“India will become one of the largest exporters of military hardware in the next 10-15 years”: Baba Kalyani

 

Baba Kalyani says Kalyani Group will turn over Rs 2,000 crore annually in defence manufacture

Q.         Large metals giants, like Krupp in Germany, have traditionally spearheaded the development of national defence industries. Is the Kalyani Group riding on such capabilities?

We are the Krupp of India. In fact, two years ago, we beat ThyssenKrupp in their own backyard to become the world’s biggest supplier of metallurgical components. Before 2005, we were not even in this business. Today, we have 60 per cent of the global market in high performance metallurgical components.

We are now global leaders in metallurgy. We make our steel, we forge it, we machine it, we heat treat it. Very few companies in the world can match us in manufacturing demanding products like gun barrels. Companies come to us from Europe for design, engineering, testing and validation of metallurgical components.

Q.        Artillery systems are your new thrust. What are the opportunities here?

The Indian army needs artillery systems. The programme for 1,500 towed guns alone will be worth Rs 25,000-30,000 crore, at Rs 15-16 crore rupees per gun. The army’s website projects a requirement for 4,000 different guns – ultra-light, self-propelled, towed and others. This is an Rs 45,000-50,000 crore opportunity, of which we can snap up half, based on our capability and cost competitiveness.

Q.         How much revenue would this generate on an annual basis?

About Rs 2,000 crore annually, counting replacement parts and maintenance.

Q.         How big is the Kalyani Group in defence today?

This year we will do Rs 500 crore of defence business. This is basically components like wheels for tanks, armoured vehicle components and ammunition shells to Europe. But, once we are asked to manufacture, say 1,000 Advanced Towed Artillery Gun Systems (ATAGS), our defence turnover will rise quickly.

Q.        Is it wise to put so many eggs in the ATAGS basket?

The ATAGS team has created a new benchmark in 155-millimetre artillery. For decades, no similar gun has been designed anywhere in the world. This is the first gun in 30 years designed afresh, from scratch. This will be a world-beater. Next year it will be in every Jane’s magazine. Nobody has a gun like this. With a range of 45 plus kilometres, it’s an amazing weapon.

Q.        You are also developing a titanium-based ultra-light howitzer (ULH). But the army has already bought these guns from abroad…

The army has bought 145 M777 guns from BAE Systems. By March [2018], our indigenous ULH will be ready to compete with that gun. The army needs many more.

Q.         Has MoD conveyed interest?

When [former defence minister] Manohar Parrikar visited us to inaugurate our plant, he was interested. We showed him the model of the ULH we were building and he assured us: “For all future guns we will come to you.”

But we’ll have to pass evaluation and we are ready to go through the process. We are very confident. It is not just for India, I’m sure our ULH will find buyers worldwide. Even Japan is interested in light artillery.

Q.         Private defence firms like yours are relying heavily on being nominated as “strategic partner” (SP). What are your views on the new SP policy?

Honestly, I think we need a lot of clarification about the SP policy. I’ve heard three versions of the SP model. But, looking at it positively, defence production will get a boost.

Q.         There is criticism that the SP policy is exclusionary, with nominated firms gaining everything, and the other left without orders. For example if you are chosen as SP for land systems, you get excluded from aerospace manufacture…

This is not correct. We can be a strategic partner for one segment, and a development partner, or Tier 1 or Tier 2 vendor for another. For building a fighter in India, at least 150 companies will be needed. There is space for all, not just the strategic partner.

Q.        So the Kalyani Group is betting big on defence?

In the next 10-15 years, India will become one of the largest exporters of military hardware. It may not be fighters or highly sophisticated stuff, but will include equipment like land systems, artillery, ammunition, missiles, bombs; we will master these technologies quickly, and do it cheaper than anybody else. The Kalyani Group will be a big part of this.