June 2021 Contact Key Highlights June 2021

INVEST KARNATAKA MONTHLY

JUNE 2021 CONTACT KEY HIGHLIGHTS JUNE 2021

Ms Gunjan Krishna

Commissioner, Dept of Industries and Commerce, GOK Phone: +91 80 2238 6796 Email: [email protected]

Mr H.M. Revanna Gowda

Managing Director, Karnataka Udyog Mitra Ph: 91-80-2228 2392, 2228 5659; 2238 1232 Email : [email protected]

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Visit us at: www.investkarnataka.co.in Special feature: Aequs Journey from a speck to a sparkle

Aequs’ journey is a story of how aeroplanes stay in the sky, would also sow the precision engineered aerospace components it has helped Karnataka become seeds of yet another successful enterprise, this could be manufactured in India. time, to make actual aeroplane parts. a shining star of manufacturing And the way to do it was to set up a global excellence in the Aerospace & Unchartered territory manufacturing ecosystem which, going Defence sector forward, was to house a series of integrated Though Karnataka had earned its wings as an and co-located facilities to support the entire Aerospace & Defence destination by then, most It all started with the passion to dream big. manufacturing value-stream – a platform When Aravind Melligeri and his childhood friend activity was limited to public sector units, of sorts that aimed for extreme efficiencies Ajit Prabhu set out to chase the American with a few private through the entire manufacturing process. Dream by pursuing their master’s degrees in players involved in a Way ahead of Way ahead of the times, and conceived with a the US, the seeds of entrepreneurship had limited way. It was the times, and 30-year vision, the concept of ecosystems of just been sowed. Landing cushy jobs with in 2007 that Aravind conceived with a efficiency took birth. multinational giants was not enough to quench Melligeri set out to 30-year vision, their thirst. They were eager to seek and write establish India’s most Aequs pioneered their own destiny. In 1997, this led to the birth of ambitious aerospace the concept of QuEST Global Engineering, that sought to bridge enterprise in the ecosystems of the gaps in outsourced engineering services out private sector. It called efficiency. of India. for state-of-the-art precision engineering Few would have imagined at the time that this and manufacturing capabilities. QuEST Global venture, which also specialised in writing code Manufacturing was born with a belief that to help leading aircraft makers keep the given the right approach globally competitive Special feature: Aequs Why Belagavi? Navigating ahead Cohesive ecosystem “Our networks While Bengaluru would With a razor-sharp focus on taking up complex Soon came the global foray with the are forged with have seemed the and difficult to execute products albeit in a acquisition of Texas-based T&K Machine in care. We believe obvious choice to set limited number, rather than chasing volumes, 2015. This was soon followed by yet another in creating global up such an ambitious the pioneering venture, has generated much acquisition, this time in France in 2016. enterprise, to many partnerships with interest from far and wide. These takeovers further enhanced Aequs’ it came as a surprise recognized capabilities and more importantly, brought when Aravind Melligeri industry leaders Along the way, in 2014, QuEST Global it closer to its customer base, that includes zeroed in on North that drive the Manufacturing, rechristened itself Aequs, Latin the likes of Airbus, Boeing, Collins Aerospace, Karnataka, and that ecosystem,” for equal, suggesting a partnership between Safran, to name a few. too Belagavi, to set it equal stakeholders. And accolades came up. Dig a bit deeper Aravind Melligeri, easily with the feather in the cap being the “Our networks are forged with care. We believe and you begin to see Chairman & CEO, recognition as India’s first Notified Precision in creating global partnerships with recognized the logic. Aequs Engineering & Manufacturing SEZ. That it industry leaders that drive the ecosystem,” offered