M & M Set To Enter Defence Products Market Via Arm

Mahindra Defence Systems, a division of Mahindra & Mahindra Ltd (M&M), is all set to make a splash in the market for defence products. Besides planning to build bomb loaders for the Indian Air Force, the company is also in talks with the ministry of defence to manufacture steel for ship building purposes in India which, at present, is being imported from other countries.

Initially, the company would manufacture steel for defence purposes and would at a later stage diversify into civil aviation as well, Mahindra Defence Systems head Brigadier Khutub A Hai said.

He added that the steel is likely to be manufactured by another group company -- Mahindra Ugine Steel Company Ltd (Musco).

While the division is expected to clock a turnover of atleast Rs 100 crore by the end of 2002-03, it is likely to register a turnover of Rs 70-80 crore during the current financial year, Hai said.

In order to grow the volumes, the division is likely to expand its product range in India. "We will consider any area of defence products with a huge domestic demand and considerable export potential, and which are currently not being produced in India," he added.

The division has already bagged contracts from the army to supply 200 bullet proof vehicles-- Rakshak-- every year for the next 2-3 years. The contract is to the tune of Rs 30 crore every year. It is likely to supply 300 such vehicles to the Jammu & Kashmir police too.

It has also applied for a license to integrate censors for surveillance vehicles in association with Elta and Taman of Israel.

The division will also be entering into memorandums of understanding with various foreign companies to bring in their technology to India and manufacture the products locally. "The division would add considerable value to all these products, customise them according to Indian specifications and then manufacture them in India," Hai said.

The company has already tied up with Israel-based Ramta to manufacture light armoured multi-roll vehicle in India and with UK-based Advanced Interactive Solutions for its small arms trading simulator. It has also tied up with UK-based Virtual Presence Ltd to design battle inoculation systems for the Indian army.

Hai added that the division was ready with prototypes in some cases. "We now have to convince the ministry of defence to accept the products so that we could start production here," he said.

Industry experts estimate the market size of defence products to be about Rs 50,000-60,000 crore for the next 5-6 years, excluding exports.

Hai said Indian manufacturers have opportunities for exports to Africa, Asia or south America. "Penetrating the west would be difficult, but we can compete with the west in these countries," Hai said.

Apart from the military vehicles, the division also provides information technology solutions, including small arms training simulator and internet search robots and database management systems.