Rolls-Royce has been a partner to the Indian Armed Forces since 1932. Going forward, how are you planning to strengthen this partnership in future, so as to help India in its vision to become a global hub for aerospace design, development and manufacturing?
Rolls-Royce is deeply embedded in India as an investor, a high skills employer and as a supplier of power systems across all our five businesses: civil aerospace, defence aerospace, marine, civil nuclear and power systems.
Presently, we are working towards the indigenisation of the Indian defence industry by exploring strong partnerships with companies who share our goals. We are already leveraging the vast engineering talent pool and playing a leading role in the government’s ‘Make in India’ initiative. In terms of design, development and supply chain capability, we have announced the recruitment of 500 people in Bengaluru by 2017. These people will undertake aerospace engineering for customers in the region as well as support for Rolls-Royce’s regional supplier base. We have plans to hire around 100 engineers at our upcoming Engineering centre in Pune by this year. In addition, more than 1000 engineers, through our partnership with QuEST & TCS, work at Rolls-Royce managed engineering centres in Bengaluru. In terms of manufacturing, International Aerospace Manufacturing Pvt Ltd (IAMPL) is now at full production, employing over 120 people for a wide range of engine programs including the Trent XWB. Today, we are already nurturing skills, developing local supplier base and building capabilities, and are well positioned to cater to the future growth opportunities available in India and South Asia.
Looking to the future, we are ready to eventually embrace opportunities to co-develop and co-manufacture for the aerospace sector with the right Indian strategic partners and keen to play a role in India’s indigenisation ambitions.
Tell us more about the operations of IAMPL, Rolls-Royce’s joint venture with HAL.
IAMPL has been built with an investment of over US$25 million, the 4500 sq mt production facility manufactures critical engine components such as compressor shrouds and cones for Rolls-Royce gas turbines – both for new production and aftermarket use. It is one of the first tier one suppliers in India for civil gas turbines, commonly known as jet engines, for any major foreign OEM. IAMPL is a benchmark manufacturing facility within the Rolls-Royce gas turbine supply chain, operating the latest technologies to the highest levels of aerospace compliance. It also has five NADCAP approvals for special processes. Its manufacturing portfolio covers approximately 140 different compressor parts for Rolls-Royce Trent and RB211 engines. Our relationship with HAL is one of the longest in the industry and we hope that our relationship will grow from strength to strength.
Who are the partners/suppliers in India that Rolls-Royce has tied up with for production facility creation?
India has a robust and competent industrial ecosystem that is capable of manufacturing components and sub-systems that require a high-level of precision. Stronger economic growth, more favourable offset policies, cost advantages, and a robust talent pool have further increased the aerospace suppliers’ base in the country. We firmly believe in leveraging India’s competencies to support the ‘Make in India’ initiative. Our biggest partnership is with HAL (IAMPL), and we intend to grow the JV partnership with a focus on opportunities to collaborate on co-development.
With the current spend on procurement around $40 m (2016), Rolls-Royce has set a target of procurement spend of around $200 m by 2020. Other Indian suppliers include Bharat Forge, Godrej & Boyce and TASL (Tata Advance Systems Ltd). Currently with 3 tier-I suppliers in 2015, we are working on doubling the supplier base in 2017.
Tell us more about Rolls Royce’s India Open Innovation Programme (IOiN-RR) for SMEs. How is the progress and response?
Rolls-Royce is committed to innovation. We continually innovate to remain competitive and most importantly, we ensure that innovation is relevant to our customers’ needs. We believe that India is home to some of the most innovative small and medium sized companies. Being a key entrepreneurial nation, the Open Innovation Programme was launched in India in 2013. Being the pilot programme, we received a tremendous response from thousands of companies in India. We received some game-changing ideas from Indian companies for the challenges shared by us. This involves farming out various problems faced by the firm to Indian companies and getting them to come up with unique solutions. We are trying to see how we can take the winning solution and give them the opportunity to integrate into Rolls-Royce global operations through a collaborative relationship with the company.
How is Rolls-Royce positioned today to cater to the future growth opportunities available in India?
As India gets ready to move on its growth path, we will continue to support the country with our powerful portfolio of products and services and the right combination of experience and advanced technologies. India as a market represents a host of significant opportunities across all sectors in which we operate – India’s defence budget allocation is estimated to touch $620 billion by 2022 as per FICCI. The civil aerospace market is growing at a double-digit pace. There is a huge energy deficit with large eventual opportunities for the gas distribution, distributed power generation and nuclear sectors despite short term challenges. The marine sector has been designated a strategic industry, though also facing immediate challenges.
India also offers the Group very significant supply side advantages due to cost-competitive, worldclass IT and BPO industries and growing engineering and manufacturing capabilities. In the short term, we will look at increasing our supply chain base. We are working towards introducing Indian supply chain to more complex commodities like complex fabs, pipes (installations SCU) and mainline shafts (rotatives SCU) as well as introducing new commodities such as: external brackets, casings, wire harnesses, castings, stub shafts/blisks. In the long-term, we will continue to build on our legacy here and identify opportunities to co-develop and co-manufacture through partnerships and collaborations with Indian companies. We can significantly increase value to the Group from these activities, while playing a greater role in growing our engineering pool, developing local advanced manufacturing capabilities and a strong supply chain base, thereby, making ourselves more relevant in the country.