CybAero Wins Contract to Supply Unmanned Helicopters to China

By Caroline Rees / 02 Jul 2014
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CybAeroFirst North-listed CybAero, which develops and sells unmanned helicopters, has received an order guarantee worth SEK 700-800 million through an eight-year framework agreement. The order has been placed by a company in the Chinese AVIC group, one of the world’s largest companies which develops and manufactures aircraft and various types of flying vehicles and has over 400,000 employees. The order is dependent on an export permit being issued by the Swedish Agency for Non-Proliferation and Export Controls (ISP).

The order is linked to a framework agreement, through which AVIC has committed to purchasing at least 20 helicopter systems during the first three years and at least a further 50 systems during the following five years. This gives a total order value of SEK 700-800 million, depending on the final design of the systems. Each system includes helicopters, ground stations and data links. The agreement also covers training and support.

“This represents a breakthrough in the market for the civil application of unmanned helicopters. Our goal is to become the global market leader with at least 30 percent of the global market. Through this order, which is our biggest to date, we’ve taken a significant step towards achieving this goal,” says Mikael Hult, CybAero’s CEO.

To be used by customs, coastguard services and agriculture CybAero will establish a joint company with AVIC in order to gain access to its volumes and production expertise. In the long-term, the company may carry out some production locally in China for the Asiatic market. CybAero expects to achieve economies of scale through the joint company, which among other things will result in the further streamlining of operations and the potential to operate closer to the local Asiatic market.

Through the joint company, AVIC will entirely target the civil and commercial markets, e.g. customs and coastguard services, the energy sector, agriculture, mapping and rescue services, etc.

“The order is the largest ever anywhere in the world in the product segment within which CybAero operates, i.e. vertical take-off and landing unmanned aerial vehicles weighing less than 200kg. This order will be worth nearly SEK 100 million a year if we can turn out the orders over the eight years covered by the agreement. This will provide a stable basis for our entire business for many years to come,” says Mikael Hult, and continues:

“A condition of the order for AVIC is the granting of a permit by the Swedish Agency for Non-Proliferation and Export Controls, but we don’t anticipate there being any problem with this at present. We received an order from the Chinese customs authorities in January worth SEK 50 million, and we have been granted an export permit for this order, which is more complex and technologically advanced. The equipment for which we have now received an order is part of our standard system,” says Mikael Hult.

The agreement and order will not give rise to any further financing requirements for CybAero. Payments will be made by AVIC on an ongoing basis as deliveries take place.

CybAero, which is based in Linköping, has already doubled its workforce from 20 to 40 people and plans to take on more employees. The company is also currently increasing its production capacity, partly through its own production facilities and partly through subcontractors.

“The agreement further demonstrates that Linköping and Sweden are at the forefront of the development and production of unmanned vehicles,” says Mikael Hult.

CybAero’s unmanned helicopters have attracted global attention because they are easy to maintain, robust and cost-effective. They have a range of 20 miles and a flying time of up to six hours.

“The Chinese market has huge potential, and we’re convinced that this agreement will generate further business,” says Claes Drougge, chairman of the company’s board, who has participated very actively in the negotiations and helped to bring about the agreement.

Posted by Caroline Rees Caroline co-founded Unmanned Systems Technology and has been at the forefront of the business ever since. With a Masters Degree in marketing Caroline has her finger on the pulse of all things unmanned and is committed to showcasing the very latest in unmanned technical innovation. Connect & Contact