The focus on Atmanirbhar Bharat and Make in India has also made the world sit up and take notice of the potential of the Indian industry, says Neeraj Gupta, managing director of MKU Ltd
Kanpur-based MKU Ltd is one of the few Indian companies that have made a mark domestically and internationally delivering bulletproof jackets and vests for Indian security forces as well as for security personnel in countries such as Brazil and Spain. In an interview, the company’s managing director Neeraj Gupta spoke about MKU’s journey in India and how the Make in India campaign helped it. Edited excerpts:
How did MKU begin and what was your early experience in the Indian defence market?
The foundation of this company was laid way back in 1985. We made tents and then composite helmets for the army and soon became one of its largest suppliers. The year 1999 was a defining one. Indian forces faced an acute shortage of snow boots (during the Kargil war) essential for fighting in the snow-capped regions and we at MKU decided to rise to the challenge. We diverted all our resources to making snow boots on priority to meet the emergency. It was during this war that I also realized our brave forces did not have quality protection equipment as well. This firmed my resolve to provide world-class equipment for our forces and in 2000 we pioneered the manufacture of composite hard armour plates in India, to replace the heavy steel plates that were in use at the time. This was a turning point in our history and marked our foray into the manufacture of lightweight bulletproof jackets.
From then on it has been an exciting but tough journey. It was not easy especially as the defence sector in India was primarily in the domain of the government and most of the requirements were met through imports or DPSUs (defence public sector undertakings). The mission was clear—to provide our brave forces with world-class protection gear and to establish the manufacturing capability in India. In 2001 we partnered with DRDO/TBRL (Defence Research and Development Organization/Terminal Ballistics Research Laboratory) and over the next seven years manufactured bulletproof jackets for our forces. It was a successful partnership and we acknowledge the support and guidance received from DRDO during the period.
From the beginning, we paid a lot of importance to building technological capability and infrastructure. We invested in research and development (R&D) and international certifications and quality standards and slowly but steadily made progress in this niche market. Soon enough we were able to establish MKU in the defence market. We are a 100% Indian company with no foreign investment or shareholding. In 2008, we acquired AST, a German company that was into armour and ballistic protection equipment, as part of our strategy for inorganic growth. One of the primary reasons was to enhance our technological capability.
What about the new products and new technologies that you have come up with?
It would not be prudent to mention this in great detail but suffice to say that we are not only investing in developing new and upgraded solutions but have also embarked on backward integration especially keeping in mind the clarion call for ‘Atmanirbhar Bharat’. Our focus has been on protection and surveillance segments and we would like to give an even more comprehensive bouquet of products to our users. Over the years we have developed several innovative products and technologies and will continue to invest in developing new products and technologies needed by the forces. We are investing heavily in electro optics and feel this will be our growth driver. We have aggressive plans and look forward to the future with a lot of hope and expectation.
What are the products that your company manufactures for the Indian defence forces? What are the products that you manufacture for countries abroad? How did you manage to find markets for your products abroad? What about your recent international contracts?
MKU is one of the leading manufacturers of protection and surveillance equipment both for the domestic and the international market. We have today a very large and integrated manufacturing facility for body armour, helmets, and other protection equipment. Our NETRO range of electro optical devices are based on both image intensification and thermal imaging technologies.
Finding overseas markets in this niche segment has not been easy. Slowly but steadily we have built a brand that is today well known and accepted internationally. We focused on quality and R&D and also ensured we had all the international quality and system certifications required. We established a wide network of channel partners, which helped us counter problems of time, language, customs and procedures, and helped us establish ourselves in the international market. Besides protection equipment, we are very proud to have bagged many prestigious international orders for our NETRO range of electro optical products from countries including the Philippines, Brazil, and Croatia.
Do you have tie-ups with foreign companies?
Yes, we have tie-ups with international companies. We have a joint venture with a German cable manufacturing company since 2013. We have entered into an agreement with world leader Thales to co-develop and manufacture advanced electro optical devices in India for the global market. At the last Aero India held in Bengaluru recently, we tied up with a leading Russian OEM (original equipment manufacturer) with the existing in-service equipment with Indian Navy. This effort is the culmination of the process started by the Indian MoD (ministry of defence) to develop capability within the country for manufacturing parts and components for Russian-made platforms and equipment.
Prime Minister Narendra Modi launched the Make in India campaign and the Atmanirbhar Bharat programme. How does this help you?
I think this is the way to go. We have always believed in this. We are in a niche business area, the market of which is both finite and cyclical. We have, therefore, been focusing on the global market and this has helped us tide over this challenge. The Make in India focus has made the user forces and also the companies realize the strategic importance of this decision. It has opened up a plethora of opportunities for the industry. Further, with the industry-friendly policies of the government, negative import list, increase in Indian content, projects up to ₹200 crore reserved for Indian companies, the public procurement policy, IDDM (Indian designed, developed and manufactured) earmarked budget for domestic procurement, favourable export climate and policies have made the Indian defence industry, especially in the private sector, we feel elated. The focus on Atmanirbhar Bharat and Make in India has also made the world sit up and take notice of the potential of Indian industry.
Many companies have complained of procedural delays in getting their products approved by the defence forces or said there are hurdles in the way of sharing technology from DRDO. Have you faced these challenges?
Defence products by their very nature take a long time to get certified. There are laid-down processes and one cannot have any short cuts. There are other procedural delays and bottlenecks such as testing, which are now being addressed through administrative and policy changes. To overcome covid-induced challenges, user forces have introduced digital processes that will help speed up the processes. The limitations because of the shortage of testing facilities are also being addressed by the government.
The process of ToT (transfer of technology) is much more transparent and industry-friendly now. To encourage such sharing of technology, DRDO has reduced the ToT fee and is openly encouraging the industry to use its technology.
There was also a feeling that Indian defence forces prefer to buy state-of-the-art products from foreign vendors. Is this a challenge that you encountered? What is it like to compete with foreign OEMs?
I do not think this is justified any more. Wherever the capacities exist, the forces are willing and eager to support the domestic industry. In fact the promulgation of the negative import list is indicative of this. Besides, we are also exporting our products to many countries and are quite used to competing with foreign manufacturers and OEMs. The important point is that the Indian industry must have the necessary international certifications and meet international quality standards.
One of the things required to stay ahead of competition is innovation and R&D. How have you managed to do this? How much do you spend on R&D/innovation?
R&D is the backbone of this business. We have always remained focused on this and spend almost 6-8% on R&D for developing new technologies and products and solutions. We have built a large team of engineers and have a modern well-equipped technology centre in Kanpur. It is this focus on R&D that has actually enabled us to successfully develop solutions for so many projects and meet the requirements of international forces.