Admiral Rudolf Nord, chairman of NP Aerospace, is showing investors his maritime expertise but is not showing off. Nor does he need to — the company’s first contract securing tanks with armour is a vote of confidence for the company.
Admiral Nord, who spent 16 years at the helm of Flugzeugwerke aircraft production in Düsseldorf, founded NP Aerospace in 2010 to manage the Düsseldorf factory formerly run by Flugzeugwerke. The factory will now handle design, engineering and procurement for the armoured version of the Leopard 2 main battle tank developed for the German Army.
He says this is the first contract he has signed with a German manufacturer since founding the company and, he acknowledges, it is ambitious. For one thing, it represents about 80 per cent of NP Aerospace’s turnover, which he expects to be about €50m this year.
The company is now looking to do the same thing with more defence and homeland security businesses, through acquisitions and joint ventures. But there are problems. The strong euro makes doing business in Germany more difficult, which NP Aerospace hopes to remedy by setting up sales offices in Frankfurt, London and Singapore. It also has a London-based partner that it hopes to make more of.
“International expansion is going to be the most important area of growth for us this year,” says Admiral Nord.
It is the Franco-German motor way to export
The company is focused on the latest generation of tank, the Leopard 2++, which are being built for the German Army by a consortium that includes the German military’s Lernhardt unit and Sweden’s TRW; it is to be phased out over time by the latest version of the main battle tank that the German military is procuring, the Leopard III.
“This was a very logical progression for us,” says Admiral Nord, “to use an existing international base where we already have a relationship and end up being one of the initiators.”
Germany is entering a new budget era, with the defence budget constrained by the substantial increase in the German national debt and the recently introduced debt brake, which limits the growth of German government debt at the rate of Gross Domestic Product.
This policy affects both the planned purchases of new weapons, such as the more powerful Leopard 3 tank, and the upgrading of existing arms and armour and vehicles. At the same time, US President Donald Trump is pressing Germany for a higher contribution to Nato and efforts to bolster Europe’s defence.
Mr Nord says Germany’s overall defence budget will rise to €100bn, or 2.7 per cent of GDP, in 2020 from €87bn, or 2.2 per cent, in 2018.
“I think there will be a double offset,” he says. “For one thing it means better equipment which means better equipment means lower risk. So naturally the new equipment has to be well financed.”
But NP Aerospace already has the inside track because Flugzeugwerke is planning to give up production of the T32 main battle tank. It will continue to manufacture armoured versions of its C76 and T60 tanks.
The message to investors is this: it takes a certain kind of business to move into this segment from the usual aircraft manufacturing.
“It is the Franco-German motor way to export,” says Admiral Nord. “I’m happy to be part of it.”