Aerospace companies move from manufacturing to services. But Quest Global has taken the opposite route. Can one feed into the other to beat competition?

Image: Mallikarjun Katakol for Forbes India

Quest Global Incs aerospace facility on the outskirts of Belgaum

he skies over Bangalores Yelahanka airbase thundered with the sound of fighter planes, helicopters, turboprops and other aircraft. As the biennial air showits 2013 edition in February is considered Asias biggest-ever aviation eventwas in action, one aircraft had a different flight path: Business jet Embraer Phenom-100 made chartered flights to Belgaum. Perhaps it was the right time for Quest Global Inc to show potential customers that the aerospace hub it has been building is ready for take-off.

On the outskirts of Belgaum, nearly 500 km from Banglaore, is the 300-acre special economic zone (SEZ) set up by Quest. Driving through the beautiful landscape, it is difficult to believe it could soon be the most sophisticated industrial belt in the region. It is already notified as the states first precision engineering region. You can walk away from this place with a finished [aerospace/automotive] product without stepping out of this facility, says Aravind Melligeri, co-founder and chief executive of Quest Global Inc, the manufacturing arm of Quest Global Engineering.

No other facility in India, other than state-owned Hindustan Aeronautics, can claim such a design-to-build capability in aerospace. It is built very neatly, in a graded manner, says Ashok Baweja, former chairman of Hindustan Aeronautics.

Over the past four years, Quest has developed essential capabilities of an aerospace cluster, such as machining, surface treatment, forging and assembly. It has done some on its own; for others, it formed joint ventures with overseas partners: Magellan Aerospace of Canada, Saab of Sweden and Aubert & Duval of France. The ventures are to serve the global supply chain, although Indias share in the $100 billion commercial aerospace manufacturing is a paltry $100 million.

It was the 2005 defence offsets policy that turned things on its head. Most industrial groups, including the Tatas, Mahindras and L&T, formed partnerships and talked big investments. Looking back, it appears they moved opportunistically. Even the human resource deployment was convenience-based, says a public sector aerospace official who saw automotive professionals handling aerospace projects. Three SEZs, two in Hyderabad and one in Bangalore, were also announced.

This February, Karnataka announced a 10-year aerospace policy, which will target $10 billion in investment. It also announced a 1,000-acre industrial park near its SEZ. Even if one considers all this to be hot air, it remains plausible for states to roll out the red carpet for big companies. Additionally, the conglomerates are finally getting a hang of this high compliance industry. Mahindra Aerospaces first greenfield project is nearing completion in Kolar. With competition soaring, can Quest create an aerospace cluster in Belgaum, like Toulouse near Paris or Wichita near Kansas City?

Melligeri has bet his life he can.

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Aerospace Engineering Firm Quest Global's Changing Lanes