Transcript Presentation to Hi Tech Defence Innovation Forum Agenda  HAL - Indian Defence Preparedness  Challenges for India Inc  HAL & National Initiatives  India.

Presentation
to
Hi Tech Defence Innovation Forum
Agenda
 HAL - Indian Defence Preparedness
 Challenges for India Inc
 HAL & National Initiatives
 India and Civil Aerospace
 Avenues for Development
 IDSA– Pondering Points
Hindustan Aeronautics Limited
 India’s Flagship National Aerospace Company
 Largest Defence Public Sector Company
 Record sales of Rs 14316 Crs
**
* Korwa
 19 Production and 10 R&D Centers
Kanpur Lucknow
 Work Force – 33000 +
 Exports to over 20 countries
*
Barrackpore
Nasik
*
Koraput
Hyderabad
*
Bangalore
* *
Kasargod
*
HAL – Learning Organisation
 Creativity & Innovation are keys to our business continuity
 Filed 174 patents in last one year
 R&D Expenditure of Rs 1750 Crs (12.2%)
 In house Design & Development of 15 platforms
Current
In House Design
& Development
Current
Co Development
HAL – Enabling India
81%
87%
100%
41%
61%
41%
49%
Helicopters,
100%
Fighter
Aircraft
Trainer
Aircraft
IAF
Helicopters Transport
Aircraft
Trainer Aircraft
Transport
Aircraft
Helicopters
Indian Navy
Indian Army
 All satellite structures launched by ISRO till date
 Designed & Developed first airworthy Turbo Jet Engine in India (PTAE-7)
 Has supplied structures for nation’s Mars Orbiter Mission
HAL & Aerospace Ecosystem
Development
Northern Zone 173
12
41
2
41
2
77
22
1
2
7
Western Zone 526
18
493
2
1119
Kerala
15
73
Eastern Zone 94
334
151
Overall Vendor Base
2412
Value of indigenous sourcing
~ 1195 Crs
Southern Zone 1619
Domestic A&D – R&D Efforts
R&D INVESTMENT AS % OF TURNOVER
HAL
BEL
BEML
MIDHANI
7.5%
HAL is the biggest investor in R&D efforts
amongst DPSUs as well as major Private
Indian Industries entering defence sectors
3.3%
7.0%
3.3%
2.6%
3.3%
0.7%
3.3%
0%
2%
US A&D Average
4%
6%
HAL Vs Other DPSUs
8%
10%
R&D INVESTMENT AS % OF TURNOVER
M&M
3.3%
Ashok Leyland
3.3%
Bharat Forge
0.3%
L&T
0.3%
Tata Power
HAL
Source : Company information & Annual reports 2010-11 available
on web-sites, US average pertains to for US A&D majors
2.8%
2.6%
3.3%
3.3%
0.1%
3.3%
3.3%
0%
2%
US A&D Average
7.5%
4%
6%
8%
HAL Vs Private A&D Industries
10%
“Challenges for India Inc”
Challenges for India Inc
Three Major Challenges
 Economic
 External Security
 Internal Security
INDIA : “Striking a Fine Balance?”
Economic Paradox
India is the second most populous Country in the world,
but Ranks a distant 134th on Human Development Index
India has the second largest workforce in the world,
yet in terms of Exports (percentage of GDP) secures 100th place
India ranks 6th in the world in terms of Patent Applications,
but comes a distant 55th in terms of high technology Exports
India has the 9th place in the world for its 17 Nuclear Power Reactor Units,
yet 35% of its population has no access to electricity 29.8 % of
its population lives below poverty line
External Security Challenges
 25 of the 60 states, at highest
risk of failure are located in Asia
 Indian borders – 7,000 km of
coast and 15,000 km of land
border
Indian Republic is in an increasingly insecure security environment
with threats from all around.
Source: http://www.fundforpeace.org/global/library/cfsir1210-failedstatesindex2012-06p.pdf
“HAL and National A&D
Initiatives”
BK Chaturvedi Report
Govt constituted BK Chaturvedi committee for strengthening HAL’s
contribution to the country
 HAL to gradually shift its role as system integrator
 HAL to strive for outsourcing 50% of total workload in terms of SMH
 HAL to focus on R&D / Development of Composites materials
 Investments in aviation metallurgy – Working with MIDHANI
 Design and Development of 25 kN Thrust class Engine
 HAL to pursue the business of UAVs
BK Chaturvedi Report
 Acquisition of companies abroad for technologies through Empowered
Committee of Secretaries
 Setting up of National Aeronautics Commission
 Modernisation / Capacity Augmentation
 HAL to establish aeronautics university or collaborate with some
universities for expansion of aviation sector capabilities
Light Combat Aircraft - Tejas
 Completed more than 2290 flights
15 (7 LSP, 6 PT, 2 TD)
 ADA commitment for IOC – Nov ‘13
 HAL geared up for production post certification
LCA – A National Effort
* SAG
* IIT
* DSC
DELHI
CHANDIGARH
DEHRADUN
* DESIDOC
* SSPL
* CSIO * TBRL
* DEAL * IRDE
* IAF
* NPL
AGRA
NAGPUR
* OF-Ambajhari
* Firth India
AMBALA
JODHPUR
* VAISESHIKA
* DL
BARODA
* IPCL * MS university
* GSFC
* ADRDE
LUCKNOW
* HAL
* RDSO
* RCMA
KANPUR
* CSDO
* HAL * MARS Auto
* DMSRDE * IIT
AHMEDABAD
KORWA
* HAL
* NID
* NML
* HAL * Polymer ent.
KOLKATA
PUNE
* ARDE
* NCL
* TRDC
* Calcutta university
* Jadhavpur university
* UBEST
* IAT
* AID
KHARAGPUR
* IIT
MUMBAI
* BARC
* IBP * IIT
* NCML
* SAMEER * L&T * NCST * TIFR
* SASMIRA * OF-Ambarnath
KORAPUT
* HAL
BANGALORE
* ADA
* HAL
* ADE
* DARE
* ALISDA
* CAIR
* CASSA * CMTI
* CEMILAC * CABS
* DEBEL * GTRE * HMT
* CSM(P)Ltd * IRIS
* LRDE * IAM
* IAF
* DG-AQA
* IISc
* Jindal * MTRDC * NAL
* Kumaran * BEL
* MUSA * RVCE * TCE
* WIPRO
* WIDIA
* TCS
* BHEL * GTTC * ASML
* Accord
* Dynamatic hyd.
* Transtec-India
* Turbotech
* Software engg(P) Ltd
* Southern electronics
* AMADA Tools
* Spectrum
COCHIN
* Cochin university
* INDAL
* NPOL
Guwahati
* IIT
JAMSHEDPUR
NASIK
* HEMRL
* R&DE(E)
* RDE
VARANASI
* BHU
THIRUVANANTHAPURAM
* VSSC
* KELTEC
* ER&DC
BHUBANESHWAR
* NALCO
VISAKHAPATNAM
* NSTL * BHPV
CHENNAI
* CVRDE * ARC * IGCAR
* IIR
* HVF * SAMEER
* SERC * VIVASONIC
* Centre for reliabiilty
TRICHY
* BHEL
* High Energy Batteries
COIMBATORE
* PSG
KARAIKUDI
* CECRI
HYDERABAD
* BHEL
* ANURAG
* CCE (R&D) * DLRL
* CV
* MCEME
* ECIL
* Midhani
* NFL
* OF-Medak
* Osmania. * IICT
university
* BH
* NFC
* NFMDC
* RCI
* RCMA
* CPDC
* KOBASHI * Praga
* ARCI
tools
* Vision Labs
* DoAC-ASL
* HAL
* CMFI
* DMRL
* DRDL
* MTAR
* OMC
MMRCA
Super Plastic
Forming
Canopy
Fragilisation
Circuit
Thermo Plastic
Composite
Microwave &
digital jamming
controller
Robotic
Riveting
FADEC
AESA Radar
Co-Cured Composite
Stiffened Parts
EW Suite
Titanium Alloy Super
plastic Forming
NC Loom
manufacturing
Radio
Crystallography
MMRCA Supply Chain Challenges
Supplies
Accessories
70+
French
OEMs
20+ Indian
Production
Agencies
 Good Example of Public Private Cooperation
 IPR s stay within country
Aerospace Structural Incoherence




