African defence company Paramount Group is expecting a 50 to 60 per cent annual increase in Middle East sales over the next five years, as tough economic conditions force governments to spend more conservatively.
“Europe and the Middle East are today under the same kind of budget constraints most of our customers have been for the last 22 years. We’re becoming far more relevant to the first world than we have ever before,” Ivor Ichikowitz, Chairman of the South Africa’s Paramount Group, told Gulf News on Tuesday at the Global Aerospace Summit in Abu Dhabi. “We are poised for exponential growth over the next five years.”
Escalating conflict in the Middle East from Iraq to Libya has resulted in a “significant” increase in sales volumes but “from a very small base,” Ichikowitz said.
Middle East governments are involved in conflicts across the region. Saudi Arabia is leading a coalition of mostly Arab states fighting in Yemen to restore the internationally recognised government and several Arab states are also members of the US-led coalition against Daesh in Syria and Iraq.“The Middle East is a massive focus for us,” Ichikowitz said.
Paramount makes armoured vehicles, military aircraft and equipment and provides training to governments.
Ichikowitz said it is the tough economic environment that has helped it edge its way into a market that has been historically dominated by European and US firms. The oil price has fallen by around 65 per cent since June 2014 when it was selling for $115 a barrel.
“The focus today is maximum performance at the lowest possible price and that’s by default what we’ve become,” Ichikowitz said.
Paramount is looking to partner with Middle East governments so that it can manufacture and assemble equipment in the region. It is already building armoured vehicles in Kazakhstan.
On Monday, Paramount announced it was partnering with the US aerospace company Boeing to develop light multi-role aircraft.
“We’re seeing a lot of opportunity; we see a lot of areas where would have otherwise been excluded where our expertise is now being actively sought,” he said.
By Alexander Cornwell
