Global market is quite big, presents lot of opportunity for Indian defence companies: Neeraj Gupta, MD, MKU Ltd
11 February 2021,
Kanpur based MKU Ltd, is the only Indian company present in the LAC region. Despite all odds, the company has been expanding its presence in the region. Last December MKU completed the delivery of 14500 Bullet Proof Jackets to Brazil and is now all set to execute the order for night vision devices received recently from Brazilian Army.On the side-lines of the recently concluded Aero India 2021, the Managing Director of the company Neeraj Gupta shared with Huma Siddiqui his company’s journey in the region and its presence in India.
When and why did you choose LAC Region for selling armour/helmets?
From the beginning we had made a conscious decision to not remain focused only on India for this niche business as the requirements are finite and cyclical in the defence business. We went out and explored the market outside India. Not only did we focus on the LAC Region but in other regions as well. Yes, it’s true that the LAC region is one of our focus areas and we have been able to achieve reasonable success in the region. We are today not just selling our body armour and helmets but also night vision devices.
What kind of challenges did you face?
The challenges faced were many. India was not recognized as a manufacturer and exporter of defence stores. As such we were not taken seriously. It took dedicated and persistent efforts over the years to establish ourselves as a credible manufacturer which could compete with the leading international companies which had been operating in this domain for several years/ decades. Yes, language, distance, time zone difference, culture, local laws were all major challenges that had to be overcome. We worked hard to overcome all these challenges. We appointed local managers in the region and developed in-house capabilities to convert these challenges into opportunities. We also established a wide network of channel partners and with their support slowly established ourselves as a credible manufacturer of defence products.
Which was the first country in the region where you sold your products?
Brazil was the first country in the LAC region where we made a breakthrough way back in 2006. Since then we have been working in several countries in the region like Mexico, Brazil, Chile, Ecuador, Argentina, Peru, Colombia, Guatemala to name a few.
What about payments? Has that ever been a problem?
No we have never faced any issues with regard to payments due to violence or the economy of the country in question. But, yes, there have been problems in the past since Indian banking relationships with other banks in the region have been very few. This has posed problems for us in getting Bank Guarantees issued in time. I feel this is one area which merits attention by the Government of India especially since there is a lot of focus on defence exports from India to this region.
Have you ever thought of setting up a manufacturing base in one of the countries in the region?
In principle we have maintained our manufacturing facilities in India and Germany but are open to explore opportunities in other regions including South & Central American regions based on the opportunities and viability.
You have expanded your line of products — please share what all are you exporting besides the body armour?
In MKU we have invested heavily in establishing a state of the art manufacturing facility for electro optic devices like night vision devices based on Image Intensification and Thermal Imaging technologies. We firmly believe this will be our next growth driver. Our team of engineers is focussed on developing in house capability through R & D in this important domain. Our NETRO range of electro optical devices are finding acceptance not only in India but also abroad. We are very happy to receive a major contract from the Brazilian Army for supply of these devices for their use.
Who are your competitors?
As I mentioned earlier when we went out of India we had to compete with the global leaders in the field. Defence business in most countries is tender based and one has to compete technically and commercially to be successful. Obviously we also had to compete with the major international manufacturers in most countries.
What kind of opportunities exist for other Indian companies in the defence & security sector?
The global market is quite big and presents a lot of opportunities for other Indian companies also. With the kind of support and focus that the Government of India is now giving to promote defence exports the opportunity exists for manufacturers in this domain. In fact the government has published an exhaustive list of systems and subsystems that can be exported from India. These include many from the private sector also.
Any suggestions you would like to give — related to visas, banking/taxes etc?
We would request the Government to sign Free Trade Agreements with as many countries as possible. This not only opens the way for a preferential rate of import duty but also makes the bids of the Indian suppliers more competitive. Besides there are countries which now insist on promoting business with only countries which have such agreements in place.
Further, we suggest the government look at establishing RMA arrangements by Indian banks wherever it is not available in the region. This is essential to facilitate establishment of Lines of Credit for export/ import as well as for issuance of foreign Bank Guarantees which are essential for participating in government tenders.
Besides the LAC region which other countries are you exporting to?
As already mentioned earlier we are or have exported to most of the regions including LAC. Over 230 forces in over 100 countries have used and trust our products.
In India – what all are you supplying?
The Indian market has always been a very important market for us. We started our journey from India and only because we were successful in satisfying our users here in India were we able to meet the requirements of the global users. We started with protection equipment and are proud to have received the first major contract for Bullet Proof Helmets (BPH) from the Indian Army. This prestigious contract for 1.58 lac helmets is nearing completion.
Some of the other landmark projects that have been completed successfully in India include the first major contract for 60000 Bullet Proof Jackets (BPJs) to Ministry of Home Affairs (MHA) in 2010-11, armour for the Fast Patrol Boats manufactured by Garden Reach Shipbuilders & Engineers and Goa Shipyard Limited for MHA, supply of armour for the 80 Fast Interceptor Crafts manufactured by Solas Marine for the Indian Navy, supply of BPJs and BPH to the Northern and Eastern Command.
Your company is investing a lot in R&D. Please share more about it.
We have over the years set high standards with regard to consistent quality and delivery which has been appreciated by the users. We take pride in the fact that even after more than 10 years the BPJs supplied by us in 2010-11 are still appreciated by the users for their capacity to meet their requirements. This has been one of the reasons for our consistent growth over the years. One of the reasons for this has been our focus and investment in R&D. We have all along invested heavily in building our R&D infrastructure and a strong team of engineers who are focused on developing and upgrading solutions to meet the ever changing demands of the user. Apart from ballistic protection our team of engineers have been working on ergonomic, customization, weight reduction and management to improve the overall experience and comfort of the soldier. This has led us to develop several innovative products that today find acceptance with the user.
We have invested in setting up a state of the art manufacturing and R&D facility for Electro Optical (EO) devices in India. Our NETRO brand of EO devices are finding acceptance with the users across forces in India. At the recently concluded Aero India Exhibition held in Bangalore, users from both the Indian Air Force and the Indian Army evinced a great interest in our Gen III night vision devices. We are confident of providing high tech Made in India devices to our forces and global users that would not only meet but exceed their expectations.
What about your CSR efforts?
As a company we are aware of our corporate and social responsibilities and ensure that we do our bit for sustainability and protection of the environment. We have consciously taken ISO14001 certification and follow the norms for environment management – not because it is mandated by the government but because of our concern as a socially responsible corporate.
MKU is an Indian defence company headquartered in Kanpur, India. It has 4 production facilities of which 3 are in India and the fourth one is in Sittensen, Germany. The company manufactures protection and surveillance range of equipment and solutions. MKU has spent the last three decades building up a broad product portfolio that includes ballistic vests, ballistic helmets and other personal protection products for military and security forces as well as Platform armouring solutions for land-air-sea platforms. It has recently set up one of the most modern facilities for the manufacture of Night Vision Devices and Day sights. MKU is a registered NATO & UN supplier, and all its manufacturing facilities are certified to ISO 9001:2008, AS 9100, ISO 14000 standards and it has also received the much coveted BA 9000 certification, mandated by NIJ for Body Armour products. Till date, it has provided protection to over 2 million soldiers and 2000 platforms. Its products are used by 230 forces in over 100 countries worldwide.