The Hindu Business Line : QuEST launches aerospace making unit

The new company, QuEST Machining and Manufacturing, signed a 10-year pact with Canada-based Magellan Aerospace Corporation to supply landing gear parts for Boeing's 747, 777 and 787 programmes. The current order is worth $ 5 million.

Over the next three years, QuEST plans to expand it from 20,000 sq.ft to twolakh sft and invest $ 25 million (around Rs 110 crore) in machinery and facilities, said Mr Aravind Melligeri, President & CEO of QuEST and the new entity. A dedicated cell would cater to Magellan, which has been sourcing engineering solutions from it.

Lead to further sourcing

Mr Konrad Hahnelt, VP, Strategic Global Sourcing, of the $ 550-million Magellan, said this deal could lead to further sourcing from QuEST. Starting with India four years ago, it set up an office early this year in Bangalore, where it has three other sub-contractors. The India cost advantage, he said, would be around 15 per cent.

The initial $ 3-million (around Rs 13.5 crore) investment in the facility is out of internal resources, while QuEST is mulling a public issue for its future plans, said Mr Ramesh Kamath, CFO.

Currently the offshoring hub Bangalore alone has 650 employees. The company is taking in 50 employees this year into the new entity and plans to reach 450 in three years, a spokesperson said.

Providing total solution

According to Mr Melligeri, QuEST's larger plan has been to provide total solutions ranging from design, development to delivery of products. The Asian aviation boom in the past couple of years has caused a `global aerospace uptick' and a huge, unprecedented backlog in orders for Airbus A320s and Boeing 737s. The strain on the supply chain, currently at 25 per cent, looks to last through 2008-09. Apart from Asian offsets, the aircraft purchases of Indian and Air India alone have added a $ 7-billion offset commitment over the next decade.

With aircraft majors looking for ways to speed up deliveries and low-cost sourcing solutions to bridge the big global demand, QuEST would now start tapping these manufacturing opportunities, he said.

The 20,000-sft facility can support 25,000 machining hours for 3/4/5 axis machining centres, handle all aerospace materials - aluminium, titanium and steel - and have total quality inspection equipment. Among its clients in aerospace, automotive, power, oil and gas are Rolls Royce, United Technologies, GE, Smiths Aerospace, Mitsubishi and Toshiba.

300-acre SEZ on anvil

QuEST's plan to set up a 300-acre SEZ for precision machining at Belgaum is awaiting final approvals of the Karnataka and Central Governments. The SEZ would employ 10,000 people

QuEST was planning to make a public issue around the third quarter of 2007 to finance the future plans, including the SEZ, according to its President and co-founder, Mr Aravind Melligeri, and CFO, Mr Ramesh Kamath. It was debt-free with turnover of $ 28 million (around Rs 125 crore) for fiscal 2005-06.

QuEST would have a captive unit catering to aerospace and automotive majors in the SEZ. Talks are on with a handful of potential domestic companies and MNCs to have them set up units at the SEZ.

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