You're watching special coverage of TVP World from Globsec Forum in Prague. With me today is Micael Johansson, the president and the CEO of Saab, one of the largest European defense companies. Sir, welcome to the show. So, I wanted to talk to you sir about a number of issues, but let me just start with something which has been most in the news recently, which is your defense deal with Ukraine for the production of 150 fighter jets. So that's obviously a very massive order, isn't it?
Yes. And that is a government-to-government discussion of course. So, and it's up to that number as you mentioned and we are supporting the Swedish government by ramping up our capacity to support them to deliver Gripen E/F fighters going forward. And I think that discussion is going really well. So, but it's no contract yet. But it's going really in the right direction and we are 100% supporting Ukraine to get the Gripen fighters into Ukraine. It will be fantastic capability for them.
Is it the largest deal in Saab's history?
If it would happen absolutely at that magnitude, but I'm sure it will be in batches over time, but of course it's a great potential for us. Yes. Okay. And who'd be paying for it? Well, it's a combination of course from, I mean, you know that Ukraine has been getting sort of this 90 billion now for two years from the European Union and European countries, and 60 billion of those 90 billion will be devoted to military investments of course. So portion will come from that and of course there must be support from Sweden and potentially other countries. So the funding is building up as we speak as I understand it. What about Russian frozen assets? Are they also foreseen as part of a payment for the deal? Honestly, I don't know that. That's sort of a political discussion to discuss that, but to my knowledge that's not been mentioned so far in the context of funding it. But of course, I mean that's an opportunity going forward, but I don't know actually on that.
So this 150, this is class E fighter jets, right? We're talking about fighters which are not in production yet at this point in time if I understand correctly.
The fighter is in production, but I mean it's going to be continuous production and ramp up in terms of capacity, delivering more every year, and I need to underline that this is up to 150 and it will be in batches of course over a period of time, but it's a great potential and of course we can manage to deliver those, and the Gripen is in production, so it's not a new development of an aircraft, absolutely not.
Before the contract is signed and everything is carried out, will there be some kind of a stopgap, something to, you know, provide Ukraine with some kind of capability at this point in time?
That is of course a question for the Swedish government, but I think that's sort of part of the plan to maybe support them with the existing version of the Gripen fighter, but that I cannot answer. I mean, that's the Swedish government decision to quickly get them some capability and then follow on with deliveries from us on the Gripen. And, but we will see, and that's sort of a setup that I think is being discussed, but I don't know how it will end up.
Okay. Well sir, I wanted to ask about Saab's capacity to actually produce that many fighter jets, because I understand that at this point in time and please correct me if I'm wrong here, but I think that you produce between 12 to 15 per annum.
Right around 15 per annum, yeah, but we're moving towards 30. Of course we have a hub in Sweden that we are expanding, we have a hub in Brazil that we are also expanding, and then of course we want to work with Ukrainian industry to make sure that we create sort of a support in the supply chain at least and do as much as possible with industry in Ukraine. So of course we can ramp this up to the levels they need per year if we finalize this contract. Do you think it's possible? Absolutely. Absolutely. I'm convinced it's possible.
So now part of the agreement, not agreement yet but of discussions, is that part of that order would be produced in Ukraine, right? Or at least some components to that.
Yeah, I mean that we were looking to do that of course to get the supply chain to work with us in Ukraine. It's not clear yet exactly whether it will be possible to do final assembly and test in Ukraine, but of course there will be industries in Ukraine involved in this. Definitely, that's as far as I can go right now in describing the setup.
And you think that Ukraine have, you know, there are companies in Ukraine who can do that?
