Wipro Infrastructure Engineering expects 25% revenues from aerospace, defence
Source: The Economic Times View: 203 Date: 2013-04-01

Wipro Infrastructure Engineering has set itself a target of generating a quarter of its revenues from the aerospace and defence industries - sectors it just entered by partnering with CESA, a subsidiary of European Aeronautic Defence and Space Co.

"In five years’ time, we want to have at least 25% of our revenues coming from these areas," said Pratik Kumar, president of Wipro Infrastructure Engineering. "I think that is a fairly aggressive and ambitious target to set."

With revenue of about 1,700 crore, the Wipro group company claims to be world’s largest independent manufacturer of hydraulic cylinders and pumps used in construction and mining equipment.

Wipro’s aerospace and defence focus comes at a time when local defence manufacturing industry is eagerly awaiting billions of dollars in offset-related business. Indian policy mandates that foreign companies winning defence contracts worth over 300 crore must spend least 30% of the contract value on local procurement of components and services.

"The understanding is that the offset programme will help outsourcing of hydraulic components since India has a strong base for the same," said, Niju V, director for automation & electronics, South Asia & Middle East at Frost & Sullivan.

Founded in 1976, the infrastructure engineering unit is part of Wipro Enterprises, which include consumer care and lighting and medical diagnostics. These businesses are being demerged from the IT services business of Wipro Ltd.

Large aircraft manufacturers, including Boeing and Airbus, already have fairly established outsourced manufacturing relationships in China but are looking to geographically diversify their manufacturing bases as part of risk mitigation exercise and this works to the advantage of companies such as Wipro. Last month, the company started production at its new aerospace actuator manufacturing facility at Bangalore special economic zone with plans to double the initial investment over the next six years to expand capacity and add new product lines. The support of EADS was enlisted in mid-2011, to help build the manufacturing facility that just got completed.

According to Wipro, the global actuator systems market is estimated at about $3 billion ( 16,300 crore).

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