The Hindu Business Line : Infotech Enterprises gears to tap defence space

Hyderabad, Dec. 10 Infotech Enterprises Ltd (IEL) is gearing up to tap big contracts in the defence sector, which are expected to be finalised soon and carry the ‘Offset Clause’.

The Hyderabad-based company, which has strengths in engineering design, has already formed a joint venture with the public sector aviation major, HAL.

The venture Infotech-HAL Ltd is well positioned to grab the opportunities in the aerospace sector. While Infotech Enterprises has put together a team of 30-40 design engineers to provide the design and software support, HAL would do the manufacturing.

IEL has also signed a memorandum of understanding (MoU) with four of the top global aerospace majors — Boeing, MIG, SAAB and Eurofighter, according to Mr B.V.R. Mohan Reddy, Chairman and Managing Director.

As per the ‘offset clause’ announced by the Union Ministry of Defence under the Defence Procurement Policy in 2006, it is mandatory for any global company which wins a major defence contract to source at least 30 per cent of the value from within India.

Giving an example of the opportunities in the defence sector, Mr Reddy said in the Multi-Role Combat Aircraft (MRCA) fighter deal, which is estimated around $10 billion, to procure around 126 aircraft, there is a 50 per cent offset (about $5 billion).

The Indian Air Force has already issued Request for Proposals (RFP) to six suppliers — Boeing, Lockheed Martin, Dassault, Eurofighter, MIG and SAAB.

The IEL has also signed a MoU with the largest Indian ship building public sector unit and a French ship building company in a tripartite arrangement to bid for mega projects, he told Business Line .

As per the offset clause, the company which bags the tender will have to reinvest 50 per cent of the value of the contract in India’s defence manufacturing, through awarding contract for sub-assemblies and components.

In aerospace, where several contracts are expected to materialise, the IEL is fully ready. It has a dedicated aerospace centre at its Bangalore facility, which was opened in April last.

Plans are afoot to strengthen the aerospace team by adding more domain and technical experts. For the current fiscal, plans are to have a team of 250 engineers at the Bangalore Centre. This, in turn, would boost the overall strength of engineers in the aerospace vertical in the company to 1,000.

Already, Infotech Enterprises has a strong relationship with the engine manufacturer Pratt & Whitney, US and Bombardier of Canada.

Related Stories:
Infotech Q1 net doubles, but down 5% sequentially
Infotech bags 3-year deal from Australian firm
Infotech drops plan to buy co in auto space

More Stories on : Outlook | Software | Security

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page