India’s Aeroflex Industries in Talks to Enter Aerospace Sector
India’s Aeroflex Industries, known for its metal hoses used in utilities, refineries, and fire fighting equipment, is in discussions to enter the aerospace sector. The company aims to take advantage of India’s growing space program, following the success of its recent lunar mission and the launch of its first solar mission.
Targeting India’s Space Mission
Aeroflex Managing Director Asad Daud expressed his ambition for the company’s products to be a part of India’s next space mission. The company is currently in early-stage talks with Hindustan Aeronautics Ltd (HAL), Bharat Heavy Electricals Ltd (BHEL), and the Indian Space Research Organisation (ISRO).
Diversifying Revenue Stream
The move into the aerospace sector will allow Aeroflex to diversify its revenue stream. The company expects its total revenue to increase by 35% in the next three to four years, with at least 5% coming from aerospace.
Reducing Dependence on Chinese Suppliers
Aeroflex aims to reduce its reliance on Chinese suppliers for coils, a key raw material that accounts for half of its overall raw material costs. The company plans to shift to local suppliers who can deliver much faster. Currently, three Chinese suppliers meet 70%-75% of Aeroflex’s coil needs, but this will decrease to 50%-60% by next March as the company increases local sourcing.
Benefits of Local Sourcing
By sourcing coils locally, Aeroflex will benefit from faster delivery times. Domestic suppliers can deliver within 4-5 days, while Chinese shipments take more than a month to arrive.
Aeroflex Industries’ entry into the aerospace sector will allow the company to capitalize on India’s growing space program. By diversifying its revenue stream and reducing dependence on Chinese suppliers, Aeroflex aims to increase its total revenue and strengthen its position in the market.