Aerospace Offset Market Opportunity In India
Creating the Equation for GrowthAerospace Offset Market Opportunity inIndiaLucintel BriefPublished: March 2011Lucintel1320 Greenway Dr., Suite 870, Las Colinas, TX 75038, USA.Tel: 1-972-636-5056, E-mail: helpdesk@lucintel.comCopyright Lucintel
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
Executive Summary Aerospace and Defense offset opportunity in India is a growing market with strongfundamentals:o Aerospace and defense offset market opportunity crossed US 500 Million annual value in2010o Market saw a growth of 78% (CAGR) during 2005-2010 and is forecast to grow at 11% CAGRduring next 5 years Growing involvement of international players in Indian aerospace and the defensesector is creating opportunity for domestic companieso OEM’s and Prime contractors looking for capable and credible options to fulfill offsetobligationso International players receive leverage with established relations and experienceo International players benefit by participating in offset market by partnering with domesticcompanies for low cost manufacturing for both offset and other opportunities Government initiative to build indigenous capability is expected to drive the marketo Indian Defense budget, estimated at US 32 Billion in 2010, is expected to exceed US 44Billion in next 5 yearso Total Offset opportunity is expected to surpass US 12 B over the next 10 years driven byprocurement plansCreating the Equation for Growth3
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
Overview – Offset Policy The Offset Policy of a country defines the mechanism for rerouting procurement funds paidto international contractors back into the spending countryProbable Defense productoffsetDirect Offset:Player agrees tocoproduce specificcomponents of itsproducts or to obtainrelated services inbuying nation’s territoryIndirect Offset:Player agrees to assistimporting country indevelopment of itsexport or in investmentrequirements unrelatedto principal contractOffsettypesSemi-direct Offset:Offsets relative to equipment and/orservices that are very similar to itemscovered by main purchase contract Small arms, mortars, cannons,guns, howitzers, anti tankweapons etc Bombs, torpedoes, rockets,missiles etc Aircraft and parts, unmannedairborne vehicles, aeroengines and parts, aircraftequipment, etc. Electronics andcommunication equipment Specialized equipment formilitary training or forsimulation software Forgings, castings and otherunfinished products, miscequipment, etc. for militaryCreating the Equation for Growth55
Global examples: Offset Policy in WorldCountryOffset SectorMinimum Contract Valuefor offset policy(US Million)Offset amount as% of contract sizeIndiaCivilian and military 7030%BothAustraliaCivilian and military 3 M foreign content/anytender of 5 MMaximized wherecost effectiveBothBelgiumCivilian and militaryNot Specified100%BothCanadaCivilian and military 2 preferred 100 requiredNot specifiedBothDenmarkCivilian and military 3,800100%BothFinlandCivilian and military 13100% marketingconsultingBothGreeceMilitary 180-120%DirectIsraelCivilian and military 0.135%No distinctionKorea, SouthMilitary 1030%No distinctionKuwaitCivilian and military 430%No distinctionCreating the Equation for Growth6Direct vs.Indirect6
Aerospace and Defense Offset Policy in India2005: Defense ProcurementPolicy (DPP-2005), to benefitIndian Defense IndustryPolicy introduced 30% offset incontracts valued above Rs 3billion under “buy” and 'buy andmake” categories to developIndian defense Industry2nd amendment 2008: List of products exempted from policy (Annexure-VI ofthe DPP) Removal of license to private industry to participate inoffset programmed unless stated by DIPP Offset credit banking Banking of surplus offset credit Exemption of acquisitions under fast track from offsetobligationsOffset policy in 0101st amendment 2006: Offset made mandatory as prescribed in DPP2005 Flexibility of forming joint ventures (JVs) withIndian firms Establishment of Defense Offset FacilitationAgency (DOFA)Creating the Equation for Growth7
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
