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Boeing eyes India captive
By siliconindia
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Monday, 10 September 2007, 19:30 IST
Bangalore: Apart from capturing business across the aerospace spectrum including manufacturing, engineering, BPO, KPO, maintenance and raw material sourcing, the $65-billion aerospace and defence, Boeing is evaluating a captive centre and defence sub-assembly line in India, reported The Economic Times.
If Boeing could set up its captive centre through joint venture or independently, it will join a host of multinationals who entered India through partnerships before setting up their captive centres. The company already has partnerships with several Indian technology majors such as Infosys, TCS, Infotech, HCL and research bodies like HAL and Indian Institute of Science (IISC) in India.
Boeing is in the process of setting up $100 million maintenance, repair and overhaul (MRO) facility in Nagpur. It also has plans of investing $75 million for setting up training centres.
The work on the MRO is expected to begin year end or early next year. Besides Air India for setting up the MRO, Boeing is in the process of finalizing partners. The MRO is expected to become operational by 2009.
In addition to these investments, Boeing has to fulfill $1.8-billion offset obligation that came with Air-India's 68-aircraft order in 2005.
Boeing is expected to buy services and goods from India companies as a part of the offset obligation. Most IT majors like Infosys, Wipro, TCS and HCL are waiting to grab a pie of the business. The company is in advanced talks with Tata Group, L&T, HAL, Ashok Leyland, Mahindra and others to explore activities like manufacture of aerospace components and also defence co-production.
Presently, Boeing currently has firm orders of around 140 aircraft from various Indian airlines, including Jet Airways, SpiceJet and Air India. It further aims to grab at least 50 percent of the projected 911 orders for commercial airplanes. According to Boeing's 2007 annual current market outlook study, India would need 911 new commercial jet airplanes worth $86 billion for the next 20 years.
"On the defence side, we are looking at opportunities worth $10-15 billion over four years and on the commercial side we are targetting orders amounting to over $40 billion, considering we are aiming at 50 percent of the project need for the commercial airplanes in the country," said Thomas.