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In a chat with ET Now, VS Noronha, Head Defence, Tata Motors, says they have back orders in hand for about Rs 900 crore and volumes from Kestrel, the wheeled amphibious platform
ET Now: Give us some background on your defencejourney so far and how it will be a departure from here on in terms of scaling up your exposure to the sector?
VS Nornoha: The background is that Tata Motors has been supplying logistics vehicles to the Indian army for about 50 years till now and when defence opened up to the private sector in 2005-2006, Tata Motors took a strategic decision to move from logistics to combat support vehicles and therefore we went into multi axle vehicles. The traditional supplier of multi vehicle axles to the Indian army was a Czech manufacturer called Tatra and they were assembling the Tatra vehicles in a public sector undertaking in South India and supplying them to the Indian army. When we presented our case to the government that Tata Motors would also like to supply the multi axle vehicles to the Indian army, the Ministry of Defence accepted our proposal and opened up that sector and there was a tender issued for the supply of 1239 multi axle vehicles.
ET Now: Can you be more specific? What are you currently executing on the defence side? While you tell us more about this partnership with Bharat Forge and General Dynamics, what is the scope of work for you?
VS Nornoha: Currently we do about Rs 1000-crore business a year for all our specialist vehicles to the defence and security forces. We have back orders in hand for about Rs 900 crore and volumes from Kestrel, the wheeled amphibious platform, will start kicking in another two to two-and-a-half years because the vehicle will go for user trial this summer. So in three years' time, we will start getting revenues from Kestrel. The next thing we are trying for is the Futuristic Infantry Combat Vehicle (FICV) programme. In about 9-12 months, government will decide among the bidders. Since, it is a government funded programme, there will be revenue from day one. As soon as we keep on developing the vehicles and start crossing certain gateways, the government will pay us for 80 per cent of the development costs. The prototype should be ready in four years from now, testing of the prototype in two years. So we should be into production six years from now. This is apart from our steady state logistic combat support vehicles and the revenues we are getting from the Kestrel.
ET Now: Any other defence contracts you are eying through such partnerships and joint ventures? What is the broad plan with the defence foray?
VS Nornoha: This is by far the biggest. The Director General Mechanised Forces (DGMF) has already asked for an early information request for information for Future Ready Combat Vehicle (FRCV) which will be something between the infantry combat vehicle and the main battle tank. That is another huge project by itself. That is the next one we will be eyeing. A little bit down the line, is a light armoured multi role vehicle, the RSP is already out. We are bidding for that contract with the Ordnance Factory Board. That is about 700 units, which is expected to cost around Rs 3 crore per unit. The smaller ones will keep coming but the two big ones are the FICV and the FRCV.
ET Now: So what we have spoken till now is about all terrain defence, what is in the works for air defence for you?
VS Nornoha: In air defence systems, we have confined ourselves to supply of the vehicle mobility platforms that is our 6x6 and 8x8 platforms. We give it to companies who take it up abroad, mount their equipment on it and bring it back. We have arrangements with some Russian companies and some Israeli companies who take Tata platforms abroad, mount their air defence equipment on it and bring it back. We are getting ready to grow that part of the business, too.
We are eyeing FICV and FRCV segments in defence: VS Nornoha, Tata Motors - timesofindia-economictimes
FICV - Infantry fighter platform
FRCV - Tank platform
TATA has submitted a proposal for both.
TATA is in partnership with the OFB, for the light armoured multi role vehicle. I dont know what this is, maybe the LAMV.
ET Now: Give us some background on your defencejourney so far and how it will be a departure from here on in terms of scaling up your exposure to the sector?
VS Nornoha: The background is that Tata Motors has been supplying logistics vehicles to the Indian army for about 50 years till now and when defence opened up to the private sector in 2005-2006, Tata Motors took a strategic decision to move from logistics to combat support vehicles and therefore we went into multi axle vehicles. The traditional supplier of multi vehicle axles to the Indian army was a Czech manufacturer called Tatra and they were assembling the Tatra vehicles in a public sector undertaking in South India and supplying them to the Indian army. When we presented our case to the government that Tata Motors would also like to supply the multi axle vehicles to the Indian army, the Ministry of Defence accepted our proposal and opened up that sector and there was a tender issued for the supply of 1239 multi axle vehicles.
ET Now: Can you be more specific? What are you currently executing on the defence side? While you tell us more about this partnership with Bharat Forge and General Dynamics, what is the scope of work for you?
VS Nornoha: Currently we do about Rs 1000-crore business a year for all our specialist vehicles to the defence and security forces. We have back orders in hand for about Rs 900 crore and volumes from Kestrel, the wheeled amphibious platform, will start kicking in another two to two-and-a-half years because the vehicle will go for user trial this summer. So in three years' time, we will start getting revenues from Kestrel. The next thing we are trying for is the Futuristic Infantry Combat Vehicle (FICV) programme. In about 9-12 months, government will decide among the bidders. Since, it is a government funded programme, there will be revenue from day one. As soon as we keep on developing the vehicles and start crossing certain gateways, the government will pay us for 80 per cent of the development costs. The prototype should be ready in four years from now, testing of the prototype in two years. So we should be into production six years from now. This is apart from our steady state logistic combat support vehicles and the revenues we are getting from the Kestrel.
ET Now: Any other defence contracts you are eying through such partnerships and joint ventures? What is the broad plan with the defence foray?
VS Nornoha: This is by far the biggest. The Director General Mechanised Forces (DGMF) has already asked for an early information request for information for Future Ready Combat Vehicle (FRCV) which will be something between the infantry combat vehicle and the main battle tank. That is another huge project by itself. That is the next one we will be eyeing. A little bit down the line, is a light armoured multi role vehicle, the RSP is already out. We are bidding for that contract with the Ordnance Factory Board. That is about 700 units, which is expected to cost around Rs 3 crore per unit. The smaller ones will keep coming but the two big ones are the FICV and the FRCV.
ET Now: So what we have spoken till now is about all terrain defence, what is in the works for air defence for you?
VS Nornoha: In air defence systems, we have confined ourselves to supply of the vehicle mobility platforms that is our 6x6 and 8x8 platforms. We give it to companies who take it up abroad, mount their equipment on it and bring it back. We have arrangements with some Russian companies and some Israeli companies who take Tata platforms abroad, mount their air defence equipment on it and bring it back. We are getting ready to grow that part of the business, too.
We are eyeing FICV and FRCV segments in defence: VS Nornoha, Tata Motors - timesofindia-economictimes
FICV - Infantry fighter platform
FRCV - Tank platform
TATA has submitted a proposal for both.
TATA is in partnership with the OFB, for the light armoured multi role vehicle. I dont know what this is, maybe the LAMV.
