For many years Brazil’s military relied on surplus equipment acquired from the leading powers. In the 1980s the country shifted to depend on domestic capabilities, developing local manufacturing of armored vehicles, trucks, and aircraft. In recent years, the country is transforming this manufacturing base, through strategic cooperation agreements, directing major investments towards modernizing systems.
In the 2000s, Brazil’s current defense procurement programs drive major orders to local industry, through foreign contractors establishing domestic manufacturing facilities in Brazil. These include the Italian company Iveco, French shipbuilder DCNS and helicopter manufacturer Eurocopter, Israel’s defense electronics company Elbit Systems and UAV prime Israel Aerospace Industries.
In the past decade Brazil’s non-aligned foreign policy drove the country closer to Russia and France and further away from the U.S. The first ‘strategic alliance in 2005 between Brazil and the Russian Federation was signed, and reiterated in 2008 during the visit of President Dmitry Medvedev to Brazil, where the two presidents signed cooperation agreements related to aerospace, nuclear and defense industries.
But the more significant strategic agreement signed with France in 2008, formalized Brazil’s procurement of military equipment from that country, at a total investment of more than US$16 billion. With this agreement Brazil signed orders for a nuclear powered submarine, four additional Scorpène class diesel-electric powered submarines and 50 EC725 helicopters – all produced by French companies. These contracts along with significant technology transfer, production and participation by local Brazilian industry spurred significant growth for the home industry. The next phase would have been the purchase of 36 Rafale fighters, for about $4 billion. However, after the election of new president the decision was delayed for 2012 and Brazil is apparently backing off from these exclusive understandings.
Other parts of the agreement are already underway; Eurocopter is manufacturing the new helicopters at its Brazilian Helibras subsidiary, while the four submarines are being built at a new shipyard being constructed by Odebrecht and DCNS in Itaguaí, Rio de Janeiro. Following yea, the two countries announced a joint venture between Agrale and Renault Trucks to produce military transport vehicles.
Two years later, with a new president at the helm, further agreements are brought to the table, opening the local market for new competition. In April 2010 Brazil and the U.S. signed a defense cooperation agreement, paving the way for closer ties between the two countries, and repositioning U.S. offerings in Brazil’s future fighter acquisition plans. The U.K. followed with a similar agreement in September, aiming at Brazil’s next generation frigate acquisition. In December 2010 Israel stepped in with the signature of bilateral defense cooperation agreement with Brazil, elevating the country as a trusted partner, opening the door for the sale of a broader range of classified defense and homeland security technologies, addressing programs which could potentially be worth billions of dollars.
Several major programs signed between Israel and Brazil are already worth close to one billion US$. The most significant is the sale of IAI Heron I medium altitude long endurance (MALE) Unmanned Aerial Vehicles to the Brazilian federal police. This program also bolstered land- surveillance capabilities along the borders at specific sectors, gained by ground radar systems, electronic fences, electro-optical surveillance equipment and satellite communications. Two other programs that following through, include the development and production of unmanned 30mm gun turrets for Brazil’s future medium armored vehicle, and delivery of Hermes 450 UAV units to the Brazilian Air Force. Both programs are to be fulfilled by local subsidiaries established by Israel’s Elbit Systems.
Based on its ‘multi-domestic’ management strategy, establishing subsidiary operations in strategic markets, Elbit Systems carved its position in the Brazilian market well ahead of other Israeli companies, establishing cooperation agreements with Brazil’s leading aerospace manufacturer Embraer, Elbit and Embraer are cooperating on multiple avionic modernization programs for Brazil’s EMB-312 Tucano trainers, F-5BR, and, more recently AMX fighters. Earning a successful track record with the Brazilian prime, Elbit is likely to cooperate in future programs as well – C-390 being one such opportunity.