India’s multinational engineering conglomerate and private sector defence major, Larsen & Toubro (L&T) on Monday joined hands with European defence major MBDA and a world leader in missile systems to set up a joint venture (JV) that will develop and supply next sophisticated generation missiles and missile systems to meet the growing potential requirements of the Indian Armed forces.
The Joint Venture Company has been named ‘L&T MBDA Missile Systems Ltd’ and will operate from a dedicated work centre, which will include pyrotechnical integration and final checkout facilities.
The two companies have already been working together for past six years especially on the defence offset programmes in India. Commenting on the partnership, Group Executive Chairman of L&T A M Naik said, “Time has come that we strengthen this partnership and manufacture on our shop floor what we design and develop.”
Betting big on its defence business, Naik said L&T group expects an annual turnover of Rs 10,000 crore from its defence vertical by 2011.
Head of L&T Defence and Aerospace, J D Patil said To begin with, the JV Company will look to develop and supply fifth generation Anti-Tank Guided Missiles (ATGM5s), missiles for Coastal Batteries and high speed target drones.
Asked about the location of the JV, Patil said two existing locations of L&T have been identified for this new JV and if the volumes grow, there is also a possibility of setting up an altogether new manufacturing facility.
Going forward, the JV would focus on business opportunities in the Missiles and Missile Systems domain and target prospects under different categories of Defence procurement with specific requirements for design, developed and manufactured in India or the Buy (Indian – IDDM), Buy (Indian) and Buy & Make (Indian) categories of Defence Procurement.
The JV is expected to be incorporated in the first half of 2017 after necessary approvals. L&T will own 51% of the Company and MBDA, 49%, fully complying with India’s Foreign Direct Investment (FDI) policy norms. MBDA is jointly held by AIRBUS Group (37.5%), BAE SYSTEMS (37.5%), and LEONARDO (25%).
“We have been trusted partners to DRDO and the Indian Navy, delivering complete weapon systems and platforms, command control and sensor systems, designed, developed and manufactured in India for over three decades. Over this period, we have worked closely with Ministry of Defence, and its different arms in jointly developing and delivering cutting-edge defence solutions”, Naik said, adding that he expects the product to roll out in the next two years.
Antoine Bouvier, Chief Executive Officer, MBDA said India was not a new market as they have been supplying to defence forces for many years now. He called the partnership with L&T a natural progression.
“Our business strategy in India has always focused on forming partnerships at the deepest level, not just with the armed forces but also with Indian industry. This has seen us involved in the transfer of technology and the production of products and components with the state-owned DPSUs (Defence Public Sector Undertakings) and also with the establishment of very close partnerships with the Indian private sector including large companies and SMEs. The setting up of this JV is a natural progression of our partnership strategy. With L&T, I am convinced that we have found the ideal Indian partner”, he said.
L&T and MBDA have collaborated and partnered on co-development and production of major subsystems involving complex technologies and sophisticated weapon systems such as MICA missile launchers and airframe segments including control actuation units for Indian MoD orders.
Having developed a strong working relationship and built mutual trust, L&T and MBDA are convinced that it is the right time for the relationship to mature in to a JV, given the conducive policy environment in the defence sector in India.
L&T said the decision to formalise this partnership, a key milestone for both L&T and MBDA in their long term relationship, was made after extensive evaluation and identifying the strong synergy between the two organisations.
Both JV partners have a proven track record as trusted suppliers to the Indian Armed Forces – providing critical weapon systems and defence solutions across land, sea and air domains.
L&T has been delivering a range of launch systems, fire control systems and airframes / sub-systems for various indigenous weapon (Missile / Rockets / Torpedo) programmes as development partners and production agency to DRDO and DPSUs.
“By combining our manufacturing and system integration capabilities and track record with MBDA’s technological excellence, we now look forward to delivering complete Missile Systems, hitherto imported, to meet the requirements of the Indian armed forces as required under DPP 2016.”
Larsen & Toubro is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services with USD 16 billion in revenue. It operates in over 30 countries worldwide. A strong, customer focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for over seven decades.
With a significant presence in five European countries and within the USA, in 2015 MBDA achieved a turnover of 2.9 billion euros with an order book of 15.1 billion euros. With more than 90 armed forces customers in the world, MBDA is a world leader in missiles and missile systems.
MBDA is the only European group capable of designing and producing missiles and missile systems that correspond to the full range of current and future operational needs of the three armed forces (land, sea and air). In total, the group offers a range of 45 missile systems and countermeasures products already in operational service and more than 15 others currently in development.