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30 March 2016

DEFEXPO 2016: Day Two (29 March 2016)

Getting Back to Basics: Industries in Collaboration Mode
Four sets of themes and issues marked the inaugural day of Defexpo 2016 at Goa on 28 March 2016 – a new venue coupled with new enthusiasm, a declaratory procurement procedure (DPP – 2016) for consideration by stakeholders, an avowed effort toward building an indigenous Indian defence industrial base with requisite foreign participation, and a concerted effort by India to attempt at an inclusive approach to national security that includes both national defence (armed forces) and internal security (paramilitary and police forces).

The second day of Defexpo-2016 witnessed three major activities – a) defence industry related intellectual activities through a series of conferences, specialized meets and exchange of ideas; b) and signing of MoUs or advancement in collaborative agreements between a few companies as well as exploratory talks.

Intellectual Stimulus at Defexpo:
Among the conferences organized by various agencies, a few stood out. An international seminar on ‘Advances in Shipbuilding Technology’, was organized by NIRDESH (National Institute for R&D in Defence Shipbuilding) where the Defence Minister Manohar Parrikar addressed the high powered gathering. He said, India has a lot of potentiality in shipbuilding and added that it has to be rightly tapped by adopting and exploiting the newer technology. There are around 200 warships and sub-marines in the Indian Navy and Coast Guard and of them 30 are to be replaced. India is a peculiar nation, which is actually at its peak not only because of Make in India, but because it has a strong consumer base. I think that the advanced technology can assure a biggest shift. Shipyards in India are in a distress at the moment. Defense should be linked with shipbuilding to ensure that the shipbuilding industry becomes robust. Technology can developed only if industry is healthy.’’ Vice Admiral P Murugesam said, ‘India’s progress depends on oceans. Nearly 45 different types of ships including the fighter ships are under construction, adding that the Indian Navy is growing.'

It was the Global Investors Summit on “Make in India in Defence Sector”, organized by ASSOCHAM – a national level industry body, which drew wide attention. Inagurated by the Defence Minister Manohar Parrikar, this summit was focused on how best to use indigenous efforts to create a globally competitive industrial base. On the occasion, Parrikar said, “defence equipment and weapons cannot be sourced 100 percent from the private sector.  The Ordnance Factories Board (OFB) and other defence public sector units needed to be an essential part of the defence manufacturing ecosystem”. Elaborating on the same, he said, ”the first target of my ministry is not procurement. The first target is to ensure that the armed forced are provided with the best equipment and the quantity adequate that they remain effective.” He was blunt enough to say, “the private sector was driven by profits and it was only the government which was in a position to sustain skilled manpower, equipment-manufacturing infrastructure over prolonged periods of time even to produce small quantities of equipment or weaponry”. Another industry body – FICCI – organized two interactive sessions – India-Korea Defence Cooperation & Business Meet and Interaction with Deputy Chief of Army Staff (P&S) during the Defexpo as well. In addition, CII – a top level national industrial body is slated to host delegates in a seminar on Defence Offsets on 30 March, details of which are awaited.

Collaborations Gather Momentum
First two days of the event witnessed quite a number of formal announcements by various companies in terms of memoranda of understanding (MoUs), joint ventures (JV), exploratory talks and informal engagements. A few notable announcements are placed here.

SAAB and Indian company Tata Power Strategic Engineering Division (Tata Power SED) have started the process of manufacturing Self-Protection Systems for Land-based Platforms, for the Indian market and for export to Saab’s global market. The partnership will also involve joint development of the next generation Self-Protection System. “Saab is fully committed to working with Indian industry to Make in India, and this partnership is another step in that direction. Tata Power SED’s strengths in Defence Electronics manufacturing are a perfect complement to Saab’s expertise in Electronic Warfare systems, sensors and self-protection systems for all domains”, says Jan Widerström, Chairman and Managing Director, Saab India Technologies. “Tata Power SED is excited to be a part of this synergetic collaboration that has already been kicked off by Saab and us. Given the long-term potential for self-protection systems for combat vehicles, both in India and abroad, we see this collaboration with Saab as an important milestone in boosting India’s capabilities in building defence systems. It is perfectly aligned with the actual essence of “Make In India” initiatives being implemented by the Indian government”, says Rahul Chaudhry, CEO, Tata Power SED.

CONTROP – a company specializing in the field of electro-optics (EO) and infrared (IR) defense and homeland security solutions – announced an agreement with the Indian company, Defsys Solutions Pvt. Ltd, just a few days before the Defexpo began, which was announced again during the event. According to the agreement, Defsys will market and locally produce CONTROP’s advanced electro-optical solutions for the Indian market. According to Mr. Dror Sharon, CONTROP’s President & CEO, “We are delighted to partner with the Indian company, Defsys, a supplier of electro-optic solutions to the Indian Ministry of Defense. The company has very advanced manufacturing facilities that will allow us to produce our products in India, and thus meet the ‘Make in India’ policy promoted by the Indian government. According to Mr. Dmitry Bernadiner, Defsys’ Executive Director, “We are proud to partner with CONTROP ­– a global leader in electro-optics – and to manufacture CONTROP’s unique solutions in India.”

