Spanish military companies are immersed in a golden decade for their businesses. Growing turnover, skyrocketing order books, more employment... The instability caused by the wars in Ukraine and Gaza has opened a horizon in which all governments that can are investing like never before to improve their defense. The present is positive and the horizon is even more promising, they admit in the sector. In this context, the national industry has embarked en masse in the search for large commercial agreements abroad. They scan a multitude of countries with military and technological capacity with the aim of selling weapons made in Spain.
“We have never been better than now,” admit sources from the Spanish military industry. The situation is unique for an atomized market (90% is dominated by a dozen companies, which are the ones with the capacity to export). And they are all in it: in making foreign governments see that their armored vehicles, fighters, frigates, submarines, radars or defense systems are useful to preserve the so-called strategic sovereignty. In the sector they still remember that before Russian troops set foot on Ukraine, large arms companies were going through a delicate situation. Airbus, for example, even announced hundreds of layoffs in Spain, which have not occurred.
Last week, a Spanish business delegation traveled to India coinciding with an official visit by the Secretary of State for Defense, Amparo Valcarce. Managers from the main companies have been present. Navantia is one of them. Its objective is to try to ensure that the Asian country can buy the new S-80 submarine, the jewel in the crown of the public company. Airbus was also present at the visit. The company has already sold more than 70 C295 transport aircraft to the Indian Government and that is the line of work that it wants to promote.
Indra is another company with a clear vocation for internationalization. The group stated in its strategic plan, presented last Wednesday, that it cannot grow only with the national market, but has to fight for contracts abroad. It has proposed growing in the United States arms market, the most important. To this end, Indra sealed a strategic agreement in January with the world's leading military company, Lockheed Martin. The Maryland-based giant has already worked with Indra on a radar project for the Navy's F-110 frigates. But the business venture was not successful. Now relations have been recomposed.
Another large arms company that wants to aspire to new contracts in other countries is Santa Bárbara, a subsidiary of the American General Dynamics, and which has an extensive commercial history with other armies.
More than half of the turnover of military companies with Spanish capital originates in international markets. Specifically, of the 12,135 million revenues of companies dedicated to defense, aeronautics, security and space in 2022, half came from abroad, according to KPMG data.
To achieve this internationalization, military companies assure that the political support of the Government is essential. The current one is actively getting involved. Because, they say, you not only compete against companies, you compete against countries. French President Emmanuel Macron hosted a trade delegation to India in January. In this sense, business sources highlight the importance of the good relationship between Pedro Sánchez's Executive and the Biden Administration. Less than a year ago, the Council of Ministers authorized an expenditure of 820 million to acquire eight MH-60R helicopters, known as Romeo in military jargon. The manufacturer of these devices is Lockheed Martin.
The new golden age of the military industry is also causing great joy on the stock market for arms companies. Indra is trading at its highest levels since 2008 and General Dynamics is hitting historic records, as are Airbus, France's Thales and Britain's BAE Systems. The Italian Leonardo is at its highest levels since 2000.
Josep Borrell, High Representative of the EU for Foreign Affairs and Security Policy, has stressed that Europe not only has to spend more on defense, but do it better and jointly. This message permeates the plans of Spanish companies, which aspire for the EU to strengthen its coordination. Indra, Airbus and Santa Bárbara had been demanding a stable budgetary environment for years. Now they have it and they want to take advantage of it.
