The defence systems are country-specific so as to meet the nation’s security requirements in most efficient manner and at economical terms. All the countries would like to have the defence systems made in their own country for reasons of self-reliance so that plug is not put in time of need. There are variations to this where collaborative developments are in vogue amongst friendly countries. However, the developing nations have not yet reached that comfortable status, and they continue to depend on exports from other countries to meet their defence requirements. This paper will review India’s international export potential in Naval Sector, and what can be done to realise and maximise this potential.
Potential Export Market in Naval Sector
The potential export market in the Naval Sector of interest to India can be summed up primarily in four regions. Firstly, Indonesia-Malaysia-Thailand region. Secondly, Saudi Arabia-UAE-Oman. Thirdly, some ten Latin American countries. Fourthly, other countries.
Indonesia has projected the requirement of 24 new ships in the coming years. Four corvettes are already being built at Royal Shelde, Vissengen, Netherlands. Consideration is being given to indigenous building of corvettes (1500 tonnes) at PT Pal Surabaya, Indonesia in collaboration with Orrizonte Sistemi Navali S.P.A (Fincantieri) and Italian Navy corvette. Jakarta is seeking a fleet of 22 corvettes by 2024. Some of these corvettes will be built in the country.
The issue of exports in the Defence (naval sector) will need to be backed by the political will of the country. The consortium approach will enable the aim to be realised much sooner. The consortium partners could be the MOD, the Navy and the Shipyard (private/public).
In addition to Royal Shelde, also Blohm+Voss, Fincantieri and Daewoo/Hyundai Heavy Industries of South Korea will be vying to provide the design. Indonesia is also exploring possibility of co-operation with Australia for development of patrol vessels. Indonesia is looking forward to acquisition of two ROK Navy Type 209/1200 class submarines. It is also to modernise and overhaul Type 209/1300 submarines.
Two more frigates have been ordered in 2007 on BAE System Surface Fleet Solutions, Glasgow UK. Earlier two frigates were built at Yarrow Shipbuilders in Glasgow. Now the in-country Labuan Shipyard and Engineering has signed an MOU with BAE Systems for the construction of the frigates for the Royal Malaysian Navy. The construction of the new vessels is likely to be shared between the Yarrow Yard, which is now owned by the BAE Systems and the Labuan Shipyard & Engineering, which has the facility on the Labuan Island of the west coast of Sabah State. There will be Transfer of Technology (TOT) and production knowhow from UK to Malaysia. More than 300 Malaysian engineers will need to be trained in UK yards. Malaysia had traditionally purchased their warships from foreign yards but is now seeking to develop an indigenous shipbuilding capability and capacity. The above frigates are based on the GEC naval systems frigate–2000 design.
In addition to the frigates, six Offshore Patrol Vessels (OPVs)–MEKO A 100 Type are being built by Penang Shipbuilding Corporation and German Naval Group Consortium led by Blohm+Voss.21 more OPVs are yet to be ordered. Bousted Heavy Industries Corporation (BHIC) is expecting order for building the OPVs of the MEKO 100 design for the Royal Malaysian Navy.
The Royal Malaysian Navy also needs a Multi -Role Support Ship. The contenders for this ship are Hanjin Heavy Industries & Constructions Korea, BAE System UK, DCNS France, Fincantieri Italy.
Two Scorpene class submarines are being built by DCNS France and Navantia Spain. There will be requirement for more submarines.
Efforts are underway to acquire two new frigates from UK.
Two OPVs are being built at Shanghai Naval Dockyard in China ordered through China State Shipbuilding Corporation. Four more OPVs are to be ordered in 2008.
One training ship for the Royal Thai Navy is being built at Shanghai Naval Dockyard China. More training ships are to be ordered.
The future naval programme for 2011–2020 include 36 new patrol vessels, light frigates, submarines, amphibious ship, MCMVs and replenishment ship.
Saudi Arabia – UAE – Oman
Request for Proposals (RFPs) for light corvettes are likely to be issued in 2008. It is expected that 8 to 12 such ships will be built. Preliminary presentations are already being made by DCN France, BAE Systems UK, VT Shipbuilding UK, Navantia Spain, Northrop Grumman Avondale, General Dynamics, Bath Iron Works.
Saudi Arabia has also shown interest in Midgets.
New class of light frigate (Project Yas) for the UAE Naval Forces is being conceived. Abu Dhabi Shipbuilding (ADSB) may be the prime contractor for this programme.
ADSB is presently building six Baynunab- class corvettes for the UAE Naval Forces.
ADSB is looking for overseas strategic partner for Shipbuilding & Naval Support Services.
