Interview: Kongsberg CEO sees trend in Europe's defence industry

KONGSBERG, Norway - Kongsberg's growing focus on partnerships and joint ventures is not only a response to rapid growth and rising demand. It is also a part of a wider trend across Europe's defence industry.

That is according to Eirik Lie, CEO of the Norwegian defence prime, who spoke to Defence Nordic on the sidelines of the company's Capital Markets Day on Wednesday.

- If you look at what the European Parliament states, they want more collaboration and industrial participation, he said.

The CEO earlier announced in his opening remarks, a growing focus on joint ventures and how important they are becoming for Kongsberg. 

You spent a lot of time today talking about how your product portfolio is uniquely positioned in the market. Why do you need joint ventures and more cooperation if you are in such a favorable position?

- We are growing quite quickly and need to be able to deliver on our orders. That is one reason why industrial cooperation is something that we are focused on, Lie said.

- Also, there is an expectation, especially in Europe, for companies to collaborate and consolidate so that we can work together better across countries.

According to him, governments and policymakers are increasingly pushing defence companies closer together.

EU pressure

Earlier in the day, CFO Martin Fjell told investors that "as Kongsberg grows, so does the importance of partnerships," arguing that joint ventures help the company combine capabilities, share technology, access markets and increase capacity.

For Lie, however, the trend extends beyond Kongsberg's own growth ambitions.

Would you say the growing focus on joint ventures is a direct consequence of increasing industrial cooperation requirements in Europe?

- Put simply: yes, he said.

The comments come as European governments continue to increase defence spending while also seeking stronger domestic industrial involvement in major procurement programmes. 

At the same time, Brussels has repeatedly called for deeper integration of Europe's fragmented defence industrial base.

According to Lie, partnerships and joint ventures provide one way of addressing both challenges.

- Joint ventures or other mechanisms that allow us to work together are good because they help us achieve the opportunities we see ahead of us, he said.

The message from Kongsberg is that Europe's defence build-up is not only creating demand for more equipment. It is also creating pressure for closer industrial cooperation across the continent.