Indian multinational soars into Australian aerospace 2 September 2010 When Indian multinational Mahindra Group decided to expand its already impressive business range into the aerospace sector it looked globally for investment prospects. However, the US$7.1 billion company found its perfect match in two established Australian Aerospace companies. The Mahindra Group employs over 100,000 people worldwide and enjoys a leadership position in utility vehicles, tractors and IT, with a growing presence in financial services, tourism, infrastructure, trade and logistics. The landmark deals with Gippsland Aeronautics and Aerostaff Australia were sealed in December 2009, with Mahindra acquiring a majority stake in both companies. Mahindra already had a presence in Australia in the area of tractor assembly, and according to Executive Director and CEO of Mahindra Aerospace, Mr Arvind Mehra, the company was well aware of the advantages Australia could offer as an investment destination specifically in the Aerospace sector. “The drawcards include Gippsland Aeronautics highly skilled and multilingual workforce, and R&D capability specifically in the aerospace domain.” He added that Gippsland and Aerostaff were considered a “perfect match for investment”, providing the product portfolio, technical expertise and commercial experience the company was looking for. Gippsland Aeronautics is an established brand in general aviation, having delivered more than 200 aircraft certified to FAR 23 in 32 countries (FAR 23 signifying the highest level of passenger safety). Aerostaff Australia is a highly regarded manufacturer of high-precision close-tolerance aircraft components and assemblies for major players such as Boeing and Lockheed Martin. The Gippsland Aeronautics acquisition is part of Mahindra’s strategic entry into the 2– 20 seater turbo prop market – one of the growing sectors in general aviation, while Aerostaff is a launching pad for Mahindra’s proposed aero structure and aero components manufacturing programs. Mr Mehra explained: “The Gippsland Aeronautics deal was attractive because it offered a combination of existing aircrafts such as the two-seat and eight-seat Airvan, which are excellent, reliable and highly configurable products. Our planned investment will also help Gippsland develop a new 10 seat aircraft and bring the 18 seater back into production,” he said. “And Aerostaff Australia had a perfect combination of processes, customer contacts, and above all, an ability to merge well with Mahindra’s ambitions in the Aerospace domain.” Mahindra has retained the existing key management people of both companies. Mahindra’s strategic investment in the Aerospace sector is a long-term growth plan and suitable additional acquisitions outside of India, including Australia, are on the cards. From Australia’s perspective, the deals present a valuable opportunity for the Aerospace sector to build its presence internationally. An Austrade spokesperson said: “This was a fantastic proposition where Australian companies could reach global markets with Mahindra's global reach and relationship with the leading players in the Aviation space.” Austrade worked closely with Mahindra providing advice and assistance on the investment process and introductions to key contacts in the Victorian State Government and other professional service providers. More information |