Shekhar Sardessai, Chairman and Managing Director, Kineco Private Limited "Offset
Policy Boon for Composite Aerospace Industry in India"
Founded in 1996, Kineco Pvt. Ltd, is a multi-dimensional composite
manufacturer based in Goa, India. The Company has many innovations to its credit,
prominent among which is the most prestigious R&D project for the Design and
Development of the Composite Sky Bus for the unique suspended metro-rail system
developed by Konkan Railway Corporation.
The Company designs and manufactures for its global customer base highly advanced
glass and carbon composite structures and components for applications ranging from
Mass Transit, Automobiles, Motor sports, Defense & Aerospace and Aviation. In
an exclusive interview Chairman and Managing Director, Mr. Shekhar Sardessai
shares his experience with Editor, Lucintel, K. Venkateshwar. Rao. Excerpts:
1. What are the key drivers for composite consumption in Aerospace in India?
Sardessai: Over the past decade, the Helicopter and aircraft production
programmes of
Hindustan Aeronautics Ltd. (HAL) have been one of the main drivers of Aerospace
composites in India. Also the space programmes of Vikram Sarabhai Space Centre (VSSC)
have contributed significantly to consumption of composites. The future holds good
potential with indigenous aircraft production and space programmes expected to continue
and grow. Besides, a major opportunity is knocking on the doors in the form of offset
opportunities from global aerospace and defense equipment suppliers.
2. Some of the key challenges faced by your company in Indian market?
Sardessai: All of the Aerospace programmes in India are Government
sponsored. Obviously, the pace of implementing the programmes and inviting participation
of private industry is slow, owing to bureaucratic hurdles.
3. Tell us about the impact of government policies on aerospace industry?
Sardessai: The government's Defence and Civil aviation offset polices
will certainly help the growth of the composite aerospace industry in India. Aircrafts
and defense equipments being the major users of composite parts this will undoubtedly
be the major thrust areas for these global suppliers who have the offset obligations
against their contract with the Government of India. Government of India has also
announced the policy for participation of private players in defense production.
This will also create opportunities for the composite industry in India.
4. Steps required in making India an export hub for Aerospace components?
Sardessai: While offset policy could provide a huge outsourcing
opportunity, a sound framework of policy which encourages investments in the sector
is essential. For this the Government and the industry have to work together in
identifying opportunities and creating an environment which facilitates creation
of such export hubs. Unlike the software industry, the ramp-up here could be slow
but the outsourcing model that worked for the software industry can also work for
the composite aerospace industry.
5. Key challenges faced by composite end-users in India?
Sardessai: The major challenges for the composite aerospace end-users
in India are the access to composite raw materials such as aerospace grade carbon
fibers. There are trade embargos from producer nations for supply of certain key
raw materials to India. The licensing requirement therefore can delay the aerospace
programmes substantially or could also run the risk of being shelved halfway through
due to non-availability of raw materials.
6. Government support and policies change that is required to encourage exports
of composite components?
Sardessai:
Government has made a good beginning with the offset policy. Private industry on
its part needs to understand that global aerospace customers are extremely demanding
on quality and delivery. Therefore, it is essential that we tread the path of growth
cautiously with strong focus on creating world class manufacturing facilities which
can compete with best in class. Risks of aerospace programmes can sometimes be high
and global customers are demanding sharing of this risk. Hence, the industry which
aspires to be a global aerospace composite supplier has to create proper risk mitigation,
the mechanism that can tackle uncertainties and delay which can result in delay
in ramp-ups and revenues.
7. How does 'Made in India' product compare with the 'Rest of the World' in terms
of quality?
Sardessai: The Indian industry in many fields has demonstrated
that 'Made in India' product can be a world class product. As far as Kineco is concerned,
we have a strong knowledge in design and engineering of complex composite structures.
We have also recruited a few expats with immense experience in global aerospace
composite manufacturing which will help us to fine tune our processes to global
standards.
8. Steps required to be taken by aerospace industry to be able to compete with more
developed industries in the west?
Sardessai: Global aerospace customers are extremely demanding on
quality and delivery. One just can't afford to fail and all this has to happen pretty
quickly because the opportunity is knocking on our doors. Airbus and Boeing, as
well as major defense equipment suppliers are looking for partners and they have
time-bound programmes to fulfill. If the Indian industry has to get a share of these
programmes it has to ramp-up quickly.
9. How has global slowdown affected the market? How has been your organization's
growth in the last 2-3 years and how do your foresee the growth forward?
Sardessai: Global slowdown has had a cascading effect on the aerospace
composite industry. But Kineco has not been affected, in fact we have grown over
100% in the last one year. Our story is different. We invested in emerging technologies
3 years back and now we are reaping the benefits. FY 08-09 has been an exceptionally
good year for us and we expect to grow at least between 80-100 % year on year over
the next 3 years.