TVS SCS, Italy’s ALA form defence, aerospace logistics JV

Addressing a media briefing, R. Dinesh, Executive Chairman of TVS Supply Chain Solutions, said aerospace manufacturing has emerged as a key focus area in India amid localisation initiatives, strategic investments and growing collaborations between India and global aerospace and defence companies.

TVS SCS already has experience in the sector through its defence and utility operations in Europe, which account for more than 30% of its European business. The venture marks its entry into India’s aerospace and defence supply chain market, which is expected to grow at a compound annual growth rate of about 8.6%.

“We have been looking at how to expand our business in India, and aerospace was a very attractive sector for us to pursue,” Dinesh said. 

The joint venture follows a memorandum of understanding signed earlier this year. According to the companies, the partnership has already witnessed strong engagement and interest from multiple participants across the aerospace and defence ecosystem.

Dinesh said the aerospace sector’s stringent compliance and certification requirements create high entry barriers, making it difficult for new players to enter the market and resulting in stronger customer retention for logistics and supply chain service providers such as TVS SCS.

“Customers are willing to pay more for the pure logistics and transportation solutions which we provide,” Dinesh said, adding that aerospace and defence supply-chain solutions generate profit-before-tax (PBT) margins of 8-9%, compared with 4-5% in traditional logistics. 

The venture will provide end-to-end integrated supply chain solutions for the aerospace and defence industry, including sourcing and supply of components, kitting and sub-assembly operations, consolidation, imports, warehousing and distribution. Initially, it will focus on opportunities in India while evaluating prospects to support aerospace and defence supply chains in select international markets over time.

ALA Group is a specialised aerospace and defence supply chain integrator supporting leading OEMs, MROs and defence programmes across Europe, North America and other international markets. The company operates a global network of commercial offices, logistics centres and kitting facilities serving major aerospace and defence programmes.

The aerospace and defence ecosystem is dominated by global majors such as Airbus, Boeing, Dassault Aviation, Safran Group, Rolls-Royce, Collins Aerospace and Thales Group. Many of these companies are expanding partnerships and joint ventures with Indian firms as part of their localisation and manufacturing strategies in the country.

“We have strong customer relationships across the aerospace sector and many global companies in this sector are actively evaluating and expanding their presence in India, creating significant opportunities for specialised supply chain services,” said Vittorio Genna, Vice President and Co-Founder of ALA Group.