By Giulia Segreti
ROME (Reuters) - Italy's aerospace conglomerate Leonardo is preparing to invest in space as one of the pillars of its new industrial strategy, aiming to tap into a buoyant global defence market.
"Space is fundamental for defence and security in the future, both in terms of satellites and in terms of services," Chief Executive Roberto Cingolani told reporters at a recent press briefing.
Cingolani, a minister in the previous Italian government, said more private and public investment in the space sector was needed to develop defence systems and secure communications.
State-controlled Leonardo manufactures satellites, orbiting infrastructure and sensors, as well as managing satellite services and propulsion and launching systems.
There is plenty of room for growth as space generated just under 4% of Leonardo's full year core profit in 2023.
"For the first time the space industry will be an important chapter in the company's business plan," the company's Chief Space Business Officer Franco Ongaro told reporters on Monday, ahead of the presentation of the plan on March 12.
Morgan Stanley (NYSE:MS) estimates the global space industry will generate revenue of more than $1 trillion or more in 2040, up from around $350 billion in 2020.
Italy's Industry Minister Adolfo Urso said on Monday that space was fundamental for the development of the economy.
He said parliament would approve by the summer a national framework law to regulate the fast expanding space economy sector and that the government had earmarked 320 million euros ($347 million) for the next two years.
Ongaro said Leonardo's space businesses would include partnerships and manufacturing.
Leonardo has teamed up with France's Thales through two separate joint ventures, satellite services company Telespazio and space manufacturer Thales Alenia Space.
In February the Ministry of Defence asked Leonardo to study the development of its military space cloud architecture project, the first in Europe.
Earlier this week, Telespazio's Fucino space centre in central Italy was assigned the role of the main control site for the IRIS² EU satellite constellation.
Leonardo has also recently reviewed its space alliance agreement with Thales, allowing it to fully consolidate Telespazio from 2024.
Like its aerospace and defence peers, Leonardo has been benefiting from rising geopolitical tensions and boosted military budgets, with its shares up 90% in the last year.
($1 = 0.9209 euros)