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Sources say Safran chooses France for major investment over Canada and the US

Two people with knowledge of the matter say that the French aerospace company Safran will choose France to house a new carbon brakes factory worth 400 million euros ($458,48 million). This follows a competition between France, the United States, and Canada.

People who asked not to be identified said that the politically sensitive decision could be made as soon as Thursday. The decision is subject to the approval of the board of the aerospace supplier and has been overshadowed in part by the debate about energy prices.

Safran, the company that pioneered the use resilient carbon brakes in Formula 1 racing cars and aircraft, declined to comment.

Location of the fourth plant in France is under close scrutiny. President Emmanuel Macron, who has made reindustrialisation a priority political goal, is pushing Europe to increase investment there.

In 2019, the partially-state-owned French company plans to open a factory in Lyon, France’s third largest city, for energy-intensive brake production. This will join three existing plants already in France, Kentucky, and Malaysia.

COVID-19 AND SOARING Energy Prices

In 2020, the COVID-19 pandemic stymied the idea. And in 2022 plans to renew the project in order to capitalize on a rise in air travel were delayed for 18-24 more months due to the escalating energy prices in Europe following Russia's invasion in Ukraine.

Safran said that it would consider three main criteria, including competitive energy prices and stable and clean supply based on nuclear and hydraulic power. It will also look at a 10-year price visibility.

In December last year, Olivier Andries, the CEO of a major French company, also mentioned criteria such as "economic and political stability".

He said that France was his company's top choice, but that the abundant hydroelectric power in Quebec and Oregon's regulated prices for energy were also attractive options.

Sources said that the race eventually narrowed to France and Canada.

Carbon brakes last longer and are lighter than traditional brakes, but they require a large capital investment to build large industrial facilities. These large facilities consume a lot of gas (from which the carbon can be extracted) and electricity for large ovens.

Electricity can account for up to 40% of costs. Industry sources claim that Safran and the French state EDF had fought in the past over the availability of supplies at affordable prices. However, tensions have eased since the recent change of management at EDF.

Safran's brakes unit competes against RTX, a Collins Aerospace subsidiary, for airline contracts. Both suppliers are able to benefit from the high margins of aftermarket repairs, as brakes undergo regular refurbishment after heavy usage.

Safran has a unit that specializes in carbon brakes, which are used for Formula 1 cars. McLaren entered the sport with Safran in 1984.

(source: Reuters)