MGA bags deal for Eurpfighter, Airbus Parts.
In one of the largest aerospace outsourcing contracts awarded to a mid-sized Indian firm, Maini Global Aerospace (MGA), a group company of the Bangalore-based Rs200- crore group Maini Precision Products, has bagged a multi-million dollar contract from German engine maker MTU Aero-Engines to make components for Eurofighter Typhoon and Airbus planes.
The engineering group, best known as maker of Reva, the country's first ever electric passenger car, will develop engine components for multi-role combat aircraft Eurofighter Typhoon and next generation A380 and A320 planes of Europe's Airbus, the world's largest aircraft maker. The deal will be signed during the Bangalore Air Show (Aero India 2011) which takes off on 9 February.
"With the commercial aero-engine market expected to generate about $740 billion sales over the next 20 years, we are now looking forward to growing the relationship with MTU on a strategic level," said Naresh Palta, chief executive, Maini Aerospace.
"The group will invest around $30-40 million in the next four to five years to scale up its infrastructure and capacity," said Palta, who was earlier an executive director at public sector major Hindustan Aeronautics Ltd (HAL). Last year, the group bagged an outsourcing contract worth up to $10 million from Marshall Aerospace, subcontractors for Boeing, the chief American rival of Airbus.
The multi-year contract now positions the Mainis as strategic suppliers to the German major that has total revenues of $ 3.5 billion and partners with aero-engine manufacturers such as GE, Pratt & Whitney and Rolls-Royce to source aero-engine components.
"For them this is the India test, to see whether private industry in India can actually deliver as per German standards," said Gautam Maini, managing director, Maini Precision, who led the aerospace foray for the group even as younger brother Chetan Maini made waves with Reva. "Aerospace is going to be a big market in five to eight years. The business cycle ranges between seven and eight years. It was a quantum shift, something we had to believe for a long-term," says Maini.
Maini Aerospace, which got Snecma, a major French manufacturer of engines, as its first customer, has now developed more than 900 built-to-print parts in the past six years. These involve contracts from global customers such as Safran, BAE Systems, Eaton, Goodrich and Magellan Aerospace . It is also working with state-owned HAL to make components for various projects.
''It took us almost two years to sign this supply agreement after several rounds of inspections and testing of our capabilities by MTU engineers,'' Gautam Maini said. ''In the aerospace industry it is quite normal to take so much of time as buyers will have to be 100 per cent sure about the precise quality of the component.''
Maini also had to do equal amount of due diligence to win a supply contract from Marshall, a UK-based company that is a tier one supplier to Boeing's military aircraft used by defence forces in many countries in the world. In the first phase of the contract Marshall will buy 70 different types of structural products from MGA over a period of time.
Maini pointed out that making components for aircraft is a highly challenging job as it needs high degree of engineering skills and precise manufacturing capabilities to achieve the highest quality levels. ''That is why we have very few aerospace components companies in India, though many make auto components.''
MGA is in the process of building a new factory on a 15 acre land near Neelamangala, Bangalore, for the aerospace business and plans to invest around Rs25 crore for new machines and new facilities.