April 8 (Bloomberg) -- Rockwell Collins Inc. is in preliminary talks about a partnership with Abu Dhabi-based Mubadala Aerospace as the U.S. aircraft-electronics supplier seeks to boost revenue from foreign markets.
Rockwell Collins is exploring as tie-up with the unit of Mubadala Development Co. on after-market support, including logistics and repairs on the equipment it sells in the region, Chief Executive Officer Kelly Ortberg said in an interview.
“We’d bring some know-how and they’d bring the market capacity and facility and people,” Ortberg said in Abu Dhabi yesterday. “We’d find some shared arrangement to do that.”
Rockwell Collins is expanding overseas as core markets such as U.S. defense become “pretty soft,” Ortberg said. The Cedar Rapids, Iowa-based company currently gets about 40 percent of revenue abroad and plans to increase the proportion to 50 percent over five years, aided by double-digit growth in China, the Middle East and Brazil, the CEO said.
Rockwell will seek to “do more partnering in countries for support of products, repair, overhaul or logistics,” he said, with the local payroll likely to expand accordingly.
An anticipated 9 percent increase in plane deliveries in the Middle East over five years will be a boon for the company given its status as a major supplier to Boeing Co. and Airbus Group NV, Ortberg said. Current double-digit annual growth for the business in the region is likely to continue, he added.
Opportunities include providing broadband connectivity for planes, moving information on and off aircraft using satellite communications, and investing in guidance technology.
“The region is very important to Rockwell Collins, it’s a growth engine for us,” Ortberg said. Saudi Arabia and the United Arab Emirates, which includes Abu Dhabi, are the leading markets, with Qatar showing good growth on the commercial side.
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