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Interview With Baba Kalyani, Chairman of Kalyani Group

November 1, 2016 (Photo Credit: Courtesy of Kalyani Group)
NEW DELHI — Kalyani Group, a $2.5 billion conglomerate and the world's largest forging company, has entered into aerospace and defense business in a big way, setting up defense research and development (R&D) and production facilities across India to win a spot in the $3 billion defense industry of artillery, armored vehicles, missiles and ammunition over the next decade.

The company's chairman, Baba Kalyani, says his business has invested sizable resources to develop a wide range of products and technological capabilities to manufacture critical components for defense systems with the objective of helping India reduce its dependence on imports and save precious foreign exchange through large-scale indigenization.

The chairman answered by email Defense News' questions about his company's role in the defense industry at home and abroad:

Q. Where do you see the role of the private sector in the Indian defense market?

A. The private industry has taken rapid strides since contributing towards the defense sector. From being the outsourcing agency for state enterprises ,they are now focusing on acquiring knowledge in design and system engineering and access to technology by partnering with foreign original equipment manufacturers (OEM) to provide the best solutions.

There is a lot of knowledge base, technical know-how, infrastructure availability and enterprise in the country in the form of both medium- and small-scale enterprises the big private players. If exploited correctly, they can help us establish a self-reliant vibrant defense base in the country.

Q. How will the Make in India initiative work in the defense sector?

A. With defense being recognized as one [of] the strategic sectors under Make in India, this represents a big opportunity for the private industry. The primary goal is to make India a global manufacturing hub by encouraging both multinational as well as domestic, private companies to manufacture their products within the country. I am very optimistic that this long-term vision will help uplift the inertia of the private industry to enter and invest into a capital-intensive sector like defense.

Q. How can India-made defense products be competitive?

A. That's one of [the] biggest advantage[s] that Indian companies offer over their foreign counterparts. Knowledge and skill arbitrage coupled with labor arbitrage gives us this edge.

Q. What are your footprints in the global aerospace and defense supply chain?

A. Kalyani Group is part of Boeing's global supply chain for [the] supply of titanium flap track forgings for 737 series aircraft. We are also the leading supplier of aero engine, landing gear and structural components to other OEMs like Rolls-Royce, Liebherr Aero and Safran.

Q. Is defense offset a good business model?

A. Offsets offer a stepping stone to technology and also make for a good business case. We are actively pursuing offset business as is the Indian offset partner for many OEMs.

Q. What defense capabilities have you created so far?

A. We have established three R&D centers at various locations in the country to cater for defense, aerospace and other strategic sectors. Kalyani Centre for Technology & Innovation (KCTI) Pune is a world-class technology center with advanced manufacturing facilities focusing on four key activities, namely 3-D printing, electron beam welding, laser welding and nanotechnology. KCTI Pune houses the largest additive manufacturing (3-D printing) set up in the country. We are using it extensively for development of weapon systems and have produced many non-firing, stress-free ordnance components using this unique technology. KCTI Pune is also the incubation center for [our] Defense Electronics [division]. We have also set up similar technology centers at Hyderabad and Bangalore for Tactical Systems and Jet Propulsion Technology, respectively.

Using the combined strength of various Kalyani Group companies, we have established modern and sophisticated infrastructure required for manufacturing and production of various defense solutions. These facilities are pan-India: Pune, Satara, Baramati, Mysore, Jejuri and Hyderabad. The facilities cater for our main focus areas in defense including artillery, armored vehicles, protected vehicles, missiles and ammunition.

Q. What are your noticeable defense programs?

A. We are participating in [a] number of major programs in various segments. In the field of artillery guns, we are participating in [a] towed Gun program and upgrade program with our JV [joint venture] partner Elbit. We are also participating in joint development with Defence Research and Development Organization for the advanced towed artillery gun system program. We have also developed four artillery platforms with our indigenous capability. One of them based on 105mm field gun is likely to go for trials shortly. In addition, we are participating in [a] number of programs like the Spike missiles with Rafael systems of Israel and also for programs of very short-range air defense system and short-range surface-to-air missile with Saab of Sweden. In addition, we are working on many other programs in land systems with DRDO and other OEMs like UVZ [UralVagonZavod] corporation of Russia.

Q. What are your defense joint venture initiatives?

A. We have three joint ventures in the defense [sector]. BF Elbit Advanced Systems for artillery systems; Kalyani Rafael Advanced Systems for specific areas like missile technology (Spike missile), infantry combat vehicle upgrade and advanced armor solutions; and BF Premier Energy Systems for ammunition. We also have strategic partnerships and technology partnerships with many other leading foreign OEMs.

Q. Why is the strategic partner policy important for private players?

A. Strategic partner is an important concept in the context of developing indigenous technology and having the intellectual property rights reside in the country for a strategic sector like defense. Very few large companies or consortium of companies have the capability to undertake large, advanced programs, and the concept of strategic partner helps in providing a much focused approach towards development. It also paves the way for assisting sustainable operations for them.
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