RIn­fra to Pro­duce Com­pos­ites for Air­craft Mak­ers

France’s Da­her roped in as tech part­ner; JV to serve lo­cal and int’l mkts

The Economic Times - - Companies & Economy - Ra­chita.Prasad @times­group.com

Mum­bai: Reliance In­fra­struc­ture is for­ay­ing into com­pos­ites man­u­fac­tur­ing for sup­ply to air­craft mak­ers with an ini­tial in­vest­ment of ₹ 85 crore and it is tar­get­ing ex­ports of ₹ 315 crore over the next five years.

The Anil Am­bani led-Reliance In­fra­struc­ture has roped in French air­craft maker Da­her as a tech­nol­ogy part­ner for man­u­fac­tur­ing com­pos­ite ma­te­ri­als for air­craft.

“Da­her is a guid­ing us on tech­ni­cal as­pects. When we get cer­ti­fied, they will form a joint ven­ture with us and will go for big­ger ex­pan­sion plans,” a se­nior Reliance In­fra­struc­ture ex­ec­u­tive told ET. The joint ven­ture will serve lo­cal as well as in­ter­na­tional mar­kets.

“Com­pos­ites are the fu­ture of aero­space and de­fence in­dus­try. Our first unit at Dhirub­hai Am­bani De­fence and Aero­space Park at MIHAN SEZ, Nag­pur, will be op­er­a­tional by end of Oc­to­ber this year. We will be fo­cus­ing both on de­fence and non-de­fence seg­ment,” a Reliance In­fra­struc­ture spokesper­son told ET.

The firm ac­quired Pi­pavav De­fence & Off­shore Engi­neer­ing in 2015 to en­ter the de­fence sec­tor, which is now its strate­gic growth area. Reliance Group has formed sep­a­rate joint ven­tures with French de­fence ma­jors Das­sault Avi­a­tion and Thales, and holds 51% each in both en­ti­ties. The Das­sault JV will be used by Das­sault to man­u­fac­ture its Rafale fighter jet for the Indian de­fence or­der worth .₹ 22,000 crore. This project has been marred in con­tro­ver­sies as op­po­si­tion par­ties have ac­cused the gov­ern­ment of favour­ing the Reliance Group com­pany that has no prior ex­pe­ri­ence in de­fence. As of now, the com­pos­ite man­u­fac­tur­ing busi­ness will not be sup­ply­ing to the two JVs formed ear­lier.

“The Rafale con­tro­versy has not af­fected us. We are mov­ing ahead with our plan and are on sched­ule,” a se­nior ex­ec­u­tive from Reliance In­fra­struc­ture said.

Ac­cord­ing to in­dus­try ex­perts, In­dia’s com­pos­ites in­dus­try in 2018 was around 3 lakh met­ric tons and was pro­jected to grow to 4.18 lakh met­ric tons by 2020 at com­pounded an­nual growth rate of 5.8 %. The air­craft in­dus­try is in­creas­ingly re­plac­ing tra­di­tion­ally used al­loys and spe­cialised met­als with com­pos­ites to re­duce the weight of air­craft which in­flu­ences per­for­mance. Ini­tial in­vest­ment by JV Tar­geted ex­ports in 5 years

“The gov­ern­ment is in­sist­ing on large in­dige­nous con­tent, al­most 40%-60%, de­pend­ing upon the project. The coun­try is not at a stage where it can man­u­fac­ture en­gines lo­cally; it re­quires very heavy in­vest­ments and will take time. En­gines alone ac­count for up to 20% of the cost of an air­craft, so if you leave it aside, man­u­fac­tur­ing ma­te­ri­als would be es­sen­tial to meet the lo­cal man­u­fac­tur­ing re­quire­ment,” the se­nior ex­ec­u­tive said, ex­plain­ing the ra­tio­nale be­hind the move.

The com­pos­ite ma­te­rial man­u­fac­tur­ing busi­ness is un­der the um­brella com­pany Reliance In­fra­struc­ture so it can lever­age on the com­pany’s bal­ance sheet.

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