Bangalore-based Taneja Aerospace is to float a joint venture with the state-owned TIDCO to create a new facility at Hosur as part of expanding its interest in aerospace there. The TN agency is set to pick up a small stake in the venture to play the role of a facilitator.
Taneja Aerospace plans to expand its existing facility at Hosur by acquiring an additional 250-300 acres. The land and infrastructure creation envisages an investment of Rs 300 crore, a top Government official told ET.
A new company or a special purpose vehicle will not be formed for the venture as Tidco’s share would be of a participatory nature only. The new unit would exploit the opportunity in the MRO — maintenance, repair and overhaul — and in the manufacture of aero parts, the official said.
A senior official of Taneja Aerospace said discussions were on with several agencies, including Tidco. He, however, declined to divulge details of the latest project.
It is learnt the State’s inherent strength in terms of talent reservoir is said to have influenced the company to select Hosur for developing it as an aerospace hub. Hosur is also close to Bangalore, where the industry is well established.
"The skillset available in TN is totally unparalleled by any other state in India. This has helped the State to attract big ticket investments in the auto sector. Now, it wants to repeat the success story in aerospace," the official explained.
It is also learnt that Taneja Aerospace is scouting for foreign partners to fund the project.
Meanwhile, the state has been steadily increasing its focus on the aerospace front, attracting other companies/groups to explore manufacturing prospects in this industry. GVK Industries, for instance, which already has 3,000 acres for its multi product SEZ in Perumbalur district , is actively considering taking an additional 2,000 acres either there or Hosur for its aerospace project.
Mahindra World City too has identified 1,000 acres in Coimbatore for promoting an aerospace project. It is also scouting for large tracts of land in the Hosur belt to locate its third campus and thereby give a leg-up to the aeropark venture, a pet project of the Tamil Nadu government.
During mid-May, a 10-member high-level delegation from Tidco, industry representatives and companies would be in the US. The team would halt at St Louis and Wichita in Kansas to forge collaborations with aviation biggies. If the visits to Boeing and EADS, to name a few, yield results, concerted efforts would be made to showcase specific sites in TN to meet their requirements, the source noted.
Apart from the $30 billion (30% offset clause) opportunity in a 5-10 year time frame, the interest in aerospace is gaining momentum, with a committed investment of $5 billion expected to pour into the state in the near horizon, the source said.
All efforts are being directed towards concretising plans and inviting investors with a gusto. A study of the St Louis Aeropark model too is in the offing, he added.
According to a CII- Pricewaterhouse Coopers report, "India is poised to become a large commercial and defence aircraft market. With rising passenger traffic and increasing military and defence expenditures, the demand for aircrafts is expected to increase".
The report further said, "Boeing expects a demand of between 900 to 1,000 commercial aircraft worth $100 billion approximately in the next 20 years. This also suggests that a significant portion of business opportunity could accrue to India, due to the associated offsets."
Source: Economic Times