HAL, Snecma finalise joint venture

Hindustan Aeronautics Limited (HAL) and French aerospace group Snecma, which already have several joint programmes going, are set to take their relationship a step forward.

From being mostly a buyer, HAL can move closer to becoming a partner in business with Turbomeca, a Snecma group company, as an agreement to form a joint venture between the two is "more or less finalised," sources said.

The new venture can result in international business and exposure for the Indian public sector aircraft maker as the co-developer of the Ardiden helicopter engine.

When Turbomeca announced the Ardiden engine in 2001, it also said HAL's advanced light helicopter (ALH) would be the first helicopter to fly with the more powerful, 1,200 shp engine. HAL calls the engine Shakti and will manufacture it for the Indian market.

"What the JV will do is give us the technology, the product and the international access that Snecma has. HAL could start with making some of the modules of Ardiden for other markets too, via the joint venture and in the process, we hope to make better profits," the sources said.

After extended talks on business plans for the new company and on "who will hold how much stake" the two companies had come to an agreement. Sources said the JV would be a 50:50 partnership, but declined to comment on the investments in the new company.

Work on customising the Ardiden to HAL's ALH requirements has been on both at HAL's helicopter division and in Bordes, Snecma's headquarters. Snecma's website says the Ardiden is planned for certification this year. Sources said, the Shakti would "hit the test bed by September 2006".

The Ardiden is built for five-six tonne helicopters flying in "hot and high" conditions. While it will initially power the Indian ALH, it is also said to be a candidate for Eurocopter's Dauphin, and Agusta's newer versions of the AB139.

Turbomeca is supplying its TM333-2B2 engines that will go on all initial versions of the twin-engine ALH that HAL has designed and is trying to export. "This engine will not be manufactured in India," sources said, as HAL is contracted to buy up to 82 of them.

Once HAL had utilised all the 82 TM333 engines (for 41 twin-engine ALHs) it buys for ALH, future versions of the ALH will fly on the Ardiden. Turbomeca sees a worldwide market for up to 1,500 Ardidens and Shaktis over the next 15 years.

HAL's efforts to export the ALH through its partnership with Israel Aircraft Industries are yet to yield results.

"Our first big thrust was in Chile, as part of our efforts to tap the Latin American market... We are in competition with other firms and the Chilean government hasn't decided on who to place orders with yet. The Chilean air force chief is also visiting Aero India," they said.

Last year HAL's exports stood at some Rs 250 crore, "Because we are able to sell two ALH to Nepal, and one Dornier aircraft," officials said. "We are making efforts to boost exports this year too."

HAL is also trying to become a more profitable organisation by outsourcing some of its own requirements to private suppliers in the country, they said.

The company aimed to get 30 per cent of the value of its procurement from private vendors, but "we haven't reached there yet". Presently, the figure stood at 15 per cent, though some divisions may have outsourced more and others less. HAL aimed to end this year with a turnover of Rs 4,400 crore compared with Rs 3,800 crore for last year.