INCAT-AFAI JOINT VENTURE

INCAT-AFAI Joint Venture

The INCAT-AFAI Joint Venture

Question 1: Evaluate why INCAT wanted to establish a Joint Venture (JV) as opposed to relying on licensing agreements as before?

Answer

New Joint Venture Company is positioned to be a global leader in aerostructures engineering and design will be the Preferred Delivery Center, for both organisations, for all aerostructures

INCAT, a global leader in engineering services outsourcing (ESO) and product development IT services and Hindustan Aeronautics Limited (HAL), Asia's premier aero structures manufacturer today announced a joint venture creating INCAT-HAL Aerostructures Limited. The new organisation is immediately positioned to establish itself as a global leader in the engineering and design of aerostructures.

"The global aerospace industry is realising the value of adopting an outsourcing-based business model, not simply to achieve cost reductions, but to speed time to market while maintaining quality," said INCAT CEO Warren Harris. "This joint venture, leveraging the strengths of both companies, creates an organisation capable of delivering outstanding value to clients within the global aerospace market."

"The objective of this joint venture is to undertake work packages related to engineering design services in aerostructures and also the captive offshore and on-site work load of both partners from aerospace OEMs, including offset programs," said M. Fakruddin, HAL Director -- Corporate Planning and Marketing.

"HAL and INCAT are set to capitalise on the global aerospace demand by leveraging their combined core strengths -- HAL's offset business, and INCAT's global offshore/on-site engineering business," added Patrick McGoldrick, Managing Director -- Tata Technologies, INCAT's parent company.

The joint venture, based in Bangalore, will be the Preferred Delivery Center for both organisations. The JV agreement was signed between HAL and Tata Technologies, INCAT's parent company. Both HAL and Tata Technologies will contribute 50 percent to the equity of the JV.

About INCAT

INCAT is a Tata Technologies company. Founded in 1989, the Company is a global leader in engineering services outsourcing (ESO) and product development IT to the world's largest automotive, aerospace and durable goods manufacturers. INCAT provides services and solutions for Product Lifecycle Management (PLM) and Information Lifecycle Management (ILM) that create value for its clients through its unique-in-the-industry Global Delivery Model, its state-of-the-art technology and a pragmatic approach to engineering and manufacturing processes that reduces costs and time to market; and helps clients realise superior products.

INCAT is headquartered in the United States (Novi, Mich.), India (Pune) and Germany (Stuttgart). Tata Technologies is headquartered in Singapore. INCAT has a combined global work force of more than 3,000 employees serving clients worldwide from facilities in North America, Europe and the Asia-Pacific region. www.incat.com

About HAL

Hindustan Aeronautics Limited (HAL), formed in 1964, is a Navratna Public Sector Undertaking, and has blossomed into a major player in the global aviation arena and is currently ranked 34th among the world's top 100 defence companies. The Company has proven capabilities in R&D, manufacturing and maintenance of fighters, trainers, transport aircraft, helicopters, their engines and associated systems. HAL's current programs include production of Advanced Light Helicopter (ALH), Light Combat Aircraft ...