Indian businesses unveil multi-crore plans for defence sector

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April 1, 2012

Home-grown corporates unveiled ambitious plans for the defence business, with Tata Motors announcing Rs 600-crore investment for developing infantry combat vehicles, and Bharat Forge saying it will invest Rs 100 crore to develop an artillery gun. Hinduja group firm Ashok Leyland said it is planning a foray into aerospace business, both defence and civilian, and is talking to foreign players for technology partnership.

April 1, 2012

Home-grown corporates unveiled ambitious plans for the defence business, with Tata Motors announcing Rs 600-crore investment for developing infantry combat vehicles, and Bharat Forge saying it will invest Rs 100 crore to develop an artillery gun. Hinduja group firm Ashok Leyland said it is planning a foray into aerospace business, both defence and civilian, and is talking to foreign players for technology partnership.

Engineering and construction conglomerate Larsen and Toubro, meanwhile, has joined hands with South Korea's Samsung Techwin Co to produce self-propelled Howitzer artillery system for the Indian army. The companies unveiled their plans at the seventh edition of International Land and Naval Defence Systems Exhibition-Defexpo-12, which was inaugurated by Defence Minister A K Antony. Tata Motors said it may invest about Rs 600 crore on development of Futuristic Infantry Combat Vehicles (FICV) and for possibly setting up of a manufacturing plant for the same.

"The development cost of FICV could be around Rs 300 crore and a manufacturing plant for the same could be around Rs 250 crore or above," Tata Motors Commercial Vehicles Business Unit President Ravi Pisharody reporters. He said, however, that the setting up of the plant would depend on the company getting government orders. The company's revenues from the defence business are estimated to be Rs 1,000 crore in this fiscal year, a 50 percent growth over the last year. In the next fiscal, the company is looking at 25-35 percent growth.

The company, with an order book of Rs 250-300 crore, is also looking to supply landmine protected vehicles to states like Maharashtra and Jharkhand. The firm is in the exploratory stage of entering the Middle East market for its defence vehicles, Pisharody said. Currently it exports to Sri Lanka, Nepal, African Nations and US agencies in Afghanistan. Bharat Forge Executive Director Amit D Kalyani said: "We are developing a towed gun of 155/52 caliber mainly for the supply to the Indian Army. We have already responded to a tender for supplying this gun."

The company has already set up facility in Pune and the technology is being developed in association with "some European players".  When asked about the investment, Kalyani said: "We have initially committed Rs 100 crore only on development. If we win the tender we will need another dedicated line of investment for the assembly line." He said the company has currently engaged about 60 people for the development of the artillery gun. The company's revenue from the defence business stands at about Rs 200 crore per annum.

L&T Board member and President of Heavy Engineering division M V Kotwal said: "L&T and Samsung Techwin have joined together to offer a state-of-the-art self-propelled tracked Howitzer system, meeting the aspirations of the Indian Army for this strategically important programme." He added that the cooperation would lead to new avenues. "L&T also plans to set up the integration and testing facility for roll out of these guns from its world class, dedicated defence equipment facility in Talegaon, near Pune," the company said.

It added that a proposal to develop the 155mm/52 calibre tracked, self-propelled artillery, with L&T as lead partner, had been submitted last year to Ministry of Defence. Ashok Leyland Vice Chairman V Sumantran the company is looking at opportunities in the aerospace business. "When we will finally enter that will depend on any good opportunity and the finalisation of areas in which we want to enter," he said. The company is looking at both civilian as well as defence sector for foraying into the business, he added.

"We are talking to different foreign companies for technology sourcing. The nature of the association whether it will be an equity partnership or a joint venture will depend on the kind of products we want to develop," Sumantran said.


Courtesy: indiandefense