Indian companies becoming single source suppliers to global OEMs3 min read . Updated: 19 Feb 2015, 01:30 AM IST
Tata Advance Systems , Dynamatic Technologies and Jupiter Aviation are among many companies that are becoming single source suppliers
Mumbai: “If a truck break downs between our Belgaum manufacturing facility and Bengaluru International Airport, there will be an impact on a final product of a plane made in Europe," says Walt Sirmans, president at the aerospace unit of Aequs Pvt. Ltd, a Karnataka-based aerospace components manufacturer.
Sirmans is right as Aequs’ aerospace unit has become the sole source for several machining material for Premium Aerotech GmbH, an aerospace manufacturing business, headquartered in Augsburg in Germany. Premium Aerotech is a subsidiary of Airbus Group.
Aequs is one among many Indian companies becoming single sources for global original equipment manufacturers, or OEMs, such as Airbus SAS of Toulouse and Boeing Co. of the US.
Tata Advance Systems Ltd (TASL), Dynamatic Technologies Ltd, Jupiter Aviation and Logistics Pvt. Ltd are among many companies that are becoming single source suppliers to OEMs.
The Narendra Modi government, after coming to power, has launched an ambitious programme to make India a manufacturing powerhouse and has advocated boosting exports and substituting imports with products manufactured domestically.
Aequs’ Sirmans said the company secured a multi-year deal worth more than $50 million from Premium Aerotech to supply materials including aluminium machining for Airbus planes such as the popular narrow body A320s, widebodied A330s and A380s, the world’s largest civilian planes.
“We will be single source manufacturers to Premium Aerotech. The deal is for seven years. It will give a revenue visibility of $8 million every year starting 2016. This project will also create 200 more jobs in India," said Aequs chairman and chief executive Aravind Melligeri.
Melligeri said there are more Indian companies turning themselves into single source suppliers to big OEMs.
Aequs is also in process of acquiring a French company with a $4 million revenue and a US company that has revenue of $10 million.
“We will be closing both deals by the end of this financial year. These acquisitions will compliment Indian capabilities. The French company is focusing on landing gear components while the US company is into aerostructures," Melligeri added.
On Monday, Airbus said it has signed an agreement with Bengaluru-based Dynamatic Technologies to be the single source supplier of flap-track beams for the wide body A330 family aircraft. The agreement is the largest manufacturing contract between Airbus and a private sector company in India and elevates Dynamatic to a global tier-1 supplier.
Dynamatic has manufactured flap-track beam assemblies for Airbus’ single-aisle A320 family on a global single source basis as a Tier-2 supplier, since 2010.
The flaps on the wings, which are instrumental in controlling the speed, direction and balance of the aircraft, move along high-tech guide rails known as flap track beams.
These flap track beams are so-called Class 1 flight critical assemblies that are connected to the wings. Dynamatic will supply four out of five flap track beams used on every A330 aircraft wing.
Tata Group controlled TASL is the global single source for assembly of helicopter fuselage for Sikorsky S-92 helicopters and wire harness installation.
Sikorsky Corp is a US-based helicopter manufacturer. TASL will deliver the 95th cabin to Sikorsky by March, 2015.
TASL is also a global single source designated for assembly of Empennage for military transport aircraft (Lockheed Martin C 130J) and assembly of center wing box structures.
Others are also ramping up their supportive facilities as more Indian companies are turning single source suppliers to OEMs.
On Tuesday, aerospace materials and logistics provider ThyssenKrupp Aerospace, part of ThyssenKrupp AG, will set up a storage facility in Bengaluru, according to Jurgen Funke, chief executive officer of the company.
The facility will have processing capabilities and offer supply chain management to tier I and tier 2 suppliers of OEMs besides offering cut-to-size and machine-ready material that is shipped to the customer just in time.
“The lead time, that is time taken to place the order for materials and receiving the same, is six months for aerospace materials in certain cases. And the cost of keeping such material accounts to 30-40% for a Tier 1 or Tier 2 supplier. This proposed facility will cut the time and cost," Gopi Hanumanthappa, managing director at ThyssenKrupp Aerospace India Pvt. Ltd had said on Tuesday.
He said content produced in India in terms of aerospace is growing.
Plane maker Boeing Co. is also tying up with Indian companies to source components from India.
General Electric Co. (GE) of the US is also setting up a multi-modular manufacturing facility in Pune envisaging an investment of $200 million. Key parts of all types of aircraft engines are going to be built from this facility.