Defence_Industry

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Defence Industry

By Suresh Remala

& Sudeep

LOGOContents

A bird’s eye view 1

Major players2

Company’s profiles3

Opportunity in Indian Defence industry4

LOGOA bird’s eye view.. India has emerged as a large defence market. It has been a centre

of economic activity, a beacon of democracy, a bastion of stability and a champion of peaceful co-existence and non-violence.

. India has striven to give its neighbours stakes in its own growth, through trade, investment and services to secure a peaceful periphery. At the same time, it continues to take all measures for the security and safety of all its citizens.

The country' defence services include three Armed Forces: (i.e., the Army, the Navy and the Air Force) and other Departments, Defence Research and Development Organisation (DRDO) Defence Ordnance Factories.

LOGOCont...DRDO: Defence Research and Development Organisation (DRDO) was formed in

1958 from the amalgamation of Technical Development Establishment (TDEs) of the Indian Army and the Directorate of Technical Development & Production (DTDP) with the Defence Science Organisation (DSO). DRDO has grown multi-dimensionally and emerged as a strong and mature organisation with a vast network of more than 50 laboratories, spread across the country. The organisation is dedicated towards progressive enhancement of self reliance in defence systems and also enhancement of R&D infrastructure and capability of the country.

Defence Ordnance Factories: Indian Ordnance Factories is a conglomerate of 40 Factories, 9 Training

Institutes, 3 Regional Marketing Centres and 4 Regional Controller of Safety. This is the largest and oldest departmentally run production organisation in the country. It is primarily engaged in the manufacture of defence hardware for the Armed forces. The ordnance factories were established with a mandate to ensure self-reliance in manufacturing of defence hardware.

LOGOCont.. Overview of defence spending in India : Since India's first defence budget for 1950-51 of US$ 34.78 million,

spending has grown to US$ 30.68 billion in 2009-10.Of this, approximately 40% relates to capital expenditure which is currently driven by equipment modernisation programmes in each of the three Services (Army, Navy and Air force).

As a percentage of GDP, India has been able to maintain defence expenditure to a range of 2 to 3 %, in line with other major developed nations, signifying a fairly steady focus on defence within the economy to date.

LOGOMajor players..Major Public Sector Undertakings in defence Sector Hindustan Aeronautics Limited (HAL) Bharat Electronics Limited (BEL) Bharat Earth Movers Ltd (BEML) Mazagon Dock Limited (MDL) Garden Reach Shipbuilders & Engineers Ltd (GRSE) Goa Shipyard Ltd (GSL) Bharat Dynamics Limited (BDL) Mishra Dhatu Nigam Limited (MIDHANI)Major Private Players in defence sector Tata Advanced Systems Limited (TAS) Larsen and Toubro Kirloskar Brothers Mahindra Defence Systems Ashok Leyland

LOGOCompany’s profiles..Hindustan Aeronautics Limited:Type State-owned enterprise

Industry Aerospace and defense

Founded 1940 (in 1964, company took on current name)

Headquarters Bangalore, Karnataka, India

Key people Ashok Nayak (Chairman)

PV Deshmukh MD (MiG) SK Jha MD (A)P SounderRajan

(Director-Corporate planning and Marketing) D.Shivmurti (Director-Finance)

Products Aerospace equipment Military aircraft

Communication & Navigation equipment Space systems

Revenue ▲ US$2.35 billion (FY 2007)

Employees 30,000

LOGOCont..Hindustan Aeronautics Limited (HAL) based in Bangalore, India, is one of Asia‘s largest aerospace companies. Under the management of the Indian Ministry of Defence, this state-owned company is mainly involved in aerospace industry, which includes manufacturing and assembling aircraft, navigation and related communication equipment, as well as operating airports.

Hindustan Aeronautics has a long history of collaboration with several other international and domestic aerospace agencies such as....AirbusBoeing Sukhoi Aviation Corporation Israel Aircraft IndustriesRSK MiG BAE Systems Rolls-Royce plc Dassault Aviation Dornier Indian Aeronautical Development Agency Indian Space Research Organisation.

