Tatas, Boeing to form JV in international defense mkt

Indian business houses Tatas, Mahindras and Wipro are poised to capture a pie of the multi-trillion dollar international defense equipment market as the Indian government is gradually opening up this sector for collaborations and getting foreign investment.

Tata Industries and world's largest aerospace and defense equipment manufacturer Boeing Company on Thursday announced plans to set up a joint-venture to manufacture defense-related aerospace components in India.

As per initial projections, the JV company would export defence-related aerospace components worth more than $500 million to Boeing and its international customers.

It is learnt that the Tatas will have a majority stake in this joint venture, though it is yet to be announced officially.

As per the MoU this JV will be established by June 2008 and then it will set up a facility to build aerospace components for Boeing. The location and the amount of the financial investment have not been made public.

In the first phase, Boeing would issue contracts to the JV for work packages involving defense-related components for manufacturing Boeing's F/A-18 Super Hornet for the U.S. Navy and Royal Australian Air Force, CH-47 Chinook and/or P-8 Maritime Patrol Aircraft.

Both Tatas and Boeing are also planning a research and development center for advanced manufacturing technologies at a later stage.

Tata group Chairman Ratan Tata in a statement said, "This joint venture is an important part of our strategy to build capabilities in defense and aerospace. I look forward to the joint-venture becoming a world-class facility in India."

Commenting on this development Jim Albaugh, President and CEO of Boeing Integrated Defense Systems said, "It represents another step in our

commitment to India, in this case by linking the capabilities and heritages of these two companies, in order to bring real and lasting value to India's aerospace industry, while making Boeing products more globally competitive."

The JV will utilize the manufacturing capabilities of different Tata Group companies currently producing defense equipments. It will also develop new supply sources for commercial and defense applications.

Manufacturing capabilities established within the joint-venture company would in later phases be leveraged across multiple Boeing programs including the Medium Multi-Role Combat Aircraft (MMRCA) competition.

Boeing is associated with India for more than 60 years when it worked airline customers, parts suppliers, research institutes and others to provide products and services. In December 2003, it established a wholly-owned subsidiary to support the growing demands of India's aviation, aerospace and defense industries.