The Godrej group is expanding its footprint into the domestic and global defence sector. It has tied up with global players for manufacturing critical components. Recently, Godrej Aerospace entered into a partnership with Rolls Royce, manufacturing 600 different parts for Rolls Royce Aerospace Engine. The group sees immense growth opportunities in aerospace and defence and will be looking at leveraging the company’s three decade -old expertise, says Jamshyd Godrej, chairman, Godrej & Boyce, in conversation with Ashwin Punnen
Over the past three decades you have been involved in Indian defence sector. Now with the government opening up the sector, how do you see the opportunity?
Well, there is no doubt at all about the potential in the sector after it opened up to private players. It is encouraging for the aviation sector - both defence and civil aviation. So, it is a matter of how the policy from the government side develops. There are two components to it. One, there are international players who are interested in developing global supply chain and bring India onto it and then there are others like ISRO, DRDO - government owned entities that are looking at supply chain for their own programmes. Actually, both are growing and a lot depends on what are the requirements and the capabilities. These two have to match overtime.
How Godrej as a group is planning to leverage this opportunity and how aggressive the group will be in the sector?
It is not about being aggressive but about the capabilities. The question is where does it match? And if at all they match then only we shall enter into that space. We are not going to enter into anything and everything, but will enter the space where we are interested and capable of delivering quality products. And we would get involved only after a proper evaluation.
The two big programmes we are involved in are BrahMos programme and ISRO. And there are many research work for the army, navy and airforce where we get involved.
In fact, Godrej Aerospace has served the domestic aerospace programme for close to three decades. We've an integrated facility meeting diverse requirements of fabrication, machining, assembly and testing with all associated capabilities for special processes in aerospace applications.
You recently tied up with Rolls Royce for aviation. What is the partnership for?
Godrej Aerospace will manufacture 600 different parts for Rolls Royce Aerospace Engine as per the recent partnership, expanding base in the global defence market.
The unit of Godrej & Boyce Manufacturing will produce products like unison rings, complex fabrication and external brackets commodities worth Rs 200 crore. We are setting up a Rs 50 crore centre of excellence in Mumbai. The contract is spread over five years. The order is in line with Godrej's vision to expand its footprint with domestic and international defence majors.
In line with our vision to expand our footprint and partner with global majors we have established a center of excellence, which I am confident will strengthen and deepen our partnership with Rolls Royce.
This will further enhance manufacturing capabilities in aerospace engine industry.
The centre will be one of the best aerospace facilities in India for manufacturing aerospace brackets. It will commence manufacturing in bulk to prove the production readiness within the next two-three months.
If you recall, Rolls Royce and Godrej signed the first contract in 2014 for manufacturing unison rings. Since then, Godrej Aerospace has also started executing complex sheet metal fabrication.
Are you looking at more such tie ups?
It could happen. Nothing is yet there. But these are things could happen along the way.
Godrej Aerospace started contributing to the global aircraft industry in 2005 with simple machine components and over a period of time, has partnered with several global OEMs supplying them complex components like sheet metal and tubing assemblies, actuators, and other complex structures. Fabrication has been a long-term area of excellence for us. Right from the beginning of the supply of the Vikas Engine (for ISRO’s rockets), the company has been doing a lot of fabrication, including the cone and all turbine parts, machining, piping and welding. Over decades we have developed the knowledge that goes into making aerospace components. Our long heritage of doing fabrication processes will be put to best use at the new facility.
The centre of excellence will be capable of meeting diverse needs of aircraft manufacturers, and can cater to fabrication, machining, assembly as well as testing of special processes required in aerospace and defence applications.
What are the issues in defence sector for private players?
There are a huge number of issues. You should speak to CII and FICCI. There are issues with taxation, infrastructure, placing orders, time involved in bidding process etc. There are many issues in this sector unlike one or two in other sectors.
Currently the government is trying to improve ease of doing business. Have things changed?
Yes of course, things have changed. But there are areas that need a lot of change.
Is there a shortage of skilled workforce?
We are looking at manufacturing in aerospace. I think we have to appropriate intervention. There are many things you may have to do with human and many things to do with automation. The requirement for automation is because it enhances the product. It is displacing labour. So automation could lead to better work. It is not that we need automation. Automation is required for building large quantities and repeating that over and over again. If the product has to be made in millions of units there could be a case of bringing in automation. I don’t think at this moment we are in automation for manufacturing. The type of machines that are put there in our units are very sophisticated. We need skilled people to carry out lot work even with automation.
Do we have that kind of skill available in the country?
See there is capable manpower but you have to train them. There is a long process of training involved. And because of our heritage of building these components we have the capacity. As we have more programmes we will have to involve more workforce.
Who is your next client?
All air engine manufactures need brackets. Over the time we can become specialist in manufacturing the component for all players in the aviation engine segment. It is a process. We specialise in fabricated items and actuators, and undertake complex fabrications. As of now, we can produce 600 families of brackets, around 20,000 annually. This is for the first year. As demand goes up, we can scale it up, since our capacity in Mumbai is for 40,000 complex brackets. Around 1,30,000 brackets are needed every year, of which we are targeting 20,000. Our existing share is roughly 10 per cent, but we can easily scale it up.