Rolls-Royce is a world leader in manufacturing and support services for aircraft engines in the civil aerospace business, and also actively involved in manufacture and supply of defence equipment.
Despite the turbulence being witnessed in the civil aviation sector in the country, Rolls-Royce is bullish and confident about the sector taking off in a big way with fine-tuning of the aviation policy to suit the changing dynamics of the global aviation industry.
In India, Rolls-Royce Trent 700 engines power Airbus A330 and a 320 family of aircraft for leading domestic airlines. Kishore Jayaraman, President, Rolls-Royce India and South Asia, in an interview to The Hindu explained about the company’s India-specific plans and overview of the aviation and aerospace sector. Excerpts:
Rolls-Royce has been in India for over eight decades now. How has the journey been?
We started our association with the Indian aerospace sector in 1932 with Gypsy engines on the first Tata Aviation aircraft. A year later, Indian Air Force took to the skies powered by Rolls-Royce Bristol Jupiter engines.
Today, Rolls-Royce has 4,000 engines in service in India, with customers across civil, defence, marine and energy sectors. In India, we have about 450 employees and another 800 engineers working in Rolls-Royce-managed engineering centres in Bangalore in partnership with QuEST and Tata Consultancy Services. In 2010, we set up a joint venture with HAL to manufacture compressor shrouds.
Another significant partnership was forged in April 2010 when Rolls-Royce signed an MoU with Larsen & Toubro to address civil nuclear opportunities both in India and globally. Rolls-Royce is also committed to bring high technology-oriented ecosystems to India. India continues to be an important strategic destination for us.
Do you think that the move to allow 49 per cent FDI in airlines will improve the current state of stagnation in the aviation industry?
Permitting foreign airlines to invest up to 49 per cent will definitely benefit the Indian aviation industry. The next major consideration is the streamlining of tax structures, especially on aviation turbine fuel, which are throttling the sector’s growth. India needs a new civil aviation policy so that input costs are reduced, airlines become financially viable, more Indians can fly and the sector can contribute more meaningfully to economic growth.
Last year, Rolls-Royce announced the construction of a new manufacturing facility in Bangalore with HAL. What is the progress?
The new manufacturing facility in Bangalore is owned by International Aerospace Manufacturing Pvt. Ltd, which is a joint venture between Rolls-Royce and HAL. This 7,200 sq. metre facility will produce components for the Trent family of civil aero engines, as well as for a number of marine and energy gas turbines.
Located near the HAL airport, IAMPL will incorporate the latest Rolls-Royce manufacturing techniques and create job opportunities for highly-skilled technicians and engineers.
We plan to develop IAMPL as a centre of excellence, with the latest manufacturing techniques and training programmes.
Are you in favour of opening up the defence sector for FDI up to 49 per cent?
Raising the FDI limit will help the Indian defence industry to become globally competitive. Foreign investments bring in new technologies and co-production of various products.
Rolls-Royce has been a strategic partner of India’s armed forces since 1933 powering a large inventory of military aircraft. We have a broad-based portfolio of engines to offer power solutions for the new tanker programme, additional trainer and transport aircraft, helicopters and UAVs.
Where do you see, in terms of business units, the maximum potential for Rolls-Royce in India and if possible could you give us an insight into what kind of investments it is looking at or what kind of local manufacturing facilities is lined up for future?
Rolls-Royce is supporting the development of India’s indigenous aerospace industry and is setting up collaborations that play to India’s knowledge base. At the moment, we have joint ventures with QuEST and TCS, which employ around 800 engineers in Bangalore. We are at the moment focussed on the next wave of co-developing products and services in the country. We have further plans which may revolve around setting up a supply chain network in India, setting up a local manufacturing base, a new services set-up and building manpower capabilities in India. The next logical step in this evolution will be to co-develop new products in partnership with Indian industry to meet both domestic needs as well as serve the global markets.
What are the potential areas of growth that the company sees in the coming future?
Recently, we secured an 8 million British pound sterling contract to design and power a highly specialised buoy tender vessel for India. The vessel will be built at the Cochin Shipyard Ltd and is scheduled for delivery in 2015. It will be operating in remote waters off the east coast of India and around the Andaman & Nicobar Islands maintaining and replacing navigational aids and buoys.
We have another contract with Cochin Shipyard to supply water jets, three per vessel, and associated control equipment for Fast Patrol Vessels which are now under construction at Cochin Shipyard. These 50 metre long vessels have a design speed of 33 knots and it will operate in Indian coastal waters and around islands. We have already started delivering the equipment and will complete supply of units over the next two years.
Where do you see the company in the next ten years in India?
India offers the opportunity of a rapidly growing market. We aim to double the defence business size in the next three to five years and are looking at collaborations with Indian firms.
With Indian carriers flying overseas, Rolls-Royce, with over 50 per cent market share in wide-bodied planes globally, sees a huge demand from the civil aviation sector. The next wave of wide bodies is going to be here. I’m also bullish about the Indian energy market and believe that ultra mega power projects will come through eventually.