According to a Global Market Insights Inc., report, India’s aerospace and defence market was estimated at over $10 billion in 2016 and is predicted to grow at an estimated CAGR of over 5% from 2017 to 2024. By 2029, this figure is expected to cross $70 billion. With programmes like Startup India and Skill India, Indian private players have witnessed original equipment manufacturers (OEMs) in aerospace and other sectors outsource parts of the value chain to them. There are also offsets being set up for private players in some sectors. When it comes to aerospace, one Indian company has been making in India even before it became a movement, with a keen understanding of the underlying potential.
Aequs Aerospace, an indigenous company built by Aravind Melligeri, who is also the co-founder of the independent aero-engine services unicorn Quest Global, makes crucial structural and system parts for the aerospace industry globally. The Aequs Group comprises Aequs Aerospace, Aequs INFRA and Aequs Consumer. The company has a Special Economic Zone (SEZ) in Belagavi, Karnataka, spread across 250 acres, from where the three entities of the group are served. “In 2005, the SEZ policy came into existence. We started with a modest 12,000 sq. ft facility in Bengaluru. But when we looked at growth, 12,000 sq. ft wasn’t enough,” explains Rajeev Kaul, managing director, Aerospace & Group CFO, Aequs. “We closed in on Belagavi due to its strategic location and to support our clients long term. We started thinking how we can address all the steps in the value chain from one place for the aerospace industry. And today, in addition to aerospace, we have our consumer division operating from here.”
Together, Aequs Aerospace and INFRA provide manufacturing—forging and machining, aerostructure assembling, processing—surface treatment, engineering services—Information Technology/Business Transformation (IT/BT) and IT enabled Services (IteS) for Aequs’ aerospace clients which include Safran, Collins Aerospace (formerly UTC Aerospace Systems), Airbus, ISRO and Boeing. The facilities are set up in joint ventures with international players such as Aubert & Duval SAS (ERAMET Group) of France, Magellan Aerospace of Canada and Saab AB of Sweden.
The aerospace components made in the SEZ form the structural and system parts of a plane. These parts are crucial as they get placed on the fuselage (body of the plane), wings, landing gears and flaps that are actuated mechatronically. They are finally delivered to OEMs such as Airbus, Boeing, Collins Aerospace, Eaton and Parker. Select engine components are also produced which are delivered to OEMs such as General Electric (GE) which manufacture jet engines. This necessitates very high levels of precision in order to avoid any mishap when the components come together in a finished aircraft.
Talking about why India is a preferred region for OEMs to invest in, Kaul claims, “We reduce the component cost by roughly 3%. Combining low labour costs and high-precision manufacturing expertise that we have with the design know-how of the OEMs gives us an edge. This gradually paves way for establishing research and development in India.” In addition to serving the global aerospace market, Aequs assembles nose cones for ISRO’s PSLV rockets. The cones find their place on the boosters of the rocket.
At the moment, Karnataka and Tamil Nadu are the Indian states which have their own aerospace policies. With the existing regulations, guidelines and industry best practices, Aequs Aerospace has been raking in a revenue of around $100 million currently and emphasises on the need for a unified policy. “There is no unified aerospace policy for the country. If there is a unified policy, it will set a goal for Indian aerospace companies to drive growth in this industry. We are bringing this up in mulitple forums and hope that the government will recognise this soon,” says Kaul.
The aerospace industry is also one of the early adopters of Industry 4.0/ automation. OEMs already have digital twins of their aircraft to enhance aircraft quality. In order to keep up with the industry, Aequs INFRA has a SAP S/4 Hana ERP (an enterprise resource planning software suite) enabled unit in the SEZ called the Flexible Manufacturing System (FMS) plant. This will facilitate consolidation of day-to-day processes at the individual units in the SEZ and give easy access to real-time data to speed up decision-making. FMS will act as the nerve centre for project execution in future.
“Automation will ease this process and open up job and skilling opportunities. We already have trained 250 of our workforce ourselves and will continue to bridge the gap between academia and the industry,” says Kaul.