LOGOCont.. HAL was established as Hindustan Aircraft in Bangalore in 1940 by

Walchand Hirachandto produce military aircraft for the Royal Indian Air Force. The initiative was actively encouraged by the Kingdom of Mysore, especially by the Diwan, Sir Mirza Ismail and it also had financial help from the Indian Government. The organisation and equipment for the factory at Banglore was set up by William D. Pawley of the Intercontinental Aircraft Corporation of New York.

The Indian Government bought a one-third stake in the company and by April 1941.

On the 2 April 1942 the government announced that the company had been nationalised when it had bought out the stakes of Walchand Hirachand and other promoters so that it can act freely.

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Operations HAL is one of the largest aerospace companies in Asia

with its annual turnover to be running above US$2 billion. More than 40% of HAL's revenues come from international deals to manufacture aircraft engines, spare parts, and other aircraft materials. Below is a partial list of major operations being undertaken by HAL.

LOGOInternational deals.. The US$10 billion fifth-generation fighter jet program with the

Sukhoi Corporation of Russia. US$1 billion contract to manufacture aircraft parts for Boeing. Multi-role transport aircraft project with Ilyushin of Russia worth US$

600 million. 120 RD-33MK turbofan engines to be manufactured for MiG-29K by

HAL for US$250 million. Contract to manufacture 1,000 TPE331 aircraft engines for

Honeywell worth US$200,000 each (estimates put total value of deal at US$200 million).

US$120 million deal to manufacture Dornier 228 for RUAG of Switzerland.

Manufacture of aircraft parts for Airbus Industries worth US$150 million.

US$100 million contract to export composite materials to Israel Aircraft Industries.

LOGOCompany’s profile..BEL: Bharat Electronics Limited (BEL) was set up at Bangalore, India, by the

Government of India under the Ministry of Defence in 1954 to meet the specialised electronic needs of the Indian defence services. Over the years, it has grown into a multi-product, multi-technology, multi-unit company serving the needs of customers in diverse fields in India and abroad . BEL is among an elite group of public sector undertakings which have been conferred the Navratna status by the Government of India.

In 1966, BEL set up a Radar manufacturing facility for the Army and in-house R&D, which has been nurtured over the years. Manufacture of Transmitting Tubes, Silicon Devices and Integrated Circuits started in 1967. The PCB manufacturing facility was established in 1968.

In 1970, manufacture of Black & White TV Picture Tube, X-ray Tube and Microwave Tubes started. The following year, facilities for manufacture of Integrated Circuits and Hybrid Micro Circuits were set up. 1972 saw BEL manufacturing TV Transmitters for Doordarshan. The following year, manufacture of Frigate Radars for the Navy began.

LOGOMilestones.. The agreement for setting up BEL's first Joint Venture Company, BE DELFT, with M/s

Delft of Holland was signed in 1990. Recently this became a subsidiary of BEL with the exit of the foreign partner and has been renamed BEL Optronic Devices Limited.

  The second Central Research Laboratory was established at Ghaziabad in 1992. The

first disinvestment (20%) and listing of the Company's shares in Bangalore and Mumbai Stock Exchanges took place the same year.

BEL Units obtained ISO 9000 certification in 1993-94. The second disinvestment (4.14%) took place in 1994. In 1996, BEL achieved Rs.1,000 corers turnover.

In 1997, GE BEL, the Joint Venture Company with M/s GE, USA, was formed. In 1998, BEL set up its second overseas office at Singapore to source components from South East Asia.

The year 2000 saw the Bangalore Unit, which had grown very large, being reorganized into Strategic Business Units (SBUs). There are seven SBUs in Bangalore Unit. The same year, BEL shares were listed in the National Stock Exchange.

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In 2002, BEL became the first defence PSU to get operational Mini Ratna Category I status. In June 2007, BEL was conferred the prestigious Navratna status based on its consistent performance.

During 2008-09, BEL recorded a turnover of Rs.4624 crores.

LOGOIndian market..Bharat Electronics Limited is a major supplier of products and turnkey

systems to the Indian Defence Services. Over the years, BEL has diversified into manufacturing many civilian products as well.