Oman has recently placed order for three corvettes for the Oman Navy on VT Shipbuilding at a cost of GBP 400 million. These corvettes are expected to be completed in 2011.
Oman has also issued RFI for new ‘hydrographic survey vessel’. US Naval Sea Systems Command is promoting ship design based on Walton Smith Catamaran design.
Latin American Countries (Mexico, Argentina, Venezuela, Chile, Brazil,Colombia, Peru, Uruguay)
Other International Naval Export Orders
Royal Moroccan Navy has given Schelde Naval Shipbuilding of DAMEN Shipyards the order for the design and delivery of three SIGMA (ship integrated geometrical modularity approach) multi-mission frigates. The ships will be delivered by 2012. The SIGMA multi-mission frigates will be an extended version of SIGMA corvettes by adding one or two modules.
Six to eight Arctic/OPVs at estimated cost of C $ 3.1 billion are likely to be ordered. These ships need to be designed and built ab nitio. Consideration is being given to base the design on Norweign “Svalbard Class.”
Brazil is to acquire four Type 214 SSKs. The first one will be built at HDW and the remaining three will be built in Brazil with HDW help.
Analysis of the International Export Market in the Naval Sector
The majority of the international export market in warship building pertains to light frigates, corvettes and OPVs.
Frigates are sophisticated and expensive platforms and represent the smallest surface combatant that can conduct extended blue water missions in a high threat environment. Frigates can range between 2,000-6,000 tonnes. These are designed for one specific role i.e. anti-submarine, anti-air warfare or multi-role design (general purpose).
Corvettes are well-armed ships with displacement ranging from 600-2,000 tonnes. They are best suited for regional operations and are generally not intended for ocean-going operations. Corvettes are probably the smallest platforms capable of accommodating the sensors, weapons, and combat systems needed to operate in a medium threat environment, including the littorals. The origin of the corvette can be traced down to World War I, when, in order to counter the German U boat menace in littoral waters, the British developed special ‘escort type’ corvettes. Also, in the convoy warfare of the World War II corvettes were used.
OPVs were developed for Navies and/ or Coast Guard missions. An OPV is capable of patrolling the waters of an Exclusive Economic Zone for an extended length of time. By virtue of its mission, an OPV needs to be relatively large (generally over 700 tonnes) to possess the necessary range and sea-keeping characteristics needed for extended offshore patrols. The OPV is often built to commercial standards and is slower (around 20 knots) than corvettes or light frigates. An OPV is generally lightly armed but can carry SSMs and ASW equipment in war time. Some OPVs are built to naval standards with growth margins for weapon upgrades. For smaller navies, the OPVs are main stay of their inventory. Even for larger navies, less costly OPVs may be essential in the future for economical extensions of coverage. The OPV has to span the gap between ‘coast guard’ and naval tasks.
International Players in the Business of Export of Warships
The international players who are presently successful in capturing the market for light frigates, corvettes and OPVs in the regions under consideration have been identified as follows : –
- BAE Systems UK and VT Shipbuilding UK.
- Royal Shelde Netherlands.
- German Consortium (Thyssen Krupp, Fr. Lurssen Werft , Fassmer and Blohm + Voss).
In addition to the above, the following players are also seeking export business for warships in the regions under reference : –
- DCNS France.
- Fincantieri Italy.
- Navantia Spain.
- Northrop Grumman , General Dynamics and Bath Iron Works, USA.
All the above players project their own designs and adapt their designs to suit the customer requirements.
Ushering India into International Export Market
Although India has lagged behind in commercial shipbuilding, yet warship building and associated ancilliary industry in India has flourished and nurtured by the Navy to achieve self-reliance through indigenisation. Our shipyards have delivered destroyers, frigates, corvettes, OPVs, FACs, hydrographic ships, which are operating successfully with the Navy.
Although India has lagged behind in commercial shipbuilding, yet warship building and associated ancillary industry in India has flourished and nurtured by the Navy to achieve self-reliance through indigenisation. Our shipyards have delivered destroyers, frigates, corvettes, OPVs, FACs, hydrographic ships, which are operating successfully with the Navy.
India has sufficient strength to meet the ‘international export potential’ in naval sector in regions where the market has been identified. India can meet the requirements of the ‘international export market’ at more economical terms. This view needs to be projected and presented to the concerned so that they can benefit from economical warship building for light frigates, corvettes and OPVs.
