Avio off to a good start: work begins on the US plant

(Il Sole 24 Ore Radiocor) - Another session of buying for Avio which, following the ‘buy’ recommendation issued the day before by Equita, is reacting to the news that construction is set to begin on its first production plant in the United States. The plant in Hurt, Virginia, will aim to produce thousands of solid-propellant engines each year for US tactical missile programmes (including those for Lockheed Martin and Raytheon). Avio has announced that construction is expected to be completed by 2028 and production is set to begin in early 2029.

“The presence at the event of representatives from the two main prospective US customers confirms their commitment and interest,” say analysts at Equita. Tim Cahill, president of Lockheed Martin Missiles Fire Control, said: “This new facility represents a significant step towards a more robust and diversified supply chain for solid-propellant motors. Lockheed Martin is actively collaborating with Avio USA to expand this vital resource for the benefit of the entire defence industrial base.” Bob Butz, Senior Vice President of Operations at Raytheon, stated: “This facility expands the national production capacity for solid-propellant motors, which is essential for strengthening national readiness.”

Analysts at Intermonte (who have a ‘outperform’ rating on Avio at €39) said that the news confirms that ‘the expansion project in the United States is proceeding according to plan and represents a further step in the execution of the group’s international growth strategy’. Intermonte notes that its forecasts assume production for US customers will commence in 2028, initially utilising production capacity in Italia, whilst the new US plant is expected to gradually reach full capacity in the following years.