Publication : 8ak – Indian Defence News
Date : 12 May 2009
8ak recently interviewed Bejoy George, Chief Marketing Officer for Quest Global about Aerospace opportunities in India and their Aerospace SEZ. Here is an excerpt, the full article details are below but first some background.
India has seen more Engineering and R&D investments in aerospace over the last 16 years, than USA or Europe. In Bangalore, India, for example, Honeywell Technology Solutions has a 5,500 engineer setup, while GE’s Jack Welch Technology Center has more than 3,000 engineers. Airbus, which recently set up its Airbus Engineering Center India (AECI) facility, aims to have 200+ engineers of its own soon, and more than 2,000 through its partners. In this light, the following JVs in the last year make more sense
Tatas & Agusta Westland to make the AW911
Thales with Samtel and also with Rolta
HAL and many major international companies
EADS and L&T
The biggest problems in Indian aerospace manufacturing however are dispersed production centres, lack of vision and co-ordination amongst the players, outdated tax & tariff structure and outdated labour laws. These are the issues that Quest Global (questenstg.wpengine.com) has solved by setting up a SEZ dedicated for Aerospace.
We asked Bejoy George, Chief Marketing Officer, Quest Global some questions.
8ak: Tell us about the SEZ?
Bejoy: Quest Global SEZ is spread over 300 acres at Belgaum in Northern Karnataka and will provide an ecosystem for OEMs, their suppliers, all ancillary and related end user industries to set up precision manufacturing and engineering units.
8ak: What services does Quest itself provide?
Bejoy: Quest Global’s engineering division provides cost-effective design services to its aerospace clients, and also saves money for OEMs and Tier 1s by doing design in such a way so as to save costs in manufacturing through reduction of material costs, reduction in machining operations, using lesser number of parts, reducing assembly costs, etc. Quest Global’s manufacturing provides precision machining, sheet metal working and aerospace special processing currently.
8ak: Who are your partners?
Bejoy: The special processing company is a 50:50 joint venture with Magellan Aerospace, providing services like anodizing, alodine, paint & primer, passivation, shot peening, MPI, FPI, heat treatment, assembly processes, etc.). Quest also has an alliance with Textron Systems, where Textron and Quest Global will work together to develop the manufacturing capabilities within the SEZ and attract investment into the SEZ from the Defence and Aerospace sector. This collaboration is part of Textron’s offset related partnerships in India.
8ak: Who are the other companies that have set up shop in the SEZ, or are in the pipeline?
Bejoy: Quest is at various stages of discussions with several organizations like specialty metal suppliers, aerospace fastener manufacturers, bearings manufacturers, castings and forgings companies, etc.
8ak: Who are you targeting?
Bejoy: Global is inviting players across the value chain, like aerospace specialty metal suppliers, investment, sand and lost-wax casting companies, tooling companies, fastener manufacturers, sheet metalworking companies, composites manufacturing companies, and heat treatment companies to setup shop in the SEZ. Essentially, any company who can play a role in the Aerospace supply chain, is invited to set up shop in the SEZ. And these can be our customers, other companies, and even our competitors. The aim is to create an aerospace supply chain ecosystem in the SEZ, that will enable a wider range, larger volume and higher value of aerospace products and services to be sourced from India.
8ak: What can you offer them?
Bejoy: Aerospace manufacturing is another growing area out of India. Airframe manufacturers and OEMs can further increase their cost savings by outsourcing castings, forgings, precision machining, sheet metal working, special processing and assembly related activities. In addition, further cost savings can be achieved in aerospace manufacturing by replacement of operations that were automated in the west, with skilled labor in India. Thus, cost savings can be achieved in India by de-automation, rather than by automation – the exact opposite of what happened in the west. Add to this the benefits offered by operating within an SEZ (15 year tax holidays, zero customs duties, etc.) and the financial benefits to companies becomes very significant. Also, these companies will not have to worry about any infrastructure – the SEZ will have well developed roads, alternate sources of power with backup, plenty of water supply, IT and communication infrastructure, conference/meeting room facilities, local transportation, 24 hour security, etc. In addition, Quest will also facilitate the SEZ occupants in terms of building the facilities, hiring of employees, etc.
8ak: Why Belgaum? Why not somewhere closer to HAL ie Bangalore, Kanpur etc?
Note: Belgaum was selected because of its lower costs of land/infrastructure/labor/living, and also because of the availability of abundant talent for manufacturing and engineering in and around Belgaum – there are more than 2000 foundries and machine shops in a 1000 km radius of the vicinity, along with 60+ engineering, diploma and ITI institutes). The weather in Belgaum is pretty much like Bangalore’s (probably better). And Belgaum is excellently located logistically, with 3 airports (Belgaum, Hubli, Kolhapur) in a 90 minute driving range, on the NH4 Golden Quadrilateral highway network of India, equidistant from Bangalore, Hyderabad and Mumbai, and an overnight journey from the Mumbai port. We expect 2 more ports to become accessible for our operations in the next few years (Goa and Karwar). For all these reasons, we selected Belgaum for our SEZ location.