautical firms; West of England Aerospace Forum, which includes some 250 firms in the southwest of England; and finally the Farnborough Aerospace Consortium, which represents more than 1,200 companies in the aeronautical sector in the southwest of the country.

This is also the venue for the international air show of the same name. In addition to these clusters, reference must also be made to the work being carried out on the facilities of the Canadian company Bombardier in Belfast, Northern Ireland. In terms of their activity, each of these business clusters specialises in different areas or sub-sectors of the aeronautical industry. For example, the southwest of the country focuses on programmes for military aircraft, wing manufacture and avionics. The northwest cluster, meanwhile, has significant experience in the field of composites and structures for the assembly of military aircraft as a consequence of the Eurofighter factory located near Bristol, which is also responsible for the assembly of Hawk aircraft and Apache helicopters for the British Air Force.

The actions which we carry out through the UK Trade and Investment Office in Andalusia have been directed precisely towards fostering relations between the Andalusian aeronautical cluster and the national association and the businesses located in these British clusters, through conferences to explain the work being carried out in the zones of the northwest and centre of the United Kingdom. The structure of the British aeronautical industry is accordingly very similar to the sector in Andalusia and Spain, with businesses and clusters which have gradually specialised in different specific areas and sub-sectors, almost always linked to major firms such as Rolls-Royce in the field of propulsion and engines in the Midlands Aerospace Alliance, and BAE Systems in the field of structures and assembly in the case of the Northwest Aerospace Alliance. Two sub-sectors which have assumed great importance in recent years in the British aeronautical sector are composites and UAS. These are areas with major future possibilities and to which the Andalusian cluster is also dedicating major efforts in order to achieve more advanced technology. It would therefore be very interesting to exchange experiences and knowledge between firms and professionals of both countries to develop new European technology for the sector which is a step above the rest of the world.

What degree of collaboration currently exists between Andalusian and British firms?

The aeronautical industry has now become a global process, and in order for companies to work at a global level on common aeronautical projects they need to collaborate with other companies, something which also occurs in the case of large British firms such as BAE Systems and Rolls-Royce, which have an important chain of suppliers. Over the years we have progressed from a process whereby a large company assumed the design and manufacture of an aircraft through to the current trend, which is characterised by subcontracting and commissioning of jobs to other smaller firms in order to avoid major financial risks and guarantee delivery of projects. To achieve all this, collaboration between companies which in many cases are from different countries is fundamental.

One of the most recent cases is the A400M, which involved the collaboration of various companies from the United Kingdom and Spain, among other countries, for the assembly of the different parts of the aircraft. As regards the degree of collaboration between Spanish and British firms, cooperation between both countries in the aeronautical sector has increased considerably over the last decade, and various companies from both countries are currently carrying out jobs for major firms such as EADS, Airbus, Boeing and Eurocopter.

But this trend will increase even more in the coming years as a consequence of emerging countries such as Russia and China, who are seeking to develop their own aeronautical industries. In order to compete with these emerging economies we will have to develop more innovative products, and the best manner of doing so is through collaboration and RDI, the execution of common projects and strengthening of the knowledge society. In this sense, I am convinced that Andalusian and British aeronautical firms will strengthen their degree of collaboration with the start-up of new programmes and initiatives. Nowadays it is unthinkable for a single country, with the possible exception of the United States, to have sufficient capacity to carry out mass production of aircraft.

How do you rate the growth and progress of the Andalusian aeronautical industry in recent years?Do you think that the British market offers good opportunities for Andalusian firms to strengthen their business relations with overseas companies and diversify their portfolio of customers?

Andalusia has always had an important aeronautical industry ever since the advent of aircraft manufacture in the 1920s, and it has received an important boost in recent years with programmes such as the A400M and the A350. Nonetheless, I believe that there are certain issues which need to be resolved, given that currently the majority of Andalusian firms depend on a single supplier, EADS-Airbus. It would be interesting to develop other products for other customers, as is already being carried out by certain firms with Boeing, Embraer and Bombardier, and to work with emerging countries and markets. The United Kingdom could be one of the markets for Andalusian aeronautical firms to seek out new business opportunities and extend their portfolio of customers, particularly in certain sub-sectors such as composites and UAVs. In fact, there is a definite interest in this sense, as was demonstrated by the increase in the number of Andalusian firms participating at the Farnborough Air Show this year.

Speaking of the Air Show, how is the new edition shaping up? What kind of response can we expect from participating firms and entities, in light of the current context of international economic crisis?

According to the information which I have been given by the organisers of the show, the prospects are good for this year. At the last edition in 2008 there were nearly 1,400 stands and more than 285,000 visits, with the participation of more than 40 countries through 29 national and regional pavilions. The event was attended by 70 delegations from 38 different countries and a total of 166 aircraft carried out aerial or static demonstrations. In economic terms, $88 billion worth of orders were placed (more than 64,000 million euros), double that recorded in 2006.

A very similar number of exhibiting stands, delegations, companies and participating countries have already been confirmed and the number of visits is expected to be similar to two years ago. It seems that the world economic crisis has not been so notable in the aeronautical industry as yet, given that these tend to be long-term projects with a duration of 10 to 15 years, and so the economic cycles of the different programmes do not affect companies and the industry as a whole in such a serious manner at any given time. There have been readjustments and difficulties in certain cases, but the crisis has not hit the sector so directly, with the exception of commercial/tourism aircraft. Following the events of 9/11 the situation was very complicated for international aeronautics due to the decrease in the number of passengers and in the orders and contracts for aircraft during that year, but this was a temporary situation which only lasted for a couple of years and both Airbus and Boeing have managed to recover from its economic effects. The current situation is very different. The management of the Farnborough Air Show expects the results to be equally satisfactory or even better than the 2008 edition. This is reflected, as I mentioned earlier, by the fact that we have increased the number of Andalusian firms participating at the event this year, with a total of eight firms. In 2008 six companies participated, and four years ago there were none at all.

What can Farnborough offer the delegation of Andalusian firms attending from the sector?

Without a doubt, Farnborough represents a unique opportunity for Andalusian companies to meet with other companies in the British aeronautical sector, establish commercial relations and secure potential deals and contracts, interchange experiences and technological knowledge and visit other initiatives and stands which may be of interest to the aeronautical industry in Andalusia. In addition, the Andalusian delegation participating through Extenda and the Hélice Foundation will be the sole representative of the Spanish aeronautical industry, as there will be no other business cluster or national association represented at the Air Show.

There will be other Spanish companies such as ITP at the RollsRoyce stand and EADS-CASA at the stand for the European aeronautical consortium, but without any physical presence which identifies their activity as being carried out by a Spanish company. Once again this year, the UK Trade and Investment Office will also organise a global business meeting to which we will invite Andalusian companies so that they can meet other companies and establish collaboration agreements for the future.

What message would you send to encourage Andalusian aeronautical firms to participate at the Air Show?

Above all, come to Farnborough because it is an incredible opportunity to meet potential collaborators in the British and international aeronautical sector, not only for this year but also in the future. The UK Trade and Investment Office for Andalusia offers its services to Andalusian firms to help them to identify possible customers and organise meetings to foster collaboration and commercial relations with other companies which may be of interest to them. That is our job. However, we not only offer this opportunity to companies who are attending the Air Show through the stand for the Andalusian delegation, but also to all those companies planning on attending this event independently as visitors and who wish to take advantage of this option to contact British and international firms. If you require any assistance, all you have to do is contact us.