Kanpur-based MKU Ltd is one of the few Indian companies that have made a mark domestically and internationally delivering bulletproof jackets and vests for Indian security forces and security personnel in countries such as Brazil and Spain. Edited excerpts from an interview with managing director of the company Neeraj Gupta.
Could you tell us something about how MKU began and your early experience in the Indian defence market?
The foundation of this company was laid way back in 1985. We made tents and then composite helmets for the Army and soon became one of its largest suppliers. 1999 was a defining year. The Indian forces faced an acute shortage of snow boots (during the Kargil war) essential for fighting in the high snow- capped regions and we at MKU decided to rise to the challenge. We diverted all our resources to make snow boots on priority to meet the emergency. It was during this war that I also realized our brave forces also did not have quality protection equipment. This firmed my resolve to provide world class equipment for our forces, and in 2000 we pioneered the manufacture of composite hard armour plates in India, to replace the heavy steel plates that were in use at the time. This was a turning point in our history and marked our foray into the manufacture of light-weight bulletproof jackets.
From then on it has been an exciting but tough journey. It was not easy, especially since the defence sector in India was primarily in the domain of the government and most requirements were met through imports or DPSUs (defence public sector undertakings). The mission was clear—to provide our brave forces with world-class protective gear and to establish the manufacturing capability in India. In 2001, we partnered with DRDO/ TBRL(Defence Research and Development Organization/Terminal Ballistics Research Laboratory), and over the next seven years manufactured bulletproof jackets for our forces. It was a successful partnership and we acknowledge the support and guidance received from DRDO during the period.
From the beginning, we paid a lot of importance to building technological capability and infrastructure. We invested in R&D and international certifications and quality standards and slowly but steadily made progress in this niche market. Soon enough we were able to establish MKU in the defence market.
Can you tell us anything about new products and new technologies that you have come up with?
It would not be prudent to mention this in great detail but suffice to say that we are not only investing in developing new and upgraded solutions but have also embarked on backward integration, especially keeping in mind the clarion call for ‘Atmanirbhar Bharat’. Our focus has been on protection and surveillance segments and going forward would like to given an even more comprehensive bouquet of products to our users. Over the years we have developed several innovative products and technologies and will continue to invest in developing new products and technologies needed by the forces. We are investing heavily in electro-optics and we feel this will be our growth driver going forward. We have aggressive plans and look forward to the future with a lot of hope and expectation.
What are the products that your company manufactures for the Indian defence forces? And what are the products that you manufacture for countries abroad? How did you manage to find markets for your products abroad? Any details on your recent international contracts?
MKU is one of the leading manufacturers of protection and surveillance equipment both for the domestic and international markets. We have today a very large and integrated manufacturing facility for body armour, helmets and other protection equipment. Our ‘NETRO’ range of electro-optical devices are based on both image intensification and thermal imaging technologies.
Finding overseas market in this niche segment has not been easy. Slowly but steadily we have built a brand that is today well known and accepted internationally. We focused on quality and R&D and also ensured we had all the necessary international quality and system certifications required. We established a wide network of channel partners which helped us counter the local problems of time, language, customs and procedures, and helped us establish ourselves in the international market. Besides protection equipment, we are very proud to have bagged many prestigious international orders for our ‘NETRO' range of electro-optical products from countries including the Philippines, Brazil and Croatia.
Do you have tie-ups with foreign companies?
Yes we have tie ups with international companies. We have been successfully running a joint venture with a German cable manufacturing company since 2013. We have entered into an agreement with world leader Thales to co develop and manufacture advanced electro-optical devices in India for the global market. At the last Aero india held in Bengaluru recently, we tied up with a leading Russian OEM with existing in-service equipment with Indian Navy. This effort is the culmination of the process started by the Indian ministry of defence to develop capability within the country for manufacturing parts and components for Russian made platforms and equipment.
Prime Minister Modi launched the Make in India campaign and the Atmanirbhar Bharat programme. How does this help you?
I think this is the way to go. We have always believed in this. We are in a niche business area the market of which is both finite and cyclical. We have therefore been focusing on the global market and this has helped us tide over this challenge. The Make in India focus has made the user forces and also the companies realize the strategic importance of this decision. It has opened up a plethora of opportunities for the industry. Further, the industry friendly policies of the government—negative import list, increase in Indian content, projects up to Rs200 crore reserved for Indian companies, public procurement policy, IDDM (Indian designed, developed and manufactured) earmarked budget for domestic procurement, favourable export climate and policies have only made the Indian defence industry, especially in the private sector, feel elated. The focus on Atmanirbhar Bharat and Make in India has also made the world sit up and take notice of the potential of the Indian industry.
Many companies have complained of procedural delays in getting their products approved by the defence forces or that there are hurdles in the way of sharing technology from DRDO. Have you faced these challenges?
Defence products by their very nature take a long time to get certified. There are laid down processes and one cannot have any short cut. There are other procedural delays and bottlenecks such as testing, which are now being addressed through administrative and policy changes. To overcome covid-induced challenges, the user forces have also introduced digital processes that, going forward, will help speed up the processes. Limitations due to shortage of testing facilities are also being addressed by the government.
The process of TOT (transfer of technology) is much more transparent and industry friendly now. To encourage such sharing of technology, DRDO has reduced the TOT fee and is openly encouraging the industry to use its technology.
There was also a feeling that the Indian defence forces prefer to buy state of the art products from foreign vendors. Is this a challenge that you, too, encountered? What is the experience like to compete with foreign OEMs?
I do not think this is justified anymore. Wherever the capacities exist, the forces are willing and eager to support the domestic industry. In fact the promulgation of the ‘Negative Import List’ is indicative of this. Besides, we are also exporting our products to many countries and are quite used to competing with the foreign manufacturers and OEMs. The important point to note is that the Indian industry must have the necessary international certifications and meet international quality standards.
One of the things that is required to stay ahead of competition is innovation and R&D (research and development). How have you managed to do this? How much do you spend on R&D/innovation?
R&D is the backbone of this business. We have always remained focused on this and spend almost 6-8% on R&D for developing new technologies and products and solutions. We have built a large team of engineers and have a modern, well-equipped technology centre in Kanpur. It is this focus on R&D that has actually enabled us to successfully develop solutions for so many projects and meet the requirements of international forces.
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