India started off early in Aerospace(1940)
Indian Space and atomic programme started 2 decades later
Need for Opinion synergy and cohesion
Pointed out by many committees – Recent is BK Chaturvedi commiittee
• Quote “To consolidate capabilities in design & development (D&D), a Design, Development and
Technology Management Governing Council chaired by Raksha Mantri may be set up. This may
provide major policy directions. The Governing Council may be supported by a Design &
Development Management Board and the entire pool of D&D personnel should be placed at the
disposal of the Board. The Board may be chaired by Director, D&D, HAL and include representatives
from CSIR and DRDO.”Unquote
• Quote “Pooling of R&D Resources: Conceptual frame work of existing aviation R&D organisation in
India needs to be revisited. The Design organizations involved in the field of aeronautics should be
brought under one roof while retaining their administrative autonomy.” Unquote
• Quote “If India wishes to be a global player in this field, there is a need to set up an Aeronautics
Commission. …….All the institutions in the Military and Civil Aviation sectors could be brought under
the umbrella of this Commission.” Unquote
“India & Civil Aerospace”
Civil Aerospace in India
Some Facts ……
 CAGR of 14% - Last 10 years
 Air Traffic to Double by 5 to 7 Years Period
 Passenger Volume - 2020 ~ 35 Crore
 1032 new aircraft ~ Rs 75900 Crores by 2028 would be
inducted by Indian Aviation Industry *
By 2020
India will be the 3rd largest aviation market in the world
National Priority : Having flagship Civil Product
Economies survive on Civil Business – Brazil, USA, Europe
* Study By CAPA, 2012
NCAD & HAL
 Planning Commission mandate – HAL to be the nodal agency
 NMCC identified as the program coordinator
 Envisaged over Rs 7500 Cr project
 Design – Rs 4325 Crs
 Production – Rs 3200 Crs
Quote from BKC Committee Report
Quote “National champions in Europe have become part of European Aeronautics Defence and Space
(EADS.) Both the global leaders, Boeing and EADS are in both the civilian and military spheres as
there are synergies. India’s capabilities in the field of Aeronautics have been created in HAL. These
can easily be used for diversification in the civilian segment. It is suggested that as the proven Indian
entity with the necessary wherewithal, HAL should spearhead the Aviation Business instead of
creating several players in an industry which is technologically complex and is highly capital
intensive. HAL has the resources to attempt this.” Unquote
Civil MRO Landscape in India

