Tag Archives: Norinco

September 2, 2024 · 14:42

A secondary marker

This is about markers and my speculation on them. I would go towards presumption, but in this instance might have the folly thought that these markets haven’t evolved since 1982 and that would indeed be folly. Still, an article in the South China Morning Post aka SCMP (at https://www.scmp.com/economy/china-economy/article/3276753/saudi-arabia-seeks-chinese-tech-it-reinvents-itself-car-and-automation-hub) where we see ‘Saudi Arabia seeks Chinese tech as it reinvents itself as car and automation hub’ and this goes against Trumpism to seek 60% tariff on Chinese imports. Well, China has its own solution to this. As we are given “Saudi industry and mineral resources minister Bandar Alkhorayef is leading a delegation to visit Guangzhou, Hong Kong and Singapore from Sunday until September 8, according to a statement from his office. The trip is aimed at improving relations and exploring joint venture opportunities.”

The setting is given, but it doesn’t seem all is given (as one could accept). You see I got news (slightly unreliable) that there was a trade show recently where China had given a presentation to Arabic parties. This seems perfectly normal, the fact that Norinco is part of that seems normal enough, its a defence contractor dream and they are all hungry for Arabic dineros (aka digital currency). The parts that we do not see here is that this Chinese tech is a lot more versatile, or better stated far reaching. It implies that the tech allows Saudi Arabia to manufacture Tiger armoured vehicles with a deployment to the customers in Oman, Bahrain and Egypt to name just three. Saudi Arabia is fulfilling its promise to cater to internal manufacturing their defence needs and gain customers at the same time. As such Trumps goals are missed completely as well as losing out their own industry towards export. See how all these blocks of censorship come tumbling down? And as we take notice that Chinese is no good. Feast your eyes on this “China lacks the necessary international standards to be considered a reliable producer of foolproof weaponry” according to Euclides Tapia, professor of International Relations at the University of Panama. Yet the thing to remember is that the setting of “necessary international standards” is not clearly given and a standard that is filtered to who can be given those reminds me of the SAS standard in the 90’s ‘SAS stamp of quality’ which SAS products got. A little one sided. Still no matter what these ‘standards’ are, America, UK and the EU nations are missing out on another set of billions to the degree that now Saudi Arabia is also becoming a manufacturing party. As such the Americans woke up to a hungry tiger. With allegedly Huawei scoring the option of communication systems deployed all over Saudi Arabia both civilian and military (still unverified) we see a better relationship between Saudi Arabia and China with several middle easters nations now following suit. I reckon that Egypt is the first and most likely player to get on board with that express line. Norinco seemingly had a net income of $1.7B in 2023 with a little over $80B revenue.

I reckon that they are hungry for more revenue, especially as in increases their net revenue and as I see it, the Saudi link get them there fast. Is it wishful thinking? Is it presumption or speculation? All great questions and yes, there is a speculative side to this. Now consider that you have a car plant, would it be such a stretch to build a second one to get the orders for the Tiger armoured vehicles? I don’t think so, especially when we consider the 2030 promise to get 50% of the defence spending in country (as was given to us 2 years ago). That one thing will not get them there, but there is more coming and this is a whopper of a delivery towards their 2030 goal.

As such there are things that need verification, or we could wait until these plants become a reality in an expected 2026 stage. So what do you think? I believe that Chinese commerce will find a way to thrive and the Trump setting made is much easier as well as make things harder for Europe. This is the consequence of arrogance when you do not have the cash to back up your actions and America and western Europe are about to learn just how much they lose out of (as per 2026/2027). So how will Norinco stock fare when this gets released?

Have a great day.

At the start of round two

I have stated more than one that America has a problem, it has a few, yet this was about defence spending and others aren’t spending it on American soil. I have been called crazy, cranky and delusional (no idea where the cranky part came from). Anyway, today I see that Saudi Arabia has a MoU (Memorandum of Understanding) with Leonardo defence.

