Bharat Forge (BFL), a major player in metal forming that serves several sectors including automotive, power, oil & gas, construction & mining, rail, marine and aerospace, after marking its footprint as the largest forging company in the world, is now betting big on the artillery gun space.
The company has ambitious plans to make it a world leader in the artillery gun business by 2025, having attained a capacity to produce 250 guns a year at its Pune facility.
Speaking to FE on the sidelines of DefExpo 2018, Bharat Forge chairman and managing director Baba N Kalyani said: “We want to be the global leader in the artillery gun space. We have the built capacity and capabilities to achieve our visor by 2025,” Kalyani said.
Bharat Forges’ move assumes significance, especially in the wake of the Centre’s decision to open up defence manufacturing and intention to make India a hub for exports of Make in India products. Kalyani said that currently, of the `6,000-crore revenue of the company, the defence pie contributes close to Rs 400 crore.
“I am doing the defence business out of national interest only”, he said.
Outlining how he intends to take the gun business forward, he said as the Indian Army is planning to procure around 4,000 guns, which is a Rs 50,000-crore programme, the company has immense scope for making for the project.
“In the next three years, the company expects the defence revenue to grow to around Rs 1,000 crore.”
He said that in the last 15 years or so, the army has not procured guns, which were mostly imported but not manufactured in India.
Kalyani said that the company is now manufacturing two guns and a missile system, besides supplying components for various defence equipment, including tanks.
The company has invested close to Rs 300 crore to set up a manufacturing facility with a capacity of 250 guns a year. He said that the localisation ranges from 60% to 100%.
On why FDI has not been increasingly flowing into the Indian defence sector, inspite of a favourable policy regime at the Centre, Kalyani said that the main issue was the uncertainty around the deal. “We need to have a certain amount of certainty about the product and programme,” he said.
Elaborating further, Kalyani said that for example, the country evaluates the requirement of the army and then floats a programme. Then starts the process of request for information (RIF) and so on, culminating in a slew of processes.
Kalyani said the Indian defence procurement and production policies were not favourably inclined to the private sector until recently, with shadow of uncertainties looming large over the entire time taken by the processes.
Earlier, there existed a situation where the companies had to spend crores of rupees for the documentation process and other things, without any assurance that they would get the deal.
Adding to the problem was the sudden waking up of the PSU majors during the process and with their claiming the project or deal, the entire procedure goes for a toss, he said.
However, he added, with the current government in place, things have changed and the private sector was being considered with special emphasis.
“The defence minister has even directed the DRDO to choose the private sector players to develop project which was missing earlier,” he said.