Aerospace giants meet in Vietnam to discuss sales and security
This week, over 50 U.S. companies, including aerospace firms such as Lockheed Martin (LMT) and SpaceX, are visiting Vietnam to discuss investment and sales opportunities in the country.
The gathering is part of an annual trip put on by the US-ASEAN Business Council, an advocacy group for U.S. corporations operating in 10 Southeast Asian countries including Vietnam.
Andrew Chanin, the founder and CEO of ProcureAM, a parent company for exchange-traded products (ETPs), says the event signifies an important trend in the aerospace industry as the war in Ukraine looms and sanctions abound.
“We've already seen the space race developing before our eyes, and it happened well before the Ukrainian invasion, and is ramping up even more since,” Chanin recently told Yahoo Finance. (Video Above)
Many countries, including the United States, have curtailed business operations with Russia after its invasion of Ukraine a little over a year ago. For instance, over 1,000 companies have ceased operations in the country, according to the Yale School for Management.
Chanin cited Vietnam as an example of how tricky international deals have become since the Ukraine war began. On one hand, Vietnam has heavily relied on Russia in the past for arms sales. On the other, Vietnam offers promising business opportunities for the U.S. and others – its economy grew 8% last year, according to The World Bank. Ultimately, Chanin argued that the United States should engage with Vietnam and other countries amid global tensions with countries like Russia and China.
“Right now we're seeing countries scrambling to shore up allies around the world. And the U.S. can't just sit by and allow allies or would-be allies to cozy up with potential adversarial nations,” Chanin said.
Chanin contended international cooperation is particularly important when it comes to the space industry, which he says has depended on collaboration between countries in the past. He cited the International Space Station, a spacecraft and scientific laboratory that orbits Earth and is operated by several countries including U.S., Russia, Canada, Japan, and European Space Agency nations.
“And so to completely raise walls and shut off communication in this industry, would potentially be a long-term negative, you know, for what could this industry become,” said Chanin.
During the Vietnam trip, executives from aerospace companies will meet with state-owned Vietnamese defense companies, according to reporting by Reuters. In a statement to CNN, Boeing said it would be meeting with government officials to explore “ways to strengthen the country’s aviation and defense capabilities.”
Chanin also said international partnerships could be “great boons for this entire space industry." He runs an ETF called UFO with holdings including Boeing and Lockheed Martin. It also includes launch companies like Rocket Lab (RKLB) and satellite manufacturers and operators like MaxarTechnologies (MAXR).
“There are many companies that are generating real revenues in space today. Many people focus on more of the further out exploration ideas or asteroid mining or colonizing of planets.” Chanin said. “But there are many real companies today. And UFO gives investors exposure to almost 40 publicly traded companies from around the world specializing all in different areas of the space economy.”
The war in Ukraine has underscored the significance of the aerospace industry to national security. For instance, Ukrainian forces have relied heavily on Starlink, a satellite constellation built by SpaceX, for internet connection and military operations.
Chanin said that the Ukraine and Russia conflict has helped increase interest in the aerospace industry and its role in national security.
“We are seeing a huge interest in space spending and contracting from the US government, the DOD and military, as well as foreign nations as well,” Chanin stated. “So if Ukraine and Russia was a wake up call for anything, it was that space is now more critical than it ever has been for our nation, for the globe.”
Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.
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