BEL, in collaboration with Indian industry and selected foreign defence OEMs, is participating in high technology, complex ‘Make’ programmes of the Indian Army like Tactical Communication System (TCS) and Battlefield Management System (BMS). The BEL Chairman and Managing Director S.K.Sharma gives details of the plans.
SP’s ShowNews (SP’s): Could you tell us about BEL’s initiatives in line with the government’s ‘Make in India’ policy?
S.K. Sharma (Sharma): BEL has been taking several initiatives to achieve self-reliance in defence through strong thrust on: in-house R&D and indigenisation; Increased outsourcing from Indian private industries; public-private partnerships; joint ventures and capacity expansion and modernisation.
With regard to R&D, constant efforts on R&D has enabled BEL to achieve 80 per cent of its turnover from indigenous technologies. We have been investing around eight per cent of our turnover on R&D annually and are planning to increase it to 10 per cent progressively in the next three years. BEL is in the process of setting up a new Product Development & Innovation Centre for developing common subsystems and futuristic products. BEL has empanelled around 180 partners for collaborative R&D including 100 Indian private industries to further augment its R&D and product design efforts and also bridge the technology gaps. Around 120 projects have already been identified for collaborative R&D. We have also increased outsourcing from private industries and the procurement level is 8 per cent from MSMEs during 2014-15 against 4.73 per cent in 2013-14. In order to broaden the domestic vendor base, BEL added 750 new indigenous vendors during 2014-15 and has planned to add around 800 new indigenous vendors during 2015-16.
SP’s: Could you give us details about BEL’s partnerships and joint ventures?
Sharma: The indigenously developed surface-to-air Akash missile system is a great success story and BEL is proud to be a part of it. Barring a few electronic components, every bit of Akash has ‘Made in India’ tag. BEL is selected as one of the development and production agency for major ‘MAKE’ category projects such as Tactical Communication System (TCS) and Battlefield Management System (BMS), to be executed in partnership with Industry players. BEL formed a new joint venture with European major Thales, France, for civilian and select defence radars.
SP’s: What are the company’s capacity expansion and modernisation plans?
Sharma: BEL spends around Rs400 crore on expansion and modernsiation of infrastructure every year. World-class manufacturing and test facilities set up in the recent past are: Super components facility; integration test facility for weapon systems; antenna test range facility; modern production set-up for airborne applications, etc. BEL is planning to spend around Rs1,500 crore in the next three years for modernisation.
SP’s: What are the new products and services for the moderniation of the armed forces?
Sharma: BEL is working in many strategic areas such as AESA based modern radars, next generation electronic warfare suites, air defence systems, TCS, BMS, passive night vision devices and multi-sensor stabilisation systems.
SP’s: What is the turnover of the company and the projections?
Sharma: BEL has been making profits consistently. The company is able to meet the incremental working capital requirements and investments towards capacity expansion and modernisation from internal resources. In 2014-15, BEL achieved a turnover of Rs6,695 crore, registering a growth of 8.43 per cent with PAT of Rs1,167 crore. BEL has got a healthy order book and also good order inflow projections for the next two to three years.
SP’s: What is the contribution of exports to BEL’s revenues?
Sharma: BEL achieved the highest ever export sales of $57.85 million in 2014-15, registering a growth of 37.7 per cent over the previous year’s export turnover of $42 million. The export sale for the year 2015-16 is expected to surpass the targeted $65 million and touch about $85 million.
Currently, the coastal surveillance systems, naval air surveillance radars, sonars, night vision devices and electronic voting machines are being promoted to South East Asian, Middle East and African countries. The long-term export plan of BEL is to reach sustained export sales to total sales turnover ratio of 10 per cent from the current level of 5.3 per cent.
SP’s: What are the expansion/diversification programmes?
Sharma: The major programmes being executed during the year include Naval Surveillance Radars to Myanmar, TI Fire Control Systems to Israel, Electro Mechanical parts to GE & Siemens, among others. In the last decade, BEL has entered into several new business areas as part of diversification efforts and has resulted in substantial business. Further, efforts are on to enter into areas like Indigenous SAM systems, Airborne Radars, Image Intensifier tubes and Thermal Imaging detectors for Night Vision Devices, Inertial Navigation Systems, Electronic Ammunition Fuses, Pressurised Missile containers, Critical Infrastructure Protection, Air Traffic Management Radars, Intelligent Traffic Management Systems, Solar Power Plants and Smart City elements for future business growth.
SP’s: Could you tell us about the L70 Gun upgrade programme?
Sharma: BEL had won the order for the L70 gun upgrade in a global open tender issued by the Indian Army. The upgradation is intended to eliminate few of the operational and maintenance difficulties faced in the existing L-70 Gun, which is driven by hydraulics and increase life span of the equipment.
SP’s: Could you tell us about the Palasamudram facility?
Sharma: BEL is setting up a Defence Systems Integration Complex spread over 400 hectres at Palasamudram in Andhra Pradesh. It will be the largest such facility in the country once it is commissioned and BEL will expand its missile systems business and carry out manufacturing and integration for the ongoing and upcoming projects.
SP’s: What is the status of some current and future projects of BEL by 2025?
Sharma: BEL, in collaboration with Indian industry and selected foreign defence OEMs, is participating in high technology, complex ‘Make’ programmes of the Indian Army like TCS and BMS. BEL is exploring to develop several variants of the Akash Missile System and is also evaluating potential export opportunities.
BEL is bullish on the opportunities available and keen to capitalise on these opportunities in the defence and aerospace sector. In the backdrop of increasing competition in the defence business from private industry, BEL is gearing up with strategies and action plans to maintain its technological edge and ensure future growth.