VEM to build platform to develop large UAVs, helicopters

Hyderabad: Hyderabad-based VEM Technologies signed a memorandum of understanding (MoU) with Telangana government to set up an integrated defence systems facility at Yelgoi, Zaheerabad. VEM will invest about Rs 1,000 crore in this facility over the next five years, creating over 2,000 jobs. V Venkata Raju, CMD, VEM Technologies shares with Telangana Today, company’s growth strategy.

Integrated facility

VEM Technologies has signed a MoU with Telangana government and we need to get the land (511 acres) allotment done. We will begin work in December 2021. We will have weapons integration, aerostructures, and radar systems’ making facilities here. The manufacturing facility, engine-related infrastructure and metallurgical processes will attract a major chunk of our investments in this facility. We expect the project to be fully commissioned by 2026.

Hyderabad ecosystem

We already have two manufacturing facilities in Hyderabad. When we were looking for a location for our integrated defence systems facility, we found the Telangana government very proactive and there is a clear logistics advantage to set up the new facility here. Hyderabad is a defence hub and thus became an obvious choice for us.

Export focus

VEM Technologies, which has been catering to defence companies in the USA, Europe and Israel, is further building capabilities to enhance its exports. The new facility will give a fillip to exports as we will be able to integrate large systems. Today, we are at systems and subsystems level, and the new facility will help us build a full-fledged platform to develop large UAVs and helicopters. In emerging markets, we will look at larger systems, and in advanced nations we will be looking for partnerships.

Indigenisation effort

Most of the systems that we develop are in-house/captive. Except for chips, most of the jobs are done in India. We have practiced R&D as our way of life. We have built R&D capabilities and teams in avionics, electromechanical systems, energetics, electro-optics, radars, and many other areas. We will be expanding in these areas in future. We will also strengthen our software capabilities to ensure cyber security. VEM is one of the large production partners for Akash, LRSAM/MRSAM, Astra and BrahMos Missile programmes supplying various systems and subsystems. The company also supplies fuselages for the Tejas programme.

Future collaborations

We will be moving to higher level value addition. In the long run, we will be focusing on application software and system engineering. We will outsource basic engineering and less capital-intensive manufacturing to MSMEs and SMEs operating in the ecosystem.

Funding for expansion

For the Rs 1,000-crore investment that will go into the integrated defence systems facility, we will manage it through internal accruals and partially through debt. If needed, we will look at other options for funding.

Skill development

We are a multi-disciplinary company, and our facilities will need staff with different skills and capabilities. We would be hiring a lot of employees in mechanical, electrical, electronics, chemical and other core streams. We will be setting up our own skill development centre in collaboration with the Telangana government to meet our skill and hiring requirements.

Building on USP

VEM’s USP is in its systems knowledge. Creating an infrastructure like VEM is not easy for other competitors in the sector. VEM is a company of companies, and we are different. That will differentiate us from others.

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