Godrej Aerospace & Defense, a business unit of Godrej & Boyce Mfg. Co. has been aligned with the number of reforms and developments in the past year in the aerospace and defence sector in order to boost the AtmaNirbhar Bharat initiative.
Godrej Aerospace & Defense, a business unit of Godrej & Boyce Mfg. Co. has been aligned with the number of reforms and developments in the past year in the aerospace and defence sector in order to boost the AtmaNirbhar Bharat initiative. The company with a vision to strengthen India’s indigenous space program, has been partnering with Indian Space Research Organisation (ISRO), and Defence Research and Development Organisation (DRDO) for over three decades now. On the eve of Republic Day, SM Vaidya, Executive Vice President and Business Head, Godrej Aerospace talks about the start-ups, PPP model and other aspects of the defence and aerospace sector, with Huma Siddiqui.
Following are excerpts
What kind of opportunities are the policy reforms presenting for the Indian MSME’s and start-ups in Defence Manufacturing?
I think this is the right time for MSME’s and start-ups to pitch in for Defence production.
The government and Ministry of Defence (MoD) is very keen on promoting `Atamnirbhar’; this means more and more indigenous content is being looked for. This assures volumes as projects that are kept under the Ban list of imports and under Make category are minimum Rs 5000 crore and above. This will ensure volumes over the next 5-8 years. The government is also planning to have domestic players to take full life cycle support, which means it will ensure post-delivery support and spares. This mode of MRO is extended to existing assets also.
GoI – MoD has published a list of Line Replaceable Unit (LRUs) or Bought outs by Public Sector Units (PSU) and Ordnance Factories (OF) which has to be indigenized.
The Ministry of Defence has further published a list of 108 technologies which the Defence Research and Development Organisation is ready to share with Indian Industries at no loss, no-profit basis. In addition to it, the government has created technology development fund and MSMEs will get up to 90 per cent aid in their efforts of development. This also assures prefixed business volumes on its successful realization.
The government has separate funds for Startups and is encouraging them to bridge the technology gap and disruption in technology in this highly guarded Defence manufacturing. And is ready to support and in fact encouraging the export of Defence production.
So, you have a market with after-sales life span assurance of business. You have access to technology, you have funds to develop technology, and you can experiment with new concepts and try for disruption when you meet requirements of domestic end-users we can export. I think one cannot expect anything more.
Are there any initiatives that Godrej is taking to boost this?
We have signed a few contracts for co-development of critical technologies for Light Combat Aircraft `Tejas’ and its engine. And have developed and are now setting up production facilities for primary actuators for `Tejas’ that will be manufactured under Transfer of Technology (TOT) with Aeronautical Development Agency (ADA).
We have entered into composite manufacturing of structural parts for Tejas and Advanced Light Helicopter.
Our Godrej Aerospace Cluster has now well-established supply chain from Raw material suppliers to a special process capabilities.
We are also interacting with many academias and startups for innovation in Defence manufacturing technologies, like light-weighting and forming of aerospace alloys to near shape and cut down on costly raw materials and its machining time.
What is the way forward for the Public-Private Partnership (PPP) in the defence domain?
PPP is a very powerful model as it brings out the best of both. Public enterprises have a wealth of domain knowledge, robust infrastructure and vast experience in building Defence and Aerospace systems in India. These organizations have also had opportunities to work under license productions, TOT agreements with world primes and are aware of global best practices. Some of them have also worked closely with ISRO, DRDO, ADA or have got involved in the design, MRO and have established global supply chains. Private companies, on the other hand, can bring to the table their expertise and project management skills, financial sustainability, skill development, cost control and productivity measures owing to their own sustainability and present to shareholders.
Many of the organizations in the private sector have proved this in their respective areas and have done it quite well. We have many examples from sectors such as Auto, Locomotive, Machine tools and general engineering.
If a private industry player gets a time-bound purchase order, which gets monitored by the customer at the highest level (say by the Chairman/MD), and also involves the end-user (e,g, MoD or DoS) to monitor and grant the necessary approvals, on-time completion of the project can be ensured.
Under PPP, we need to create a win-win solution by defining/predefining work share and the task shall be to win over global competitors rather than cutting costs internally which may lead to compromise on quality and/or delivery. I am very sure that the PPP will be a competitive solution for today’s vast need and scarcity of budget.
Has domestic defence manufacturing seen a boost after the announcement banning the import of 101 defence items?
It is too early to see a boost, however, I can see a huge momentum building up within both Public and Private Organizations. DRDO will co-develop right from design to proto to production, and support after sales. On the other hand, the industry is also preparing for identifying gaps and developing them within or with partners. MoD shall now speed up indenting and placing orders/contracts so that this momentum will not die down over a period of time.
Along with the ban on 101 items, DRDO is willing to share 108 technologies at a very competitive price so that the industry will have ready solutions and can start using these technologies for development of products. One must also see the number of industries coming up in Aerospace & Defence domain and we must take notice of startups and MSMEs who are willing to work with MoD on fast-track projects and disruptive innovations. Tech Development Fund (TDF) by MoD is another significant move to nurture and encourage industry participation. Lastly, announcement of export of products developed in India is also a very welcome move which will bring in numbers.
All these major decisions will take about 12-18 months to witness physically on ground, till then I wish that all the industries work hard and be ready.
What are the ways in which a level playing field can be formed for the Private sector in defence manufacturing?
I think the decisions taken by the government as mentioned earlier have created the much-awaited wish list by the private industry. Now quickly converting all the plans into reality is the only requirement. We cannot expect anything more than what has already been announced now to create a level playing field.
Some of Godrej’s significant contributions to the sector over the years.
Contribution to various missile systems and their successful productionization to meet the customer deliveries. Participation in new systems from the development stage and setting up world-class, horizontally and fully integrated manufacturing systems for metallic and non-metallic equipment.
A very robust and reliable supply chain.
Our performance on quality and delivery is extremely high and we can be a role model or benchmark at this stage.
Project-wise, we are major partners to BrahMos with almost 70 per cent share in metallic assemblies, Surface to Air Missile (SAM) and we are involved in the futuristic Indian designed cruise missiles.
What are some of the challenges that remain in the defence sector and ways to overcome them?
Fundamental research that will help us bridge the gap between our design and manufacturing capability with the rest of the world is a challenge. In 1990, we were catching up with the world which was 20 years ahead and this gap has dramatically reduced today. However, aviation is one of the weakest sections, both in aviation propulsion systems and in jets. Secondly, we need to invest into strategic materials, especially electronics items to be manufactured in India. Lastly, we need to focus and concentrate on Indian standards and specifications so that we can evolve as exporters.