Snapshot 2006: Major deals announced under aerospace anddefense subjected to offset policy in IndiaPotential US 18 Billion offset opportunity from 2006ItemsDeal Amount( Million)Offset amount@30%( Million)126 Fighters15,0004,500197 Helicopters700200Maritime, Freighters,AWACS etc.20,0006,00068 Boeing for Air India7,7002,00043 Airbus for Indian2,800700 300 aircraft for otherairlines *18,0005,00063,60018,400SectorDefenseCivilTotal* Not mandatory for non-government deals, but negotiations on country basis possible Source: CLSA Asia-Pacific Markets** Deals are based on CLSA 2006 DataCreating the Equation for Growth9
Relative market attractiveness for offset opportunity in rkFinlandGreeceManufacturingfacility CompositeManufacturingfacility -MetalTechnologyand ityOthersHighMediumLow- MediumLowNoCreating the Equation for Growth10
Offset opportunity in India is expected to be more in defense sectoras compare to commercial sector, driven by increasing defensebudget and deals in fighter and helicopter segmentsIndian defense budget in 2010US 32 BillionOffsetIndian offset market in 2010US 500 Million Increasing Indian defense budgetDefense Aerospace2%Key Insights0%creates more opportunity forforeign investors– It is expected that the defensebudget will grow with 6%CAGR from 2010-2016 and98%100%Non-OffsetCommercial AerospaceIndian defense budget in 2016US 44 BOffsetreach to US 44 billion in 2016Indian offset market in 2016US 700 Million2% Offset opportunity in India isexpected to increase and willreach to US 700 million in 2016CommercialAerospace34%– Offset opportunity is expectedto be 70% of offset market– Major driver for defense deal isDefenseAerospace98%Non-Offset66%MRCASource: LucintelCreating the Equation for Growth11
Aerospace and Defense Offset Market In India– Trend and ForecastOffset value ( Million)Key Insight702 Total Offset Market for Aerospaceand defense is expected to be US 702 Million in 2016 Top deals in offset policy (multiyear)CAGR11%– Contract between Boeing and AirIndia for 68 Boeing planes, valueof US 7.7 Billion–500 B737-800: 18 planes B787-800: 27 planes B777(-300, -200): 23 planes– Contract between Airbus and AirIndia for 43 Airbus planes, valueof US 2.2 Billion – A319: 20 planes A320: 4 planes0200520102016Source: Lucintel A321: 19 planesCreating the Equation for Growth12
Driving Factors for Aerospace Manufacturing in India: Indian OffsetMarketIndian Aerospace and Defense offset value ( B)(Deal Finalized till 2010; 4 Deals)3.10.3DefenseCommercialFuture India Aerospace and Defense offset value ( B)(7 Deals)5.91.70.6HelicopterFighterOthersKey Insight Until 2010, 10 offset contractshave been finalized There are 41 offset contractsworth more than US 11 B inpipeline and at various stage ofnegotiation Total offset market foraerospace and defense isexpected to be US 11 B overthe next 10 years (2011-2020) Government initiative to buildindigenous capability isexpected to drive the market More defense deals areexpected in next 5 years– Obsolesce in currentsystems & sub-systems– Quest to evolve into aglobal powerSource: IDSA and Times of India articlesCreating the Equation for Growth13
Success Roadmap- Offset policy implementation in IndiaKey Success FactorsSuccess Roadmap of Offset PolicyJV with globalTier-1 and Tier2 companies toenter the offsetmarket2008To getoutsourcedprojects fromTier-1 or Tier-2players fromEurope andUSALook foroutsourcedprojects fromHAL, ISRORepair andmaintenance ofcomposite andmetallic partsfor MRO units2016Creating the Equation for GrowthSource: Lucintel14
Indian companies most likely to benefit from aerospace and defense offsetpolicyCompaniesSectorHindustan Aeronautics (HAL)Will provide airframe subassemblies and product support forBell Helicopter. Involved in the manufacture of Jaguar aircraft.Bharat Electronics LimitedState Owned - Electronics, EngineeringNELCOElectronic products, Automation SystemsInfotech EnterprisesIT solutions in Geo-space, Engg. Design(Close association with Pratt & Whitney)HCLT, TCS, Satyam, WiproIT, ITESBharat ForgeAuto Component, ForgingAstra MicrowaveRF and Microwave componentsDynamatic TechnologiesHydraulics and Aerospace component mfg.Mahindra and MahindraAutosLarsen and Toubro (L&T)Engineering GoodsTitan IndustriesPrecision equipment manufacturing for aerospace industry*Source: CLSA 2006Creating the Equation for Growth15
