Segments such as Network Centric Warfare, Radars, Weapon systems, Electronic Warfare & Avionics, Military Communications and Electro Optics are likely to drive the Company’s growth in the future, says M V Gowtama, Chairman & Managing Director, Bharat Electronics Limited (BEL).
DW: Could you talk about how successful BEL has been in attaining technological leadership in defence electronics? Please share details about the major achievements recently?
M V Gowtama: BEL, with a vision of making India self-reliant, has been India’s foremost Defence Electronics Company since 1954. BEL is steadily increasing its portfolio in defence Defence electronics. It has been the most trusted partner of DRDO and spends 8 to 9% of its turnover on R&D. It has strengthened the armed forces (Indian Navy, Indian Air Force as well as Indian Army) with many indigenous defence systems in the field of Radars, Communication systems, Electronic Warfare systems, Weapon systems, night vision devices, etc. Some of the systems already delivered include the various surveillance and weapon locating radars, Akash Missile System, IFF radars, Air Defence Control & Reporting System (ADC&RS), Combat Management Systems (CMS) and Sonars for ships & submarines, ship-borne and land based EW Systems, Communication equipment for Navy and Army, Digital Flight Control Computer (DFCC) & Avionics for Light Combat Aircraft (LCA), Night Vision devices, etc.
DW: How does BEL contribute to the modernization of armed forces? What are the latest products in defence and aerospace category?
M V Gowtama: Modernization of Armed forces happens through induction of state-of-the-art equipment and upgrading sensors & weapons on existing platforms. BEL is contributing in both these areas. Today BEL is working on many new products such as AESA based modern Multi-mode Radars, Next Generation Electronic Warfare suites for fighter aircraft, Integrated EW systems for various terrains / ships, Tactical Communication Systems, Battlefield Management Systems, Passive Night Vision Devices, Multi-sensor Stabilisation Systems with sensors, and new gun program with target acquisition and fire control capabilities. Also, BEL is providing upgrade solutions like for Schilka and L70 guns.
DW: Could you talk about the revenue expectations in FY18? Also, please talk about the order book position of BEL?
M V Gowtama: Revenue Expectations: BEL is likely to achieve a turnover mark of around Rs.10,000 Crore for FY 2017-18. The company is deploying all efforts to sustain double digit growth in revenues Y-o-Y. Based on comprehensive analysis of the next 5 year plan, proactive new business initiatives, new order acquisition and future business trends, the company is confident of reaching a turnover of Rs.15,000 Crore in the next three to four years. Order Book: The order book of the Company as on February 2018 is around Rs.40,350 Crore. The order book comprises of major programs like Integrated Air Command & Control Systems (IACCS), Long Range Surface to Air Missile System (LRSAM) and Battlefield Surveillance System (BSS). Then we have various Radar, Sonar and Communication equipment for new class ships, night vision devices, Radars, EW and Gun upgrades for Army, and Electronic Voting Machines with Voter Verifiable Paper Audit Trail (VVPAT) for Election Commission of India. The Company has an export order book of around US$ 93 Million as on February 2018, including offset order book of US$ 19 Million.
DW: To give thrust to exports is one of the objectives of BEL. Could you give an overview of your export business?
M V Gowtama: BEL has a dedicated International Marketing Division for providing an increased thrust for harnessing the export potential of defence electronics products and systems, which represent its core area of business. BEL has been exporting various products and systems to friendly countries of India. Apart from this, BEL is interacting with Election Commissions of various democratic countries to market Electronic Voting Machines. Having established a Coastal Surveillance Radar System for few neighbouring countries, BEL is interacting with Government on a regular basis for supply of the system to other friendly countries of India. BEL has identified the market segments and has a structured market plan for its products and systems. BEL has been visiting customers on a periodic basis to understand their requirements, acquisition process and to establish long-term customer relationship for enhancing export business. BEL is starting new overseas marketing offices in four countries in the coming months. These countries are strategically located in South Asia, South East Asia and Middle East with a focussed approach towards enhancement of export. BEL is the only organization in the country which is fully geared up to meet the expectations of Make in India program in the field of Professional defence electronics equipment development and manufacturing with a focus on exports. With this, BEL is focusing on the opportunities in the areas of helping OEMs to meet their offset obligations in various RFPs of MOD, on account of the Offset policy incorporated in Defence Procurement Procedure (DPP). In this regard BEL is closely working with various major foreign Aerospace and Defence companies. BEL has also identified contract manufacturing (both build to print and build to spec) as one of the areas to address the emerging opportunities with OEMs. Further, efforts are being made to establish long-term supply chain relationships with global players. BEL participates in International Exhibitions to showcase its products and capabilities and for creating brand awareness among global supply chain partners. BEL publishes periodic advertisements in international / defence magazines / periodicals / journals to enhance the visibility of BEL. BEL is currently exporting Communication equipment, Radars, Coastal Surveillance System, Cable Looms and Mechanical Parts etc to various countries – mainly Sri Lanka, Myanmar, Maldives, Mauritius, Seychelles, Vietnam, Indonesia, Israel, Switzerland, Germany, Sweden and USA.