a full-scale manufacturing ecosystem says Aravind Melligeri. These partnerships Belagavi, apart from its serving global clients from a single location and the global footprint, including in USA and strategic location and its climate, also offered turned out to be its USP. The country’s first France, have given Aequs the capabilities and easy access to ample engineering talent. North vertically integrated ecosystem, spread over reach to deliver effectively across continents Karnataka is blessed with the presence of 250+ acres, became the go-to destination for to customers that include giants of the some of the best engineering and technical global aerospace companies. Aerospace industry. institutes. Add to this the presence of the perhaps the biggest agglomeration of casting Aequs has always believed that its people businesses and automotive parts makers, and are its strength, the core of the ecosystem. you have access to ready talent. Moreover, It was one of the first in the country to set Belagavi is not only close to business hubs up an inhouse Aerospace training centre, the like Bengaluru, Mumbai, and Pune, but also Aerospace Knowledge Centre in 2016. The provides a cosmopolitan mix to make any expat institute runs a 30-months training program comfortable. for engineering graduates and diploma holders Special feature: Aequs equipping them with skills needed to flourish Aequs is also the first aerospace company Striking new Ground in the aerospace industry. A transparent and in India to achieve NADCAP accreditation positive work culture is also reinforced by its and the AS9100D After logging many firsts in the Aerospace strict policies on safety with certifications certification. It sector, Aravind Melligeri has now embarked on such as ISO 14001:2015 and BS OHSAS was a moment of Aerospace striking new ground. Aequs, which has been 18001:2007. great pride for the manufacturing toys for some of the biggest Operations began company when brands across the world since 2016, is in 2009 A Habit of Making it First Airbus recognized now setting by its achievement India’s 1st Precision India’s first toy Looking back, Aequs can proudly boast of Toys in creating the Manufacturing SEZ manufacturing many firsts including the largest machining unique aerospace cluster at Koppal at Belgaum Operations began capability of over one million machining manufacturing in Karnataka. This in 2016 hours per year which is poised to grow to ecosystem and State-of-the-art difference this time India’s 1st Toy 4 million hours in the coming years. This is presented it technologies round is that apart nearly two times the combined capacity of with the most from manufacturing Manufacturing Cluster under all other Indian machining players. Aequs is prestigious Global footprint: toys itself, the construction at also the first in India to assemble Plug Doors Airbus Innovation India, US, & France company will also Koppal and Over-Wing Exit Doors for global OEMs. Award. It was be helping other 3 Multinational joint also awarded the entrepreneurs add Integrated Its forging (JV) unit boasts of India’s largest ventures Airbus Detailed capacity at the product design & hydraulic press at a capacity of 10,000 tons. Parts Partner Cluster. Spread manufacturing Its assemblies (JV) unit, Aerostructures Award (D2P) in over 400+ acres Assemblies India (AAI), has helped India cross 2016, 2017, 2018 & 2019, the Airbus Supply the Koppal Toy Injection molding, a major milestone by delivering fuselage plug Chain & Quality Improvement Plan (SQIP) Cluster (KTC), is painting, & doors directly to Airbus. One of its other JVs, Award in 2018 & 2019, the Collins Aerospace designed to house assemblies the Aerospace Processing India Pvt Ltd (API), Best Supplier Award (India Region) in 2019 an entire Ecosystem Tooling design & was the first surface treatment units in India and the first “Casing Industrialization Award”, to support toy manufacturing to be approved by both Airbus and Boeing. from Safran (SHE), under the Aequs Global manufacturers, Transition Model. Special feature: Aequs

