Buoyed by its 2022 performance, defence public sector undertaking (PSU) Bharat Electronics Ltd (BEL) is gearing up to focus more on research and development and enter into tie-ups for getting into cutting new age technologies and artificial intelligence to meet the demand of next generation warfare. Sitting on over record ₹15,000 crore turnover, Bhanu Prakash Srivastava, Director (Other Units) & Additional Charge, Chairman & Managing Director & Director (Marketing), BEL spoke to businessline on Aatmanirbhar Bharat scheme, its achievements and challenges ahead as the PSU has to compete with emerging private sector. Excerpts:
The domestic defence industry is being considered as the country’s sunrise sector. How is BEL contributing to government’s Atmanirbhar Bharat initiative in defence space?
BEL being a key player in defence with multiple existing competencies and strong R&D competencies has already responded to many ‘Make-II’ projects under DAP 2020 and target to increase participation. We are also working on indigenous development of sub-systems, systems and services for which capabilities and competencies are being built.
This includes investing in infrastructure creation and modernisation, skill development and outsourcing to Indian industries, especially MSMEs. About 31 per cent of BEL’s domestic procurement has been done through MSMEs in 2021-22. BEL has opened its state-of-the-art testing and infrastructure facilities for use by private industries. BEL has created Defence Innovation Organisation (DIO) with Hindustan Aeronautics Ltd (HAL), to create an ecosystem to foster innovation and technology development in Defence, by encouraging start-ups.
BEL has been contributing towards the government’s Atmanirbhar Bharat initiative in defence space with absorption of technologies from Foreign OEMs for manufacturing of TR modules, Low Band Receivers, Micro Modules required for Fighter Aircraft and utilising the expertise in various other business segments to improve the product for domestic and exports business.
What are the major milestones achieved by BEL? Please share the details including exports.
It is our constant effort towards indigenous development that has led us to achieve 78 per cent of our turnover from indigenous products.
The major achievements in the recent past are : delivered DRDO designed Akash Missile System, Long Range Surface to Air Missile (LR SAM), Naval Fire Control Systems, L-70 Air Defence Gun System, and Schilka Air Defence Gun System.
Other than that the largest export order worth $93.15 million was received from Airbus Defence and Space, Spain, for the manufacture and supply of Radar Warning Receiver (RWR) and Missile Approach Warning System (MAWS) under the prestigious C295 aircraft programme. During 2021-22, BEL achieved an export sale of $33.3 million and exported to countries like the USA, France, China, Germany, Switzerland, ASEAN, Mauritius, Republic of Armenia, Sri Lanka, Sweden and Israel. BEL’s export order book stands at $278 million as on date.
It is proposed to pursue new business opportunities globally to enhance the export vision of the government . The focus is to increase exports for civil requirement – solar, critical infrastructure, homeland security solutions, smart city, electric vehicles, medical equipment, contract manufacturing services, etc.
What are future challenges BEL sees in 2023 and how do you intend to overcome them?
Several evolutions of the defence procurement procedure have progressively ensured wider participation of Indian and foreign companies and created the following challenges for BEL: retention of Indian defence market share; diversification into the related business areas for growth; global competition and access to critical technologies / highly guarded defence technologies.
Globally, if an Indian company needs to compete, irrespective of a PSU or a private company, it has to address challenges related to the latest technology requirements, industry specific international standards compliance along with certifications, quality adherence to global standards, shortened delivery cycle time, etc.
These challenges have led to many strategic initiatives being under taken in various areas of operation of the company, such as: restructuring of strategic business units; thrust on exports and offsets; formation of joint venture companies to bridge the technology gaps; new business development initiatives in areas allied to core strengths; enhanced thrust on in-house R&D to reduce time to market and introduce new products – basic foundation for growth; further strengthening of relationships with DRDO labs, national research labs and other scientific institutions; development of new technologies through joint development projects with technology houses, both domestic and international; enhanced thrust on business partnerships: strengthening the marketing set-up and entering into marketing tie-ups. BEL’s software development capabilities has been further enhanced.
BEL is in discussions for setting up Joint Ventures with Indian / foreign partners to acquire high-end technologies, developing new products, reducing competition and exploring offset opportunities. Continuous cost reduction is another competitive strategy. BEL has been assessing and augmenting its current infrastructure requirements, where necessary.