Small defence companies gain ground

France’s Ministry of the Armed Forces published its Yearbook of Defence Statistics on 18 October, which includes a mountain of interesting data, especially concerning the defence industry sector. Published by the Economic Defence Observatory, the report reveals that in 2016 the Ministry of the Armed Forces paid €18.2bn to its suppliers, a 1.8% rise compared to last year.

(photo credit: DGA Comm)

The overwhelming majority of this, €14.1bn, went to French companies, even if this was down 1.9% over the previous 12-month period. With the proportion allocated to large and mid-size companies falling respectively by 3% and 5.3%, the “big” winners are micro-enterprises and SMEs*. Purchases from them were respectively increased by €58m and €70m to reach €412m and €1.5bn in 2016. An impressive increase of 16.3% for micro-enterprises and 4.8% for SMEs.

Supported by the many financial levers proposed by the DGA procurement agency, in particular the RAPID system, SMEs and micro-enterprises are gaining ground in the French industrial base. These SMEs and micro-enterprises alone accounted for almost 84% of the suppliers to the French armed forces and 57% of the 859 companies exporting military equipment in 2016.

This trend will only strengthen in the coming years, the Minister of the Armed Forces Florence Parly having announced on August 29 the launch of a new €50m investment fund for SMEs. This fund, initiated in partnership with BpiFrance “will allow the state to buy into the capital of some of our technological nuggets, support them in their governance and their ambitions,” Parly said at the time.

More good news, finally, for French companies: delays in payments made by the Ministry are decreasing from year to year to reach “only” 23.9 days on average in 2016, and 22.9 days to SMEs.

 

* Small and medium enterprises