From one source I am getting “The Ministry of Investment (MISA) of the Kingdom of Saudi Arabia, the General Authority for Military Industries (GAMI) of the Kingdom and Leonardo announced yesterday the signing of a Memorandum of Understanding (MoU) with the intention to discuss, develop and evaluate a range of investment and collaboration opportunities in the defence and aerospace sector.” Some will say ‘so what?’ and until recently I would have agreed. I never heard of them, that doesn’t mean anything, but when you consider that the amount (unverified) is rumoured to be around a billion dollars, the case starts to give a different stage. China is taking a massive slice, Germany and the UK are on the pie hunting side and now Italy takes a billion too. This means that the pie that America one had, what is left is a lot smaller and a lot less impressive (for America that is).

So the pie that was overwhelmingly America (Raytheon, Northrop and a few others) is now set to at least four additional players and even as we do not know the slice of China, there has been a few indicators (unverified) that it amounts to billions. As I personally see it, this is the result of biting the hand that feeds you and I never saw any clear evidence of what happened to that columnist no one cares about. That is the larger station. In addition to this, one source gives us ‘Fifteen Spanish companies compete for a slice of Saudi Arabia’s military pie’. There is no way to see how far they get and the defence market that is going on right now has 700 arms manufacturers trying to get a slice of $71,000,000,000. It is anyones guess how much is left after China gets its slice. All indicators give me that they are succeeding, in least in part, in securing that revenue and that is revenue that is lost to America. I feel certain that players like Raytheon will get a slice, but as far as I can tell it is rumoured to be the smallest slice they have gotten in a decade.

And a lot of this could have been prevented, but feel free to think that my delusion.

I wonder what news we will see next week when the trade fair is over. Yet I feel that a few European firms will be happy on what they were able to achieve. The largest setting That I expect at some point is that FN Herstal and/or the Herstal Group will place facilities in Saudi Arabia to see the setting that Saudi Arabia has advocated for close to 3 years to have 50% to be produced nationally. I reckon that FN Herstal/Herstal Group might reconsider that setting and move some of that to Saudi Arabia, not only for the slice of pie, but as part of Brics their dance-book will open up to several players. There is no data showing this to happen, it is pure speculation but that move makes sense to me. You see if FN Herstal doesn’t China and their AVIC, CASC, CETC, CASIC, CSSC, CSGC could get a lot more revenue. Norinco is unlikely to make that cut as it has been a really bad boy, but that could be my personal view on the matter.

Enjoy the day.

Egg timer? What egg timer?

Yes, we get that. There are egg timers that give us what we were waiting for. I stated on November 17th (12 days ago) “A complete overhaul was the only option and now with BRICS and China pushing in on the little revenue they had left, they have no options now and their competitors are moving in on whatever revenue they had left.” I said so in ‘It’s that time again’ (at https://lawlordtobe.com/2023/11/17/its-that-time-again/) Now Politico gives us ‘Brussels wants to beat the Pentagon at its own game on arms sales’ (at https://www.politico.eu/article/european-union-weapons-sales-united-states-defense/) there we see “The European Commission is hinting at a new mechanism similar to the US Foreign Military Sales to facilitate arms exports”, well that didn’t take long, did it? So when we see “In order to claw back the initiative, the European Commission is raising the prospect of copying the U.S. Foreign Military Sales (FMS) scheme” we see one thing, but I think it is more about stopping the Chinese sales system of becoming too successful. I fear it might be a little too late for that. There is every indication that China is almost ready to the defence needs of Saudi Arabia and the United Arab Emirates. Too little, too late and as I see it, a little over two years too late. I reckon they ill soon be fishing on the wrong side of the net. So whilst we are now given “In early 2024, Internal Market Commissioner Thierry Breton is expected to present a European Defence Industrial Strategy to help support the Continent’s European Defence Technological and Industrial Base (EDTIB). The consultation document is one of five papers circulated to national delegations to get their views on what the strategy should look like.” You see several reports are out there in the trend of “Riyadh eyes air defence systems and drones as part of possible yuan-based deal while Cairo plans to buy J-10C fighter jets”, so whilst the Europeans are trying to figure out “how to go about it” Saudi Arabia and Egypt are at this point getting catered to by China. As such we see that the China North Industries Group Corporation Limited (NORINCO) is actively talking to the Saudi Arabian Military Industries (SAMI), who is interested in diversifying.