LOGOCont..Products & services customers

Defence Communication Indian Defence Services , Para -military forces

Radars & Sonars Indian Defence Services, Civil Aviation, Meteorological Department, Space Department

Telecommunication Department of Telecommunication, Para- military forces, Power Sector, Oil Industry, Railways

Broadcasting Equipments and Studio   Systems All India Radio, Doordarshan, (National Radio & TV Broadcasters)

Electronic Voting Machine Election Commission Of India

Solar Products & Systems Individuals, Private and Government Organizations

Turnkey Systems, E-Governance Networks    Police, State Governments, Public Sector Undertakings

LOGOExports..

Products and Services CountriesDefence Communication equipment and spare parts

Botswana, Indonesia, Suriname, Malaysia

Radars & Sub-systems Indonesia, Egypt, Switzerland

Electronic Warfare products and services   Russia, Brazil

Opto-electronics products Sri Lanka, Nepal, Israel, South Africa

Semiconductor devices, Microwave Tubes and Transmitting Tubes

Malaysia, Singapore, Turkey, Netherlands, UK, USA, France, Hong Kong

Solar Products & Systems Suriname, Germany, Zimbabwe, Botswana, Kenya, Nigeria

Vacuum Interrupters Malaysia, UAE, Uganda, Turkey, UK, Azerbaijan

Exports play a key role in BEL's strategic perspective. The ranges of products and services exported have been increasing over the years. A number of international companies are using the facilities at BEL for contract manufacturing. The broad list of products and services being exported is given below:

LOGOTATA.. Type Private Industry Conglomerate Founded 1868 Founder(s) Jamshetji Tata Headquarters Mumbai, India Area served Worldwide Key people Ratan Tata (Chairman) Products

Automobiles Telecommunications Software Hotels Consumer goods

Revenue ▲ US$ 70.8 billion (July 2010) Total assets ▲ US$ 51.7 billion (2009) Employees 363,039 (2008-09) Subsidiaries Tata Steel

Corus SteelTata Motors Tata Consultancy Services Tata TechnologiesTata Tea ,Titan Industries Tata PowerTata Communications Tata TeleservicesTata AutoComp Systems LimitedTaj Hotels

LOGOCont..ProductsTata Salt, i-Shakti Salt, Tata Salt LiteEight O'Clock CoffeeTata CeramicsInfiniti RetailTata Tea Limited is the world's second largest manufacturer of

packaged tea and tea products. It also owns the Tetley brand of tea sold primarily in Europe.

Titan Industries manufacturers of Titan watchesTrent (Westside)Tata SkyTata International Ltd - Leather Products DivisionTanishq jewelleryStar Bazaar

LOGOCont..Information systems and communicationsComputational Research LaboratoriesINCATNelcoNelito SystemsTata Business Support Services (formerly Serwizsol)Tata Consultancy Services Ltd. (TCS) is Asia's largest software company with 2008-09

revenues being over US$ 6 bn.Tata Elxsi is another software and industrial design company of the Tata stable. Based in

Bangalore and Trivandrum.Tata Interactive SystemsTata Technologies LimitedTata TeleservicesTata Communications, formerly VSNL, the Indian telecom giant, was acquired in 2002.

Tata-owned VSNL acquired Teleglobe in 2005.CMC LimitedTATANET, Managed connectivity and VSAT service provider

LOGOAshok Leyland profile Type Public Industry automotive Founded 1948 Headquarters Chennai, Tamil Nadu, India Key people R. Seshasayee, R. J. Shahaney, S. P. Hinduja , D. G.

Hinduja , Vinod Dasari Products Automobiles Engines Revenue US$ 1.4 billion (2008-09) Employees 11,500 Parent Hinduja Group Subsidiaries

Ennore foundries LimitedAutomotive Coaches and Components Limited

Gulf-Ashley Motors LimitedAshley Holdings Limited

Ashley Investments LimitedAshley Design and Engineering Services (ADES)

Avia Ashok LeylandAshok Leyland Project Services Limited

LOGOAshok Leyland

ProductsLuxura

Viking BS-I - city busViking BS-II - city busViking BS-III -city bus

Cheetah BS-ICheetah BS-II

Panther12M busStag MiniStag CNG222 CNG

LynxDouble DeckerVestibule bus

Airport Tarmac Coach

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