INVEST KARNATAKA MONTHLY - JUNE 2021 - Aequs
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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: commissioner@karnatakaindustry.gov.in
Mr H.M. Revanna Gowda
Managing Director, Karnataka Udyog Mitra
Ph: 91-80-2228 2392,
2228 5659; 2238 1232
Email : md@kumbangalore.com
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V is it u s at: w w w.inve stkar nataka .c o. i n
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
seeds of yet another successful enterprise, this could be manufactured in India.
it has helped Karnataka become 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
It all started with the passion to dream big. Aerospace & Defence destination by then, most
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
the gaps in outsourced engineering services out ecosystems of
private sector. It called
of India. efficiency.
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
While Bengaluru would
“Our networks Soon came the global foray with the
With a razor-sharp focus on taking up complex
are forged with
have seemed the and difficult to execute products albeit in a acquisition of Texas-based T&K Machine in
obvious choice to set care. We believe 2015. This was soon followed by yet another
limited number, rather than chasing volumes,
up such an ambitious in creating global acquisition, this time in France in 2016.
the pioneering venture, has generated much
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 in creating the manufacturing Toys
Manufacturing SEZ
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
4 million hours in the coming years. This is presented it round is that apart India’s 1st Toy
technologies
nearly two times the combined capacity of with the most from manufacturing Manufacturing
all other Indian machining players. Aequs is Global footprint: Cluster under
prestigious toys itself, the
also the first in India to assemble Plug Doors construction at
Airbus Innovation India, US, & France company will also
and Over-Wing Exit Doors for global OEMs. Koppal
Award. It was be helping other
also awarded the 3 Multinational joint entrepreneurs add Integrated
Its forging (JV) unit boasts of India’s largest Airbus Detailed ventures 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 can be replicated irrespective of the sector in
Consumer Durable
from a host of which it wants to operate.
Goods
other common
facilities, Operations began in With Ease of Doing Business (EODB) as the core
i n c l u d i n g 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
Hon’ble Prime Minister Shri. Narendra Hubballi
When fully back has now turned into a reality making
Modi’s Atmanirbhir Abhiyan for a self-reliant operational the a difference to North Karnataka and its
An emerging global
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
cater to all infrastructure and operational Integrated design to and conglomerations of sector-specific
provide nearly
support requirements of the toys, plastic, product realization
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
Aequs. His farsightedness and
and choosing this focus fit well into my plans.
I belonged to a middle-class family and lost
PROFILE differentiated approach have led
Karnataka to increase in-country
value add and gain a competitive
my dad when I was one. My mother and
cousins took on the responsibility to raise me
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
Mr Aravind Melligeri Institute of Technology) for under graduation in
1986 with a specialization in Mechanical
tried establishing firms which
materialize for various reasons. In 1997, we
did not
Chairman and CEO, Aequs Engineering. I have been passionate about
eventually established a small engineering
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
manufacturing in Karnataka.
began. We had no experience in manufacturing, Most of Aequs’ projects are in
we had never worked on the shop floor, we did
Our vision with manufacturing has always been to
districts across North Karnataka.
not know what it would take to establish and
bring about in country value add. Unlike the What is your take on industrial
run manufacturing units. We pulled together a
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 As I see it, the government plays an important
and manufacturing ecosystem that we required to
state to establish landmark
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 Five specific measures Karnataka can take to
this can be harnessed only by providing
have also learnt through the years that when you increase investment in the state would be to
opportunities to the people of the region. If we
demonstrate a value, the state also reciprocates. I identify and assign specific specialty to each
invest in the region migration to other states and
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.
We have made many mistakes and multiple I love coding when I have the time because it
have learnt? gives me joy. I could make time to read a novel,
business plans have failed through the years. I
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 and I live in Texas so we our own version called
What is your daily routine?
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 hourSpecialty 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.
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