* Italy's AgustaWestland and Brazilian planemaker propose JV
* Eyeing demand in military, executive, offshore transport
By Brad Haynes and Danilo Masoni
SAO PAULO/MILAN, Jan 21 Brazilian planemaker
Embraer SA and a unit of Italy's Finmeccanica SpA
said on Monday they plan to form a joint venture
within months to produce helicopters in Brazil for military and
commercial use in Latin America.
Preliminary studies by AgustaWestland and Embraer show a
promising market for midsize twin engine helicopters to service
a growing number of remote oil rigs off the Brazilian coast.
Brazil's growing defense budget and private demand in
traffic-choked cities also present opportunities, they said in a
The scope of the partnership is still being defined, but the
proposal is to customize and produce AgustaWestland helicopters
and some of their components in Brazil for sale throughout the
region, according to company press offices. Talks have left open
the possibility of eventually developing new helicopters.
Shares of Embraer rose 0.3 percent in Sao Paulo
trading, while the benchmark Bovespa stock index lost
0.2 percent. Finmeccanica shares fell 0.9 percent, paring
earlier losses after ratings agency Standard & Poor's cut its
debt rating to junk on Friday.
AgustaWestland already has joint ventures in Russia, India
and China and the new deal, part of a long-standing strategy of
expansion into emerging markets, would complete its presence in
the so-called BRIC bloc, a spokesperson said.
For Embraer the announcement marks another departure from
its traditional business of regional and executive jets, where
demand has stagnated in recent years. Its fast-growing defense
division could make up a quarter of total revenue by 2020, up
from less than 5 percent in 2006.
Last year, Embraer secured a border monitoring contract with
Brazil's armed forces and executives said they were looking into
building navy patrol ships.
More specifics of the partnership with Finmeccanica's
AgustaWestland unit were not disclosed. The companies said they
hoped to establish the new venture "in a few months" after
ironing out details and getting necessary approvals.