Offset Outsourcing Area in Indian Aerospace and Defense IndustryOutsourcing Maturity in AerospaceEngine control systemsFuture outsourcing areasAir control management systemsNavigation systemEmbedded developmentControl system designSimulationEmerging outsourcing opportunitiesHigh-level aeronautical system designTesting servicesCockpit equipment support softwareComposite structuringDetailed design for modelingCurrently being undertaken by Indian IT vendorsManufacturingDrafting and field failure analysisNon-core commonly outsourcedTesting, validation and verificationTechnical documentation of designing workCreating the Equation for Growth16
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
Emerging Trends in Aerospace Offset Opportunity in IndiaGrowing Engineeringservices outsourcing (ESO)in IndiaTrend AIncreasing defensespendingTrend BTrend CEmergingTrends inAerospaceOffsetOpportunity inIndiaTrend DIncreasing domesticplayers involvement inIndian defense industryIncreasing overseassuppliers involvement inIndian defense industryCreating the Equation for Growth18
Increasing defense spending; defense expenditure was 32 B in2010, expected to 44 B by 2016India Defense Spending ( Billion)CAGR6%32CAGR14%1720052010Key Insight Indian government currentlyranked among top 15 countrieson the basis of defense44expenditure It is expected that Indian defenseexpenditure will reach US 44Billion in 2016 with CAGR of 8% Growing defense spendingincreases the opportunity forFDIs (Foreign Direct Investment)in Indian defense sector –– Increasing capital investmenton new weapons/platforms– Increasing demand forupdating equipments createlargest equipmentprocurement cycles 94% of all planned offsetsare in aerospace sector andthe rest are in manufacture2016 Source: Lucintelof naval systemsCreating the Equation for Growth19
Increasing domestic players involvement in Indian defense industryIncreasing domestic players involvement in Indian defense industry – Introduction of “Buy and Make (Indian)” category in DPP 2009 40 Ordnance Factories (OFBs) and eight Defense Public Sector Undertakings (DPSUs) areworking in India as defense weapons and systems manufacturer in India These DPSUs and OFBs outsourced tie-ups with Indian private players and overseas players toimprove Indian defense industry infrastructure Following are few agreements made by various foreign players and Indian private players –ObjectiveIndian PrivatePlayerForeign PlayerInsightBallistic Missile Defense(BDM) SystemsDefense Research andDevelopmentOrganization (DRDO)Israel and FranceExpected date to launch: 2015Based on radar technology for trackingand fire controlIndian Aircraft Carrier Project71 INS VikrantShipyard LtdFincanteri and NDB,RussiaCochinProjected started in 2001-02Light Combat Helicopter(LCH)Hindustan AeronauticsLimited (HAL)Turbomiea, FranceDerivative of Dhruv ALH with tandemseatingBrahMos MissileDefense Research andDevelopmentOrganization (DRDO)NPOMashinostroeyenia,RussiaBrahMos Missile is a supersonic cruisemissile and can be launched fromsubmarinesStrategic partnershipBharat ElectronicsLimitedLockheed Martin, Boeing, EADS, Northrop Grumman, RafaelAdvanced Defense Systems and Isarel Aerospace IndustriesCreating the Equation for Growth20
Growing Overseas Suppliers involvement in Indian Defense IndustryDefense procurement contracts from 2008-2010 ( 3826010783 25 788001,00042522568128240127 Multi Mission RoleCombat Aircrafts (MMRC)Boeing,Lockheed Martin10,00015 Heavy lift HelicopterBoeing/ Sikorsky70010 C-17 Globemaster-IIIGiant Strategic Lift AircraftBoeing251300420195BAeS Rafael ELTA Fincan Finmec Roson RAC Isarel Lockhe GE Boeingtieri canica bornon MiG Aerosp ed AviatioExportace MartinnContract value ( M)IndustriesOffset amount ( M)Boeing550LockheedMartin/ Sikorsky300Javelin Anti Tank missileRaytheon/Lockheed Martin900510 CBU- 105 SensorFuzed WeaponsTextronSystems375F125IN Engine for JaguarFighter AircraftHoneywell670Quick Reaction Surface tpAir Missile WeaponRaytheon1,4006303003,00016 Multi Role Helicopter838650293Company22 Apache AttackHelicopter1,4001,000Procurement programContractvalue( M)*Source: KPMGCreating the Equation for Growth21
