Turbines to tailoring: Rolls-Royce and Prada cash in on exports

The engineering firm has made a $650m deal with Brazilian firm Petrobras. Gold star to Rolls-Royce.

by Emma Haslett
Last Updated: 06 Nov 2012
Amid all the stresses and strains of the public sector strike, a bit of good news for Messrs Cameron and Osborne, who have both been keen to impress their commitment to persuading companies to export (not least during yesterday’s Autumn Statement, when they promised export help for an extra 25,000 SMEs and mid-cap firms). Rolls-Royce, in many ways the UK’s flagship engineering firm, has signed a deal worth $650m  (£418m) with Brazilian state oil firm Petrobras to supply it with offshore mining equipment. Good work.

Under the deal, Rolls-Royce will send 32 gas turbine power generation packages, including waste-heat recovery units, out to South America, which will eventually help to power eight production storage and offloading vessels in Santos Basin, just off the coast of Brazil.

Clearly, the firm sees a bright future in Brazil, one of the fastest-growing developing economies in the world. Back in February, it announced plans to open a $100m gas turbine assembly and test facility in Rio de Janeiro. So expect a lot more RR/Brazil announcements in the future. That should keep the Government happy.

Meanwhile, at the other end of the glamour scale, Prada has also spent the past few months quietly cashing in on its popularity in emerging markets. In the three months to the end of October, net profits for the Italian fashion house jumped by three-quarters on the same period the year before, to €273m (£234m). Sales at the group, which also owns Miu Miu, Church’s and Car Shoe, increased by a positively trendy 25%, to €1.73bn.

Like other high-end fashion brands, there’s been a huge upsurge in demand for Prada products in emerging markets – specifically, China and India, where the newly-minted middle classes have plenty of cash to flash. Thus, Prada said sales in the Asia-Pacific region had increased by 39% to €580m – although, as a statement pointed out, ‘all geographical areas recorded growth rates in double figures’.

So a couple of positive messages there for European firms whose sales have been hit hard by the crisis in the eurozone. Although operating in the emerging markets can be a tricky business, boosting our exports to Asia would certainly help the economy about now…

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