Economic Zone (SEZ) and a Domestic Tariff Area manufacturing ecosystems. It has succeeded in (DTA), and consist of approximately 4.5 million integrating entire manufacturing value streams sq. ft. of factory in a single location establishing a template that space apart Consumer Durable can be replicated irrespective of the sector in from a host of Goods which it wants to operate. other common facilities, Operations began in With Ease of Doing Business (EODB) as the core including 2020 value proposition to manufacturers wanting to warehouse and set up shop in these Clusters, Aequs is adding logistics, skill India’s 1st Durable to the congenial business in Karnataka. suppliers, and vendors across the toy Goods Mfg. Cluster development manufacturing value chain. In line with under construction at centres etc. The dream that took off a little over a decade Hubballi Hon’ble Prime Minister Shri. Narendra When fully back has now turned into a reality making Modi’s Atmanirbhir Abhiyan for a self-reliant operational the An emerging global a difference to North Karnataka and its India and supported by the Government of two projects sourcing hub people. More importantly, it is making the Karnataka, the self-sustained ecosystem will are expected to country proud pioneering new concepts Integrated design to cater to all infrastructure and operational provide nearly and conglomerations of sector-specific product realization support requirements of the toys, plastic, 40,000 direct manufacturing hubs, or the ecosystems of and electronic manufacturing industry. This jobs apart Agile industrialization efficiencies. apart the cluster will offer support services, from indirect & value creation (ends) skill centers, and workforce to match employment to manufacturing requirements. some two-lakh people in North Yet another first will be the upcoming Hubbali Karnataka. Consumer Durable Goods Cluster, which will be India’s first such mega park in the durables A legacy of sorts sector. Also, spread over 400 acres, the Aequs took a 30-year view when setting up self-sustained ecosystem will house a Special the Aerospace SEZ and seeded the concept of LEADERSHIP Aravind Melligeri is the founder of and choosing this focus fit well into my plans. Aequs. His farsightedness and I belonged to a middle-class family and lost differentiated approach have led my dad when I was one. My mother and PROFILE Karnataka to increase in-country cousins took on the responsibility to raise me value add and gain a competitive in Hubballi. At that time, our idea of success advantage in the manufacturing was to move to USA and make a living there. I sector. Today, Aequs operates India’s got a full scholarship for a Masters’ program in first Precision Manufacturing SEZ in Robotics at Penn State University which took Belagavi, is at the helm of developing me to America. I eventually enrolled in a PhD and building India’s first ~400-acre program as well and realized that concepts toy manufacturing ecosystem in such as AI and neural networks were being Koppal, Karnataka, and India’s first discussed back then as well but technology ~400 acres sector-specific Durable was not advanced enough for it to be Goods Cluster in Hubballi. implemented. So, I decided to drop out of the PhD program and joined Ford as a contractor. Could you tell us about your I was part of the team that studied childhood and early professional automotive crash analysis and other journey? scenarios. I was born and raised in Hubballi and attended In the 1990’s, Ajith Prabhu, my current the local school run by Huballi- Dharwad partner who is also from Hubballi and was corporation up until pre university. I went on to working with GE in the US at the time and I join REC in Suratkal (now called National tried establishing firms which did not Institute of Technology) for under graduation in Mr Aravind Melligeri materialize for various reasons. In 1997, we 1986 with a specialization in Mechanical eventually established a small engineering Chairman and CEO, Aequs Engineering. I have been passionate about manufacturing and product from the beginning consultancy firm called Quest Global and the rest is history. We quickly expanded in Karnataka manufacturing due to the high cost involved and done in-country. We wanted to change this as it was a natural progression for us. By 1998, moving from services to manufacturing was not phenomenon. We had to establish a zone to we had a Bangalore office and by 2000 we the traditional path businesses took. This did not scale and sustain these operations to make started working with large contracts for GE and matter to me as I saw a massive opportunity. We large scale impact. The impact here would be to other companies. never looked for any incentives from the state as create employment for lakhs and change the we were so focused on setting up operations and industrial landscape of the region. These zones Tell us about your vision for delivering to the best of our ability. had to built out of main urban epicenters Karnataka’s manufacturing and because of cost and connectivity reasons that At that time, Aerospace sector in India was going made us look at North Karnataka. infrastructure sector. through a big change in mindset. Historically, When we set up Quest Global in Karnataka, we aerospace sector in India ran through I am investing for multiple decades to come and were essentially a services company and we collaborations with big foreign companies. We never for short term gains. I see adding value were giving out engineering design to our bought technology and equipment from other consistently through the years and bringing long customers and they were getting it countries, but this changed in 2001-2003 where term changes to the industrial ecosystem in manufactured elsewhere. We soon found out the government made buying direct offset Karnataka. For me it is solving a particular that our customers were happy to manufacture mandatory. This changed the opportunities for problem and I am willing make the required in India and that’s when our first ideas of manufacturing sector in India. This allowed for us investment. establishing manufacturing infrastructure to expand our operations and invest in began. We had no experience in manufacturing, manufacturing in Karnataka. Most of Aequs’ projects are in we had never worked on the shop floor, we did districts across North Karnataka. Our vision with manufacturing has always been to not know what it would take to establish and What is your take on industrial run manufacturing units. We pulled together a bring about in country value add. Unlike the services sector, manufacturing is heavily development in the region? small team in Bangalore and established Quest dependent on multiple external aspects to bring Manufacturing to enter aerospace North Karnataka is home for me, and I have very together equipment, technology, components, manufacturing in India. I distinctly remember strong roots there. When we decided to enter processes, implementation etc. Initially, with our funders warning us about getting into the manufacturing sector, we were