Monday, June 24, 2024

“TESCOM’s 15-Acre Drone Park Will House India’s Entire Drone Ecosystem”

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Electronics contract manufacturer TESCOM aims to be “the drone manufacturer of India.” In a candid conversation with EFY, TESCOM’s V. Balasubramani (Founder and MD) and B. Nandini (Director) and Flying Wedge’s Founder Suhas Tejaskanda revealed the company’s aspirational plans and investments to surpass Chinese prices and lead a drone manufacturing ecosystem in India.


Q. What types of electronic products does TESCOM manufacture, and who are your primary customer segments?

A. TESCOM has been in the electronics manufacturing service business for over 35 years. We’ve served as a contract manufacturer for diverse OEMs in automotive, IoT, medical electronics, industrial automation, defence, aerospace, and consumer electronics. Operating from three units in Bangalore and equipped with high-speed SMT lines in Coimbatore and Hosur, TESCOM stands out as the first Indian company for large-scale IoT module production. Renowned for our capabilities in handling 03015 package components, our equipment ensures optimal yields, which is our USP.

Q. What are your thoughts about the potential for growth for Drones in India?

A. The Indian Government views the drone sector as a major growth area, projecting a value of 295,000 crores by 2030, as per the EY FICCI report. Even with 50% indigenisation, this translates to a substantial 1,47,500 crores in Indian manufacturing. The rise of the drone industry will trigger manufacturing benefits across subcomponents such as motors, payloads, communication modules, batteries, propellers, assembly, navigation systems, and airframes. This, according to the report, will foster indigenisation in allied industries, aligning with the “Make in India” initiative and contributing significantly to India’s economy.

Q. What key capabilities are you building to cater to the unique requirements of the drone market?

A. TESCOM has proposed a 15-acre drone park that will house the entire drone ecosystem. We will follow the model where this ecosystem will supply to all in the drone market. We plan to have machining players, motor manufacturers, carbon fibre sheet processing, flight controller manufacturing, battery packs, and the other necessary sub-assemblies to meet the end-to-end needs of the drone industry. TESCOM’s pricing will beat international competition with the expected volume and growth.

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Drone testing needs a minimum of 5 acres of open land, a lab setup, and a classroom to train pilots, as per the DGCA guidelines, and we already possess this. We also plan to develop a Remote Pilot Training Organization to train drone pilots. This will complete the ecosystem and generate employment in rural areas. Customisation of drone manufacturing for different customers will be the highlight of this ecosystem.

Q. How do you manage the drone supply chain, including sourcing components and dealing with potential shortages?

A. Initially reliant on Chinese suppliers, we faced concerns with motor shortages. We’ve shifted to indigenous suppliers, validated their strengths, and aimed to expand this network. Collaborating with startups, we focus on R&D in battery manufacturing. The Electronics City Industries Cluster provides mechanical parts and we are working to increase their output. TESCOM and Flying Wedge aim for over 90% indigenisation of drone derivatives, with plans to manufacture all components except lithium core sourcing and ICs. Government schemes for MSMEs and large companies in the drone segment align with our goals. Initiatives to make parts in-house are underway, with a strategy to scale up current efforts.

Q. Are there any challenges you’ve encountered in this process? How did you overcome them?

A. We currently face challenges in sourcing lithium core and semiconductors, which are still being imported. We are sure that with India’s semiconductor policy, we will soon become self-sufficient with ICs. Since we depend on a few other countries for lithium core availability, we are working with our partners to identify other solutions apart from lithium. Though this is in a very nascent stage, we are sure of achieving this as well.

Q. What motivated you to partner with Flying Wedge?

A. The product quality, aligned and shared vision of both the companies, values between both the companies, knowledge, skill, and expertise of the Flying Wedge team are very refreshing and worthy to emulate. The cultural fit between our companies has been good, and we value each other and the strategic partnership. TESCOM and Flying Wedge are always ready for continuous improvement, which has been our driving force. We were quick to understand and concrete our partnership to be prepared to meet the global boom.