So that is billions missed, just as I predicted almost two years ago. Now that it is happening, some are ‘reporting’ all whilst whatever intension Europe has with “on what the strategy should look like”, Beijing is not merely getting its feet wet, it is catering to a new clientele and China is hungry for that revenue. So when was the last time you left billions on the floor? As I personally see it Amazon did so a year ago (but they have plenty of cash), the US government does not, it has a debt of $31,000,000,000,000 as such every billion lost is another carve on the debt stick and the next shutdown is expected to be around January 19th 2024 if they cannot agree on a new continuing resolution a lot will fall away. That was a given, but with Europe now tying to get defence money, giving the US less and already China is in the mix (has been for months) with Saudi Arabia, Egypt and they are expected to score some revenue from the United Arab Emirates as well, this upcoming CR will be missing a few revenue posts and not much is needed to make it all fall over. The larger setting is not merely defence, the UAE will (according to one source) be looking at ships as well. As such there is every chance that the China Shipbuilding Industry Corporation (CSIC) could be up for some UAE coast guard ships. As I understand it, it has something to do with the Abu Dhabi Ship Building Co (ADSB). So is it mere consultancy? Ships design? I honestly do not know, but what does matter is that they used to have an American fleet, now as that falls away a lot more revenue will be missed by American companies.

All this and the larger setting isn’t merely what Politico tells you, it is the second degree that the Saudi and Egyptian deals open the doors for. I think that Bangladesh is next on the Chinese sights. China has a two sided tactic, gain revenue and stop America from getting revenue. It is the same setting we saw with Evergreen in 1989. Yung-Fa Chang played his hand brilliantly, a setting where players like Nedlloyd had close to complete control was lost in less than 5 years to Evergreen. I reckon that we get a similar kind of play towards the larger naval needs of Bangladesh and Indonesia. After that there will not be much left for America. They already broke their own windows with their ‘elite’ approach towards the F-22 Raptor. I am not criticising this. It was the demand of the US to keep sole custody of that dinky toy. Yet now Chengdu has several nations vying for their J-20 and with the range options, that is a thing coveted by many defence forces all over the globe and there Saudi Arabia, UAE and optionally Egypt and Indonesia as well is a setting of several billions right of the bat, and I expect that the USA cannot counter those odds on revenue. Yet there are a few options for Europe as well. If they push their agenda Chengdu will have to compete with the Eurofighter Typhoon. I have no idea who will win that revenue race, but Europe better be moving fast, the early bird that hesitates becomes worm food. As for the technical side, I am not a pilot. Yet in all this the Evergreen approach comes to mind, so America and Europe are quickly running out of time and Europe’s voiced response of “on what the strategy should look like” sounded nice in 2021, but not now. It’s crunch time for them at this point.

Enjoy your day today.

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Tagged as Abu Dhabi Ship Building Co, ADSB, America, Bangladesh, Chengdu, China North Industries Group Corporation Limited, China Shipbuilding Industry Corporation, CSIC, EDTIB, Egypt, Evergreen, F22, FMS, Indonesia, J-20, military, Norinco, Raptor, SAMI, Saudi Arabia, Thierry Breton, U.S. Foreign Military Sales, UAE, USA, Yung-Fa Chang

August 8, 2020 · 02:51

Business lost, options lost

There is no denying it, at times people take decisions, and when that happens others get to live with the consequences. This is how it has always been, it is a simple truth. Yet, when was the last time you had to live with the ethical believes of others, all whilst they refuse to demand the same on the other side of the coin?

