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French aerospace giant Snecma plans India base

Fakir Chand in Bangalore

Snecma, the world's leading French aerospace company, is planning to set up an independent manufacturing base in India to roll out aero engines for civilian and military aircraft, including helicopters and transport planes.

Snecma will set up a wholly owned subsidiary in India in 18 months, with in initial investment of euro 20 million ($19.83 million), for the purpose.

The company will also make components and spare parts for its global aerospace customers.

Disclosing its India plans, Snecma vice-president Dominique Paris told rediff.com in Bangalore that the company's manufacturing base would be independent of its proposed joint venture with the Bangalore-based Hindustan Aeronautics Ltd, being set up to produce aero engines for the latter's advanced light helicopters (ALHs) and the intermediate jet trainers (IJTs).

"Our proposed facility will be a 100 percent export-oriented unit. We have not yet decided its location. We are considering Bangalore as one of the options, keeping in view the city's reputation as an aerospace hub of the sub-continent," Paris stated.

Declaring that the global aviation industry was looking at India and China for increased outsourcing, Paris said Snecma would have a cost benefit of 40 per cent if aero engines and accessories were manufactured in India and exported worldwide.

"India has not only established its leadership in software sector, but also proved its pre-eminence in the fields of aeronautics and aerospace, thanks to a strong industrial and engineering base, built over the last four decades," Paris claimed.

Though global downturn and recession in the aviation industry had impacted Snecma's production operations since last year, the company had orders to deliver about 750 CFM engines for civilian and military aircraft, 600-700 engines for helicopters, and 500 engines for transport or cargo planes in the current year (2002) as against 2500 engines in 2000-01.

"With Snecma diversified into propulsion and equipment group companies, we look forward for a greater collaboration with the Indian aerospace industry for components and accessories, besides avionics software.

The global aviation industry is set for a gradual revival in the coming years, with higher growth rates in the Asia Pacific region, led by China and India, both in the civilian as well as military segments," Paris asserted.

In the long-term, if the American or European aerospace industry wants to remain competitive and profitable, then they need to shift a substantial portion of their production facilities to high-skilled but cost-effective industrial bases like India or China.

In the run-up to its proposed manufacturing facility, the Euro 6.9-billion Snecma has early this year set up an 100 per cent research and development centre in Bangalore, with an initial investment of Rs 20 crore (Rs 200 million).

The R&D centre will perform studies and develop engine components, aircraft equipment, and onboard software. It will also develop embedded software to design engines and other equipment to be used for simulation and manufacturing.

"Initially, the centre will carry out design studies on behalf of Snecma's group companies We will also have development projects for the group's future collaboration with the Indian aerospace industry," Snecma Aerospace India managing director Olivier Laederich said.

The centre will have strength of about 100 employees, including lateral software engineers with specialization in aeronautics and avionics. Another 250 engineers will ramp up the number up by 2004.

"Bangalore is not only the Silicon Valley of India, but also the capital of aerospace with outstanding human resources and academic/R&D establishments in defence, aviation, and space. We intend to take advantage of the skills and leverage the Indian capability for outsourcing management software, and applications for engine controls," Laederich said.

As the centre will be a 100 percent export-oriented unit, it will be considered as Snecma's software technology park unit. To be operated as a revenue centre, the subsidiary is expecting to post sales of euro 3 million by the second year of operations.

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