Pvt sector defence manufacturing growing in City

February 6, 2012

The City, which has been the hub of private defence industries, is fortifying its positioning in this realm. In fact, the Defence Research & Development Laboratory (DRDL) have enabled the formation and growth of private defence industries in the City.

One such allied defence manufacturer is SEC which is expecting a growth of 10-12 per cent this fiscal to become a 100-crore company, according to D Vidyasagar, Managing Director of SEC Industries.

SEC manufactures sophisticated equipment for defence and space programmes. Research and development for prototype projects contribute to 30 per cent of the business and the rest is contributed by designing and manufacturing of defence products.

The 350-employee company expects to increase its turnover by 25-30 per cent in next 18 months with the new defence projects of France and Israel. It also has plans to increase its employee base to 450 people.

Talking about the offset policy, Vidyasagar said it is helping industry get orders from international companies and to upgrade its technologies for manufacturing defence equipment. India has revised the offset policy in buying the French Rafale jets through a massive $11 billion MMRCA deal.

The French company needs to procure 50 per cent of the value of the imported defence products from Indian companies. This would benefit Indian defence industry to get manufacturing orders of $5.5 billion from the French company.

This would create a lot of demand and market for defence production companies. It also improves the skillset of the companies and generates employment in the sector, he said.

The Defence Research and Development Organisation (DRDO) designs and develops defence products with private participation at various levels. The ideas of scientists at DRDO are transformed into reality at various industries in the city. This research and development (R&D) work of DRDO would contribute to almost 30 per cent of the private industry business, says D Vidyasagar, managing director, SEC Industries.

The other area of business comes from City-based public sector organisations like Bharat Dynamics Limited (BDL), Electronics Corporation of India Limited (ECIL) and Hindustan Aeronautics Limited (HAL). The prototype designed by DRDO enters mass production at these companies, he said.

These public sector undertakings do not manufacture the entire range of products by themselves but outsource different sub-assemblies to different private companies. Their primary role is to integrate sub-assemblies to make a final product. Some of the private industries that are interacting with laboratories at the prototype stage also mass produce sub-assemblies. The high security concern components like warheads and explosive material are directly manufactured by the PSUs. Industry is facing serious difficulty with political agitation and lack of adequate power supply. The cost of the production is three times higher with the use of diesel generator.

Source:-Pvt sector defence manufacturing growing in City : Postnoon