With 83,400 talented people in Australia, India, the Kingdom of Saudi Arabia, the United Kingdom and the United States, BAE Systems, a truly global company, is clear about its market strategy — building significant indigenous capability and footprint, often through mutually beneficial partnerships with investment in local businesses and sharing of skills and technologies, providing sustainable employment for local people. Alistair Castle, Vice President and General Manager, India, BAE Systems, talks about the company’s strong India footprint.
SP’s ShowNews (SP’s): What is BAE Systems’ strategy for India? What has been the impact on your vision for your business in India with the emphasis on ‘Make in India’?
Alister Castle (Castle): ‘Make in India’ is a powerful and hugely positive idea and we are fully aligned and committed to supporting its success. We take pride in being a founding partner of defence manufacturing in the country — with a track record of the Avro, Jaguars, the ‘Leander class’ ships, and most recently, the Hawk advanced jet trainer manufacturing programmes. The cornerstone of our strategy for India is partnerships across Indian industries, both public and private sectors, with whom we develop technology and capability and production, for India. We have significantly enhanced our offer on the Indian Government’s procurement of the M777 ultra-light howitzers from the US Government and will establish a specialist Assembly, Integration & Test facility for this weapon system in India. We recently down-selected Mahindra as our business partner for this facility. This programme will integrate nearly 40 Indian companies into our global supply chain. From an investment point of view, we were a first mover amongst international companies to make a direct investment in local manufacturing in partnership with Indian industry, and going forward too, we remain enthusiastic about such opportunities.
SP’s: The Hawk has been in service in the Air Force in large numbers and the Indian Navy has also inducted it. What are your plans for the platform going forward?
Castle: India is the largest operator of the Hawk advanced jet trainer with 123 aircraft ordered to date. Of these, 99 are made in India at the production line we helped establish in Bengaluru working closely with the Indian Ministry of Defence and HAL. It is no wonder then that the Hawk advanced jet trainer manufacturing programme is a flagship for BAE Systems in India, and together with HAL, we believe there is substantial scope in our partnership.These discussions got off to a good start with a five-year contract worth GBP 18.5 million to provide HAL a comprehensive package comprising Ground Support Equipment, Spares, Support and Training for the Hawk. This is in support of HAL’s plans to establish a dedicated Repair & Overhaul facility for the aircraft in advance of a major servicing milestone anticipated in 2016. We have also qualified Indian suppliers working with HAL into our Hawk Global Supply Chain.
SP’s: In addition to the aerospace and defence sector, are you exploring any new areas for growth in India?
Castle: India is a key international market for BAE Systems and we have an established defence and aerospace footprint in the country that spans several decades. Our strategy is to continue to work with local partners to support the Indian armed forces with our cutting-edge products and capabilities across all sectors including the intelligence domain. This is one of the fastest growing sectors and solutions for cyber security, financial crime, communications intelligence and digital transformation.
SP’s: You have been a major investor in the community. What’s been your experience?
Castle: India has a clearly articulated goal of improving its position on key Human Development Index parameters and achieving the Millennium Development Goals and our community investment programme in India supports this. We’ve just concluded a multi-year programme with Smile Foundation, a national level, not-for-profit trust in India focused on improving access to quality education and health care amongst select underserved communitiesacross eight locations in seven states. I am pleased to share that this programme set an exceptional standard of continuous beneficiary-focused performance and has delivered a healthy set of outputs and outcomes directly impacting over 51,000 beneficiaries and mainstreaming over 400 non-school going children into formal mainstream schooling. We are excited about our next phase of investment in India for which we have initiated discussions with several potential partners.
SP’s : What are your views and plans for local Indian suppliers?
Castle: For us, partnerships, both manufacturing and technology-based, are vital and we are in continuous discussions to expand our current portfolio with an emphasis on MSMEs. In fact, for the M777 ultra-light howitzer FMS case, we have integrated over 40 Indian MSME companies into the $200 million offset offer. Additionally, we have developed Goa based Kineco Kaman Composites India Private Limited, a joint venture company between Kineco Group of Goa and Kaman Aerospace Group of USA, as a supplier on our industrial commitments on the Boeing P-8 Poseidon acquisition by India. Our aim is to continue to develop domestic industrial capabilities and build skills in partnership with local suppliers.