KONGSBERG'S POSITION IN THE DEFENCE MARKET

The defence market requires products and systems for ground-based, air-based and sea-based defence. The market is excepted from international free trade agreements. Consequently, most countries choose national suppliers or require offset agreements if suppliers are chosen from countries other than their own. The US market is the world's largest defence market, accounting for nearly 50 per cent of overall global defence spending. The market is nevertheless extremely difficult for foreign suppliers to penetrate.

KONGSBERG has carved out a position in the US market through direct deliveries of proprietary systems and through cooperation with US alliance partners. The framework agreement for the US CROWS programme is valued at NOK 8 billion and was won against keen international competition. This proves once again that defence systems developed in Norway can succeed on the international market. A total of about 40 per cent of the BA's revenues are derived from the US market.

Today's defence procurements are increasingly aimed at multinational and peacekeeping operations. There is strong emphasis on the protection of personnel and on maintaining a high degree of safety. Kongsberg is well positioned for this through its PROTECTOR, among other products. Moreover, growing emphasis is being placed on the monitoring of natural resources, as well as on protecting one's own country against terrorist acts and environmental offences.

KONGSBERG is Norway's premier defence enterprise when it comes to advanced technological defence systems. We usually win a high proportion of the offset agreements generated by the Norwegian Armed Forces' procurements from foreign vendors. This makes the upcoming replacement of the Norwegian fighter craft a profoundly important project for KONGSBERG. The Group is working with the three short-listed suppliers to devise acceptable industrial packages.

KONGSBERG is a small supplier by international standards. This means we must largely concentrate on niche products to succeed. We have developed many systems and products that have proven competitive on international markets, both in collaboration with international alliance partners and on our own.