L&T and MBDA forms JV to make missile systems in India

Larsen & Toubro (L&T) and the UK-based MBDA, one of the leading global players in missile systems, have set up a joint venture (JV) to develop and supply missiles and missile systems to meet the growing potential requirements of the Indian armed forces. MBDA is jointly held by Airbus Group (37.5 percent), BAE Systems (37.5 percent), and Leonardo (25 percent).

The JV company, named ‘L&T MBDA Missile Systems Ltd’, will operate from a dedicated work centre, which will include pyrotechnical integration and final checkout facilities. The JV, aimed at helping the Indian Government’s efforts to indigenise the defence sector under the Make in India initiative, is expected to be incorporated in the first half of 2017 after necessary approvals.

While L&T will hold 51 percent stake in the JV, MBDA will own the remaining stake. The JV would focus on business opportunities in the missiles and missile systems domain and target prospects under the Buy (Indian – IDDM), Buy (Indian) and Buy & Make (Indian) categories of Defence Procurement.

The decision to formalise this 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 (Ministry of Defence) orders.

Both JV partners have been providing critical weapon systems and defence solutions across land, sea and air domains to the Indian armed forces. 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 partners and production agency to DRDO and DPSUs.

By combining its manufacturing and system integration capabilities and track record with MBDA’s technological excellence, the JV will aim to deliver complete missile systems, hitherto imported, to meet the requirements of the Indian armed forces as required under DPP 2016. To begin with, the JV company will look to develop and supply fifth generation anti-tank guided missiles (ATGM5s), missiles for coastal batteries and high speed target drones.

A M Naik, the group executive chairman of L&T, commented, “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.”

Antoine Bouvier, chief executive officer, MBDA, informed, “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.”

With a significant presence in five European countries and within the US, in 2015 MBDA achieved a turnover of Euro 2.9 billion with an order book of Euro 15.1 billion. 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). In total, the group offers a range of 45 missile systems and countermeasures products already in operational service and more than 15 others currently in development.