advised Quest manufacturing, only 15-20% value was being to set up in Gujarat by multiple adviso and board regions can be curtailed, multiple industries can be must say that as an entrepreneur, I have my own members. Personally, it was not a choice I could built, and it is an advantage for Karnataka’s overall limitations and cannot solve entire infrastructure go for. I don’t understand Gujarat the way I industrial development as well. We are problems of the state. The state’s contribution understand Karnataka. We were entering the overcrowding Tier 1 cities and curbing and collaboration are a must to bring about manufacturing sector which was entirely new for opportunities for Tier 2 and Tier 3 cities that is not sustainable changes in the state. us, additionally we were entering the aerospace helping the overall development of the state. manufacturing space which was new as well, and I am happy to support the administration if it means we are working towards the same goal. we were not ready to choose a new geography to Most importantly, it was a natural progression for I am proud that we have worked with the state setup these operations in. With three unknowns, me to choose North Karnataka. I want to see the irrespective of the political party in power and we were doomed to fail and I had no interest in region flourish and I see the kind of value people of delivered value. For me policies are independent failing. the region can add. I might have a personal of who is in power. I congratulate the able inclination, but I have set up operations in the bureaucrats in Karnataka for pushing us to do We did study various districts across the state to region because I see what opportunities can bring more. I recognize the need for collaboration choose the best location for our units. Our out for the overall development of the state. between the state and industries and I am happy options were Mangalore, Bellari, Karwar, Hubballi to collaborate further. and other areas. We eventually chose Belgaum for You have worked closely with the the aerospace SEZ. Belgaum has a rich casting state to establish landmark As I see it, the government plays an important and manufacturing ecosystem that we required to role in helping us fill important gaps in build aerospace manufacturing units. We will go projects in Karnataka. How can various aspects of development. Be it skill where we see value for our business. Karnataka’s investors work with the state to or infrastructure development, businesses rich aerospace ecosystem also helped us make increase investment potential? cannot tackle these issues by themselves. I am that decision. passionate about solving specific problems and As I mentioned, we will invest where we see value. I I will work with the state to make that happen. see that value in Karnataka through my interactions North Karnataka has so much value to add and with bureaucrats, politicians and my peers. I this can be harnessed only by providing Five specific measures Karnataka can take to have also learnt through the years that when you opportunities to the people of the region. If we increase investment in the state would be to demonstrate a value, the state also reciprocates. I invest in the region migration to other states and identify and assign specific specialty to each district and work towards building industries in with Ford and managed three jobs at once. The for myself before I get on calls which will each of them; get out of Bangalore, especially day I received my green card, I quit my position at typically go on until noon. I have breakfast while for manufacturing sector, create penalties for Ford and focused entirely on building my own I am on calls and typically eat eggs every day. By businesses that refuse to leave Bangalore; company. I was an immigrant and I had to work 5pm, things start slowing down. I try to make develop airport connectivity in districts such hard to make my space. I worked through the time for some exercise or for a golf session in as Shivamogga, Hasan, Bijapur and build better entire process and until my partner Ajith Prabhu the evening. After work, it’s usually dinner and connectivity between Bangalore and the other and I had the required paperwork, we worked hard TV time with my wife. For dinner, we usually districts in the state; continue to be consistent to run our company. have North Karnataka food at home. I usually with policies. have 12 to 15 hour days. As I often say, when I am I have learnt that constraints are the reason one not working, I am sleeping. You are one of Karnataka’s best evolves. It forces us to come up with solutions and entrepreneurial success stories. makes one resilient to change. Resilience pushes a What are your hobbies? What are the main lessons you person to adapt quickly and be solution oriented. have learnt? We have made many mistakes and multiple I love coding when I have the time because it business plans have failed through the years. I gives me joy. I could make time to read a novel, I do not come from a business family, I have not have no regrets and I would not know what works but it wouldn’t give me the same kind of taken any courses in management and how to run unless I try. Success for me is a journey and it is happiness. To be honest, I don’t really pursue a a business and I have no formal education in about staying hungry for more. I believe the most hobby. Connecting the dots and strategizing for business strategy. I have learnt it all on the job. successful business venture is the one which our companies is my biggest pastime. I don’t When we were starting off Quest, I had to take on brings large-scale socio-economic impact for enjoy shopping, my wife helps me with that. I multiple roles including finance, accounting, people. am a foodie and I love exploring various client servicing, and I also ran the IT department cuisines. My favorites are Thai, Mexican, Indian for a few years. In my experience, the only thing What is your daily routine? and I live in Texas so we our own version called that will take us ahead is tenacity and time. If we Tex-Mex which I enjoy as well. My business build the ability to constantly learn and build on My day starts at 5 am if I am in the US and around partner Ajith and I love Thai food and is our those learnings, it will take us places. 5:30 am in India. The first thing I do is get my cuisine of choice. coffee. I drink a few espresso shots from my I had started a company while I was a contractor Nespresso between calls. I have about half hour Specialty Covid Care Hospital, Yelahanka Inauguration by Hon’ble Chief Minister B.S Yediyurappa and Hon’ble DV Sadananda Gowda & Visit by Hon'ble Union Minister Nirmala Sitharaman Industry Roundtable Discussion on Aerospace & Defence Policy (2021-26)

Government of Karnataka is revisiting the Aerospace and Defense policy and conducted a roundtable with key industry leaders to discuss various aspects of the upcoming policy. The goal is to build Karnataka to be a major state for investors in the aerospace and defense industry. Discussion was also held on creating defense hubs in the state.