Why am I in lovely Rio de Janeiro this week to cover the Latin America Aerospace and Defense (LAAD) exhibition? The Stockholm International Peace Research Institute (SIPRI) timely provided one answer yesterday, reporting that military spending in Latin America last year out-paced the rest of the world. While global outlays increased a measly 1.3% in 2010, Latin America spending jumped 5.8%. True, the region still accounts for only about 4% of global defense spending, but it's one of the few markets expecting long-term, sustained growth.
Fueling the boom market is Brazil's growing interests as a regional and world power, and my to-do list for today is to get caught up on all the big stories, including:
1. The three-way competition for Brazil's FX-2 contract. We'll be hearing from each of the competitors -- Gripen, Rafale and Super Hornet -- today, as well as getting an update from the Ministry of Defense.
2. Embraer has scheduled two press conferences today and five overall this week. Topics for each event have not been announced, but I anticipate at least one conference today will provide an update on the pivotal KC-390 tanker-transport program.
3. UAVs are suddenly all the rage in Latin America more than five years after Colombia began flying Scan Eagles against the FARC. Brazil has contracted with Elbit Systems to demonstrate UAV capabilities with the Hermes 450, but the military plans to develop its own systems eventually. We'll be hearing from several new Brazilian UAV companies, including Flight Technology, which is introducing a new family of UAVs today.
4. Brazil's national defense strategy also may drive a new wave of consolidation in this country's aerospace industry. There are rumors that Odebrecht and Mectron will formally announce a partnership this week, uniting one of Brazil's largest engineeering and construction companies with an entrepreneurial aerospace leader. Meanwhile, Embraer will introduce its standalone defense business at the show for the first time. But local competitor and partner Avibras must answer questions about its future viability after cutting hundreds of jobs a few months ago.
5. And I'm always looking for anything new and interesting. I hope to learn more about Brazil's ambitious 14-X hypersonic aircraft, which is allegedly scheduled to fly next year. Updates on Avibras' new cruise missile and Mectron's MAR-1 missile are also on my radar this week.