LA SPEZIA, ITALY — After years of putting its faith in the development of guided munitions — for both naval and land use — Italy’s Oto Melara now claims it has working technology and a range of products ready for sale.

“We have had the breakthrough and we are on the downhill slope now,” said CEO Roberto Cortesi, adding, “We know now we have a system that works.”

Oto Melara, a unit of Italy’s Finmeccanica, has spent €200 million (US $278 million) on developing a range of munitions with small moveable fins that steer a projectile toward its target using a variety of guidance systems.

A key characteristic of the munitions is that when fired from the cannon, they are clad in a sabot, or jacket, which protects the fins in the barrel before falling away in flight. Since the shells are therefore smaller than the caliber of the gun, they have less destructive potential but fly farther while costing far less than a missile.

Under a development and industrialization contract, Italy’s Defense Ministry is testing munitions developed for Oto Melara’s 127mm naval cannon and 155mm howitzer that are guided by GPS and an inertial measurement unit, as well as variants adding infrared targeting for naval use and semi-active laser targeting.

The so-called Vulcano range also contains an unguided shell — now being qualified — that does not have fins but comes in a sabot and reaches 60 kilometers in the 127mm configuration thanks to its sub-caliber size.

“We aim to have all variants in initial production by 2016 with delivery the following year,” one company official said.

All the 127mm Vulcano munition types are under contract from Italy for use on its multimission frigates. Holland, which has four naval 127mm compact cannons fit for Vulcano munitions, and Germany, which has ordered five 127mm cannons from Oto Melara for its F125 frigates, are potential users and are yet to decide which types of guided munition they want.

Oto Melara officials said Japan and South Korea, which operate 127mm naval cannons, were also watching development, while Algeria, which has ordered the cannon from Oto Melara for its German Meko frigates, is also interested.

Cortesi said Oto Melara had tried without success to place its cannons on US littoral combat ships, and has since reduced the head count at its US operation Oto Inc.

Meanwhile, Oto Melara’s Strales program for its 76mm cannon has seen sales so far to Italy, for use on its multimission and Horizon frigates and Cavour carrier, and to Colombia. The cannon fires a munition that is guided to its target — an aircraft or incoming missiles — by a beam directed at the target by the ship’s radar.

The program is undergoing a qualifying program this year on the Italian naval vessel Foscari, and Italy has purchased about 500 shells for testing and stocks. The Colombian Navy has taken about 100 shells to equip its four 76mm cannons, two of which require conversion kits to upgrade them to fire the munition.

The Strales system is in competition to equip the Singapore Navy, and one Oto Melara official said Singapore has said that instead of using the offered beam emitter that sits on the cannon, it could be used with the Thales Pharos radar, which can both track targets and emit beams to steer munitions.

“It is a cost-effective solution, and we could offer that type of setup to future customers,” the Oto Melara official said.

Officials said they are still developing — with limited Italian funding — the Vulcano 76 program, launched in 2011, which envisions the use of a GPS-guided 76mm munition.

Armor-piercing variants for the 127mm and 155mm guns are also being developed in collaboration with the Italian MoD.

Also in the works is the Scout, an unarmed munition that uses GPS to relay its position during flight in real time, indicating the strength of wind and other atmospheric conditions, allowing operators to adjust their aim when they choose to fire the unguided 127mm munition.

Finmeccanica managers have dropped hints over the years that Oto Melara is ripe for merging with one of Europe’s other land systems firms, given that the sector is overcrowded in Europe, even as defense budgets shrink.

Cortesi said the firm has gotten “very close” to forging ties with another firm, which he did not name, but had broken off talks because of the lack of guarantees of sovereignty. “We believe we are strategic for Italy and Italy would have lost know-how,” he said. The door remains open on program level partnerships, he added.