Security giant seeks huge expansion in China
By Jiang Yan (China Business Weekly)
Updated: 2004-07-06 15:19

European Aeronautic Defence and Space Co (EADS), a global leader in the field of defence and security solutions, is seeking to expand its presence in China.

A major aspect of this expansion is the firm's bid to partner with the Beijing Municipality in offering high-tech defence and security solutions for the 2008 Beijing Olympics.

The move, which was recently confirmed by EADS Defence and Communications Systems Chief Operating Officer Patrick Jourdan, comes after the company's great successes in its China projects involving Airbus and Eurocopter, two subsidiaries of EADS.

Two major contracts involving EADS were signed on June 11 during Chinese Vice-Premier Zeng Peiyan's visit to France. The first is for the assembly of EC-120 helicopters in China, and the second is for China's purchase of 20 Airbus A330-300 worth 26 billion yuan (US$3.17 billion). This came just two months after China Southern Airlines' decision to buy 21 Airbus aircraft worth US$1 billion.

EADS has already invested more than US$100 million in China. The company's China sales earned US$1.6 billion last year, almost 5 per cent of its total revenue.

"We expect the percentage to grow steadily in the future. With the rapid development of China's economy, we will continue to increase our investments," Jourdan told China Business Weekly.

EADS, Europe's leading public security company, is now looking at the opportunities in China's huge defence and security market.

"We want to pursue further success in the security market by investing and developing security systems in China," Jourdan said.

Defence and security systems, one of EADS' five core businesses, generated 5.2 billion euros (US$6.24 billion) last year, about 16 per cent of the firm's total revenue.

Its four other core businesses are the Airbus aircraft, aeronautics, military transport aircraft and space.

China's defence and security market is huge as a result of the nation's size and population and the fact that it is confronting new security threats, such as terrorism and traffic control.

"The Beijing 2008 Olympic Games will play a very important role in renewing old technology and equipments and will change the overall nature of security equipment in China," Jourdan said.

China's hosting of the 2010 Shanghai World Expo and the 2006 Asian Games also highlight the need to increase security.

According to an estimate, defence and security for the 2008 Beijing Olympics is expected to reach over US$300 million.

In terms of defence and security for the 2004 Athens Olympics, Greece has invested over 1 billion euro (US$1.2 billion), triple that of the 2000 Sydney Olympics, providing leading global defence and security companies with a host of new opportunities.

Major US security service providers, including the security partner Science Applications International Corp, have also made bids for the partnership with Beijing Municipality for the 2008 Olympics.

Although, the Chinese Government has yet to make its final decision,EADS remains confident.

"We are willing to play a role offering security solutions in the Beijing 2008 Olympics," said Jourdan.  "We are also confident that our best-in-class products, expertise and experience will make us fully prepared for the challenges in 2008."

In order to be awarded the contract, the company intends to gather all the leading European companies in terms of defence and security with state-of-the-art technologies and know-how.

It also proposed to be positioned as the systems integrator in close partnership with leading Chinese companies.

"We aim for a long-term investment and facilitating the transfer of technological know-how to China," Jourdan said.

The company is looking for Chinese partners in major event security management.

He told China Business Weekly that the company wishes to partner with leading companies in the field of defence and security with the best expertise and technology, a good knowledge of existing systems used by future customers and a good knowledge of the Chinese security customers.

China and France have also established strategic co-operation in public security affairs, and EADS is an industrial partner in this co-operation.

Jourdan said that also adds weight to EADS' bid.

EADS has much experience in the security of large events, including the 60th anniversary of D-Day on Normandy beaches held last month, the wedding of Spanish Crown Prince Felipe in Madrid five weeks after the train attack in March, and the G8 summit in Evian last year. It has provided spectrum surveillance for the last five Olympic Games and the approaching Olympic Games in Athens.

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