 "Kalyani Group-Rafael JV to develop defence products")
The JV aims to develop and manufacture a wide range of missiles, remote weapon systems and advanced armour solutions. In line with the new investment norms in the sector, which stipulate the Indian partner have majority control, Kalyani Group will hold a 51 per cent stake in the JV, while the rest will be with Rafael.
Neither side disclosed the size of investment in the JV. Kalyani Group Chairman and Managing Director Baba Kalyani said the investment would be “substantial” in the JV, which would be executed through Kalyani Strategic Systems Ltd. “For the past one year, we were in talks with Rafael to explore a joint venture opportunity. Now, we have entered into an agreement with them. It is absolutely essential for us to have a tie-up with a foreign partner, as they bring technology and expertise,” he said.
“This is one of the first major joint ventures to be formed in the defence sector after the government hiked the cap on foreign direct investment in the defence sector to 49 per cent. It is also in line with the government’s ‘Make in India’ policy to indigenise development and production of defence equipment,” Kalyani added.
In other steps that will help strengthen the indigenous defence production base, Bharat Electronics Limited (BEL), the public sector defence undertaking based in this city, on Thursday announced it would soon commence mass production of the Akash Missile System for the Indian Army. “We are already manufacturing the system for the Indian Air Force (IAF), while the production for the Army will commence very soon and be delivered to them over the next two to four years,” S K Sharma, chairman and managing director of BEL, told Business Standard at the Aero India show here.
Bengaluru-based Hindustan Aeronautics Ltd (HAL) announced it would set up a greenfield manufacturing facility in Tumakuru district of Karnataka to manufacture light utility helicopters (LUH). “We have acquired 610 acres for this facility from the Karnataka government. We will start the project by the middle of this year and commence production from April 2017,” HAL Chairman T Suvarna Raju said at Aero India on Thursday. The facility will have annual production capacity of 60 helicopters and separate complexes for aerostructures, engines, aggregators and residential quarters.
For its part, the Rafael-Kalyani JV will explore orders from the Indian defence forces and might look at exports at a later stage. On the products side, the integration of missile systems will be done by Bharat Dynamics Ltd (BDL), a listed defence company based in Hyderabad. “We are looking at land near Hyderabad to set up a manufacturing facility and we wish to put in place a new factory within a year,” Baba Kalyani told Business Standard.
Andhra Pradesh’s push to attract investment from the sector was unveiled by Chief Minister N Chandrababu Naidu at the air show on Thursday.
Rafael will provide the JV technology to manufacture Spike missiles for the Indian armed forces, for which the government is slated to float a tender soon. “The JV will also manufacture weapons systems and advanced armour solutions for Indian, as well as global customers of Rafael,” Kalyani said.
The group would broadly focus on four new areas — artillery weapons, anti-tank missiles, armoured vehicles and aerospace components, he added.
S K Sharma, chairman and managing director of BEL, said the Army had placed an order with the company. While BDL will be the main integrator for the missile system, BEL will supply all major systems such as long-range capture surveillance and capture radar, fire-control radar and control systems.
The total size of the Army’s order for Akash Missile Systems with BDL is said to be about Rs 14,000 crore. “Our share in the total order is in the range of Rs 3,000 crore to Rs 4,000 crore, which will be delivered over the next four years,” Sharma said.
The home-grown Akash Missile System is the first indigenously built missile system in the country by BEL. The first order, worth Rs 1,200 crore, was placed by the IAF in 2008 and was successfully delivered by BEL for two squadrons. Subsequently, the IAF placed another order for six more squadrons. For that, production is underway and BEL hopes to complete it this year.
The Army has already placed an order with BDL for the Akash Weapon System, for two of its regiments. BEL will supply all radars, control centres, satellite data-links to BDL for integration with Army variants of Akash Weapon System.
The $2.1-billion Rafael, which designs, develops, manufactures and supplies a range of high-tech defence systems for air, land, sea and space applications, was set up as part of the Israeli ministry of defence, about seven decades ago. Rafael, Israel’s second-largest defence firm, offers an array of products ranging from underwater systems through naval, ground and air superiority systems to space systems.
At Aero India on Thursday, Chandrababu Naidu said Andhra Pradesh would set up a greenfield aerotropolis in Visakhapatnam district to attract Rs 3,000 crore of investment from the sector. The project will be spread over 7,500 acres and provide all infrastructure to investors.
The state has already received investment proposals from defence public sector undertakings such as BEL and Defence Research & Development Orga-nisation to set up plants. BEL has committed around Rs 500 crore to set up a new facility for a range of weapons systems.