Heavy Vehicles Factory has orders to produce battle tanks till 2035: official

Despite the measures to promote private industry in defence, challenges including availability of manpower are concerns, say experts

Chennai-based Heavy Vehicles Factory (HVF), which manufactures battle tanks under the Indian Ordnance Factories, is expecting a 60 per cent growth in turnover during this year and orders to produce battle tanks till 2035, said a senior official.

HVF, which is struggling with availability of quality suppliers, is working with Lucas TVS to develop the company as a second vendor who will manufacture one of the components in its battle tank, said Hari Mohan, senior general manager, HVF-Avadi, Ministry of Defence.

Delivering a special address at a Conference on Defence Manufacturing Technologies with the theme 'Defence Indigenisation - Window of Opportunities', organised by the Tamil Nadu Technology Development & Promotion Centre of CII, he said, "Last year our turnover was Rs 1,500 crore. This year, we are targeting a turnover of around Rs 2,400 crore and next year it is going to be Rs 3,000 crore. Whatever the projections of the Army, we are almost booked up to 2035, and beyond that also we are confident that Army would be looking forward to build tanks with HVF."

He said that the factory will build the Arjun Mk II tanks, and it is the Army which has to take further decision on it.

For HVF, the procurement of inputs is to the tune of Rs 500-600 crore, of which roughly Rs 350 crore is for buying components and assemblies from its industry partners alone.

The turnover of the Ordinance Factories is around Rs 16,000 crore, of which roughly Rs 6,000 crore of inputs is bought from various industries, including imports. Of this Rs 6,000 crore, around Rs 3,500 crore consists solely of components and other consumables, Mohan said.

"We have almost 300 industry partners who are supporting us, of wihch, more than 100 are located in Tamil Nadu. Many items are yet to be indigenised, and many are supplied by only one vendor. In several cases, the vendors that we have developed, have severe capacity limitations," he added.

Mohan said that HVF sources a particular turret-ring collector box that is used in battle tanks, from Bengaluru and is currently developing Lucas TVS as a vendor of this component in Chennai. Lucas TVS is already working with HVF for another component, he added.

HVF has reached over 90 per cent indigenisation for the T-72 tank during regular production, and over 70 per cent in the T-90 tank.

"Our main problem is that we have very few vendors. Many items are made by a single vendor who has capacity constraints. So we are looking for more vendors," he told reporters later.

All the components are technology-intensive and for battle tanks, vehicle mobility, fire power and armoured protection are important and difficult to achieve. All the subsystems going inside the system are highly optmised and it requires a great deal of technical competence to understand the specifications, fulfilling the production process and meeting all performance parameters.

Experts at the conference agreed that while new policies are throwing up huge opportunities in the area of defence procurement, issues such as indigenisation, the role of private manufacturers and smaller players, lack of skilled manpower and funding for long-gestation projects persist. .

The overall import content in defence procurement is around 60-65 per cent, with the rest is indigenised. However, the ownership of technology and design is an important aspect, said Sanjay Garg, joint secretary-DIP, Department of Defence Production, Ministry of Defence in his inaugural speech. He said that the ministry has listed around 25 projects, including a few smaller ones, on which start-ups or SMEs can work. These are available on the ministry's website. Almost 90-95 per cent of the claims in terms of offset obligation has been received and the government has taken steps for simplification of offset norms.

Indigenisation should not be limited to manufacturing, but shoudl also embrace design and technology, said Bala Bharadvaj, managing director, Boeing Research & Technology-India, He said his company is working to promote localisation, and has a tie-up with the Tata Group to produce floor beams used in 787 Dreamliner planes. 

While many of the impediments have been done away with, the certification process for the components and assemblies is a process where the government has to come out supporting the private sector, said Sudhir Kumar, chief executive officer off Taneja Aerospace & Aviation Ltd. Jayakar Krishnamurthy,chairman and managing director of UCAL Fuel Systems Ltd said that MSMEs in the sector would account for about $50 billion of defence industry revenues in next 15 years, which is an estimate based on the MSME performance in the automobile industry.