Aerospace SEZs are they creating an ecosystem for manufacturing?

Aerospace SEZs are they creating an ecosystem for manufacturing?

Sun, 02/17/2019 - 14:56
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By R.Chandrakanth

India is not a manufacturing hub for aerospace and defence, two vital economic segments. Both till recently have been in the realm of public sector and we all know the limitations of PSUs, hence manufacturing has never reached commanding heights. Will it? It remains to be seen.

Rightly, the Chairman and CEO of Aequs Aerospace, Aravind Melligeri has said that the aerospace and defence manufacturing abilities of a nation are often considered a yardstick to evaluate its industrial and technological prowess. “The reason for this is that a high level of scientific and engineering expertise, years of research and development and massive resources are required to manufacture aircraft and their components.”

For that to happen, one of the requirements, at least in this present era, is an environment for entrepreneurship to thrive. A cluster approach or a special economic zone can be the starting point. The newly formed Telangana state was the first to get off the block, setting up a special economic zone for Aerospace and Precision Engineering near the Rajiv Gandhi International Airport, Hyderabad.  Companies such as Lockheed Martin, Pratt and Whitney and Sikorsky (now part of Airbus Helicopters) and Indian entities such as Tata Advanced Systems Ltd, Motion Dynamics, Gagan Aerospace, Aeroc Space Tech, Hemmair, Apollo Aerospace, DSR Tech, Lokesh Machine Tools, Gowra and many more have started operating from the SEZ and have benefitted. The Telangana government is proposing to set up three more aerospace and defence parks on the outskirts of the city over the next four years with an investment of Rs. 2,500 crores. It has also announced that it would come out with a sector-specific policy. 

Karnataka first to come up with aerospace policy

Karnataka which was the first state to come up with a policy for aerospace development has also set up an aerospace park over 1,000 acres near the Kempegowda International Airport, Bengaluru.  Karnataka has the advantage of being home for many aerospace companies, almost two-thirds of aerospace manufacturing happens here. The SEZ which is part of the aerospace park comprises export-oriented industries and those that deal with maintenance, repair and overhaul (MRO). The aerospace hub has been developed in collaboration with the US Aerospace Supplier Development Mission to India in order to introduce US companies to Indian joint venture groups.

The presence of major international companies gives a boost to a number of other companies. Pushpak Prakash, Chairman of the MSME Defence Suppliers Group and Managing Director of Pushpak Pvt Ltd states that with global players such as Boeing it helps other industries to scale up their activities. Pushpak has taken space in the aerospace park to set up a dedicated facility to cater to its aerospace clients such as ISRO, HAL, BEL and others.

Prakash said that there was a promise of getting business. The over 2000 SMEs in and around Bengaluru which execute niche subcontracting for the defence PSUs will benefit immensely from the park as a cluster approach has several benefits over scattered units. Besides, location advantage, there would be a sharing of common facilities, thus bringing down the costs, giving the units a competitive edge.  He said that Bengaluru which is a leader in heavy engineering and machine tools manufacturing has created an environment for entrepreneurship to flourish. “There are teething issues and they can be resolved with tweaking of policies to favour industrial development.”

Dynamatic Technologies completes two years at SEZ

There are already 11 units which are operational in the aerospace SEZ. The Aerospace Common Finishing Facility (ACFF) is a joint venture between the Karnataka and the Central Governments which has set up a heat treatment, plating, surface treatment and common testing facilities. Its primary aim is to benefit the MSMEs. Dynamatic Technologies inaugurated its first hangar in February 2017. Dynamatics Aerotropolis spans across 27 acres and boasts of state-of-the-art facilities. It manufactures the main cabin for Bell Helicopters. The facility of Centum Electronics is spread over six acres with an investment of Rs. 200 crores and aims at integrating design, manufacturing, factory testing, quality control and advanced manufacturing and engineering. Apart from these, the others in the SEZ are Alpha Design Technologies; BEML; Bills Aerospace Components; CIM Tools; Kinetix Solutions; ThyssenKrupp Aerospace; Pranavam Aerospace; Tata Power; Wipro; and Zenith Precision.

Another aerospace park which is doing well is that of Aequs in Belgavi. The Aequs Aerospace park has 23 units including Apollo Aerospace; Deephole Solutions; Indo Schottle; Inspiron Enterprise; Quest Global Engineering; Sandvik Asia; Squad Forging; and UFI Filters. Aravind Melligeri who brought the aerospace park to Belgavi states that three significant themes will have a major impact on India’s aerospace and defence manufacturing capabilities. The first among these is the defence offset policy and the issues surrounding it. The second is the role of governments towards nurturing India’s nascent aerospace manufacturing sector. The third is the relatively slower advent of India’s commercial aerospace manufacturing sector.

Aravind said that “With Karnataka developing an aerospace policy a few years ago and Telangana being home to the country’s first public SEZ for aerospace manufacturing, the environment is finally becoming conducive for new entrants to come into the aerospace manufacturing ecosystem.”

Author is a Bengaluru based independent journalist.