BEML to set up aerospace unit in B'lore

BEML Ltd, the state-owned heavy engineering and defence equipment major, is setting up another greenfield manufacturing plant at an investment of Rs 316 crore in Bangalore.

The Bangalore-headquartered company will make aircraft components and undertake aircraft maintenance, repair and overhaul activities at its new plant, spread over 25 acres land, in the special economic zone (SEZ) near the Bangalore International Airport.

To explore scope in the aerospace components industry, the company has set up Aerospace Manufacturing Division (AMD). BEML also plans to make use of the opportunities available under the defence offset policy.

According to company sources, BEML manufactures some of the components — slat jigs for SU-30, fuselage rotating jig for IJTs, tow bars for aircraft operations, gear component for Cheetah helicopters and ALH (advanced light helicopter) — at its Mysore complex for its clients, including Hindustan Aeronautics Ltd. It also manufactures some ground support equipment and ground handling equipment, which includes 18-tonne and 28-tonne aircraft towing tractors (ATT), automatic weapon loaders and crash fire tenders.

The AMD also plans to manufacture aero-structures and different types of jigs. Recently, the company received certification from Center for Military Airworthiness & Certification (CEMILAC) for aero design and is in the process of obtaining manufacturing certification to become eligible for tie-up for defence aero offsets, according to the sources.

V Mohan, director (defence business), BEML, had earlier told Business Standard that the company was looking at a business of around Rs 100 crore during the two-year period ending March 2011 from the defence offset policy.

V RS Natarajan, chairman and managing director of BEML, on Thursday signed a memorandum of understanding (MoU) with the Karnataka government for the new plant. According to the MoU, the state government would provide 25 acres land to BEML in the notified SEZ near the Bangalore International Airport.

The proposed unit is expected to provide employment to about 250 personnel initially, besides providing business opportunities to local vendors with regard to procurement of raw materials and components.

The aero and defence related offset business is expected to exceed $15 billion in the next 10 years. For 2009-10, BEML registered a turnover of Rs 3,557 crore, a rise of 18 per cent over the previous year. Its net profit was down by 17 per cent to Rs 223 crore.