Tata bid to take off in aerospace

The $70-billion Tata group is quietly building its presence in the aerospace industry that has recently seen significant investment from the private sector. It is in the process of applying for licenses from several central government ministries, predominantly the defence ministry, to sell helicopters that it plans to assemble at its joint venture with Italian conglomerate Finmeccanica’s AgustaWestland. The Tata group and AgustaWestland decided in early 2009 to form a joint venture that would establish a plant to assemble the AW 119 helicopter — an eight-seater utility copter meant for both defence and civilian uses. The deliveries were supposed to start by 2011, but the deadline has since been pushed back by a year.  The joint venture was concurrently applying for licences as it went about putting up the assembly unit in Hyderabad. At the time the joint venture was formed, the production target was fixed at 30 units a year. The Centre for Asia Pacific Aviation (CAPA) has estimated that the Hyderabad-based greenfield facility of this joint venture is likely to entail an investment of $30 million. The joint venture company, Indian Rotorcraft, will assemble and deliver these helicopters. It will target domestic as well as global customers. Estimates indicate that India will be a key market for helicopters with an expected demand of 800 units in the next decade from both the public and private sector. Late last year, another Tata group company, Tata Advanced Systems Ltd, rolled out the first made-in-India Sirkorzy S-92 helicopter cabins from Andhra Pradesh. These helicopter cabins, which were previously manufactured in Japan, were exported to Sirkozy’s assembly plant in the US. A recent paper by the CAPA on aerospace manufacturing in India said the Tatas and the Mahindra group with strong financial credentials had entered into various alliances to manufacture parts and assemble machines under offset agreements. “However, there are strong prospects and good reasons for these groups to move from defence offset to licensed manufacturing and beyond to civil aviation manufacturing as the defence market becomes saturated,” it added. Mahindra & Mahindra (M&M) had acquired Aerostaff Australia and Gippsland Aeronautics in 2009 as a part of Rs 1.75-billion investment and capacity building forays into aerospace components and aircraft manufacturing. Recent reports said Mahindra Aerospace Pvt. Ltd, the aerospace unit of M&M, is scouting for a technology partner to make aircraft components at a proposed plant in Bangalore. The CAPA says that the interest shown in aviation by industrial houses suggests a real opportunity for India to develop a presence in international aerospace manufacturing where other developing economies such as Brazil have done well.