Financial Daily from THE HINDU group of publications
Friday, Jun 17, 2005
Corporate - Outlook
Safran group bullish on India
Le Bourget (France) , June 16
INDIA and China are the future markets of aviation, and as Snecma has had an enduring relationship with India, "we have no doubt that we will work closely, both for Indian and third markets," says Mr Francois Courtot, Senior Vice-President, International Development of the Safran group.
Speaking to a small team of Indian newspersons Safran is hosting at the Paris Air Show, Mr Courtot, who has long experience in the aviation industry, said that quite independently the two arms of the group - Snecma and Sagem - had decided to look east, especially India and China. Now, both had come to occupy an important place in the group's budget-making exercise.
Snecma's long association with Hindustan Aeronautics Ltd gives Safran the confidence that India will be a reliable partner and not a mere low-cost sourcing base.
Yet, if the group's investments in India remain small, Mr Courtot says that is because in certain businesses it is not necessary to make large investments right at the start but can be stepped up gradually.
All praise for HAL and its capabilities, Mr Courtot says that certain areas of engine building can be wholly outsourced to India - for instance, helicopter engines, with which HAL is wholly conversant. "India can be a single-source production centre for these engines."
Safran is also exploring other areas of outsourcing, including engine blades, mechanical parts and pumps.
Comparing India and China, Mr Courtot says that as Beijing did not allow free collaborations in the military area, tie-ups had happened only in the civil aviation sector.
Also, with as many as 800 CFM engines running in China, Snecma thought it right to open an MRO (maintenance-repair-overhaul) facility in that country.
Now Indian civil aviation is entering that phase, with huge growth expected in the civil aviation sector. India will be a potential MRO centre, he says.
According to him, globally the Safran group has become a stronger entity with the completion of the merger of Snecma and Sagem.
With the emergence of Asia as a major aviation market, and with the saturation of Europe, business could be expected to shift towards the former.
With a turnover touching 11 billion euros, Safran is one of the top aviation groups in the world.
Its strategy of allowing all group companies, which cover every aspect of an aircraft, to operate independently has worked well.
This was evident at the Paris Air Show, with the group present in strength.
From engines and landing gears to brakes and wiring systems, all the group companies had large stalls and were attracting a large number of visitors.
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