HAL, Snecma sign agreement on JV

Hindustan Aeronautics Limited (HAL) and Snecma have signed a shareholders' agreement on a 50:50 joint venture to be set up by the two firms.

Among other things, the joint venture will build components for the Ardiden, a new helicopter engine that Snecma is developing. The engine will be tested on HAL's advanced light helicopter.

Ashok K Baweja, chairman of HAL, and Marc Ventre, chairman and CEO of Snecma, signed the agreement, the two firms said in a statement, here on Wednesday.

Also present was Jean-Paul Herteman, executive vice president for propulsion, at Snecma's parent, Safran, a French aerospace and defence contactor, the statement said.

The Bangalore-headquartered joint venture company will start operations in early 2006 at Bangalore. While its capitalisation was 50:50, HAL's contribution towards developing the Ardiden was 11 per cent, Safran officials had said at the Aero India trade show, in February this year.

Wednesday's statement said the JV will become a centre of excellence for the manufacture of key components and assemblies of aero-engines.

HAL will bring its experience of manufacturing in India and Snecma will transfer technology to the joint venture company, providing HAL additional export avenues and greater access to civil aerospace industry, the statement said.

The JV will produce components for Snecma as well as for Turbomeca, a Safran group company that makes helicopter engines.

Initially, the JV will manufacture components for engines such as the CFM56 of America's General Electric, which powers some Boeing and Airbus aircraft.

Baweja said, "HAL and Snecma have been working together on several programmes and setting up of this joint venture company will synergise the best practices of both companies. Business related to civil aeronautical sector offers enormous opportunities and both partners will benefit in a major way in the international market through this venture."

Marc Ventre said, "In our industry where there are few players and where investments are high, it is important to build strong international partnerships. Snecma has gained a strong experience in this field worldwide. We want to share this experience with HAL, due to become a future major player of the aero-engine industry. It is with this state of mind we are establishing with HAL this joint venture and we hope that the first step will lead to a long series of future successes."