Growing Overseas Suppliers involvement in Indian Defense IndustryDistribution of Offset Contracts Awarded by India (March 2008 –October 2010)(Total offset value: 2.65 billion)Isarel AerospaceIndustries16%BAeS RafaelELTA1%3%3%Lockheed Martin11%RAC MiG 11%42% USARosonbornonExportBoeing 24%10%7%GE Aviation9%Finmeccanica5%Fincantieri US companies accounted for 42% of total offset contracts awarded by Indian government– Boeing accounted for 24% of total deal followed by Lockheed Martin with 11% for the period*Source: KPMGCreating the Equation for Growth22
Growing Engineering services outsourcing (ESO) in IndiaGrowing Engineering Services Outsourcing (ESO) in India drives Indian ITES sector Indian aerospace and defense ITES sector was estimated 30 billion in 2010– Aerospace and defense ESO opportunity accounted for 700 million in 2010– Aerospace and defense ESO market is expected to reach 50 billion in 2020 Objective of ESO are product design, development and testing with CAD/CAM design, fluiddynamics, 2D & 3D modeling, remote monitoring, system architecture development, and associatedtechnologies Approx 10 companies such as Boeing, Airbus, Raytheon, Pratt and Whitney, Northrop Grummanand Magellan Aerospace are setting their captive centers in India– It is expected that EOS in India will help foreign players to reduce design costs 30%-40% andshortening design cycles– Following are few major deals in Indian ITES sectors under EOSCompanyBoeingAirbusPratt & WhitneyHCL Technologies Infosys Tata Consultancy Services(TCS) Larsen and Toubro (L&T) *Source: CLSA 2006 Represents contracts among companiesCreating the Equation for Growth23
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
Findings/Conclusions Total Offset opportunity is expected to surpass US 12 B over the next 10 years driven by:–Increasing Indian defense budget, expected to reach US 44 billion in 2016 Making Indian defense market lucrative for foreign players and bringing FDI– Increasing procurement plans for new weapons/programs and increasing demand for updatingequipments Defense sector will see more offset opportunity than commercial aerospace– Defense market will account for more than 60% of total Indian offset market in 2016Majority of offset opportunity in India will be in MRO sector, Technology and IT sector, ESO,Part manufacturing, control systems, Navigation system, Simulation and training Currently, there is a technology gap in Indian aerospace industry as compared to developednations and the Indian aerospace industry lacks strong supply chain – Technology partnership by domestic players with multi-nationals will minimize this gapIn next 10 years, there will be significant joint venture opportunity in Indian aerospace industry.Companies entering early in this opportunity will benefit from future growth potential.There will be an increase in multi-national companies in the Indian aerospace industry over thenext 10 years – –Companies such as Boeing, Lockheed Martin, Sikorsky, Raytheon, Textron Systems have theirlong term investment strategies for IndiaCreating the Equation for Growth25
Table of contents Executive Summary Offset Policy Overview Offset Market Opportunity in India Emerging Trends in Indian Offset Market Conclusions About LucintelCreating the Equation for Growth
About LucintelLucintel is the leading global management consulting & marketresearch firm.Lucintel creates your equation for growth and is committed toactionable results that deliver significant value and long term growthto our clients.Lucintel has been creating measurable value for over 10 years andfor more than 1000 clients in 70 countries worldwide.Visit http://www.lucintel.com/imovie/ for a short 3.5-minute movie onLucintel solutions.Creating the Equation for Growth27
Lucintel Products & Services: Over 100 market reports to optimizeyour market research investmentMarket ReportsAerospaceTransportationConsultingGrowth and Strategic ConsultingBenchmarkingMarineOpportunity ScreeningConstructionPartner Search and EvaluationRenewable EnergyRecreationalComposite MaterialsDue Diligence and M&AMarket Entry StrategyCreating the Equation for Growth28
