Executive Insight Back

Shekhar Sardessai, Chairman and Managing Director, Kineco Private Limited "Offset Policy Boon for Composite Aerospace Industry in India"

Founded in 1996, Kineco Pvt. Ltd, is a multi-dimensional composite manufacturer based in Goa, India. The Company has many innovations to its credit, prominent among which is the most prestigious R&D project for the Design and Development of the Composite Sky Bus for the unique suspended metro-rail system developed by Konkan Railway Corporation.

The Company designs and manufactures for its global customer base highly advanced glass and carbon composite structures and components for applications ranging from Mass Transit, Automobiles, Motor sports, Defense & Aerospace and Aviation. In an exclusive interview Chairman and Managing Director, Mr. Shekhar Sardessai shares his experience with Editor, Lucintel, K. Venkateshwar. Rao. Excerpts:

1. What are the key drivers for composite consumption in Aerospace in India?

Sardessai: Over the past decade, the Helicopter and aircraft production programmes of

Hindustan Aeronautics Ltd. (HAL) have been one of the main drivers of Aerospace composites in India. Also the space programmes of Vikram Sarabhai Space Centre (VSSC) have contributed significantly to consumption of composites. The future holds good potential with indigenous aircraft production and space programmes expected to continue and grow. Besides, a major opportunity is knocking on the doors in the form of offset opportunities from global aerospace and defense equipment suppliers.

2. Some of the key challenges faced by your company in Indian market?

Sardessai: All of the Aerospace programmes in India are Government sponsored. Obviously, the pace of implementing the programmes and inviting participation of private industry is slow, owing to bureaucratic hurdles.

3. Tell us about the impact of government policies on aerospace industry?

Sardessai: The government's Defence and Civil aviation offset polices will certainly help the growth of the composite aerospace industry in India. Aircrafts and defense equipments being the major users of composite parts this will undoubtedly be the major thrust areas for these global suppliers who have the offset obligations against their contract with the Government of India. Government of India has also announced the policy for participation of private players in defense production. This will also create opportunities for the composite industry in India.

4. Steps required in making India an export hub for Aerospace components?

Sardessai: While offset policy could provide a huge outsourcing opportunity, a sound framework of policy which encourages investments in the sector is essential. For this the Government and the industry have to work together in identifying opportunities and creating an environment which facilitates creation of such export hubs. Unlike the software industry, the ramp-up here could be slow but the outsourcing model that worked for the software industry can also work for the composite aerospace industry.

5. Key challenges faced by composite end-users in India?

Sardessai: The major challenges for the composite aerospace end-users in India are the access to composite raw materials such as aerospace grade carbon fibers. There are trade embargos from producer nations for supply of certain key raw materials to India. The licensing requirement therefore can delay the aerospace programmes substantially or could also run the risk of being shelved halfway through due to non-availability of raw materials.

6. Government support and policies change that is required to encourage exports of composite components?

Sardessai: Government has made a good beginning with the offset policy. Private industry on its part needs to understand that global aerospace customers are extremely demanding on quality and delivery. Therefore, it is essential that we tread the path of growth cautiously with strong focus on creating world class manufacturing facilities which can compete with best in class. Risks of aerospace programmes can sometimes be high and global customers are demanding sharing of this risk. Hence, the industry which aspires to be a global aerospace composite supplier has to create proper risk mitigation, the mechanism that can tackle uncertainties and delay which can result in delay in ramp-ups and revenues.

7. How does 'Made in India' product compare with the 'Rest of the World' in terms of quality?

Sardessai: The Indian industry in many fields has demonstrated that 'Made in India' product can be a world class product. As far as Kineco is concerned, we have a strong knowledge in design and engineering of complex composite structures. We have also recruited a few expats with immense experience in global aerospace composite manufacturing which will help us to fine tune our processes to global standards.

8. Steps required to be taken by aerospace industry to be able to compete with more developed industries in the west?

Sardessai: Global aerospace customers are extremely demanding on quality and delivery. One just can't afford to fail and all this has to happen pretty quickly because the opportunity is knocking on our doors. Airbus and Boeing, as well as major defense equipment suppliers are looking for partners and they have time-bound programmes to fulfill. If the Indian industry has to get a share of these programmes it has to ramp-up quickly.

9. How has global slowdown affected the market? How has been your organization's growth in the last 2-3 years and how do your foresee the growth forward?

Sardessai: Global slowdown has had a cascading effect on the aerospace composite industry. But Kineco has not been affected, in fact we have grown over 100% in the last one year. Our story is different. We invested in emerging technologies 3 years back and now we are reaping the benefits. FY 08-09 has been an exceptionally good year for us and we expect to grow at least between 80-100 % year on year over the next 3 years.

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