September 24, 2012 | Business Line

Hyderabad’s aerospace hub bets on first-mover advantage

Hyderabad: The country’s first aerospace and precision engineering special economic zone (SEZ) is taking shape at a location close to the Hyderabad international airport.

This emerging aerospace manufacturing cluster at Adibatla will focus on defence equipment, commercial aircraft components, testing and calibration labs, a commercial MRO and flying training hub. It will also include design and development of satellites.

According to S. Ramadorai, Chairman of Tata Elxsi and Vice-Chairman of Tata Consultancy Services, “the Tata initiative that has brought international presence here can trigger a larger developmental advantage for this whole area as an Aero Cluster,” he feels.

Tata Advanced Systems, in partnership with Lockheed Martin, has built a top-notch facility from where it has begun deliveries of the centre wing box to be used in planes.

From no employee in 2009, this unit now has 700 aerospace professionals, meeting all aerospace technical standards.

“You will be amazed that the average age of the employees in three Tata facilities is only 23 years. An academy has been set up to train young engineers and mechanics to global standards of aerospace, adding to the national talent pool,” Ramadorai says .

Although traditionally one would associate aircraft clusters with Montreal, Seattle, Toronto and Toulouse, international outsourcing has produced spillovers and created new poles of growth, mainly in Southeast Asia.

POISED TO TAKE-OFF

With India spending as much as $36 billion (data for 2009) on its defence needs — among the top 10 globally — Hyderabad is well placed for defence and aerospace activities, since the city provides an ecosystem for the sector. Hindustan Aeronautics Ltd already has an Avionics Division, there are several defence laboratories, and active defence equipment and component manufacturers here.

Global leaders in aerospace have also set up their technology and engineering service support centres in Hyderabad. With over 700 engineering colleges and technical institutes, talent supply is not a constraint , according to Ramadorai.

COST ADVANTAGE

Global interest in India is on the rise not just due to defence offsets but also due to pressure on defence budgets in the US and the UK and their inability to leverage China as a production base. The country, therefore, enjoys cost advantages to serve and supply globally.

The Tatas have successfully tried to jumpstart a set of inter-related businesses in and around Hyderabad.

Their initial India-based Sikorsky helicopter fuselage assembly facility had found takers with upstream aerospace component manufacturers. It was then re-located to India and co-located with the assembly facility.

In turn, given the pool of technical and managerial skills developing here, Lockheed Martin is now more confident about relocating their Empennage assembly facility from the US to a location close to the other Tata Aerospace projects.

Already, significant interest has been generated across the world in what Hyderabad’s aerospace hub has to offer. Global original equipment manufacturers (OEMs) have stated that the existing production base in India is insufficient to address offset opportunities.

Like IT, the aerospace sector is very attractive to the local community because of the quality of jobs and fiscal benefits they create.

With the aerospace and defence industry going through very interesting times, the Hyderabad aero hub has the first-mover advantage.