Vol 10 Issue 6 Jan - Feb 2017
Mr. MV Gowtama outlines BEL’s priorities and strategy in the challenging defence production environment
Monday, February 6, 2017
SADSR. As the new CMD of Bharat Electronics could you discuss your vision for the company?
BEL. The Indian Defence market is one of the most attractive markets in the World and it is poised for substantial growth in the coming years. As per various market reports, the Indian defence capital acquisitions of platforms will be of the order of about Rs.22 Lakh Crores in the next 10 to 15 years. The Defence Electronics opportunity will be of the order of more than Rs.7 Lakh Crores, typically forming about 30% of the platform cost. Around 65% of the Indian defence needs are met through Imports and the Indian Government’s Vision is to develop a strong, self-reliant domestic industry in the defence sector with substantial participation from the private sector.
The Defence segment continues to be BEL’s main business and provides close to 80% of revenues. In keeping with the modernization plans of the Indian Defence forces, BEL aims to grow at a rate of 12 to 15% in the next 8 to 10 years.
Segments like Radars, Weapon Systems, Electronic Warfare & Avionics, Military Communications, Network Centric Warfare and Electro Optics are likely to largely drive the Company’s growth in the future.
With the opening up of the Defence segment to private sector participation, BEL is being exposed to increasing competition. As a diversification strategy, BEL is continuously exploring opportunities in defence and allied non-defence areas for enhanced growth, leveraging its strengths and capabilities acquired in the defence electronics domain. Some of the new areas of focus in the defence segment include Electronic Ammunition Fuzes, Complex Navigational Systems and Inertial Navigation Systems. BEL intends to use its knowledge and experience acquired in Defence by offering spin-off technology products for civil segment applications. The main areas of focus identified for the civil sector business include Homeland Security, Smart City elements, Solar Power, Modern Communication Systems for Police and Paramilitary Networks, in addition to continuous efforts to expand its present line of Civil business in the areas of EVMs, Smart Card, Communication equipment and Electro Optic devices.
BEL has been continuously carrying out changes in its organizational setup, business processes and systems to adapt to the changing business requirements. BEL is planning to invest substantially for expansion and modernisation of facilities, especially in areas of Radars, Missile systems, Advanced Electro-optics, Antennas manufacturing, RF & Microwave components and Homeland Security solutions.
SADSR. What have been BEL’s successful orders and supplies to the Indian armed forces and security forces in the recent past?
BEL. BEL has successfully executed many notable orders for the Indian Armed forces. These include Akash Weapon Systems for the Indian Army and the Indian Air Force, 3D Tactical Radar for the Army, Passive Night Vision Devices, Low Level Light Weight Radar for the Air Force, Fire Control Systems for the Navy, Ship Data Network and new generation Sonars for the Navy.
Significant orders received by BEL in the recent past include Integrated Air Command Control System, Weapon Locating Radar, Hand Held Thermal Imager with Laser Range Finder, Ground Based Mobile ELINT, Integrated Communication System, Sonars for Submarines, Electronic Ammunition Fuzes, Armoured Engineer Reconnaissance Vehicle and EW System for IAC.
SADSR. BEL has a reputation for encouraging Micro, Small and Medium industries as part of its vendor and sub-vendor base. Would you please tell us more about this noble policy?
BEL. BEL recognizes outsourcing as one of the strategic tools to achieve cost benefits and also complement the strengths of the private sector to build a strong industrial base. Such initiatives will also help BEL to focus more on core areas and R&D.
BEL has been taking several initiatives in order to broaden the domestic vendor base by formulating a long-term outsourcing and vendor development policy, implementing online vendor registration and e-procurement processes. As a policy, MoD is encouraging all DPSUs to have common vendor base. BEL is working towards this.
BEL has prepared the list of 358 items reserved for purchase from MSMEs and this is uploaded on its website. Nodal officers are nominated specifically for outsourcing and vendor development at all of its 9 manufacturing Units.
Collaborative R&D process is put in place to further augment BEL’s R&D and product design efforts and also bridge the technology gaps. About 120 projects have already been identified for collaborative R&D and 180 partners including 75 MSMEs are empanelled.
BEL also participates in the annual conferences and workshops of MSMEs to identify products and suppliers for procurement.
