April 6 (Reuters) - Fire Point, maker of Ukraine's Flamingo cruise missile, is in talks with European companies to launch a new air defence system by next year, a senior executive told Reuters, creating a low-cost alternative to the increasingly hard-to-get Patriot system.
With governments seeking to defend their skies as the wars in Ukraine and Iran sow global instability, Fire Point's co-founder and chief designer Denys Shtilierman said it aimed to slash the cost of intercepting a ballistic missile to below $1 million.
Shtilierman also said Fire Point was awaiting government approval for an investment by a Middle Eastern conglomerate that valued the company at $2.5 billion and would open the door to new business opportunities, including low-orbit satellite launches.
Years of know-how gained on the battlefield fighting Russian forces have made Ukraine a leading innovator in low-cost defence tech. With the outbreak of war in the Gulf, Kyiv has leveraged that expertise to sign security agreements with governments across the region.
Many Ukrainian defence firms are now seeking to export their excess capacity and cash in on a global boom in military spending. While the government recently loosened wartime export restrictions, each proposed deal is still subject to stringent checks and state approval.
DEVELOPING AN ALTERNATIVE TO THE PATRIOT SYSTEM
Ukraine and many other Western-allied nations rely heavily on the U.S.-made Patriot system to stop ballistic missiles.
But Patriot missiles are in increasingly short supply amid extensive deployment in the Gulf against Iranian attacks.And Europe's only anti-ballistic system, the Italo-French SAMP/T, is produced in relatively small numbers.
To bring down a ballistic projectile, the Patriot system - manufactured by Raytheon and Lockheed Martin - often requires two or three air defence missiles, each costing several million dollars, Shtilierman said.
"If we can decrease it to less than $1 million, it will be ... a game changer in air defence solutions," he said in an interview. "We plan to intercept the first ballistic missile at the end of 2027."
Shtilierman declined to name the European companies involved in the discussions to develop the new system but said Fire Point is "deeply interested" in collaboration on radar, missile target-seeking and communications systems - areas where it lacks expertise.
European companies including Weibel, Hensoldt, SAAB and Thales have good radar solutions, he noted.
Founded after Moscow's 2022 invasion, Fire Point is Ukraine's biggest maker of the long-range drones used in the majority of strikes deep inside Russia.
In recent months, its FP5 long-range cruise missile - commonly known as the Flamingo - has also been used to hit Russian military facilities and arms factories, including a ballistic missile plant nearly 1,400 km (870 miles) inside Russian territory.
Shtilierman said Fire Point was now in the final stages of developing two supersonic ballistic missiles.
The smaller FP-7 missile, with a range of around 300 km, will have its first military deployment "in the close future", he said, describing it as similar to Lockheed Martin's ATACMS short-range ballistic system.
The larger FP-9, capable of carrying an 800 kg warhead up to 850 km, is about to enter testing and would place Moscow within range of Ukraine's ballistic arsenal, he added.
Shtilierman said strikes on Moscow, which is ringed by some of the world's most formidable air defences, would cause a "mass shift in the Russian mind and the mind of top guys in Russia."
Russia's defence ministry did not respond to a request for comment.
Fabian Hoffmann, a missile expert and senior researcher at the Norwegian Defence University College, said that, while Russia has experience in successfully downing ATACMS, more widespread use of ballistic missiles could stretch Russian air defences, already degraded by Ukrainian strikes.
And while Fire Point's 2027 target for launching a low-cost air defence system was "ambitious", he said that, beyond Ukraine's own military needs, there would be strong demand from governments even if its kill rates per missile were less effective than the Patriot's.
UAE INVESTMENT COULD START SATELLITE VENTURE
Ukraine's anti-monopoly authority has until around October to decide on the proposed $760-million acquisition of a 30% stake in Fire Point by the Middle Eastern investor, Shtilierman said.
Ukrainian media have identified the suitor as Emirati defence firm Edge Group. Edge Group and Ukraine's anti-monopoly authorities did not respond to a request for comment.
The investment would be the first step in a project to build a space launch terminal in the UAE, with the aim of eventually establishing a constellation of low-orbit European satellites. Shtilierman said the country's location next to the Indian Ocean and geographical conditions were favourable for space launches.
"We built a carbon winding machine, which allows us to wind a big solid rocket booster for satellite delivery," he said, noting the project remained at the conceptual stage although there were already agreements "with a couple of Western companies".
Regardless of whether the UAE deal proceeds, Shtilierman said Fire Point would not take on further investors until after it had demonstrated success with its missile defence system, which will use the company's FP7 missile. .
Fire Point has, meanwhile, received interest from Gulf states for purchases of its existing drone products and is awaiting approval from Ukraine's government to begin exports. Shtilierman said the company has monthly capacity to export up to 2,500 long-range drones.
Exporting the Flamingo missile, however, is much more difficult due to regulatory barriers, he said.
Fire Point says it makes hundreds of long-range strike drones a day, each costing about 50,000 euros ($57,775) to produce, and three Flamingo missiles, at a cost of about 600,000 euros apiece. He acknowledged some "bottleneck" issues with the Flamingo, including with engine production.
Fire Point will increase production of the Flamingo when a new, in-house engine goes into mass production in October and a rocket fuel plant in Denmark comes online later this year, he said. The plant is awaiting two final approvals from Danish authorities.
($1 = 0.8654 euros)
(Editing by Joe Bavier)
