So Mr. Kalyani, you know, India has seen a green revolution in the 1960s, then you had an IT revolution after that. Is it right to say that this gray revolution that I call began post 2014...
More than a gray revolution, this is a revolution that created confidence in Indians, in Indian industry, in Indian entrepreneurs who wanted to do. The problem was that during the initial period after Manohar Parrikar became defense minister, unfortunately, you know, for all of us in India, he didn't last for a very long time because of his health issues. But the changes he made were so fundamental that this is what we are seeing today is the fruits of those changes. A lot of people did a lot of work to make this happen. It just didn't happen by itself. The biggest advantage of this whole policy change and the whole procurement process change was that Indian technologies came on the surface, whether it came through DRDO, whether it came through private sector labs or public sector-private sector collaboration, but Indian technology came on the table. I had met many years ago the best gun designer in the world called Gerald Bull, and Gerald Bull's story itself is quite well known. It's all documented on the internet. Ultimately, he was shot down by Mossad, assassinated. Yes, assassinated. But before he was killed, I met him a couple of times in Belgium at the airport, Brussels airport. He drew the design of a base bleed shell and he said, 'Can you make this for me?' I said, 'Of course.' So he gave me an order of 250,000 base bleed attachments there on a paper napkin. Okay. And that's how our relationship started with Bull.
Mr. Kalyani, welcome to Chakran News. Such an honor to have you on our show.
Pleasure. Pleasure to be here. Pleasure to meet with you guys.
Tell us about your inspiration of getting into the defense business. You were one of the pioneers of the Atmanirbhar Indian movement even before it became a thing, more than 15 years ago, nearly two decades ago.
How did it begin? Why defense? And why was it an extension of what you were already doing?
You know, it all started with a concept that a lot of products that we produce here can be related to a lot of defense products. Actually, there was a time when the Kargil war happened, Indian army ran out of ammunition, the 155 mm ammunition for the Bofors gun. And the SA to the defense minister that time came down to my office. I mean, he just popped into my office one day and he said, 'We need 100,000 shells, we don't have ammunition and you need to do this in 6 months time.' We used to make a lot of 81 mm mortars and small things like that for the ordnance factories on tender basis on and off, but never made this 155 mm shell. But I took it up as a challenge and I said, 'Okay, we'll do it.' And we made it happen. We were able to make, you know, maybe not 100,000, but a pretty large quantity, 60-70,000 shells, fully machined, copper banded, ready to fill type condition, and supplied to the Indian army. And that was sitting in my memory for a long time. And when 2010-11 came, I said, 'Why don't we look at how to make gun barrels?' Actually, I had no idea of how to make a gun. So I was looking at how to make components, parts, because gun barrel is a component that gets worn out and has to be replaced after X number of shots, things like that. So I said, 'Let's make products that are replaceable so that becomes a revenue item for us.' So we started with that. And I did a little bit of research and I found that on the T-72 tanks, and it's there in the internet you can see and find out, almost 17,800 barrels were destroyed or blew up initially when the tank production started. So they had huge shortage of gun barrels for the tank program. So we said, 'Let's try and make that.' So we started working with ordnance factories, HVF, and you know, the factory in Avadi that makes the tank, but just simply couldn't get anywhere. And so that was in 2011-12. Then somehow I went to Cranfield University. And because Cranfield University is the DRDO of UK MOD, UK MOD moved its DRDO into Cranfield University. I went to Cranfield University. They have a school of artillery there. They teach artillery, how to design artillery, how to make artillery. They also have a huge showpiece of artillery from every country for the last 25-30 years. I mean, right from World War II till now. So they have American artillery guns, European ones, they didn't have an Indian one, but they had the British guns, etc. It was quite an interesting visit. And at that time, the professor who was teaching artillery there, there were some four Indian students, DRDO used to send four of their scientists in that course, that was a two or three year course at Cranfield. They used to send them every 2 or 3 years to learn about how to design artillery guns. So he told me that day that there is an artillery plant for sale which belongs to Rheinmetall near Zurich. Right. And it was set up fundamentally not to produce new artillery guns, was set up to service all the American artillery that was used in the Afghan war at that time. Right. And he said it's for sale and he showed me the tender documents, you know, for sale.
And this is in Switzerland, which is best known for chocolates, for cheese, for clocks, and for Yash Chopra films.
