That Embraer has chosen OGMA - alongside design engineering specialist Empresa de Engenharia Aeronáutica (EAA) - to lead Portugal's involvement in the KC-390 airlifter and tanker programme comes perhaps as no great surprise. OGMA is, after all, Portugal's aerospace champion and the only company to be able to manufacture aircraft parts to any scale.
It has also been - since 2005 - effectively an Embraer subsidiary. The maintenance, repair and overhaul and aerostructures business is held 35% by the Portuguese government and 65% by a third-party shareholding, made up of Embraer (70%) and EADS (30%). Embraer's overall 45.5% stake effectively gives its management control, and its man, Almir Borges, is chairman and chief executive. Lisbon, however, remains a "strategic partner" in the formerly state-owned firm.
OGMA builds the central fuselage on the C-295
Under the deal, OGMA will produce the KC-390's central fuselage panels, elevators, fairings and landing-gear doors, and will support Embraer during the certification phase that will kick off with production of the first prototype in 2013, followed by first flight a year later. Portugal has committed to five of the aircraft, which is designed to be a replacement for the venerable Lockheed Martin C-130J, and the workshare agreement follows a partnership signed between Lisbon and Brazilia in 2010.
Although the contract was expected, it will be a welcome piece of business for the 83-year-old company, which saw revenues dip sharply from €146 million ($190 million) to €120 million in 2010 after four years of steady growth since privatisation. Margins, however, improved with earnings before interest and tax continuing to grow to just under 10% of turnover - before privatisation the business had been losing money. Since then, the shareholders have invested €24 million in capital expenditure, including a new composites manufacturing building opened in 2008.
What first strikes many visitors to OGMA's 400,000m² site at Alverca outside Lisbon is its scale and diversity. Sitting in various hangers are an assortment of business jets together with military aircraft and helicopters displaying the roundels of air arms around the world. It maintains types such as the Lockheed Martin C-130J, P-3 Orion and F-16, the Airbus Military C-212 and C-295, the EH Industries EH101 and the Embraer ERJ-145 Airborne Early Warning & Control variant.
Although it remains the in-house maintenance provider for the Portuguese armed forces, the majority of its MRO defence business comes from overseas, and customers include the armed forces of Belgium, France, India, Pakistan, Spain and Tunisia. Borges acknowledges that OGMA often beats domestic MRO providers in these countries to the business. "Part of the reason is that we are able to provide a one-stop shop on a number of types," he says.
On the commercial MRO side - a smaller part of the overall business - OGMA's approvals include the Airbus A320 family, Embraer's ERJ-145 and E-Jets family as well as business jets from both these airframers and Dassault's Falcon 50 and 900. The company also offers overhaul capability on the Rolls-Royce T-56, AE 2100 and AE 3007 series, as well as a range of components servicing.
OGMA's MRO approvals include the Airbus A320 family
OGMA's overall revenues are split 70/30 in favour of MRO, but Borges expects the aerostructures element to rise to 45% within the next six years - partly as a result of the Embraer business. A growing share will be made up of composites - currently a quarter of aerostructures turnover. The company's main contracts are to construct the fuselage of the Pilatus PC-12 business turboprop - it has built over 1,000 for the Swiss airframer - and the central fuselage on the C-295. It also makes pylons for the Dassault 7X.
Borges believes that as the company gains experience on the aerostructures side and Portugal's aerospace sector develops, more customers will be prepared to hand over responsibility to OGMA to select and manage individual supply chains. "We have just got responsibility for the C-295," he says. "Airbus Military used to choose their own suppliers. Now they are happy for us to do it."
OGMA's spread of activities and three-shareholder structure is also an advantage for a company that was traditionally regarded as a competent but rather unexciting MRO provider on the edge of Europe. "Diversity is important to stabilise the company against declines in certain areas, and it makes us more flexible," he says. "And our shareholders open doors for us throughout the world."