Getting The Act Together
The market available is known. The products to be exported i.e. OPVs, corvettes, light frigates, the associated systems,and machinery and equipment which goes on board these ships are also known. Which are the possible agencies to be involved in ‘international export in naval sector’? Firstly, the MOD and the Navy of the host country, to give confidence and assurance to the customer regarding the nation’s backing. Secondly, the ‘design bureau’ and the shipyard which could meet the customer’s requirements with regard to design, and build these ships at economical terms. Thirdly, the ancilliary industry that could supply the systems These may be from indigenous or foreign sources. Fourthly, the weapon payload which could be partly indigenous and partly from foreign sources. In the latter case, tripartite government to government agreement may be necessary.
The issue of exports in the Defence (naval sector) will need to be backed by the political will of the country. The consortium approach will enable the aim to be realised much sooner. The consortium partners could be the MOD, the Navy and the Shipyard (private/public). The sourcing of the systems and payload can be organised by the consortium in an effective manner. The projection of the offers can also be organised by the consortium which will be acceptable to the customer.
Versatile Designs for OPV, Corvette and Light Frigate
The suggested consortium can easily get ready the basic designs of the above types of warships keeping the features versatile to adapt to the customer requirements. The cost of typical OPV, corvette and light frigate could be US$100 million, US$ 250 million and US$ 350 million respectively.
India’s Capability in Design and Building of Warships
Some typical warships designed and built in India are depicted in the 3D images in this paper. These highlight the capabilities of India in the field of warship design and construction.
Range of Indian Naval Products for Export
These can be grouped into three categories; Naval Marine Systems, Naval Combat Systems, and the Complete Naval Units eg OPVs, Corvettes, Light Frigates.
Prospects for Export of Indian Naval Marine Systems
These include main propulsion systems with diesel engines, gear boxes, shafting and complete stern gear, steering gear, stabilisers, pumps, compressors,switchboards/EDCs/APMS/degaussing systems, deck machinery, helo landing grids/helo traversing systems/hangar shutters and IPMs etc. The Indian Consortium needs to project/present these systems for fitment in the new design/construction of ships. This requires aggressive marketing through local lobbyists with the respective navies, indigenous shipyards and foreign international players who have bagged the orders to urge them to consider Indian marine naval systems for fitment in the new ships. The success can be achieved in countries which do not have the facilities for making these systems. All these countries are now alive to making indigenous efforts.
Therefore, it will be a means to surer success if the Indian Consortium collaborates with the respective industry for gradual and progressive indigenisation in their country with TOT from the Indian industry and guarantee to keep the supply chain for major vital parts alive. This involves identifying suitable industry in the respective country who have influence with decision makers.
Prospects of Export of Indian Naval Combat Systems
The Indian Consortium can project the missiles, missile delivery systems, torpedoes, RBUs, ASW delivery systems, radars, sonars, communication and early warning systems, CAIO, etc. It will be required to work through the supplier of missiles, torpedoes and sonars. The efforts with international players in this arena will need to be pursued, otherwise, we would have to depend on the limited choice of indigenous SSM,SAM and torpedoes.
Prospects of Export of Complete Units
The Indian Consortium needs to evolve a versatile concept design of an OPV, corvette and light frigate. These basic designs can be presented and subsequently developed to suit the customer requirements. Such versatile designs could be based on Navy ships or collaboration with international player or Indian Consortium’s own initiative ab nitio. In the latter case, the consortium will have to incur some expenditure for design-up -to-model tests. This approach will be more lucrative, and amount of export business will be large, and restricted not only to few systems.
Ladder to Success
Firstly, the formation of the Consortium Shipyard + MOD/Navy needs to be formalised, and a core group instituted and authorised to co-ordinate export related activities. Secondly, contact needs to be established in the regions of potential export market (in this case; Indonesia– Malaysia–Thailand; Saudi Arabia–UAE–Oman; Latin American countries) by making presentations, appointing/collaborating with suitable local persons/agencies/industry to represent the Indian Consortium in the respective countries of interest, and make frequent visits to keep abreast with the customer requirement.
Thirdly, the Indian Consortium needs to have a full fledged website depicting our capability in design and building of warships, and also of the ancilliary industry to supply the various systems, machinery, equipment and fittings for the ships. Fourthly, there will be need for aggressive marketing through local lobbyists with respective navies, shipyards and industries. Fifthly, the international weapon system suppliers will have to be kept as our consortium partners. Sixthly, it will also entail evolution of versatile concept designs for OPV, corvette, light frigate on our own, or through suitable collaboration with international players. These designs could be presented and discussed with the prospective customers in anticipation. Last but not the least, exports are reflection of the internal orders and there is need to adopt strategy to ensure that the Indian Navy’s requirements are supplied through Indian industry, even if there is collaboration with leading international players.