India will be the fastest growing country for air travel in next 10 years

Current Share of India in world MRO Market is 1 % of 41.8 BUSD

Total commercial fleet size is in excess of 430, expected to double in
next 5-7 years

MRO is the third largest component(~15%) of the operating cost of an
airline

Indian MRO Market is projected to balloon up to 2.6 BUSD by 2020
growing 10% per annum
Civil MRO Landscape in India
“Advantage India”

Low Labor Cost (35$ per man hour in India vs. $ 60 in South East
Asia & even more in Middle East and Europe)

Availability of technical talent to be trained and employed, More than
55 Aircraft Maintenance Training Schools

Geographical Advantage (Between Europe and Asia Pacific)

Untapped Demand , total Outgoing MRO Business is 0.7 BUSD per
year

100 % FDI in MRO Business
HAL and Aircraft MRO
 Huge Infrastructure for Military MRO
 Established Quality Systems and Logistical framework
 Dedicated Overhaul and Accessories Divisions
 Experienced work force with necessary skill set
 Two operational Airports (Proprietary) at Nasik and Bangalore while its
Accessories Division at Lucknow is close to Amausi Airport
To Sum it up...
India as well as HAL at a unique vantage point for Civil Aircraft MRO.
“Avenues for Capabiliy
Development”
India – Offset Scenario
 19 contracts signed since 2007 worth 14.93 BUSD*

Leads to $ 4.479 billion as offsets(~ 20,000 crore)
 100 BUSD contracting in next 5 to 7 years

Approximately 1,00,000 Crore
 Our focus as a country to offset should be on



Relevant Technology
Capability development
Performance Driven
Lessons from other countries

Turkey

South Korea

Saudi Arabia

Brazil
*Figure indicates the likely value of offsets and not the liquidated value of offset
Indian Aero Engine Scenario
•
•
•
India as a country needs to develop capability in field of Aero Engines
Requirement of Engines - Formidable cash outflow & long term dependency
HAL , AERDC - First flying jet engine in country & initiated development for 20 kN engine
Indian Aero Engine Scenario
 Overall Outflow of approximately Rs 2,38,000+ Crores (More than Indian defence
budget allocation for 2012-13)
 HAL - First flight worthy jet engine in country & initiated development for 20 kN
engine with internal funding
SNo.
Manufacturing Projects
 Requires a serious national effort &
01
RD-33 (MiG-29)
National Funding for Development
BKC Committee Recommendation
Quote “An important need would be to develop
aero engines, design & development and
production to be managed by one
organization,..........”Unquote
02
03
04
AL-31FP (Su-30MKI)
AL-55I (IJT)
Shakti Engine (ALH/ LCH/ LUH)
05
06
07
08
09
10
11
12
13
F 414 INS6 (LCA)
F 125 IN (Jaguar Upgrade)
Adour Mk 871 (Hawk)
M 88-2 E4(MMRCA)
117 -S (FGFA )
AMCA Engine
Kaveri (Dry)- UCAV
IMRH Engine
APU; Starters; STFE
IDSA – Pondering Points
National Consensus
National Aerospace Accountability Center
Civil Aircraft Development should be a
national priority
Introspection Points
 Collaboration vs Competition ?
 Synergy vs Redundancy ?
 Short Term Gains vs Capability Building ?
 Profit maximization vs Self Reliance ?
Neither Public Sector alone nor private sector will achieve the
goal of Indian Self Reliance
Together WE CAN and WE WILL ACHIEVE IT
Jai Hind