ADEX - After the pandemic the defence industry will experience a period of recovery unprecedented in its history

After the pandemic the defence industry will experience a period of recovery unprecedented in its history



Rashad Suleymanov, editor-in-chief of the magazine “Azeri Defence”

- How do you assess the current state of the defence industry market in Azerbaijan? To what extent are enterprises that produce military products becoming more active? What trends are observed in the military industry products market in the world?

- Firstly, thank you for this topical question. Today, the defence industry is one of the most profitable and promising industries in the world. Based on our appraisal, I can say that thanks to the liberalisation of the legal framework in Azerbaijan, the state's implementation of incentive programmes implemented in the agricultural and ICT sectors, the defence industry, as well as the creation of funds to support the development of the defence industry in Turkey and Kazakhstan, and other measures, it is possible to achieve significant development in this sphere in a short time. The creation of products in the defence industry, research and development work requires serious funding. The creation of such a financial fund is of great importance in terms of attracting domestic engineers to research work, preventing the brain drain abroad, and supporting the development of promising private companies.

Today, it is impossible to imagine the development of the defence industry without the participation of the private sector. The current trend in the world is also observed in Azerbaijan.

It is necessary to develop a roadmap covering the prospective development of the defence industry with the participation of the public and private sectors, as well as scientific institutions and research centres. I think that defining our future goals and coordinated actions may be more useful.

In response to the second part of your question, I can say that at present, the enterprises of the Ministry of Defence Industry of the Republic of Azerbaijan, along with meeting local needs, export certain products abroad. Although the exact figures are not disclosed, the Cabinet of Ministers report on its activities in 2019 also notes that exports in the defence industry increased 5.5 times. There is no information about what percentage of this is actual export and what percentage is re-export.

Active work of military enterprises depends on several factors: proper marketing work, serious market research, analysis, a flexible response to requests, and attracting orders.

For a permanent presence in a market where there are many players, first of all, you need flexibility and speed.

Despite the COVID-19 pandemic, defence industry companies continue their activities, including the fight against the pandemic. Developers of the global defence industry, such as Lockheed Martin, Northrop Grumman, BAE Systems, SAAB, ROSTEX, ASELSAN, Elbit Systems, Poly Technologies, Airbus, and Leonardo, are engaged in the creation and production of a large number of necessary products from detecting people with a virus to disinfection and evacuation systems, analysing devices, and protection equipment.

In neighbouring Iran, Turkey, Russia, and Kazakhstan, where the pandemic is widespread, leading defence industry companies were able to install remote measuring devices, isolated movements for transporting patients, clothing, masks, protective coatings, breathing apparatus, sanitising and temperature measuring drones, manufacturing mobile hospitals, and delivering food to hospitals in the shortest possible time. The military enterprises of Russia and Iran can also be said to be focused on the production of biological and bacteriological means of fighting. Laboratories that study biological weapons conduct research to study the virus and neutralise it.

-How would you characterise the market for defence industrial complex products at the present time and in the period after the pandemic? How active will this market be after the pandemic?

- The pandemic is causing serious damage to the defence industry, delaying orders and delaying new procurement contracts. An important role here is played by the fact that due to the fall in oil prices on the world market, many States are forced to tighten their belts.

But it is safe to say that in the post-pandemic period, the defence industry will experience a period of recovery unprecedented in its history. And there is no doubt that today's pandemic will benefit manufacturers who have made the right choice and devoted their time to creating new products. Countries that were prepared for chemical, biological and bacteriological threats during the cold war were powerless to fight the virus. The global pandemic is once again threatening the Chemical, Biological, Radiological and Nuclear protection (CBRN) of States, which makes it possible to predict a resurgence of this industry in the post-pandemic period.

In fact, today all the States of the world have focused their attention not on weapons, but on CBRN protection. As I have already noted, due to their lack of preparedness, States use the reserve funds of the army and civil defence institutions. The number one issue after the pandemic will be to reproduce these resources. At the same time, States will pay great attention to CBRN systems during the cold war. This will open up new opportunities for this segment of the defence industry. The work of defence industry companies in the production of CBRN systems and protective equipment currently represents an export potential both in addition to meeting large needs within the country, and in the post-pandemic period. Why shouldn't our industry take advantage of these opportunities?

The ongoing tensions in the Middle East region, the growing threats of drones around the world, and so on are threats that are driving the development of this sector.

- How will the ADEX exhibition affect the development of the defence industry market during the crisis and after the pandemic?

- Due to the coronavirus pandemic, all planned exhibitions around the world, including defence exhibitions, have been postponed since January. Exhibitions are the most appropriate platform in terms of promoting innovations in the defence industry for customers, as well as establishing business relationships between manufacturers and users. Not surprisingly, there will also be a resurgence in exhibitions after the pandemic. Currently, some exhibition organisers are working on holding virtual exhibitions and B2B meetings. I believe that companies interested in organising the exhibition should put forward new ideas in this area.

We are witnessing the company Caspian Event Organisers, which specialises in organising and holding exhibitions in Azerbaijan, continue its activities without interruption, and is seriously preparing for the exhibitions planned for the coming months. I am sure that in the near future the pandemic that is sweeping the world will be eliminated, and the exhibition sector will be revived as before. I wish you success in this business!