‘BEL has identified contract manufacturing as one of the major areas to address offset obligations of vendors in the various RFPs of MoD’

SP’s: What are you showcasing at Aero India 2011? Will you be signing any memorandum of understandings (MoU) at Aero India?

Ashwani Kumar Datt (Datt): BEL will showcase indigenously developed network-centric warfare technologies such as command and control system, multi-sensor tracking, situation simulator and tactical algorithm for air defence applications; battlefield management system and coastal surveillance system. BEL will also showcase its inherent research and development (R&D) capabilities by demonstrating some of its new products / technologies including software defined radios, next generation bulk encryptor and high data tactical radio. Airborne products on display will include radar finger printing system, data link, digital flight control computer and identification friend or foe. Also on display will be the complete range of optoelectronic equipment, including night vision devices, digital hand held compass and advanced land navigation system.

We are in advanced stage of discussion with a few proposed joint venture partners. We are also discussing with original equipment manufacturers (OEMs) and some MoUs may be signed during Aero India 2011.

SP’s: What are the unique selling points of BEL products that can be offered to enhance your export business? How much progress has been achieved in exports? What is your export plan/target for the next two years?

Datt: R&D, very good quality systems, extensive manufacturing infrastructure and capability of providing total system solutions are the core competencies of BEL. This along with a pool of technically sound manpower takes care of customer requirement and provides long-term product support.

Export registered growth of 33 per cent from $17.77 million in 2008-09 to the US $23.6 million during 2009-10. The year 2010-11 too has seen significant improvement in exports turnover. This year, we are targeting an export turnover of $40 million. This includes offset, direct and deemed export. The total export orders acquired this year is $24 million and the order book is around $64 million. Further orders worth about $15 million are expected during the year.

Apart from the export of products and services, BEL has identified contract manufacturing as one of the major areas to address offset obligations of vendors in the various request for proposals (RFPs) of Ministry of Defence (MoD). Turnkey solutions’ is another new area of focus for increasing exports.

SP’s: Can you mention some of the new products/systems in the pipeline and upgrades that are planned for existing products?

Datt: Some of the new products that BEL is looking forward to are weapon locating radar, multifunction hand-held thermal imager, low power jammer system, 3D tactical control radar, low level light weight radar, software defined radio, radar warning receiver, coastal surveillance system and battlefield surveillance system. An upgradation has been done for Schilka, the tank-based fire control system for the Indian Army.

SP’s: Have you received any orders received for weapon locating radar, 3D tactical control radar and battlefield surveillance system (BSS)?

Datt: Weapon locating radar is undergoing user trials and has performed extremely well. Orders will follow the completion of these trials. The 3D tactical control radar is in the advanced stage of order placement. An order is expected shortly. We are also expecting an order shortly for battlefield surveillance system.

SP’: Are there any other important contracts that BEL is pursuing?

Datt: We are also pursuing orders for command information decision support system, night vision devices and missile approach warning system.

SP’s: What kind of business do you expect from offsets? In the area of contract manufacturing, how many contracts has the company won?

Datt: BEL is targeting a total offset business of $300 million in the next three to five years. It is estimated that the percentage of BEL share in offset business is expected to be around eight per cent of the total offset business possible. Among the RFPs issued so far, about 80 per cent value of total acquisition by MoD is for air platforms and rest are for naval platforms, Gun programme and radar and missile systems (in the range six per cent-9 per cent). The percentage of BEL’s share of offset may improve when more RFPs in naval, radar and missile systems area issued.

BEL has signed MoUs with major aerospace and defence companies abroad to take advantage of the mandatory offset clause in the RFPs for Indian defence procurement. In addition, BEL has planned plant upgradation in identified areas to address the offset opportunities. BEL has already identified homeland security as a focus area and has initiated development of stateof-the-art night vision devices, jammers, etc. As the current DPP allows for offset in the area of inland security, BEL expects to gain substantially through these development efforts.

BEL signed 15 MoUs and 11 NDA in the year 2010 with major international players for offsets arising out of RFPs issued by MoD, for example with Northrop Grumman, Boeing, Honeywell, etc.

In the last two years, we have won manufacturing contracts worth $12 million for supply to Hamilton Sundstrand, Northrop Grumman and GE, Varian, Philips and Siemens. We are expecting some orders from Boeing this month.