BEL – Bharat Electronics Limited and Rosoboroneexport (part of Rostec State Corporation) have signed an MoU at Defexpo 2016. As per the framework of agreement signed BEL and Rosoboroneexport will co-operate for the joint development of various sub-systems of major defence projects under the offset clause of the defence procurement procedure (DPP) of the Ministry of Defence.

RELIANCE Defence Systems and Rafael have announced a Joint Venture at the Defexpo 2016. The JV is the biggest between an Indian and a foreign company. The deal has a potential value of more tha $10 billion dollars.
The new joint venture will collaborate in the field of air/air and surface & air missile systems. Another area of the collaboration will be large aerostats. Rafael Advanced Defense systems have already supplied the aerostat systems to the Indian Air Force. 
The JV will assist to complete the follow on orders of such systems. In the JV Reliance will have 51% holding with Rafael holding the rest 49% as per the current guidelines of the government of India. Dhirubhai Ambani land Systems Park in Pithampur, Madhya Pradesh is selected as the location for the joint venture. The project will have the intial capital investment of around $200 million which does not include the cost of technology transfer.

THALES and BEL-Thales Systems Limited (BTSL), the joint venture between Bharat Electronics Limited (BEL) and Thales, have signed a partnership agreement during Defexpo for the joint development of the Pharos fire control radar. This joint development will strengthen the co-operation of Thales and BTSL in the field of innovative technologies. The responsibility of overall system design will be borne by Thales. BTSL will develop the mechanical design and radar processing modifications while Thales will
be responsible for the design and production of the radar antenna. The jointly developed Pharos system will cater to both domestic Indian and international market requirements. "We are pleased to work in close collaboration with BTSL for the development of this new type of fire control sensor to address the needs of the Indian and global markets. This strategic step goes
beyond the co-development partnership; it reaffirms our commitment to the country and to actively contribute to the ‘Make in India’ policy,” said Serge Adrian, Senior Vice President of Surface Radars Activities
at Thales.

MKU and Russian company JSC Shvabe signed an memorandum of understanding during the ongoing Defexpo to manufacture Electro Optical Devices in India, with production facilities to be situated in Kanpur, Uttar Pradesh, MKU’s headquarters. This joint venture is not only focused  on manufacturing of electro optical (EO) devices but has also to cater in-service EO equipment with the Indian Army and Ministry of Defence at large. EO devices from Shvabe are in use by the Indian army for sometime now and many of these devices require upgradation, refurbishment and maintenance to keep up with the changing combat theaters and its intense requirements. As per the MOU Shvabe will train and assist in setting up of EO manufacturing and servicing unit in India with MKU. Training initially will be given to technical persons from MKU to carry out maintenance and repair of the in-service EO units, which will give a kick start to the JV and later graduating to a full fledged manufacturing unit by mid of 2017. “The company has exported defence eqipment worth Rs 300 crore from India and has registered a turnover of over INR 400 crore during 2015-16. In next two years our target is to export equipment worth INR 500 crore as we are a registered supplier to the United Nations and the NATO,” said Mr Rajesh Gupta, Senior Manager, Business Development, MKU.

Astra Microwave Products Limited and Rafael Advanced Defence Systems Limited have announced the formation of a private joint venture company (JVC) under the name of Astra Rafael Comsys Private Limited. The new JV company will have Astra holding 51 percent and Rafael holding 49 percent, while in future it may convert into a 50:50 by Astra and Rafael subject to regulatory approval. Astra Rafael Comsys will become operational from September 2016 and about USD 40 million is expected to be invested jointly by the promoters in the next 3 to 4 years of operations. It will have its manufacturing facilities in Hyderabad with a marketing office at Delhi, it was announced by Astra and Rafael during the press release at Defexpo.

Astra Microwave Products Limited of India and Unique Broadband Systems Limited of Canada have announced the formation of a joint venture to do business in the areas of UHF broadcasting, satellite up linking and medical imaging products for India and other international markets. The JV is expected to do business of about USD 50 to 70 million in next five to seven years and also expected to create more than 200 new jobs. The new venture – Astra UBS Technologies Private Limited is expected to benefit Canadian and Indian economies, it was stated through a press release at Defexpo 2016.

OIS Advanced Technology (OIS-AT) and SAMP of France have entered into a Joint Venture agreement where OIS-AT and SAMP have agreed to manufacture proven, advanced Penetrator Bombs in India, and to conduct research and development for India’s customized requirements. This will utilize advanced technology from SAMP, which is a proven supplier in this field. “We are pleased that SAMP has agreed to support establishing a joint venture with OIS-AT to manufacturing, and research and develop a portfolio of advanced penetrator bombs in India. We believe that these also directly support and advance the Government of India’s Make In India program”, said Sanjay Bhandari, Chairman and Managing Director of OIS Advanced Technology. “We are pleased with our Joint Venture relationship with OIS-AT to establish an advanced penetrator bomb manufacturing facility, and to establish a research and development facility for customized local requirements. We will provide the necessary technology transfer to OIS-AT and the Joint Venture to develop and manufacture a range of penetrator bombs for Indian requirements to serve the requirements of the Indian military”, said Christian Martin CEO of SAMP.
Dena Mohanti