India Needs $10 Billion Aircraft Programme to Build Jet Engines: Aequs CEO – Outlook Business

The Belagavi-based supplier of aircraft components to global majors like Airbus and Boeing says India currently accounts for just 1% of the sector’s global supply chain.

Q. What motivated you to get into aerospace manufacturing?

A. Aequs is a 15-year-old entity focused on manufacturing. We started with aerospace manufacturing. As our DNA comes from engineering background (Aequs’ parent company QuEST Global is a global ER&D player), and high-precision engineering was a natural extension for us.

So, we started aerospace (manufacturing) due to the opportunity we saw during the 2005-to-2007-time frame. We realised that in-country value addition in aerospace was less than 20% at that point in time.

We realized that unless we increase the in-country value addition, becoming part of a global supply chain would be challenging. For example, services have 100% in-country value add. That’s why we do very well in that.

But in manufacturing, raw material, cutting tools, machine tools, and all this stuff was imported, in aerospace especially. We didn’t have something called surface treatments and various other processes required in the country.

So, we set out to build an ecosystem. We took a 20–30-year view of how the industry will evolve and we established a special economic zone (Belagavi, Karnataka) to overcome some of the regulatory challenges in India related to imports, exports, ease of doing business, etc. It was much easier in the special economic zone.

Q. What was the idea behind choosing Belagavi in place of a metro city?

A. So today, we have products in which the in-country value addition is 100%. For example, we make wheels for Airbus and Boeing, for which the raw materials sourced within the country. We’ve received approvals from the customers, forged the products within the SEZ. We then machined, surface treated, finished and shipped (the products) to the customers. By doing this we are reducing the working capital cycles. It used to be sometimes 5000 miles, or even 10,000 miles, to transport and bring in raw materials/machine surface treated from Europe. We are doing everything in one location. So, that is how our theme of ecosystems of efficiency came about as a company.