Meggitt seeks EU foothold

Success in space race is linked to your address says Dorset firm losing out on Ariane

By Melanie Tringham

Meggitt, the Dorset-based aerospace electronic components and controls company, is considering a European acquisition to claw back work lost on the Ariane 5 launcher.

A purchase on the Continent would allow its subsidiary, Avica, to get round European Space Agency contract rules whereby companies only receive contracts equivalent to their government’s financial commitment to the programme.

Britain has put forward less than £3m to Ariane 5.

Avica’s contracts for Ariane 5 are consequently up to 50% less than those on Ariane 4. Work valued at around £2m to manufacture feed lines, flexible hosing and joints from the fuel tanks to the Vulcain cryogenic engine on Ariane 4 slipped to around £1m on Ariane 5.

`We have looked at buying a small company in one of the member countries. Some of the discussions have been fruitful,’ said Roger Tyson, sales and marketing director for Avica.

`We’re not going to be buying something that’s £50m [in turnover]; there are a number of small companies that potentially could do the work.’

Acquiring a business in a more ESA-friendly country would let Avica, through the acquisition, bid for work on the next development phase of the Vulcain engine, tabled for 2000 or 2001, and get the work back.

Tyson favours acquiring a specialist firm or one receptive to technology transfer, but does not rule out a joint venture with Cryospace, the consortium of Aerospatiale and Air Liquide which has picked up the work Avica lost.

Licensing another company to manufacture the products is not considered an option.

Intensive lobbying of the Government by Meggitt’s chief executive, Mike Stacey, has until very recently failed to change the ESA procurement policy.

Revised plans announced last week could herald a relaxation of funding arrangements, but this is unlikely to happen before 2001.