Argentina plans to buy Embraer military transport planes

* Argentina is 6th country pledged to buy KC-390 plane

* Embraer expects deliveries as early as 2015

* Planes could be made in Argentina under accord

By Guillermo Parra-Bernal

SAO PAULO, Oct 29 (BestGrowthStock) – Argentina signed a letter of
intent to buy as many as six military transport planes built by
Brazilian aircraft maker Embraer, the sixth country that
pledged orders for the aircraft.

Argentina’s defense minister, Nilda Garre, and her
Brazilian counterpart, Nelson Jobim, signed the letter this
week, Embraer said in a statement. The accord includes plane
maker Fabrica Argentina de Aviones taking part in the
development of the KC-390 transport plane with Embraer.

The deal is the sixth in about three months for Embraer’s
defense unit after Brazil, Chile, Colombia, the Czech Republic
and Portugal entered contract talks. The plane is expected to
operate as early as 2015 and has a cargo capacity of 23.6
tonnes.

Embraer is seeking to diversify from making regional
aircraft into the production of executive and defense jets to
weather the worst market for commercial aviation in decades.
Countries like Brazil are stepping up defense spending to
protect their recent finds of oil and other natural resources
seen as strategic.

“This is a show of strong interest for the KC-390, which
makes it evident that this new product is adapting to the
requirements of the military transport industry,” Orlando Jose
Ferreira Neto, Embraer’s vice president for the defense
business segment, said in the statement.

With the Argentine deal, potential orders for the plane
rose to 60. Embraer will produce up to 180 cargo planes in the
first 10 years of operation of the program, and has said
potential demand could reach up to 700 units in the same
period.

The Sao Jose dos Campos, Brazil-based company derived 13
percent of its revenue in the third quarter from the defense
segment and 61 percent from commercial planes.

Voting shares of Embraer (EMBR3.SA: ) gained 1.7 percent to
12.05 reais in Sao Paulo, their highest level since Sept. 22.
American depositary receipts (ERJ.N: ) rose 2.7 percent to $28.89
in New York, the highest price since Oct. 11.

(Editing by Dave Zimmerman)

Argentina plans to buy Embraer military transport planes