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SAAB CEO says European defence firms can step up to meet

rising

EU demand

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Expansion will take time but is doable

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Politicians need to speed up order processes to facilitate

expansion

By Johan Ahlander

STOCKHOLM, March 6 (Reuters) - Europe's defence sector

has the capacity to meet rising demand for military equipment as

EU member states scramble to boost defences, the CEO of Swedish

defence company SAAB said on Thursday, but contract

talks needed to be sped up.

Europe is racing to boost military spending in a "sea

change" moment for the bloc as Washington threatens to pull back

aid. European Union leaders are set to discuss a proposal to

mobilise up to 800 billion euros ($840 billion) at an emergency

defence summit on Thursday.

That sparked a rally in the share prices of regional defence

companies, which have been bullish about their ability to ramp

up production, though cautioned this will take time and will

rely on governments turning rhetoric into solid contracts.

"We can do it, absolutely," SAAB CEO Micael Johansson told

Reuters, when asked if Europe's sector could step up in the wake

of Donald Trump's suspension of military aid to Ukraine, locked

in a years long war after its invasion by Russia.

"It's not done in a week or a month ... but I'm completely

convinced that it can be done."

While European defence firms are in a stage of rapid

expansion, the top five arms producing companies were all

American in 2023, according to the latest data from the

Stockholm International Peace Research Institute.

SAAB, which makes jets, submarines and anti-tank systems,

has seen its share price soar 60% this year. It competes with

defence giants such as U.S. firm Lockheed Martin ( LMT ),

France's Dassault and Britain's BAE Systems.

Johansson said concrete volumes and orders would need to be

discussed earlier during talks with national governments to give

firms confidence to expand. He added there remained bottlenecks

in supply chains for certain components and gunpowder.

"Then we can from an industry side start to take a little

more risk ... while we actually negotiate the contracts. That

needs to be a lot faster, that loop," he said.