Seven New Defence Companies, Carved out of OFB, Would Form a Strong Base for the Military Strength: PM

Defence Industry

New Delhi: Seven new defence companies, carved out of Ordnance Factory Board (OFB), were dedicated to the Nation at a function organised by Ministry of Defence on the occasion of ‘Vijayadashami’ here on October 15 with Prime Minister Narendra Modi delivering a video address during the event. Defence Minister Rajnath Singh presided over the ceremony at Kothari Auditorium, DRDO Bhawan.

In his address, Prime Minister  noted the auspicious occasion of Vijayadashami today and the tradition of worshiping arms and ammunition on the day. He said, In India, we see power as a medium of creation. He remarked that with the same spirit, the nation is moving towards strength.

Paying tributes to Bharat Ratna late Dr APJ Abdul Kalam, the prime minister said that Dr Kalam dedicated his life to the cause of a strong nation and said that Restructuring of Ordnance Factories and creation of seven companies will give strength to his dream of strong India. New Defence companies are a part of the various resolutions which the nation is pursuing to build a new future for the country during this Amrit Kaal of India’s independence, he added.

The Prime Minister said that the decision of creating these companies was stuck for a long time and expressed the belief these 7 new companies would form a strong base for the military strength of the country in the times to come. Noting the glorious past of Indian ordnance factories, Modi commented that upgradation of these companies was ignored in the post-independence period, leading to the country’s dependence on foreign suppliers for its needs.  “These 7 defence companies will play a major role in changing this situation”, he said.

The prime minister said these new companies would play an important role in import substitution, in line with the vision of ‘Atmanirbhar Bharat’. An order book of more than Rs 65,000 crore reflect the increasing confidence of the country in these companies, he added.

Modi recalled the various initiatives and reforms undertaken in the recent past that have created Trust, Transparency and Technology driven approach in the defence sector like never before. Today, private and public sector are working hand in hand in the mission of national security, he added.

He cited Uttar Pradesh and Tamil Nadu Defence Corridors as examples of the new approach. He noted as new opportunities are emerging for the youth and MSME, the country is seeing the result of policy changes in the recent years. “Our defence export has increased by 325 per cent in last five years”, he added.

The prime minister said the  target of these companies is not only to establish expertise in their products but also become a global brand. He urged that while competitive cost is our strength, quality and reliability should be our identity. He said in the 21st century, growth and brand value of any nation or any company is determined by its R&D and innovation. He appealed to the new companies that Research and innovation should be a part of their work culture, so that they just don’t catch up but take lead in future technologies. This restructuring would provide more autonomy to the new companies to nurture innovation and expertise and the new companies should encourage such talent, he added. He urged the start-ups to become a part of this new journey through these companies to leverage the research and expertise of each other.

He said  the Government has given these new companies not only a better production environment but also complete functional autonomy. He reiterated that the Government has also ensured that the interests of the employees are fully protected.

To enhance functional autonomy, efficiency and unleash new growth potential and innovation, Government had decided to convert OFB from a Government Department into seven 100 per cent Government-owned corporate entities as a measure to improve self-reliance in the defence preparedness of the country. The seven new Defence companies are: Munitions India Limited (MIL); Armoured Vehicles Nigam Limited (AVANI); Advanced Weapons and Equipment India Limited (AWE India); Troop Comforts Limited (TCL) (Troop Comfort Items); Yantra India Limited (YIL); India Optel Limited (IOL) and Gliders India Limited (GIL). These companies have commenced business from October One.

Describing the decision to convert OFB into seven defence companies as historic, Defence Minister said the move reflects the Government’s resolve of achieving ‘Atmanirbhar Bharat’. He said, this decision will provide autonomy to these companies and improve accountability and efficiency in the functioning of 41 factories under them. He exuded confidence that the new structure will help in overcoming various shortcomings in the existing system of OFB and provide these companies incentive to become competitive and exploring new opportunities in the market including exports, while safeguarding the interests of the employees.

“The objective of this restructuring is to transform Ordnance Factories into productive, and profitable assets; improve expertise in product range; increase competitiveness; improve quality; enhance cost-efficiency and ensure self-reliance in defence preparedness,” he said.

Singh hoped that in the times to come, these new companies would not only play an important role in the defence manufacturing ecosystem but would also be engines of growth for the Indian economy. He added that restructuring is a continuing process, not an end in itself.

Stating that the new companies have full potential for growth, Singh said, if required, the government will provide support initially through financial and non-financial interventions.

Reiterating the Government’s commitment towards protecting the interests of OFB employees, Defence Minister said   all employees of OFB (Group A, B & C) belonging to production units will be transferred to corporate entities on deemed deputation for a period of two years without any change in their service conditions as Central Government employees.

Terming production of defence items as key for achieving ‘Atmanirbhar Bharat’, Singh voiced the Government’s resolve of making India a defence manufacturing hub and net exporter through active participation of the private sector, joint ventures and setting up of defence manufacturing units. He said, since 2014, all efforts have been made to bridge the gap between age-old business methods and modern-day practices that are needed to make way into the global market, expressing satisfaction that the country is making giant strides towards achieving ‘Make in India, Make for the World’ vision of the Prime Minister.

“The country’s defence sector has scaled greater heights due to the reforms taken by the Government in the past few years. We have created a conducive ecosystem for exports and FDI with focus on manufacturing products indigenously,” Singh said adding that Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services by 2024, including exports of Rs 35,000 crore.

The minister defined the present defence manufacturing scenario in the country as a synergy of the private and public sectors. “Public and private sectors are working hand-in-hand to enhance the preparedness of our Armed Forces,” he said.

Singh urged the new management to not just depend on orders for the Services, but explore new opportunities in India and abroad. He also wished the Nation on ‘Vijayadashami’ and remembered former President APJ Abdul Kalam on his birth anniversary.

Minister of State for Defence, Ajay Bhatt said the transformation of OFB could become a reality only because of the vision and leadership of Prime Minister Modi. He expressed gratitude to the EGoM, led by the Defence Minister, which made it feasible to carry out such a huge reform, involving more than 75,000 employees, 41 production units and a number of non-production units spread over 10 States/UT in the country, having assets worth more than Rs. 79,000 crore and above all, legacy of more than 220 years.

National Security Advisor  Ajit Doval, Chief of Air Staff Air Chief Marshal V R Chaudhari, Defence Secretary Dr Ajay Kumar, Secretary (Defence Production)  Raj Kumar, Secretary (Ex-Servicemen Welfare)  B Anand, Financial Advisor (Defence Services) Sanjiv Mittal and other senior officers of Ministry of Defence and representatives from the Defence Industry Associations were also present.

In addition to the central programme, the ceremony was held in a federated manner with programmes and events held in all the seven new companies and their units located in various states. Several independent events were also organised at local level by these companies to commemorate the historic day. These programmes were connected to the central programme through video conferencing.