Teamwork Technology Trust

Theme: Potential for SMEs in Defense Sector

Centum Electronics Limited, Bangalore

A Case Study

Vinod S Chippalkatti

27th July 2012

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Teamwork Technology Trust

Centum - Overview • Established in 1994

• Employees: ~ 1200 [300 Engineers, 100 Design Engineers]

• Revenues: 312 crores

• Defense, Aerospace, Space,

Industrial and Telecom

• Manufacturing area – 250,000 SFT

[Clean rooms Class-1000 & Class-100]

Systems and Certifications

• ISO 9001:2008

• AS9100 Rev C

• ISO 13485 : 2003

• ISO14001:2004

• ISO 16949 : 2009

• MIL-STD-883 Test House

• Lines Certified to Mil & Space Standards

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Teamwork Technology Trust

Key Strategic Electronics Customers

OFB

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Teamwork Technology Trust

Products

• Missile Electronics

LRUs like MIU, OBC,

FSPU

• Torpedo Fin Controllers

• Power Supplies &

Electro Optics Sensors

for Satellites and

Launch Vehicles

• Inertial Navigation

Modules and

Subsystems

• Micro Circuits

• Crystal Oscillators

Design, development and Productionization of

Modules, Subsystems and Systems in

• Built to Spec (BTS) mode

• Built to Print (BTP) mode

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Centum has the Defense

License for Manufacture of

Electronic and Communication

subsystems / systems for Defense.

Centum’s eligibility in participating

in all the offset programs including

DPP2006 or prior is strengthened.

Defense License – Offset Eligibility

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Teamwork Technology Trust

Centum – Story

• 1994 – Booming DOT-COM days

• 1994-2000 – Established as a significant player in Telecom domain

• 2000 – DOT COM bust

• Strategic Decision to diversify into Space

• Line qualification to Space standards

• Explored entry into Defence sector

• First break through with NSTL order for development of Torpedo Fin Controllers

• 2002-2006 Consolidation in Space and Defence sectors

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Teamwork Technology Trust

Centum – Story

Strategies:

• Formation of two divisions 1. BTS (Design to Delivery)

2. BTP (Manufacturing to Customer Designs)

• Built a strong Design & Engineering Team (over 100 Engineers)

• Investments in training manpower to various IPC, J-STD requirements

• Heavy investment in Business Development teams 1. India Team for Domestic BTP/BTS opportunities

2. International Team [With Expats from Europe and USA] for OFFSET opportunities

• Investment in Plant and Machinery

• Building teams with Domain Knowledge. 7

Teamwork Technology Trust

Centum – Story

A combination of Right Technical Skill with Domain knowledge, supported by state of the art manufacturing facility and Global business development team has resulted in

UMBRELLA AGREEMENT with L3 Communication to address the Indian and Overseas markets.

This agreement is also being supplemented with ‘go-to-market’ strategy as a team for opportunities which are not covered under offset clause.

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Teamwork Technology Trust

Centum - Experience

Incremental Investments in Infrastructure:

• If you invest significantly on infrastructure required for ‘Defense-only’

then you are IN for a trouble.

• All investments at centum have been 20-25% incremental.

• While we understand that sometimes, there is no order without an

investment, we can be IN for a trouble, if we invest without orders.

Investment in People:

• Contrary to investment in infrastructure, the investments in people is a continuous process.

These helped centum to take on the challenges of any Complex product realisation.

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Teamwork Technology Trust

Challenges

• The defense sector projects / program lead times are too long and many a

times test the patience and tenacity of the players. This will also significantly

affect the cash flow cycles.

• The frustrations of waiting long, for successful qualification of NCNC hardware

delivered.

• There is no level playing field for Indian vendors and overseas vendors where

the Indian vendors are asked to go through a rigorous qualification route with

continuously changing specifications and unrealistic schedule expectations. In

many cases, the payment terms are also different.

• LDs are levied in many cases when the cause of the delay is not the Indian

company.

• With CDEC/EDEC issued, the input duty becomes a significant cost (due to

high import content of the raw materials), thus making the Indian vendor less

competitive when compared with overseas competition.

Centum also has certain good experiences of being stretched to perform better than

import options with clear intent of technically beating the import option to give the

country, a superior product.

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Teamwork Technology Trust

Centum- Journey

Established in

1994

Microcircuits

to telecom

market

‘11 ‘10 ‘09 ‘08 ‘07 ‘06 ‘05 ‘04 ‘03 ‘02 ‘01 ‘00 ‘99 ‘98 ‘97 ‘96 ‘95 ‘94 ‘12

Design of FIN

CONTROLLER

s for Torpedos

Strategic

Decision to

enter into

Space Market

ISRO line

qualification

Modules to

Defence & Space

Segment [Radars,

Hand-held radios]

Consolidation in

Defence and

Space Market in

Subsystems

Chandrayaan-1

modules

MOU with L3 Com

Missile Electronics for

K15, Agni, Nag, Invar,

Aakash

RISAT, Agni

missile,

T3CAS for

Aerospace

Telecom Defence, Space,

Industrial Defence, Space, Aerospace, Industrial & Medical

Product for F16,

Micro-Nano

Satellites (systems)

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Teamwork Technology Trust

“No amount of money can give us the Pride and the

Satisfaction than that of delivering reliable products

to the safety and security of our Nation”

Jai Hind

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Teamwork Technology Trust

Thank You

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