‘Airbus Wants Us To Come To India’

Phillip Underwood, president and CEO of Magellan Aerospace, talks to BW Businessworld about the joint venture with Indian firm Aequs for Airbus’s components.

Excerpts:

Q: Tell us about your joint venture with Aequs?
A: The joint venture between Aequs and Magellan Aerospace was started in 2007. We have been sourcing parts in Bengaluru since 2004. This facility at Belagavi, Karnataka took 18 months to start functioning. We have had problem to ship the parts of Airbus back to the UK for treatment, where we are based. We stared sourcing the machine components, but realised that it wasn’t feasible (to Europe) and then decided to begin surface treatment in India. We had the expertise because we have got probably the biggest treatment plant in Europe for Airbus and this special economic zone was an ideal place for us to start our joint venture.

Q: What was the thing that brought you to India?
A: Our major customer is Airbus; almost 80 per cent of our products are assigned to Airbus. At Airbus they wanted to lower the prices and sell more aircrafts in India, and they are successful in doing that. Airbus wanted us to come to India, and start sourcing part as we have the biggest portfolio of products for Airbus. And then we with Aequs formed API to surface treat the components of Airbus in India and those finished products can be sent back to Europe for manufacturing of the aircraft. Earlier it was only Airbus, but now we have other customers as well in India like Boeing.

Q: Will it going to bring down the prices of the aircraft manufacturing?
A: Certainly. Over the past few years prices have come down and this facility in India is not only going to reduce the cost of labour but also technology and equipment. The product that we manufacture here in India is smaller in size as compared to what we do in the UK and Canada.
The availability of skilled labour and engineers in India and more particularly in the SEZ have been phenomenal and we have much easier task now.

Q: How do you see the government’s role and FDI in defence?
A: Earlier, when we looked for investment it wasn’t possible due to a cap in FDI which was at 26 per cent, but the government has opened up few sectors in defence up to 49 per cent which was a very encouraging move. Now, Indian government has been very receptive about the foreign investments coming in aerospace and defence.

Currently, we are sourcing only commercial products, but the Magellan aerospace would like to acquire the military work here and we are looking more at it.