L&T to make missile systems, drones in pact with Airbus' MBDA

Engineering conglomerate and private sector defence major Larsen & Toubro (L&T) and Europe's MBDA, a world leader in missile systems, have teamed up to set up a joint venture to develop and supply missiles and missile systems to Indian armed forces.

MBDA is a European developer and manufacturer of missiles, formed in 2001 through the merger of French Aérospatiale-Matra Missiles, Italian Alenia Marconi Systems and British Matra BAe Dynamics.

The L&T joint venture, named 'L&T MBDA Missile Systems Ltd', will operate from a dedicated work centre, which will include pyrotechnical integration and final checkout facilities. It is expected to be incorporated in the first half of 2017 after necessary approvals.

To begin with, the JV company hopes to develop and supply fifth generation anti-tank guided missiles (ATGMs), missiles for coastal batteries and high speed target drones.

L&T will own 51 per cent of the company and MBDA, 49 per cent, fully complying with India's foreign direct investment (FDI) policy norms. The JV will be registered in India and conduct business as an Indian company, subject to Indian laws.

The JV plans to focus on business opportunities in the missiles and missile systems domain and target prospects under the Buy (indigenously designed developed and manufactured (IDDM) ), Buy (Indian) and Buy & Make (Indian) categories of defence procurement.

L&T said the decision to formalise the partnership, a key milestone for both L&T and MBDA in their long-term relationship, was made after extensive evaluation and identifying the strong synergy between the two organisations.

L&T and MBDA have collaborated and partnered on co-development and production of major subsystems involving complex technologies and sophisticated weapon systems such as MICA missile launchers and airframe segments including control actuation units for Indian MoD orders.

L&T is close to winning a $660-million deal for mobile heavy artillery weapons, for which it has partnered with South Korea's Hanwha Techwin.

Price negotiations for the 155-mm, 52-calibre K9 artillery gun – modified for the Army's requirement for a highly mobile, long-range deep fire support weapon with a higher rate of fire – have been concluded and the deal will be signed once the union cabinet approves the deal, Bloomberg reported.

L&T has been delivering a range of launch systems, fire control systems and airframes / sub-systems for various indigenous weapon (missile / rockets / torpedo) programmes as development partner and production agency to DRDO and defence public  sector undertakings (DPSUs).

''We have been trusted partners to DRDO and the Indian Navy, delivering complete weapon systems and platforms, command control and sensor systems, designed, developed and manufactured in India for over three decades. Over this period, we have worked closely with ministry of defence, and its different arms in jointly developing and delivering cutting-edge defence solutions,'' A M Naik, group executive chairman of L&T, said.

''Our business strategy in India has always focused on forming partnerships at the deepest level, not just with the armed forces but also with Indian industry. This has seen us involved in the transfer of technology and the production of products and components with the state-owned DPSUs [Defence Public Sector Undertakings] and also with the establishment of very close partnerships with the Indian private sector, including large companies and SMEs. The setting up of this JV is a natural progression of our partnership strategy. With L&T, I am convinced that we have found the ideal Indian partner,'' Antoine Bouvier, chief executive of MBDA, said.

With $16 billion in annual revenues, Larsen & Toubro engaged in technology, engineering, construction, manufacturing and financial services. It operates in over 30 countries worldwide.

With a significant presence in five European countries and within the USA, in 2015 MBDA achieved a turnover of €2.9 billion with an order book of €15.1 billion. It caters to more than 90 armed forces customers around the world and is a world leader in missiles and missile systems.

MBDA is the only European group capable of designing and producing missiles and missile systems that correspond to the full range of current and future operational needs of the three armed forces (land, sea and air). The group offers a range of 45 missile systems and countermeasures products already in operational service and more than 15 others currently in development.

MBDA is jointly held by Airbus Group (37.5 per cent), BAE Systems (37.5 per cent), and Leonardo, which was formerly Finmeccanica (25 per cent).