Mahindra Satyam eyes aircraft making

Bangalore: Information technology firm Mahindra Satyam is looking to leverage group synergies to move from aerospace design services to manufacturing of components. The firm has begun to build on a few contracts that will include design plus manufacturing, a top company executive has said.
The move towards ‘design to build’ will help the firm garner a bigger pie of the Indian outsourced aerospace engineering market, valued between $600 million and $700 million. The market, without the defence offset windfall, is expected to balloon to $4 billion by 2020.
“We are getting ready for the offset. We are a design services company. Now we are getting into ‘design to build’ because of group synergies. This means we will be able to manufacture as well. This will help in better positioning,” said Karthikeyan Natarajan, VP and head, Integrated Engineering Solutions, Mahindra Satyam.
Under the offset clause, companies bagging defence tenders need to source 30% of the value of the contract awarded from India – this may include IT, engineering, manufacturing, supply chain, maintenance, and MRO. On the defense side, the government is expected to spend $40-50 billion on modernisation programmes over the next five-seven years and to the extent of $100 billion over the next 10-12 years, experts say. This implies $30-$40 billion offset needs to be managed within the country.
11/05/10 Goutam Das/Financial Express

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Categories: Indian Aviation- In General May 2010, New May 2010