Theme: Potential for SMEs in Defense Sector. Centum Electronics Limited, Bangalore A Case Study

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Millicent Flowers
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1 Theme: Potential for SMEs in Defense Sector Centum Electronics Limited, Bangalore A Case Study Vinod S Chippalkatti 27 th July

Centum - Overview Established in 1994 Employees: ~ 1200 [300 Engineers, 100 Design Engineers] Revenues: 312 crores Defense, Aerospace, Space, Industrial and Telecom Manufacturing area 250,000 SFT

2 Centum - Overview Established in 1994 Employees: ~ 1200 [300 Engineers, 100 Design Engineers] Revenues: 312 crores Defense, Aerospace, Space, Industrial and Telecom Manufacturing area 250,000 SFT [Clean rooms Class-1000 & Class-100] Systems and Certifications ISO 9001:2008 AS9100 Rev C ISO : 2003 ISO14001:2004 ISO : 2009 MIL-STD-883 Test House Lines Certified to Mil & Space Standards 2

3 Key Strategic Electronics Customers OFB 3

and Productionization of Modules, Subsystems and Systems in Built to Spec (BTS) mode Built

4 Products Missile Electronics LRUs like MIU, OBC, FSPU Torpedo Fin Controllers Power Supplies & Electro Optics Sensors for Satellites and Launch Vehicles Design, development and Productionization of Modules, Subsystems and Systems in Built to Spec (BTS) mode Built to Print (BTP) mode Inertial Navigation Modules and Subsystems Micro Circuits Crystal Oscillators 4

5 Defense License Offset Eligibility Centum has the Defense License for Manufacture of Electronic and Communication subsystems / systems for Defense. Centum s eligibility in participating in all the offset programs including DPP2006 or prior is strengthened. 5

6 Centum Story 1994 Booming DOT-COM days Established as a significant player in Telecom domain 2000 DOT COM bust Strategic Decision to diversify into Space Line qualification to Space standards Explored entry into Defence sector First break through with NSTL order for development of Torpedo Fin Controllers Consolidation in Space and Defence sectors 6

7 Centum Story Strategies: Formation of two divisions 1. BTS (Design to Delivery) 2. BTP (Manufacturing to Customer Designs) Built a strong Design & Engineering Team (over 100 Engineers) Investments in training manpower to various IPC, J-STD requirements Heavy investment in Business Development teams 1. India Team for Domestic BTP/BTS opportunities 2. International Team [With Expats from Europe and USA] for OFFSET opportunities Investment in Plant and Machinery Building teams with Domain Knowledge. 7

Centum Story A combination of Right Technical Skill with Domain knowledge, supported by state of the art manufacturing facility and Global business development team has resulted in UMBRELLA AGREEMENT

8 Centum Story A combination of Right Technical Skill with Domain knowledge, supported by state of the art manufacturing facility and Global business development team has resulted in UMBRELLA AGREEMENT with L3 Communication to address the Indian and Overseas markets. This agreement is also being supplemented with go-to-market strategy as a team for opportunities which are not covered under offset clause. 8

9 Centum - Experience Incremental Investments in Infrastructure: If you invest significantly on infrastructure required for Defense-only then you are IN for a trouble. All investments at centum have been 20-25% incremental. While we understand that sometimes, there is no order without an investment, we can be IN for a trouble, if we invest without orders. Investment in People: Contrary to investment in infrastructure, the investments in people is a continuous process. These helped centum to take on the challenges of any Complex product realisation. 9

10 Challenges The defense sector projects / program lead times are too long and many a times test the patience and tenacity of the players. This will also significantly affect the cash flow cycles. The frustrations of waiting long, for successful qualification of NCNC hardware delivered. There is no level playing field for Indian vendors and overseas vendors where the Indian vendors are asked to go through a rigorous qualification route with continuously changing specifications and unrealistic schedule expectations. In many cases, the payment terms are also different. LDs are levied in many cases when the cause of the delay is not the Indian company. With CDEC/EDEC issued, the input duty becomes a significant cost (due to high import content of the raw materials), thus making the Indian vendor less competitive when compared with overseas competition. Centum also has certain good experiences of being stretched to perform better than import options with clear intent of technically beating the import option to give the country, a superior product. 10

11 Centum- Journey Established in 1994 Microcircuits to telecom market Design of FIN CONTROLLER s for Torpedos ISRO line qualification Consolidation in Defence and Space Market in Subsystems Product for F16, Micro-Nano Satellites (systems) RISAT, Agni missile, T3CAS for Aerospace Strategic Decision to enter into Space Market Modules to Defence & Space Segment [Radars, Hand-held radios] Chandrayaan-1 modules MOU with L3 Com Missile Electronics for K15, Agni, Nag, Invar, Aakash Telecom Defence, Space, Industrial Defence, Space, Aerospace, Industrial & Medical 11

12 No amount of money can give us the Pride and the Satisfaction than that of delivering reliable products to the safety and security of our Nation Jai Hind 12

13 Thank You 13

Potential for $400 Bn revenues in next 10 yrs. ESDM imports in India can exceed oil imports. ESDM manufacturing can become 10% of GDP

Potential for $400 Bn revenues in next 10 yrs. ESDM imports in India can exceed oil imports. ESDM manufacturing can become 10% of GDP India Electronics and Semiconductor Association () & MMI Extends a Warm Welcome to All the Guests, Delegates and Media representatives to DEFTRONICS conference and Exhibition is committed to work together