French Naval Group says investment in PH hinges on supply contracts

Published June 7, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

The Naval Group (NG) of France, which has been looking to supply military vessels to the Armed Forces of the Philippines, has clearly identified the Philippines as a strong investment prospect for the future, but said this will  depend on what kind of contracts it can secure from the government. 

“We have already started working to identify local partners and to design projects that would results in investments to the country, however, all will depend on the decision of the Philippine authorities regarding the type of ships, the scope of the contract, the timeframe etc.,” said Alain Guillou, senior executive vice-president of Naval Group, in an email interview with Business Bulletin.

NG is a defense company based in France that proposed to bring to the Philippines its  expertise and technological superiority to address specific requirements of the armed forces modernization program.  It specializes in military vessels but said that its know-how and technologies its local partners will gain from working with them could be applied to both military and civilian ships.

When asked if it would be interested in the Hanjin shipbuilding facility in Subic, Guillou replied that the Naval Group will support the Philippine Navy to retool and adapt to the naval base the country will choose.

“Naval Group is interested in working with the Philippines to create the submarine force as well as strengthen the surface fleet and we will be looking into developing strong local partnerships and building on local facilities and know-how,” added  Guillou, who is in charge of all international prospects and of the furthering of the international footprint of the company.

According to Guillou, French Authorities have proposed to the Philippines a strategic government to government agreement, including a reinforcement of Navy to Navy cooperation and a support from the French DGA for the management of the acquisition to ensure the success of the program. 

The French offer also includes an ambitious financing plan developed to enable the country to benefit from French advantageous rates and long-term payment plan to finance 100 percent of the project. “This would enable the country to finance this long-term investment without burdening national finances, especially during this crucial Covid-19 pandemic phase,” said Guillou.

Guillou said that NG was attracted by the  Philippine government’s decision  to increase its naval capacity over the next years. The Philippines has a high potential for development and has many needs in terms of naval defense due to its particular geo-strategic situation. This prompted NG to announce the opening of a representative office in the country in December 2020.

“We want to “stand for the Philippines” in the development of their naval capabilities,” he said. 

He noted that the creation of the submarine force is part of the AFP modernization program which envisions the reinforcement of the defense posture to protect the nation’s maritime sovereignty and interests against the increasing external threats to the national waters.

“Naval Group has a unique know-how and can help the Philippines create its submarine force. Creating a submarine force is very different from merely buying submarines, since it is also necessary to consider the training, logistics and fleet support aspects. We have proven experience to develop submarine squadron with Malaysia when we helped them create their own submarine force in the 2000s,” he said.

But more than ships, Guillou said that what Naval Group offers to the Philippines is a strategic partnership to reach the military and industrial autonomy that the Philippines requires. It will contribute to strengthening their maritime sovereignty and reinforcing their defense posture.

Naval Group has proposed to the Philippine Navy the sea proven Scorpene® class submarine equipped with systems also in use on-board French latest generation of SSN Barracuda. The Scorpene will also benefit from Naval Group’s widely recognized acoustic superiority. The French Navy committed to supporting the Philippines in the development of its submarine force.

“We want to be long-term partners of the Philippines and we can help even beyond the submarines project. Naval Group has a vast portfolio of ships, from Patrol Vessels to frigates, and we are looking forward to working with the Philippine Navy to develop solutions to meet their needs,” he added.

“We see our presence in the Philippines in the long term for the submarine project but also to help the Philippines develop their naval capabilities. Naval Group has a large experience and portfolio and we are looking forward to addressing the different needs of the Philippine Navy for the submarines but also for surface ships.”

“Naval Group wants to become a long-term strategic partner of the Philippines and that the opening of the representative office in Manila is a first step.”

As such, the French military shipbuilder is already looking for local partners to transfer its know-how and technology to support the Philippine Navy and industry in the maintenance and through-life cycle of the submarines. If the Philippines will choose the Naval Group for surface ships, Guillou said these ships could also be produced in the country, creating thousands of jobs.

In addition, Guillou said that their submarines are well-adapted for the West  Philippines Sea.  The Scorpene® is a reliable mid-size conventional submarine, sea-proven in operations with four navies and equipped to face today’s and tomorrow’s threats ensuring its technological superiority over any other ship in the West Philippine Sea. “It is the perfect tool to safeguard the Philippines maritime sovereignty and conduct a wide range of missions. It offers outstanding performances expected from an oceanic submarine (deep dive, tactical speed, autonomy and indiscretion rate) as well as a fantastic maneuverability in shallow waters,” he added.

The Indo Pacific region is one of the world’s most strategic areas for global economy and trade, with huge maritime area to be protected and growing tensions in the region with increasing pressure on countries national waters and borders, the NG official said.

“The reaffirmation of the French posture with the elaboration in 2018 of the French defense strategy in the Indo Pacific has given new impetus to our bilateral relations in this region in which France has nearly 2 million nationals and 9 million km2 of EEZ. The French Minister of Defense Florence Parly recently stated that the region would be a priority of the French Presidency of the European Union,” said Guillou.

By 2030, he said, 50 percent of the world’s submarines will be operating in the Indo-Pacific. In a tense geostrategic context, many countries in the region wish to strengthen their capabilities and are turning to France to acquire sovereignty.

France is committed to enforcing the freedom of navigation all around the world. The French Navy ships often sails in the region, including the West Philippine Sea. 

Naval Group, which has presence in more than 18 countries, has also a strong footprint and track record in the region being present in South East Asia for more than 30 years. 

It has been partner of Singapore-based ST Marine to design and build Formidable class frigates since the 2000s and operates an R &D center in the country.

In 2005, NG also signed a contract with Mazagon Dock Limited (MDL), based in Mumbaï, India to locally produce 6 Scorpene submarines. 

It has also helped the Royal Malaysian Navy developed its force, train the crews, create the support infrastructure and they operate 2 Scorpene submarines. The group was also selected in 2016 by Australia to deliver 12 regionally superior submarines and develop an Australian sovereign submarine capability.