Alexandre Ziegler, former French Ambassador to India is now the Senior Executive Vice President, International and Public Affairs, Safran. In an interview to ET, the senior executive says that France is ready to go the extra mile to support India for its indigenous weapons industry. He says leading engine manufacturer Safran is in India for the long run and is seeking more local partnerships.
As India embarks on its plan to develop a future fighter jet, what role can Safran offer in the development process. Have talks been initiated for a possible partnership?
For several decades, Safran has been a major partner in the development of Indian aerospace. And we have always made technology transfer a key factor in our development in India. Just think, for example, of the Vikas rocket engine, derived from an engine we still manufacture for Ariane rockets. We also have our long-standing cooperation with HAL on Indian helicopter programs, with the Shakti engine. Safran is one of the few world leaders in the field of fighter jet engines. Our technologies make France one of the four countries in the world to master the complete development of a fighter jet engine. And if India needs us on this particularly strategic field, we will be there. Safran is definitely ready for a partnership with India, with the full support of the French government. Exchanges on this subject have already begun.
The air force has mandated that the AMCA should have an indigenous engine after the first two squadrons. Is that an achievable goal and how can a French partnership work for this?
The development of an indigenous fighter jet engine is a key factor for strategic autonomy. If India chooses to cooperate with France in this field, we will be delighted and honoured to make our contribution. We are ready to propose a full transfer of technology and know-how. That is the strength of our partnership.
Safran has significant offset obligations in India as part of the Rafale deal. Can you share plans on how this is being done and what Indian partnerships are being established?
In 2016, Safran committed to achieving 50% offsets as part of its contribution to the Rafale program. That’s a significant volume, and we will obviously meet our commitments. For a group like Safran, which has been present in the Indian aerospace landscape for a very long time, there are many ways to carry out these offsets: the Group’s purchases from Indian companies have grown considerably and now reach dozens of millions of euros each year. In addition, we have great ambitions in terms of Make in India and industrial investments in India, whether in production, like we are already doing in Bangalore and Hyderabad, or in aeronautics MRO. Of course, one incentive will lie in our ability to get recognition of our 100% direct investment projects in India. Finally, I already mentioned our ambitions in terms of technology transfers and our desire to support India in the development of its aeronautical projects. In total, these avenues represent several hundred million euros, a significant portion of which has already been identified or even committed. I repeat, we will respect our commitments and we have begun to do so.
We have been hearing of plans by the French Group to invest in the Indian defence corridors. Could you please share details on whether this will be an MRO or possibly other work as well?
We are currently completing the construction of a new industrial park in Hyderabad, which is already manufacturing harnesses for our CFM’s Leap engine and the Rafale, and will soon produce other parts for the Leap. In the short term, we plan to make additional investments, particularly in the civil MRO sector (where global demand is growing strongly), as soon as the tax environment allows this project to be economically viable. We have also made it very clear that if new defense contracts are concluded, we would be ready to further enter the Make in India by setting up production units in India, particularly in the area of military engines. No decision has yet been taken as to the location of these future investments. We will be open to all options, including of course the Indian defense corridors. Ultimately, our choice will have to take into account the proximity of our customers, our potential industrial partnerships, existing infrastructures and skills, and, of course, the economic competitiveness of our facilities.
The Shakti engine is often cited as a good example of foreign collaboration. Where does the project go from here? Are there possibilities to expand this partnership to jointly explore other markets as well?
The Shakti engine was co-developed by HAL and Safran. It now powers all HAL’s Dhruv helicopters. This is a fine example of the vitality of our partnership and our willingness to engage with India in genuine technology transfer. To date, more than 250 Shakti engines have been produced in Bangalore, mostly with Indian-made components. We are proud that the Shakti engine has been selected to power the new Light Combat Helicopter. A Shakti-derivative has also been chosen for the Light Utility Helicopter. We are also working on the development of a MRO facility in Goa, through our joint venture with HAL. On helicopter engines, our partnership with HAL is a true success story and we want it to further develop.
Safran currently has over 600 employees in India. Are there plans to scale up operations and what job opportunities can be created?
Safran employs nearly 100,000 people worldwide. In India, our industrial footprint is still small, but it is growing steadily. Today it is around 800 direct jobs, to which we should add the equivalent in indirect jobs. I have already mentioned our investment projects in the country. To give an order of magnitude, a civil MRO centre would represent between 500 and 1,000 additional jobs, mostly highly qualified (engineers and maintenance technicians), and a very significant number of indirect jobs. In India, we can find a skilled, high-quality workforce at a competitive cost, and this is obviously an asset for a group like Safran.
Safran has extensively worked with the public sector in India but has relatively smaller experience with the private sector. What capabilities do you believe the private sector can offer and which possible partners are being assessed by the group?
That’s not quite right. While we are proud of our defence contracts and our long-standing partnership with HAL, the bulk of our business in India is in the civilian sector. Most of our customers in this field are private groups: all Indian airlines use our equipment, whether it’s our CFM engines (we’ll soon have a thousand of them in operation), our landing and braking systems, our seats or our cabin equipment. Every time you fly in India, you fly with one of our products. We are honored by the confidence these customers have placed in us today. They find in our solutions a way to increase their competitiveness in a highly competitive industry.
On the production side, many private Indian companies, including SMEs, are now integrated into our global supply chain, sometimes with high value-added products. It is true that, unlike other players in the aerospace industry, we have not yet concluded an industrial partnership agreement with a major Indian group. This is something we are thinking about. I would add that an ecosystem of innovation and start-ups is rapidly developing in India, with which we will have to cooperate more closely, in particular for the development of innovative low-carbon technologies, which is a priority for Safran.
We are in India for the long term and we will not be able to develop there without working even more with private partners.