restructures

Tim Ripley talks to Lars G. Josefsson, chief executive of Celsius Group, Sweden's largest defence Systems integrator, warship and submarine manufacturer.

In spite of continued profitability the Celsius Group has announced details of major corporate re-structuring to ensure it stays healthy in a shrinking global defence marketplace.
As of January the group has operated in business units or independent profit centres that report directly to the chief executive. This replaces a previous structure where subsidiary companies such as Bofors and Kockums operated in an almost independent manner. These famous names remain as product brands but the driving force will be the Celsius Group. "Our new organisation is focused on increased profitability," Josefsson told Global Defence Review. "This gives us greater opportunity to utilise our resources in the most effective way and improves our business prospects. We are consolidating in areas where we excel that yield substantial efficiency gains. Previously the company's profitability level was too low to finance future investment.

Changing world
"The world in which we operate is subject to rapid change," says Josefsson, "so it is vital that we have a flexible organisation able to deal with change effectively. A key component of group business strategy relates to the creation of co-operative ventures/alliances and acquisitions that can be integrated satisfactorily into the group."
Defence-related activities constitute 70 per cent of the group's business and company turnover in 1996 was almost $1.4 billion, making it the 14th-largest defence company in Europe and 31st in the world.
The old Bofors AB armaments and underwater weapons company, Celsius Tech AB information technology, sensors and countermeasures unit, Kockums warship and submarine building operation and Aerotech AB aircraft maintenance company are divided into eight business units, comprising weapon systems, missiles, torpedoes, ammunition and small arms, command and information systems, sensors and countermeasures, naval vessels, and military maintenance.

International links
The quickening pace of European defence consolidation is of great interest to Celsius whose joint projects with European companies include working on the 155 BONUS sensor-fused artillery shell GIAT in France and the Taurus air-to-ground missile with Germany's
Daimler-Benz Aerospace (DASA).
"We are a member of the European family and it is our responsibility to find partners," says Celsius vice president for defence marketing development, Hans Palm. "We will work towards joint projects first and then perhaps talk about mergers."
The group also has a strong presence in the American market that includes its civil aircraft maintenance business, anti-tank missile sales, combat aircraft countermeasures and military bridges and because of its link-up with the Australian Submarine Corporation (ASC), the group also has a strong presence in the far east. It has built three of a six-boat order for Collins Class submarines for the Royal Australian Navy that are fitted with the revolutionary Sterling air-independent propulsion system. Celsius is also looking at increasing its 49 per cent stake in ASC.

In 1997 Kockums delivered the first of four upgraded ex-Swedish navy Sioormen-class submarines to Singapore to whom it has also sold mine countermeasure vessels.
Dr Tony Tan, Singapore's deputy prime minister and defence minister, visited Malmo for the launch of RSS Challenge'; the first submarine. "What impresses me most is the Swedish way of creating a strong defence founded on an extremely advanced technological approach in terms of defence strategy," he said. "The defence systems built up by Sweden over the years are among the best in the world."