The response to the initiative of outsourcing from private sector especially from MSMEs is overwhelming and BEL has added 782 new indigenous vendors during 2015-16 and approximately 400 Indian suppliers including MSMEs and Startups are getting added every quarter to the Vendor base of BEL. It has achieved procurement level of 20% from MSMEs during 2015-16 against 8% during 2014-15.
SADSR. Exports in defence sector are one of the priorities with the present Government. BEL as a leading DPSU can lead the way. Please tell us about BEL’s export policy and orders. What has been the turnover from such exports?
BEL. The present Government is encouraging defence exports through many policy initiatives. The Government is aiming to achieve US$ 2 Billion exports in a couple of years. India’s defence exports have increased from INR 994 Crores in 2014-15 to more than INR 1500 Crores during 2015-16 with focused efforts from Indian Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and the private sector companies.
Exports and Offsets have been identified as one of the thrust areas for BEL. The Company has drawn up plans to offer its select products and systems to various markets. BEL has achieved exports of USD 85 Million in the financial year 2015-16, registering a growth of 47% over the previous year’s export turnover. BEL plans to achieve exports business of about 10% of the turnover from the current level of 7.3% in the near future.
BEL is supplying Naval Radars & Sonars, Coastal Surveillance Systems, EW & Avionics products, Communication equipment, TI based EO products, among others, to various global customers.
Presently, the major orders being executed are from customers in USA, Switzerland, Israel, Sri Lanka, Myanmar and Maldives.
SADSR. Is BEL planning to introduce new technologies or enter into fresh segments related to defence and aerospace, particularly in the aerospace sector?
BEL. BEL is working in many new strategic areas such as AESA based modern Multi-mode Radars for Airborne applications, Next Generation Electronic Warfare suites for fighter Aircraft & Helicopters, sensors and data links for UAVs, Integrated EW systems for various terrains / ships, AESA based Air Defence Surveillance and Fire Control Radars, Tactical Communication Systems, Battlefield Management Systems, Multi-sensor Stabilisation Systems with sensors, Electronic suites for Gun upgrade and new gun program with Target acquisition and Fire Control capabilities.
SADSR. What’s your strategy to bag orders from the opportunities arising out of offsets based on Indian armed forces contracts in the next few years?
The avenues for discharge of Offsets obligations by foreign OEMs include transfer of technology, foreign investments, joint ventures / co-development / co-production arrangements with Indian industry with an aim to enhance the capability of indigenous industry.
BEL has a dedicated International Marketing group to focus on development of exports / offset business. BEL proactively interacts with global OEMs to identify their requirements / potential business opportunities for fulfillment of their offset obligations, carry out demonstration of technology / product capabilities, entering into MoUs / Agreements, etc to capture the offset business.
SADSR. Could you please tell us about BEL’s participation in the forthcoming Bangalore Airshow 2017.
BEL. BEL is participating in Asia’s premier air show and exhibition, Aero India 2017. BEL will be showcasing its wide range of capabilities.
BEL will showcase its capabilities spanning every domain of its business – Electronic Warfare & Avionics, C4I Systems, Communication Systems, Electro Optics, Radars, C4I solutions, Energy Shelters and Missile Systems. BEL will also display its R&D capabilities by demonstrating some of its new products / technologies.
Electronic Warfare & airborne products on display will include avionics for Light Combat Aircraft (LCA), Light Weight ESM System for Helicopters and LRUs for Rustom Unmanned Aerial Vehicle (UAV).
Communication systems on display will include the Software Defined Radio – Airborne & AFV versions (with Live Display), Radio on The Move (ROTM), STARS V Mk-III, CNR MK-II, SATCOM Terminal Manpack and Hand held and Advanced Landing Ground Communication Terminal.
The complete range of Electro Optic devices will be displayed with live demonstration. BEL will display a host of new radars like Ground Penetrating Radar, Through Wall Radar, Weapon Locating Radar, Schilka Weapon System, and Mine Field Recording System. The C4I systems capability demonstration will be showcased in a live Customer Experience Centre during the Exhibition. Naval Systems capability will be showcased through display of Advanced Composite Communication System.
The highlight of BEL’s outdoor display will be the Army version of the Akash Missile System including the Troop Level Radar, Troop Control Centre, Troop Power Supply Vehicle, Mast and Energy Shelter.