Exactly. But also for precision. Okay. So, and he said it's a good opportunity if you're interested in this. The whole plant is available. And you know, you want to make artillery gun, there are only four components that are critical to an artillery gun. And one is the ordnance, the gun barrel, the breech, the muzzle, the recoil system. This is one set, just the whole ordnance set. Then is the control system, the fire control system, your, I mean, in modern guns you have a gun control computer, etc. And then you have a whole set of ancillary things for ammunition handling systems and then your primer shooting for automation. Just four things are required. So I saw this opportunity. Next day I was in Zurich and it was about an hour's drive from Zurich. I went and met those guys. In the meantime, that professor had phoned them saying, 'You know, Mr. Kalyani, who is the chairman of Bharat Forge, a big company in India, he's going to come to meet you and he's interested in your plant.' That guy was trying to sell machine by machine, usual auction process. So I went there. I had a look around for 2 hours. I saw the plant. I was convinced that's a good facility. I told him I want to buy the whole plant and I told him, 'Name your price.' So he named his price. In 10 minutes I made a deal.
But this is the time you're ordering artillery when you have no...
I had no orders and I didn't even know how to make a gun. But this was an equipment. You would never get a chance to get this equipment at the price I got it. And it required permission of the Swiss government. It required permission of the German government because it was a German company that owned this facility. The typical buffer permissions and all that. So we got all that done in less than a month's time. I sent my engineers there. They dismantled everything and it came to Pune. In 6 months it was set up and slowly we started productionizing it. So we got a facility in 2011 which could make guns. Now we needed, you know, knowledge of how to make a gun. That is another coincidence in my life. I had met many years ago the best gun designer in the world called Gerald Bull. And Gerald Bull's story itself is quite well known. It's all documented on the internet. But this guy was an American who was kicked out of the US, went to Canada, was designing artillery guns. He was kicked out of Canada. He came to Europe. He tried to design the heavy gun for Saddam Hussein and then got a lot of people in jail. He himself was hounded. Ultimately, he was shot down by Mossad. Assassinated. Yes. Assassinated. But before he was killed, I met him a couple of times in Belgium at the airport in Brussels airport. It was just accidental actually first time when I met him. He drew the design of a base bleed shell. He was the designer, original designer of something called a base bleed shell. Base bleed shell increases the range of artillery ammunition by some 10-15%.
So it's rocket assisted projectile?
No, no. It's not rocket assisted. It's base bleed. The gases go through the bottom of the shell which is a little bit hollow and it generates a reduced air drag. That is what gives it a little higher range. I mean, Colonel, you know about this, right? And he ordered, he said, 'Can you make this for me?' I said, 'Of course.' So he gave me an order of 250,000 base bleed attachments there on a paper napkin. Okay. And that's how our relationship started with Bull. And he said, 'I have designed this gun. It is produced by MFL. There's a company in Austria.' That was a company that supplied 155 mm 45 caliber guns to Iraq and Iran during their war in large quantities.
The same company was supplying both?
MFL, Austrian company. That tells you Gerald Bull had given the technology to MFL. That's how it worked. So I went to, I forget who was the secretary defense that time, but nice guy. And I went to him and I said, 'I need to import one of these guns. I'll ensure that the barrel is drilled so you can't fire anything out of it. It's a dead gun, but I need to import it because I want my engineers to see and I want to see how this gun is and what do we need to produce it.' He gave me permission. I imported one gun and from that we learned so many things. In two years time we were able to make our own gun which is what I showcased in the defense expo in Delhi in 2012. Then of course, 2014 December came the Make in India and there was a Make in India for defense. I was part of that team in 2014. Late Manohar Parrikar was the defense minister at that time. And then the whole process started. He set up committees to streamline the defense acquisition process. How to bring private sector into that. At that time private sector had no licenses to produce defense products. Right? Defense products were only made by public sector enterprise and you had that monolith that the ordnance factory board. And Amitabh Kant was then the DIPP secretary, DIPP is the governing ministry for giving licenses that time. So after the whole Make in India conference, DIPP said, 'Whoever wants to apply for defense licenses please apply and he will clear those licenses in 15 days.' So we all applied and as true to his word he cleared everybody's licenses in 15 days. Earlier we used to get a license which was valid for one year and if you didn't produce in one year then you have to reapply for a license. Okay. Now in defense you can't produce in one year because it takes 5 years to get an order in the first place. So that itself was a crazy situation.
What's the reason for this, Mr. Kalyani? Is it because they didn't trust the private sector enough?
