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Samtel, General Dynamics sign Rs 500-cr agreement

To make digital displays for military and non-military vehicles

Ajai Shukla  |  New Delhi 

General Dynamics Canada, has signed a cooperation agreement with Samtel Avionics Ltd, to co-produce digital displays in India for a range of military and non-military vehicles worldwide.

For General Dynamics, buffeted like most western suppliers by sharp budget cuts, manufacturing in India cuts costs. For Samtel Avionics, struggling to sell in an Indian procurement market where sales have not matched expectations, a strong international customer like General Dynamics provides a welcome hedge.

The partnership will produce multi-function displays (MFDs) for armoured and reconnaissance vehicles, and for civilian use in utility vehicles like those used for garbage collection. The displays give the vehicle crew 360-degree situational awareness, sitting inside the vehicle. Computing systems built into the displays convert the signals from externally mounted sensors onto easy-to-see visual displays on digital screens inside.

Both firms say the tie-up targets a range of prospective orders from the Indian ministry of defence (MoD). This includes 7,800 displays for some 2,600 future infantry combat vehicles (FICVs); 2,800 displays for 1,400 light armoured multi-purpose vehicles (LAMVs); 1,500 displays for the upgrading of the BMP-2 infantry combat vehicle (ICV); and 2,400 displays for upgrading the T-72 tank.

"We will have displays designed and ready for these contracts, as and when they come up," Craig Jansen, Vice President, General Dynamics, told Business Standard. He also hopes to offer Samtel-built displays for artillery guns being developed in India, and for the M777 ultralight howitzer being procured from BAE Systems.

Industry sources estimate the potential foreseeable orders are worth at least Rs 500 crore. Samtel Avionics hopes to build Rs 100 crore worth of displays each year for General Dynamics' domestic and international markets by 2015-16.

Puneet Kaura, Executive Director, Samtel Avionics, describes the cooperation agreement as part of a "push-and-pull strategy". By building products in India for General Dynamics' global programmes, the company will position itself for Indian requirements as they arise.

Says Kaura: "There is a mutuality of interests - we help General Dynamics win in India, while they help us win global markets."

Samtel Avionics, one of the private sector's most dynamic defence firms, has emerged from the ruins of Samtel Display Systems, once a successful builder of cathode ray tubes for television sets, but technologically bypassed with the advent of liquid crystal displays (LCDs). Leveraging its core strength of building displays, Samtel set up an avionics subsidiary that made its first major breakthrough in building cockpit displays for the Sukhoi-30MKI fighter. Those, and a planned Sukhoi upgrade, remain staples for Samtel Avionics.

The parent company, Samtel Display Systems, has closed down but Samtel Avionics now has an annual turnover of Rs 100 crore. Puneet Kaura expects annual sales of Rs 500 crore by 2015-16.

In 2010, Samtel set up a JV with French avionics giant, Thales, hoping to build displays for the Mirage 2000 upgrade and the medium fighter (MMRCA) contract. However, business has been slow - the Mirage 2000 upgrade would generate orders for Samtel only once Hindustan Aeronautics Ltd (HAL) begins upgrading the fighter.

Uncertainty also dogs the $16-20 billion contract for 126 Rafale fighters. With the French contractors - primarily Dassault, Rafale and Snecma - required to generate some $8-10 billion worth of offset-related production in India, Samtel-Thales is hoping to build MFDs for the Rafale's cockpit; helmet mounted sight displays that let the pilot cue and fire his weapons merely by turning his head towards the target. Samtel might also build an infrared search and track (IRST) system that lets the Rafale detect enemy aircraft through their heat radiations, without emitting give-away radar signals.

Samtel, however, is diversifying fast. Kaura says Honeywell is a prospective partner for up to 700-800 displays and line replacement units for commercial aviation aircraft built in the US. Separately, Samtel is competing with Zen Technologies, another emerging private company, to supply avionics for the light combat helicopters that HAL is developing for the army and IAF.

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First Published: Mon, February 03 2014. 00:45 IST