Canadian Defence Review

 

September 18, 2013

 

Title: DEFSEC Atlantic 2013 increases focus on IRBs

Subtitle: Growing show gets new legs on the heels of strong expected defence purchases, which are forcing producers to streamline offset policies

 

Defence industry, government and armed forces players converged on Halifax earlier this month for DEFSEC Atlantic 2013. This growing annual event once again proved to be a great success, boosted by increased traffic stemming from heightened interest in projected defence procurements. These include the Fixed Wing Search and Rescue Aircraft and especially the National Shipbuilding Procurement Strategy, which holds great promise for the region,

 

“We had been increasingly constrained space-wise in the past, so this year we took additional room outside of Cunard Center in Pier 21, where meal events were held,” says Colin Stephenson, DEFSEC Atlantic’s executive director. “This gave us access to 20 percent more sorely-needed square footage.”

As usual the show featured a series of bells and whistles to keep participants happy. Tours were organized on the HMCS Sackville a retired corvette, which is now a floating naval museum.  Vincent Malley of Meggitt was also a visible presence, helping to organize rides on the company’s remotely-controlled Barracuda USV-T Naval Target (a rigid hull inflatable boat powered by a 200 hp marine diesel engine), a move which, judging from participants’ reactions turned out to be a visible public relations success.

However the rides in Halifax Harbor weren’t all just about fun. They provided Meggitt with an excellent opportunity to tangibly demonstrate the Barracuda‘s manoeuvrability, high-speed naval tactics and operational scenarios. Almost all participants walked away impressed with the Barracuda, which is operated via remote line-of-sight speed and course controls and which leverages GPS to enable self-contained tracking.

The increasing importance of IRBs in Atlantic Canada

To the many central Canadian and foreign bigwigs attending DEFSEC Atlantic, the event’s most defining feature was located a kilometer or so away. There sits the huge Canadian Armed Forces base which hosts Canada’s Eastern naval fleet. And next door is Irving Shipbuilding’s Halifax Shipyard, which will be charged with upgrading the combat potion of that fleet during the coming decades, and whose plans drove much of the corridor chatter at DEFSEC (see our story on page XXX).

 

Irving Shipbuilding’s president Kevin McCoy gave a keynote luncheon address in which he discussed $300 million in investments being made in the Halifax Shipyard. These upgrades have much of the local defence industry angling to get industrial and regional benefits IRB work from upcoming production projected to be housed there such as the Arctic Offshore Patrol vessels and Canadian Surface Combatants.

 

Industrial and Regional Benefit were thus a major DEFSEC Atlantic theme, with several event presentations tackling the subject. These included a panel discussion about leveraging IRB opportunities, led by Mike McAbon, vice-president (finance & IRB programs) at Irving Shipbuilding, Gary Hones, senior offset/IRB manager at Lockheed Martin Canada and Paul Greedy, president at Mil-Aero Electronics Atlantic.  

 

“With the Canadian Armed Forces set to spend $490 billion over the next 20 years, the industrial regional benefits that will be distributed are forecasted to increase dramatically,” says Nicole Verkindt, president of OMX, who was at DEFSEC to market a software platform that the company has developed to help contractors identify, validate and track potential suppliers and which produces reports on how they are fulfilling their obligations. “The ability to be able to do that effectively will provide a key competitive advantage in light of recent emphasis on 'Buy Canada' in military procurements.”

 

The ability to leverage IRB value was one of the key drivers of a teeming announced at DEFSEC Atlantic between Kaycom and J+S, a UK-based supplier of sonar, torpedo and acoustic tools. According to Brian March, Kaycom’s president, the new unit, which will be known as JSK Naval Support, will deliver  naval equipment and in-service support expertise developed and optimized for the British Royal Navy. “This will enable DND to procure products and services from a Canadian company with an international reach,” says March. “For our part, we will be able to continue to support legacy systems and to build up new business on programs such as the Halifax Class refurbishment and Canadian Surface Combatant.”

 

A substantial American presence

DEFESEC Atlantic 2013 also featured a large American pavilion filled with US companies trying to get NSPS-related and other work. For example Huntington Ingalls Industries was one of several companies trying to pitch to the Department of National Defence (DND) the idea of using a stock frigate design for its Canadian Surface Combatants.

 

According to Patrick Stadt, its corporate director (customer affairs) Huntington Ingalls wants to adapt an exiting design it is already using to build eight US Coast Guard ships, a solution he says would be far cheaper than starting from scratch. While the idea may seem far fetched, those US Coast Guard ships are roughly the same size as existing Canadian frigates, and the design changes needed could be accommodated fairly economically he says. “Defence budgets are under pressure everywhere and we believe that this would present Canada with an economic alternative,” notes Stadt. “It saves money, provide a proven solution and enables any builder to hit the ground running.”

 

Maersk Line Limited, one of the world’s largest shipping players was also a visible presence at the show. The company, which is looking to increase its defence sector presence also has one eye on NSPS. “We have a solid background in providing in-service support work to the U.S. Department of Defence and hope to be able to leverage those skills to do the same thing in Canada,” said Meredith Siviter, a spokesperson.  Maersk actually operates similar vessels in the United States and could probably save DND a ton of money if it could sell those services too.

 

Local firms get a chance to shine…

As Paul Evans, chief operating officer of CarteNav Solutions notes, DEFSEC Atlantic also provided an excellent platform for local companies to show off wares on a national stage without having to leave the region. “We have been using the show as a platform to showcase the most recent features of our ISR solutions, particularly AIMS-ISR to DND,” says Evans. “These include improvements in terrain and mission modeling.  We now have clients in 16 countries and hope to broaden that even further. That’s not bad for a Halifax-based firm.”

 

Claude Baril,  president of Composites Atlantic, a major supplier to the Canada’s Joint Strike Fighter program agrees that the show’s location provides an excellent meeting ground for local players. “You don’t just come here to try to sell products,” says Baril, whose team just started a new production program in 2012, and which recently boosted local staff by about 160 employees to 390. “You also come to make contacts, build working relationships and set the ground for future cooperation down the line.”

 

Ken Howard, chief executive officer, at Atlantis Systems, a Dartmouth based aviation training supplier agrees. “We have been attending DEFSEC Atlantic since its inception and it keeps getting better year after year,” says Howard, who has been angling to bring new work into the Atlantis facility, to fill capacity provided by the maturing of existing programs as they reach the completion stage. “Colin (Stephenson) has done a tremendous job and the show has steadily grown. Now we are all waiting to see how they are going to top it in 2014.”

 

Peter@peterdiekmeyer.com

 

 

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