Presentationto

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

19 Production and 10 R&D Centers

Work Force – 33000 +

Exports to over 20 countries

Lucknow

Korwa

Kanpur

Hyderabad

Bangalore

Barrackpore

Nasik

Koraput

*

**

*

***

*

*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

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

IAF Indian Navy Indian Army

Helicopters; 100%

Fighte

r Airc

raft

Trainer A

ircra

ft

Helicopte

rs

Transp

ort Airc

raft

81%87%

41% 41%

Trainer Aircraft

Transport Aircraft

Helicopters

100%

49%61%

1

2

18

73

Eastern Zone 94

2

22

493

7

2

Western Zone 526

4141

12

2

77

Northern Zone 173

3341119

15151 Southern Zone 1619

Overall Vendor Base2412

HAL & Aerospace Ecosystem Development

Kerala

Value of indigenous sourcing ~ 1195 Crs

R&D INVESTMENT AS % OF TURNOVER

3.3%

3.3%

3.3%

3.3%

3.3%

3.3%

7.5%

0.1%

0.3%

0.3%

2.6%

2.8%

0% 2% 4% 6% 8% 10%

HAL

Tata Power

L&T

Bharat Forge

Ashok Leyland

M&M

US A&D Average HAL Vs Private A&D Industries

Domestic A&D – R&D Efforts

Source : Company information & Annual reports 2010-11 available on web-sites, US average pertains to for US A&D majors

R&D INVESTMENT AS % OF TURNOVER

3.3%

3.3%

3.3%

3.3%

0.7%

2.6%

7.0%

7.5%

0% 2% 4% 6% 8% 10%

MIDHANI

BEML

BEL

HAL

US A&D Average HAL Vs Other DPSUs

HAL is the biggest investor in R&D efforts amongst DPSUs as well as major Private

Indian Industries entering defence sectors

“Challenges for India Inc”

Three Major Challenges

Economic

External Security

Internal Security

Challenges for India Inc

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”

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

BK Chaturvedi Report

Light Combat Aircraft - Tejas

Completed more than 2290 flights15 (7 LSP, 6 PT, 2 TD) ADA commitment for IOC – Nov ‘13 HAL geared up for production post certification

* CSIO * TBRL

CHANDIGARH

* SAG * DESIDOC * IAF* IIT * SSPL * NPL* DSC

DELHI

* OF-Ambajhari * Firth India

NAGPUR

* DL

JODHPUR

* NID

AHMEDABAD* IPCL * MS university * GSFC

BARODA

* HAL * Polymer ent.

NASIK

* ADRDE

AGRA

* DEAL * IRDE

DEHRADUN

* HAL * RDSO* RCMA

LUCKNOW

* CSDO * HAL * MARS Auto* DMSRDE * IIT

KANPUR

* HAL

KORWA

* BHU

VARANASI

* Calcutta university * Jadhavpur university* UBEST

KOLKATA

* IIT

KHARAGPUR

* NALCOBHUBANESHWAR

* HAL

KORAPUT

* NSTL * BHPV

VISAKHAPATNAM

* CVRDE * ARC * IGCAR * IIR * HVF * SAMEER * SERC * VIVASONIC * Centre for reliabiilty

CHENNAI* HAL * BHEL * ANURAG* CMFI * CCE (R&D) * DLRL * DMRL * CV * MCEME * DRDL * ECIL * Midhani * MTAR * NFL * OF-Medak * OMC * Osmania. * IICT

university* BH * NFC * NFMDC * RCI * RCMA * CPDC * KOBASHI * Praga * ARCI

tools* Vision Labs * DoAC-ASL

HYDERABAD

* BHEL* High Energy Batteries

TRICHY

* CECRIKARAIKUDI

* PSG COIMBATORE

* Cochin university* INDAL * NPOL

COCHIN

* VSSC * ER&DC * KELTEC

THIRUVANANTHAPURAM

* 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

BANGALORE

MUMBAI* BARC * IBP * IIT * NCML* SAMEER * L&T * NCST * TIFR* SASMIRA * OF-Ambarnath

* HEMRL * ARDE * IAT * R&DE(E) * NCL * AID* RDE * TRDC

PUNE

* NML

JAMSHEDPUR

* IIT

Guwahati

* VAISESHIKA

AMBALA

LCA – A National Effort

Super Plastic Forming

Robotic Riveting

Thermo Plastic Composite

Canopy Fragilisation Circuit

NC Loom manufacturing

MMRCA

Titanium Alloy Super plastic Forming

Microwave & digital jamming controller

EW Suite

AESA Radar

Radio Crystallography

Co-Cured Composite

Stiffened Parts

FADEC

70+ French OEMs

20+ Indian Production

Agencies

Accessories

ToT &Supplies

ToT &

Supplies

Su

pp

lies

ToT &Supplies

ToT &

Supplies

ToT & Supplies

ToT &

Supplies

MMRCA Supply Chain Challenges

Supplies

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

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

Some Facts ……

* Study By CAPA, 2012

National Priority : Having flagship Civil ProductEconomies survive on Civil Business – Brazil, USA,

Europe

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

“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

Civil MRO Landscape in India

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”

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

India – Offset 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

Requires a serious national effort & National Funding for Development

Indian Aero Engine Scenario

SNo. Manufacturing Projects

01 RD-33 (MiG-29)02 AL-31FP (Su-30MKI)03 AL-55I (IJT)04 Shakti Engine (ALH/ LCH/ LUH)

05 F 414 INS6 (LCA)06 F 125 IN (Jaguar Upgrade)07 Adour Mk 871 (Hawk)08 M 88-2 E4(MMRCA)09 117 -S (FGFA )10 AMCA Engine11 Kaveri (Dry)- UCAV12 IMRH Engine13 APU; Starters; STFE

BKC Committee RecommendationQuote “An important need would be to develop

aero engines, design & development and production to be managed by one

organization,..........”Unquote

IDSA – Pondering Points

National ConsensusNational Aerospace Accountability CenterCivil 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