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HAL to scout for global partnerships at Paris air show

Fakir Chand in Bangalore

Hindustan Aeronautics Ltd, the Bangalore-based largest defence undertaking in the country, is gearing up to emerge as a global player in the aerospace industry for joint partnerships and co-production.

Disclosing this in Bangalore on Friday, HAL chairman and managing director Krishnadas Nair told Rediff.com that the company would showcase its competitive strengths in all segments of aeronautics at the ensuing Paris Air Show, being held at Le Bourget from June 17th to 23rd, for building a partnership with like-minded international aviation companies.

"HAL will offer its vast design, manufacturing, and maintenance expertise to global companies at the air show so as to take advantage of building various types of technologies and aircraft at a much lower cost than the prevailing international prices," Nair stated.

Making a departure from its conventional approach to growth and expansion, HAL is making a paradigm shift towards partnership from its traditional buyer-seller relationship.

Some of the areas of co-operation HAL will be seeking are:

Joint design and development of engines for fighter aircraft and helicopters to be sold in the global market at competitive prices;

Upgrade of aircraft and helicopters of different categories;

Servicing and repair of aircraft, helicopters, aero-engines, and associated accessories;

Joint development and production of under carriages, hydraulics and fuel systems, ECS integration packages, and simulators;

Execution of structural parts, sub-assemblies, precision-machined parts, avionics packages, and aviation software packages, and

Supply of components, sub-assemblies, work packages, and other services to meet the offset requirements against the acquisition for civil and military aviation equipment.

"As an independent corporate entity with the largest base in Asia, HAL wants to utilise the right to sell its products to overseas customers/OEMs whenever direct purchase is resorted to involving 'transfer of technology' by co-developing and co-producing with the selected partners," Nair said.

On the eve of the air show, the HAL board of directors has decided to float a separate joint venture with an international company to set up a forge facility to manufacture and repair aero-engine blades at an estimated cost of Rs 600 million.

"We are waiting for the guidelines from the ministry on allowing 26% foreign equity participation in joint ventures as part of the proposed privatisation of defence production. If engine blades are produced and repaired here, foreign exchange to the tune of 20 -30 per cent can be saved by Indian military and civil aircraft users. It will also enable us to export the blades to global companies," Nair affirmed.

HAL is also exploring the possibility of executing work packages under sub-contract as they have been identified as an area of core competency for exports.

"We have started executing such sub-contracts involving aircraft structural components to major OEMs, including Airbus Industries and Boeing. Discussions are also underway with Airbus for a similar participation in its latest A380 program on a risk-sharing basis."

HAL has recently tied up with Turbo Mekay of France to jointly design and develop a new variant of advance light helicopter engine. Named as Shakthi, the light developed engine will be used in manufacturing light observation helicopters, which can fly at high altitudes for surveillance, observations, and emergencies. It will be a 4-seater copter.

"The 50:50 joint venture will have an investment of $40 million with half of it being HAL's contribution. The design, development and manufacturing will take place in Bangalore with support services from HAL's other divisions at Nashik, Kanpur, and Lucknow. The project cost for regular production will be around Rs 1billion. After trials and certification, it will be also be marketed globally from 2005," Nair averred.

Referring to the recent deal with Russia for rolling out the multi-role transport aircraft to replace the aging AN-32 guzzlers, Nair said HAL had signed an agreement with Ilyushin Aviation Complex and Irkutsk Aviation Production Organization for joint design, development, and co-production of MTA with a 15-20 ton capacity or 100-seater.

The MTA will be designed and developed for military as well as civilian purposes. It will have a range of 2,500-6,000km depending upon the load to be carried with the cruise speed of around 850km per hour. The design project report is likely to be ready in 6 months. Development and certification will take another 4-5 years.

"We are planning to deliver the first aircraft by 2006. We are expecting an order of 100-200 aircraft with half of them from the defence forces, and the rest from Russian customers. We may rope in other defence undertakings like NAL and DRDO, besides private players to source their expertise, including components," Nair claimed.

After meeting the requirements in both the countries, MTA will be marketed globally as it will have an advantage of being cheaper by 20-30 per cent, thanks to lower development and production cost with high skills.

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