Even as the approval from the Board of Approval is yet to come for the development of the aerospace special economic zone (SEZ) near the Bangalore international airport, the Karnataka government has already attracted aviation and defence majors to set up shop there. The government is moving forward to materialise the aerospace SEZ, which will be the second such SEZ in the state.
Companies like Amada of Japan, Dynamatics Technologies, BEML Ltd, Hindustan Aeronautics Limited have acquired land at the Aerospace SEZ. The Karnataka Industrial Area Development Board (KIADB) has acquired 1,000 acres for the SEZ. About 55 per cent of the land will be allotted to companies for setting up factories.
Units in the SEZ will cater to domestic demand as well as the export market. The park will include aviation MRO (maintenance, repair and overhaul) activities too. This would be the second aerospace SEZ after Quest’s aerospace SEZ in Belgaum district, which is already functional. In addition to these two, Mahindra & Mahindra is also planning its own aerospace SEZ in Bangalore.
According to V P Baligar, principal secretary, department of commerce and industries, the KIADB has so far allotted 100 acres to HAL, 35 acres to Dynamatics Technologies, 25 acres to BEML Ltd and eight acres to Amada to set up their manufacturing facilities. These companies have paid 20 per cent of the land value to KIADB towards the land acquisition.
BEML, the public sector undertaking under the ministry of defence, and a maker of rail, metro coaches and construction equipment, is setting up a manufacturing plant at the aerospace SEZ at an investment of Rs 316 crore. It plans to manufacture a wide range of aerospace components to make use of the opportunities available under the defence-offset business. The products be manufactured at this plant include aircraft components, assemblies and MRO activities related to aerospace applications.
The company has set up an Aerospace Manufacturing Division (AMD), to explore opportunities in the sector. It would provide jobs to 235 persons at this plant.
HAL plans to establish a unit for manufacture of TPE 331 engine and engine components, ring rolling, fan cases, welded structural assemblies, maintenance, repair and overhaul of civil aircraft, engines and manufacture of helicopters. The total investment from HAL would be Rs 2,100 crore and create 1,631 jobs.
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Dynamatic Technologies has entered into a partnership with Spirit AeroSystems Europe Ltd to manufacture wing flap track beams for Airbus A320-family aircraft. The company is looking to invest Rs 465 crore to set up an aerospace components unit. It would be creating jobs for 2,100 persons at the plant.
Amada (India) Pvt Ltd has proposed to invest Rs 44 crore to set up a technology centre. Other small companies that would be setting up facility at the Aerospace SEZ includes AIMIL Ltd for components, Ayyappa CNC Pvt Ltd for aerospace components, Centum Electronics Ltd, Dynatech Tools and Devices, Priyaraj Electronics Ltd, Sunshine Aerospace Pvt Ltd, Universal Electro Magnetic Cores and Yamini Automation Pvt Ltd.
In June this year, the state government had signed MoUs with these companies to set up facilities at the aerospace
SEZ for a combined investment of Rs 2,936 crore. The government expects to attract more companies to the aerospace SEZ once the Centre’s approval comes through. It is estimated that each acre of land at the SEZ would see an investment of Rs 5-10 crore. This would translate into investments of about Rs 10,000 crore at the Aerospace SEZ, Baligar said.
The aero and defence-related offset business is expected to exceed $15 billion in the next 10 years.