Streit Group Chairman outlines his exciting vision for the future
Posted: 05/07/2012 12:00:00 AM EDT
It’s been an important few weeks for Canada-based Streit Group as the armoured vehicle manufacturer cemented its place at the top of the food chain in one region, while expanding into another. Guerman Goutorov, the Chairman of Streit Group, talked exclusively with Defence IQ about the company’s vision for the future after opening a new facility in Ras Al Khaimah (RAK) and announcing the establishment of a UK office.
“Previously we haven’t paid much attention to the UK,” Goutorov began telling me, “but now we’d like to bring our expertise to the UK and European market.
“We have 5,000 vehicles in Iraq and 2,500 in Afghanistan …our vehicles get tested daily, not just in the lab or a test range but in the real world.”
Goutorov knows that Europe is a large and important market – he called it “complex and sophisticated” – so setting up a UK office, while only with an initial staff of three, represents another big step in the company’s march for rapid, global growth.
"We see the opening of a London office as an important stepping stone which gives us an invaluable face-to-face presence in the UK and European marketplace,” Goutorov said. “Now we will be able to more readily discuss the requirements of prospective customers locally and also, crucially, gain a better understanding of the trends in what we see as a pivotal region for future expansion.”
This learning aspect is critical for Streit’s Chairman and owner. While the company is well established with six production plants around the globe, it is yet to gain significant traction in Europe, and particularly in military circles.
“The expectations and standards in Europe are much higher than everywhere else … on the military side we need to learn more about the requirements.”
Goutorov explained that currently around 80% of the vehicles it produces are for the commercial sector and 20% for the military. But this is a statistic the Chairman is keen to begin reversing.
“We’re about 80% commercial and 20% military at the moment but projections for next year are moving towards a 70:30 split, and we’ll continue to move more in that direction,” he said.
This focus on the military market is one of the driving factors behind Streit’s move into the UK. I asked if the company was likely to open any other offices in Europe or perhaps even wider afield, but Goutorov was keen to press the importance of winning business in the UK.
“We’re looking at Europe in general – so specifically Germany, France and Belgium – but if you’re in the UK then I think you’ve already got Europe quite well covered … when you have a reference from the UK military it’s very beneficial and is a mark of quality.”
Don’t be fooled; while only a few people will work out of the UK office to begin with, the decision to set up shop in London represents a significant step forward for Streit and its vision for the future. It effectively marks the beginning of a new era for Goutorov as he eyes the military market.
Discussing military requirements, Goutorov said the company is working on 6 x 6 and 8 x 8 armoured vehicle variants. In June he said a 7 tonne multi-purpose vehicle designed for six person occupancy will be unveiled at the Eurosatory exhibition in Paris. He explained that the vehicle, called Scorpion, will be protected against STANAG Level 4 blast, which is equivalent to a 10kg explosive charge under the wheel and belly.
On the opening of a UK office, Goutorov went on to say:
“We believe we are well equipped to deliver armouring on a par with, if not beyond, traditional suppliers thanks to our field-proven experience in major conflict zones, extensive R&D base, while maintaining an extremely competitive price point. Given the scale of the capabilities that Streit Group now has in place worldwide, with the recent opening of our largest facility yet in the United Arab Emirates, which ramps up production capacity to an unprecedented level of 520 vehicles per month, we are geared up to rapidly fulfil orders for potential European buyers, whatever their specific requirements."
While the UK opening is important in terms of what it symbolises for the company’s future, the opening of a new facility in RAK is a more tangible milestone and, according to a press release, “is by far and away Streit's most significant in its 20 year history.”
At a cost of $21.8 million, the 1.4 million sq foot facility is now the largest armoured vehicle manufacturing space in the world. And that’s only after Phase 1 of the project has been completed. By 2014 the company will complete a further two phases with another $32.7 million investment.
At the opening ceremony earlier this month, which was presided over by His Highness Sheikh Saud Bin Saqr Al Qasimi, Member of the UAE Supreme Council and the Ruler of Ras Al Khaimah, Goutorov said: “Immediately the new factory gives us the potential to support 40 vehicle types from concept to completion – all the way from the input of steel sheets to the finished product – which links in with our drive for engineering excellence.”
Asked why he decided to build the factory in the UAE, the Chairman simply said it made sense logistically, economically, and perhaps most importantly, geographically.
“The UAE is a very well located country geographically … you have access to Asia, Africa, Europe and the other Middle East countries … you’re connected to all the world.”
Goutorov said it’s not always easy doing business in the UAE – the surrounding region is politically unstable and, since it’s only a young country, the regulation of processes such as import/export rules can be frustratingly unpredictable – but the Chairman is in little doubt the UAE is the right place to be the central hub for Streit’s global ambitions.
Phase 3 of the project in RAK will essentially see the facility become an armoured vehicle “compound” and international distribution centre. The plan is to bring in component manufacturers – those producing run-flat tyres, composite armour, seats, ballistic glass, etc. – to work from dedicated facilities inside the Streit compound.
“For Phase 3 we will bring in other suppliers,” Goutorov explained. “[The facility in RAK] will become a park, a compound … we’ll save money on logistics and will work with other companies on a JV or partnership basis.”
It’s a compelling vision and one that could make Streit the go-to company for armoured vehicles in the future. Historically this market has been rigid and slow to react; with the new facility in RAK Goutorov is confident that Streit can bring a level of flexibility and efficiency to customers that has been previously lacking.
I’ve yet to establish if it’s Streit pronounced ‘S-treet’ or Streit pronounced ‘S-trate’. Next time I’m sitting down with Mr Goutorov I’ll ask; with his ambitions to push the company into the military space and continue expanding globally, there’s bound to be a next time.
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