The Hindu Business Line : Keltec takeover proposal under consideration, says Antony

Kochi March 20 The Defence Ministry is considering a Kerala Government proposal for a possible tie-up with the State-owned Kerala Hitech Industries Ltd (Keltec).

The Government has put forward the proposal recently to the Ministry for co-operation with Keltec, a high precision engineering manufacturing unit supplying defence and space related components to Defence Research and Development Organisation, ISRO, BARC etc.

The Ministry is currently studying the feasibility of the proposal and the modalities to be adopted, a senior official told Business Line.

"It could be a takeover by the DRDO or a joint venture or a long-term supply contract," he said.

Takeover Proposal

The Industries department had also given a presentation before the Defence Ministry and the DRDO and "our proposal is under active consideration of the Defence Ministry," the official said.

The Union Defence Minister, Mr A.K. Antony, who had held discussions on Keltec during his visit to the State said that the proposal was under consideration of the Ministry and another round of discussions would be held soon.

Meanwhile, the State Industries Minister, Mr Elamaram Kareem, told the State Assembly earlier that the DRDO was considering a proposal to takeover Keltec.

The official said that defence procurement during the next five years was estimated at Rs 5-lakh crore. Main bidders for supplying the items are foreign companies.

However, according to the Government policy, components worth 30 per cent of the bid value should be procured from the country and as such Rs 1.5-lakh crore worth procurement has to be made from indigenous sources, he said.

Keltec could become one of the beneficiaries given its status as a supplier of high-precision engineering products to strategic establishments. A potential joint venture or DRDO takeover would help expand its operations apart from strengthening the down stream industries creating good employment opportunities for a long term, he said.

Small and medium scale units in the engineering, electrical and electronic sectors could get a boost, he said.

The turnover of the Keltec last fiscal was Rs 20 crore excluding the cost of materials. The high cost materials such as titanium metal etc are supplied to the unit by the Defence and Space organisations.

The State Government has already identified some foreign vendors for future tie-up as buyers for Keltec products, he said.

The small and medium units are at present lagging behind for want of proper marketing avenues. This problem could also be addressed once the company enters into a tie-up with the DRDO, he added.

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