Mahindra – BAE Systems JV for land systems to commence in February

DW : Defenseworld.net: What are the recent developments regarding your joint venture with BAE Systems. When will it commence business?

Brig. Hai: We are going to announce the joint venture (JV) company in February 2010. As has been said before it will be 74% held by Mahindra and the rest by BAE Systems. Its CEO will be a Mahindra nominee while the deputy CEO will be from BAE Systems. The Mahindra Defence Systems facility in Faridabad which was set up last year for land systems equipment will be transferred to the new company and will be the initial production base of the JV.

DW : Defenseworld.net: What specific business will the JV company cater to?

Brig. Hai: After the formation of the company, the Mahindra Land Systems business will be transferred to the JV. The basic focus will be land systems such as light vehicles, artillery guns, armoured vehicles and other equipment associated with the army, police and paramilitary forces. This will be among the first JVs in the defence sector in India. The JV will participate in the upcoming Defexpo exhibition in Delhi and exhibit a number of land systems equipment it is aiming at the Indian market. Besides the Indian market, it will, at a later stage, serve as a supply chain for BAE Systems’ international business.

DW : Being the first joint venture in the defence business, what will your approach be in bidding for projects considering the various norms you will have to meet.

Brig. Hai: We will have a full time compliance officer. It is not enough that we sign an integrity pact (with the Indian MoD). We will follow it up with a compliance policy and the officer will ensure it.

DW : Defenseworld.net: Could you tell our readers about your initiatives in the naval equipment sector.

Brig. Hai: We have set up a naval systems facility in Pune for our naval business. We are supplying decoy launchers and shells for sea-mines to the Indian Navy. We are looking forward to bid for two major projects in new generation mines and torpedo launchers in the coming months. We have also established expertise in composites which will go into various naval equipment. The naval side of the business is very promising for us and we will continue to maintain focus on this. Incidentally, at Defexpo, we will be exhibiting our naval capability in a separate stand under the Mahindra Defence Systems banner.

DW : Defenseworld.net: We have learnt that Mahindra Defense Systems will be entering the simulators business. Can you please throw some light on this?

Brig. Hai: We are starting a simulator training centre in the Indian Air Force(IAF) for the C130J aircraft which India has purchased from Lockheed Martin. The simulator for these aircraft has been made by CAE and will come to us through the offsets agreement Lockheed Martin has with the Indian MoD. We will maintain the simulator and provide training to IAF pilots who will be flying the C130J aircraft. At present, Lockheed Martin is training our staff on the simulator who will then impart training to IAF pilots. Later on, we intend to set it up as a business vertical considering the demand for simulator services in the Indian defence forces. Simulators are increasingly the training tool of choice not only for aircraft but also for tanks, artillery guns and military vehicles.

DW : Any other areas of defence or security you are looking at going forward?

Brig. Hai: We have the Mahindra Special Services Group which is a security and risk consulting firm. They have provided risk consultancy to the Delhi Metro Rail Corporation and some leading Indian corporates. We are looking at how they will fit into providing consultancy for defence.

DW : How is your traditional business, which is the manufacture and supply of light vehicles doing?

Brig. Hai: This year we will be supplying about 200 vehicles to the police and paramilitary forces as well as state governments. The up-armoured Scorpio has become a vehicle of choice for VVIPs in several states and demand for it is very high. Over the years we have delivered almost 1000 Rakshak light vehicles, 300-400 up- armored Scorpio. We have another vehicle called “Marksman” coming. In addition, the newly developed armored bus will be another area of high demand. We have also developed a mine protected vehicle for the use of security forces in insurgency prone areas.