Defence parks in the crosshairs of firms with land bank

Rahul Wadke Mumbai | Updated on January 20, 2018 Published on May 17, 2016

Tata Steel, Dholera Industrial City and Reliance Defence are among those scouting for investors (file photo)

Besides manufacturing, arms factories require space for testing, storing inventory

The new liberal Defence Procurement Policy (DPP) has not only stirred Indian corporate houses to actively consider equipment manufacturing in the country but also given a new push to companies with large land holdings.

For example, Tata Steel, which has a 2,970-acre parcel for an industrial park and SEZ at Gopalpur, Odisha, is looking for investors in a bid to convert it into a defence park.

S Sittarasu, vice-president, Tata Steel Special Economic Zone Ltd, told BusinessLine that he has been meeting with a number of Indian, US and Ukrainian defence companies for manufacturing opportunities.

“We want to create an ecosystem and infrastructure where companies can come and set up their businesses. After the basic facilities are provided, foreign players could tie up with Indian players and start local manufacturing of the components,” Sittarasu said.

Similarly, Dholera Industrial City, which is coming up on a large land parcel in Gujarat under the Delhi Mumbai Industrial Corridor (DMIC) project, is also actively scouting for interest from large defence companies.

Although the Dholera city project is under the Centre’s DMIC Development Corporation, the master planning and development is being carried out by Los Angeles-based infrastructure developer AECOM.

Size matters

Senior vice-president of Aecom, Jagadish Salgaonkar, told BusinessLine that the size of the land parcel is one of the main prerequisites for a defence manufacturing site. Unlike semiconductor units, which can be housed in a factory building, defence companies need space for manufacturing, test facility and storing inventory.

Salgaonkar said at Dholera, the total land available is 22.5 sq km, out of which 11 sq km is targeted for industrial use. In the manufacturing zones, land parcels measuring even 5 sq km can be provided for such companies, he said “In Dholera, a city is being built, not just an industrial area. The city is listed as one of the prime projects under Make in India campaign. It can house a huge manufacturing base of Lockheed Martin or a Dassault Rafale.

“Along with big companies, there will also be room for SME units, which will support them with components manufacturing,” he said.

At MIHAN (Multi-modal International Hub Airport at Nagpur), Reliance Defence of the Anil Ambani Group is already developing a defence park over 400 acres.

The Maharashtra Airport Development Company (MADC), which is the holding company of MIHAN, is also talking to other defence manufacturers.

A senior officer of MADC told BusinessLine on condition of anonymity that investment by Reliance Defence has made a positive impact on MIHAN.

“Other companies, including SMEs, are also eyeing their share of defence orders,” the official.

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Published on May 17, 2016
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