Lucintel has an extensive toolkit to address key strategic questions forincreasing your company’s profitability and market presenceKey QuestionsMarketEntryStrategy Is market space / opportunity of currentproduct offerings sufficiently elConsultingDueDiligence Markets are focus for many: how can mycompany profitably differentiate? Based on our core skills, where shouldwe focus?StrategicGrowthConsulting Should we build or buy? Is build even anoption? What game changer actions exist and/oris a more incremental approach best?FeasibilityStudySalesforceOptimization What is the order sequence of marketentry segments / products?Creating the Equation for Growth29
Clients around the world value our servicesCreating the Equation for Growth30
Reach LucintelFor your business requirements and cutting edge consulting solutions, contactLucintel at helpdesk@Lucintel.com or Tel. 1-972-636-5056 or call one of thefollowing.Norman Timmins, MBAVP, Consulting, USANorman.timmins@lucintel.comCell : 1-940-597-3786Roy AlmaguerSales Manager, USAEmail: roy.almaguer@lucintel.comTel. : 1-210-878-7693 (Office)Alan ClarkDirector of Sales, UKAlan.clark@lucintel.comTel : 44 (0) 7875 708825Nigel OdeaBusiness Development Manager, UKnigel.odea@lucintel.comCell : 44 (0) 207 558 8798Creating the Equation for Growth31
Creating the Equation for Growth Executive Summary 3 Aerospace and Defense offset opportunity in India is a growing market with strong fundamentals: o Aerospace and defense offset market opportunity crossed US 500 Million annual value in 2010 o Market saw a growth of 78% (CAGR) during 2005-2010 and is forecast to grow at 11% CAGR during next 5 years Growing involvement of .
Grade Level/4-H Experince Pre-Flight (1) Aerospace Lift-Off (2) Aerospace Reaching New Heigts (3) Aerospace Pilot in Command (4) Aerospace Flight Crew Aerospace Leaders Launching Youth Aerospace Programs Aerospace Leaders Gifts of Gold: Seeds, Stalks, & Science Agriculture Gifts of Gold: Food
i dc 5fA 2%i dc pixel/offset A D 50µm 2 0. 4%A D pixel/gain C D 20fF 0. 4%C D pixel/offset,gain v TR 1.1V 0. 2%v TR pixel/offset C R 0.4fF 0. 4%C R pixel/pffset v TF 0.9V 0. 2%v TF pixel/offset W F L F 4 2 0. 2% W F L F pixel/offset i s 1. 88µA 1%i s column/offset k e 7-21
Sep 25, 2019 · Table includes all offset credits issued including offset credits placed in ARB's Forest Buffer Account, offset credits returned to an Early Action Offset Program’s forest buffer pool, and offset credits subsequently invalidated.
TF5200 TwinCAT 3 CNC Coordinate systems and offsets Version: 1.0111 Differences in definition and selection of individual offsets. O p e r a t i o n S t a r t-u p. Clamp position offset Tool offset Clamp pos.-offset data Tool offset-data Zero offset-data G54 G55 G56 G57 G58 G59 G159 G92. #PSET. Df9: iu Pk. Clamp pos.-offset index (HMI) #CS # .
Aerospace Retirees’ Club (- Name of Board Member -) P.O. Box 2194 El Segundo, CA 90245 Call the ARC voicemail: 310-336-5454, Box 12582 NOTICE The expressions of opinion in the Aerospace Retirees’ Club Newsletter are the opinions of the writers and not necessarily those of the Aerospace Retirees’ Club or The Aerospace Corporation.
AS9100 Aerospace Standard, SAE AS9131 Aerospace Standard, SAE, Nonconformance Documentation AQMSM1001 Aerospace Quality Management System Manual, Kavlico AP0410 Aerospace Procedure for Receiving Inspection AP0410-1 Aerospace Procedure for In-Process Inspection AP0410-2
Petroferm Inc. 3938 Porett Dr. Gurnee, IL 60031 (847) 244-3410 aerospace@petroferm.com www.petroferm.com CLEANING PRODUCTS FOR AEROSPACE & DEFENSE AEROSPACE APPROVAL LIST OEM/MRO Approvals/Test Method Conformance Honeywell Aerospace MIL AXAREL 1000 MIL -PRF 680 qualifications (Type I) AXAREL 2000
R&D projects, but there are doubts on how many innovations have effectively gone to the market. The mid-term evaluations show outputs and results coming out of collective actions and support to regional filières and clusters. 2011 is the first year with outputs in the field of