Consider the headline ‘Belgium suspends arms exports to Saudi national guard’, I get it, it is a choice, so when we see “the southern Belgian region of Wallonia halted weapons sales to Saudi Arabia’s defence ministry and air force over concerns about the conduct of its war in Yemen”, I cannot say one way or the other, yet so far NO ONE has held Iran to any level of standards, and the same was not demanded from the Houthi forces. That part is a first in understanding just how stupid the action was. Now, we need to understand that human rights groups have their own ideology and that is fine. So as there is now an increased danger that $2-$4 billion in small arms over the next 5 years will now end in the coffers of either Russia or China, one had to wonder how the US (at minus 25 trillion) or Europe (at minus 14 trillion) will live with losing billions in revenue and handing it over to China and/or Russia. Let’s be clear I have nothing against human rights, yet this is a situation where the house is on fire and someone is telling you (not a fireman mind you) that only rainwater can be used to stop the fire, all whilst it is not raining, so how will that end? I have seen a whole range of actions, but the EU refuses to act against Iranian interference or Houthi inhumane actions, for the most the European media has taken all the efforts to keep it out of their publications as well. Even as Israel’s Hayom gives us ‘Iran sees disaster as opportunity to advance regional interests’, we might not react, but who will asks the questions that matters when we see “more than 84,000 children who have died of starvation in the bloody civil war in Yemen can teach us a basic lesson”, so when we compare that to the UN news which was given last month, and similar news for close to a year ‘Waiting to declare famine ‘will be too late for Yemenis on brink of starvation’’, so please explain to me how ‘on brink of starvation’ is staged in a situation where well over 84,000 children that died of starvation? How much more idiocy will we watch, empty actions from human rights groups so that we can sleep at night in a stage where it is already too late?

So not only are these people in denial, they are handing billion dollar industries over to China and/or Russia, so how does that sit with you? And let’s be clear, Belgium is not in the greatest economic situations. Yet, they have that right, and they are not doing anything illegal, it is merely silly on a few levels. So when the initial options are lost and the opportunities are lost to a group of nations that can ACTUALLY SPEND money, how intelligent are these people? The moral high ground is only interesting on a level playing field and it was never a level playing field. In this some may state that they would never work in the arms industry, but what happens when you are offered an instructor job on weapons? If you are unemployed, are you allowed the station of refusal? Consider that for a moment, working or unemployed? Is it such a bad call to teach a person how to properly handing a firearm? Is it illegal to be a data miner? An investment banker? What is the borderline where we decide on the events of others?

Where is the wisdom?

We seem to believe that we have the wisdom to make things better in Yemen and Syria, but the people who should have acted refused to do so and now human rights are making it impossible for issues to be resolved, so basically our believe in human rights killed 84,000 children of hunger. Have you considered that part in the equation? Until human right groups can deal with both sides of the equation, they are basically worthless, not achieving much of anything, so if they get baskets of Yum Cha or Black-bread and Vodka this Christmas, they know which government is thanking them for the billions of extra revenue in 2020 and 2021. You see, in this instance the house is on fire and there is no rain coming, so will you forfeit the house or will you safe what you can? In the end having principles are nice, but unless the others are on the same page, you are merely handing others money you could make to make things better and remember, as an economic partner the EU had some options of talks in Saudi Arabia, when that falls away they are merely speakers with intent to be useless it ends. So tell me, when was the last time ANY government made time for any person with the mere intent to be useless?

No matter who the need has, I was willing (and eager) to sell either the MP5, the Vityaz-SN （PP-19-01), or the Norinco NR08. Whatever the client wants, and if MP5 is pulling itself off the market, we should remember that there are 2 alternatives. I wonder how much thought the human right groups took that into consideration and when the money stops, their options stop as well. Sun Tsu learns us what battles to fight and which ones we should ignore, it is a basic setting in commerce as well. If certain people will not learn that lesson a lot faster there will not be a population in Yemen left.