DW: Could you talk about BEL’s business in non-defence category? Also, please talk about the latest products and major clients.
M V Gowtama: BEL is continuously exploring opportunities in non-defence areas for enhanced growth by leveraging its strengths and capabilities acquired in the Defence electronics domain. BEL intends to use its knowledge and experience acquired in Defence by offering spin-off technology products for civilian applications. The main areas of focus and the products associated with the identified areas for the non-defence include Homeland Security, Smart City elements, Solar Power, Space and satellite integration business, Modern Communication Systems for Police and Paramilitary Networks, in addition to EVMs, Smart Card, Communication equipment and Electro Optic Devices Some of the clients in non-defence are Election Commission of India, Central Paramilitary forces, MHA, Government agencies, State Municipal Corporation, Public sectors, State Police.
DW: Please talk about the indigenization efforts of BEL in line with the ‘Make in India’ programmes?
M V Gowtama: In line with the Government’s Make in India policy, BEL has taken several initiatives towards indigenization to achieve self-reliance through In-house R&D, Import Substitution, Outsourcing from Indian Private industries, Public Private Partnerships, Joint Ventures, Capacity expansion, Infrastructure Development / Modernization and Collaborative R&D. Around 87% of BEL's turnover is generated through indigenously developed products / systems. As part of our efforts to enhance indigenization, BEL has created an exclusive web link on Make in India in the BEL website (www.bel-india.com), listing the Items for Indigenization, Items for Procurement from MSMEs, Test Facilities for use by Indian Private Vendors, Collaborative R&D, Nodal Officers to promote Make In India and Start-ups.
DW: Could you shed some light about your vision and priorities for BEL to achieve its objectives?
M V Gowtama: Defence segment continues to be BEL’s main business and provides about 85% of revenues. BEL’s vision is to be a world-class enterprise in professional electronics. In keeping with the Modernization plans of the Indian Defence forces, BEL aims to grow at a rate of 12 to 15% in the coming years. Segments like Network Centric Warfare, Radars, Weapon systems, Electronic Warfare & Avionics, Military Communications and Electro Optics are likely to largely drive the Company’s growth in the future. As a diversification strategy, BEL is continuously exploring opportunities in defence and allied non-defence areas for enhanced growth, leveraging its strengths and capabilities acquired in the defence electronics domain. Some of the new areas of focus in defence segment include Electronic Ammunition Fuzes, Inertial Navigation Systems and in non-defence segment include homeland security and smart city solutions. BEL is also working with ISRO to address growing needs in satellites and space applications. India is one of the most lucrative Defence markets globally with mega acquisition programmes coupled with the Government’s firm resolve for Defence modernisation. At present, the Indian Defence market is undergoing several fundamental changes with the Government setting a firm platform for the private sector to play a major role in the Indian Defence industry. BEL is poised to face increased challenges due to competition from the private sector. BEL is working closely with platform manufacturers like HAL and OFB to become a preferred Electronics Systems Supplier for their programs. BEL has been continuously carrying out changes in its organizational structure, business processes and systems to adapt to the changing business requirements. BEL is planning to invest substantially in R&D and also for expansion and modernisation of facilities especially in areas of Radars, Missile systems, Advanced Electro-optics, Antennas manufacturing, RF & Microwave components and Homeland Security solutions.
DW: How do you look at DefExpo 2018 as a platform to identify new business opportunities? Could you talk about BEL’s highlights at the expo?
M V Gowtama: DefExpo 2018 is a wonderful platform to interact with existing and potential customers, partners and suppliers. At DefExpo 2018, BEL will showcase its capabilities spanning every domain of its business – Radar and Fire Control Systems, Network Centric Systems, Communication Systems, Missile Systems, Electronic Warfare & Avionics, Anti-Submarine Warfare Systems, Electro Optics & Laser Systems, Gun Upgrades, Tank Electronics, Home Land Security Systems, Technology Modules, Simulators, Shelters and civilian products. BEL will display its R&D capabilities by launching some of its new products / technologies during the DefExpo 2018. The theme for this year’s display is ‘Make in India’ in keeping with the Government’s impetus on this initiative.
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