CV90 IFV for the Czech Republic: injection for Czech industry worth more than 18 billion crowns

 02. 04. 2023      category: Events
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The ongoing negotiations between the Czech and Swedish sides on the purchase of the CV90 IFV are also moving forward negotiations on the involvement of Czech industry. Recent information from BAE Systems has shown that the value of the Czech companies' involvement will reach CZK 18 billion, i.e. at least 40% of the share, as requested by the Ministry of Defence from the beginning. More than 30 companies across the Czech Republic will be involved in the chain of industrial partners. The door is also open to Czech partners for other contracts currently awarded to BAE Systems in the production of the CV90 IFV or the smaller BvS10 vehicle.

cv90sved_TITPicture: The deadline for signing the contract for the acquisition of 210 CV90 tracked IFVs was set by the Minister of Defence until 31 May 2023. | Michal Pivoňka / CZ DEFENCE

As Tommy Gustafsson-Rask, President of BAE Systems Hägglunds, points out, the minimum framework of 40% involvement of Czech industry in the IFV project for the Czech Army will be achieved, just as the Czech Republic wished, fully in accordance with the tender documentation. After all, BAE Systems has experience from the previous 6 projects, which always included industrial cooperation, in which BAE Systems always succeeded - six times it turned out that BAE Systems came up with a proven model how to define and distribute industrial cooperation for the IFV project in local aspects. "We have always delivered on time, with expectations achieved, and most of the time we have even exceeded them," says Gustafsson-Rask.

The Czech industrial chain with BAE Systems Hägglunds now has more than 30 companies in the Czech Republic, and for the Czech defence industry, the project to supply IFVs will be a "boosting injection" in terms of size and financial resources, but also in terms of know-how and increased competitiveness for the years to come. It will also have a significant impact on employment. And it will also bring back or substantially boost high value-added activities to the country - such as the development of some variants, the production of the chassis, the turret and the integration of the turrets, including the integration of all sub-systems and sensors. In addition, the main sight and fire control system will be produced in the Czech Republic.

Tommy MkIV, 5Picture: Tommy Gustafsson-Rask, CEO of BAE Systems Hägglunds | BAE Systems

BAE Systems Hägg lunds opted for the industrial arrangement based on the requirements of the Czech Ministry of Defence. The signing of the contract will open the door to cooperation worth over 18 billion crowns for the Czech industry (the amount is in total value excluding VAT). Both turrets and chassis will be produced in the Czech Republic. A number of vehicle parts will be produced by Czech industry. Components such as the power unit, weapon sight and sensors will be purchased and partly manufactured in the Czech Republic, with typically 10-50% of the parts being of Czech manufacture. Czech industry will also be responsible for the manufacture and integration of the turret and chassis. Some variants without turret will also be developed by Czech industry. BAE Systems also envisages handing over the licences to the Czech Republic from the outset. "This is part of our advanced system of industrial cooperation. As far as who will get the licence - our partner is the Czech state. BAE Systems operates under Swedish controlled export law and usually grants licenses to the state," explains BAE Systems President Hägglunds.

"We are convinced that within the framework of the assignment this is a very mature system, defending the interests of the Czech Republic and Czech industry. The final form of the industry must reflect how industrial cooperation is defined in the demand. And we were pleasantly surprised by how many highly developed industrial partners we found in the Czech Republic to choose from when making our decision. The Czech defence industry is indeed very mature," says Tommy Gustafsson-Rask.

"We have been working closely with Czech industry since 2016 and have met a large number of highly qualified Czech companies. We already have contracts in place or are close to signing contracts with strategic partners who will be responsible for the main 'packages' of work. We have signed Memoranda of Understanding with 11 Czech companies with the expectation that contracts will be signed in the coming months. With the smaller suppliers, we are in the process of negotiating the final scope and will have signed contracts with them in the coming months as well," says Tommy Gustafsson-Rask, President of BAE Systems Hägglunds, describing the current situation in the industrial cooperation setup.

The strategic companies include VOP CZ, Excalibur Army, VR Group, VTU, Meopta, Ray Service. Other partners include Ace Tech, Agados, AM-CME, B.O.I.S. - FILTERS, Charvát Group, CPF, EVPÚ Defence, Novogear, URC Systems, VMV, Zako Turčín, Poličské strojírny and SVOS. In addition, more companies are gradually being added to the list. "Right now, for example, we have two interesting new potential partners that we would like to add to this list. It is also important that our industrial partners are spread across the country, so they are not concentrated in one area, and some of these companies are already our long-standing industrial partners in other projects," explains Gustafsson-Rask. These include Ray Service, Agados, Meopta, AM-CME and LASER CENTRUM CZ.

These include several hundred million CZK of contracted work and some new contracts from recent times. In addition, Czech companies are also contracted for other programmes in Sweden, Austria and for a three-country programme to supply BvS10 vehicles to Sweden, Germany and England. As BAE Systems Hägglunds has won a large number of major contracts in recent years, further involvement of Czech industry in their implementation can be expected. Indeed, specific negotiations are already underway. "I would not be afraid to describe the possibility of involving the Czech defence industry in our partner chain in further projects as a great opportunity for Czech companies, experts and the Czech economy. Thousands of CV90 vehicles in different variants and thousands of BvS10 vehicles are waiting for us to produce," Gustafsson-Rask points out.

 Author: Martin Šiška

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