Q. What is the USP of Flying Wedge’s drones as compared to its competitors?

A. Flying Wedge is India’s first DGCA type-certified drone technology for agriculture. Its pesticide-carrying drones feature lightweight, easily interchangeable tanks designed for quick handling without external tools. Flying Wedge drones boast of a sturdy design, utilising aluminium and carbon fibre instead of plastic, enhancing airframe lifespan and crash durability. They are modular, portable, and easily reconfigurable for various use cases. A two-wheeler with a box case replaces the need for multiple people, large vehicles, and diesel, reducing operational costs. Equipped with auto-flight safety checks and mandatory health monitoring, these drones offer autonomous flights with built-in workflows and user-friendly interfaces.

Q. What are the types of drones Flying Wedge produces?

A. Flying Wedge was launched in February 2022, beginning with catcher drones which were supplied to L&T. We view this as a breakthrough and a milestone in our journey. From there, we developed the best-in-class agricultural and defence drones. We proudly hold a monopoly in the unique catcher and killer drone market. Our surveillance drones are actively guarding India’s borders and critical personnel.

Q. How will this USP affect Flying Wedge’s customers, and why should it matter to them?

A. Our cost reduction and innovative techniques will undoubtedly impact the drone industry. The modular nature will increase our drones’ popularity and ease of management. This will give us an edge over competitors who import drones as CKD and assemble them in India. Farmers will find our drones more comfortable to use with swappable tanks. Customers prioritise cost, comfort, and service, so they highly value our unique selling proposition (USP).

Q. What were the challenges Flying Wedge faced in developing this USP?

A. The first challenge was understanding what our competitors offered and making our strength and business model as our USP. Our target customers needed a cost-effective, easy-to-handle solution, and we had to work towards that. Initially, we used plastic for internal parts and components like the folding mechanism which holds the motor and the arm. This mechanism undergoes maximum stress, and redesigning it to aluminium while maintaining precision was challenging. Similarly, we worked towards a swappable pesticide tank and successfully achieved it. Our software was initially open-source, but later, we developed our customised software and firmware that is simple and stable. It is indeed a bold attempt to invest a huge amount of money in developing technology as a startup. We had no flying object type certified in India to look for a reference when we started, and we had to completely depend on foreign technologies, be it manned airplanes or unmanned aircraft. We wanted to change this and have a technology of our own to make India proud. The initial days of R&D were quite disappointing. The entire team struggled for about a year and finally achieved it. We are now India’s first and only type-certified indigenous unmanned aircraft technology company for the agriculture sector. Raising funds for R&D was the biggest challenge that we faced. Nobody was willing to believe in a group of youngsters trying out a new technology and a new product. At every stage, we had to prove ourselves and establish our competence.

Q. For which categories of drones have you partnered with TESCOM?

A. Currently, we have partnered with TESCOM for agricultural drones. We are sure of a long-term relationship where we also intend to extend the collaboration for defence drones. We have also partnered with TESCOM in the agricultural sector, showcasing drones as a service to the farmers.

Q. What key reasons prompted Flying Wedge to partner with TESCOM?

A. Flying Wedge is phenomenally good at research and technology. We were looking for an exceptionally good partner with expertise in electronics manufacturing and assembly. TESCOM’s managing director, V. Balasubramani, and director, Nandini, come with a combined experience of more than 50 years in the industry. They have been instrumental in building the Electronic City ecosystem. Balasubramani’s entrepreneurial capacity and risk-taking ability is very high, and they greatly aid in developing new ideas and projects.
We believe the relationship between an organisation and its supplier should go beyond simple buying and selling. It should have synergy in trust-building and alignment of goals. With TESCOM, we have found the comfort of managing the business and planning for risk management activities together. This has resulted in improvement in all sectors and helps Flying Wedge stay ahead of the curve. The strategic partnership is also helping in significant cost reduction. Also, TESCOM has served as a crucial lifeline during supply chain disruptions, offering alternate sources of supply or stepping in as contingency partners. This partnership ensures business continuity and fortifies the organisation’s resilience in the face of unforeseen challenges.

Q. Do you have similar partnerships with other manufacturers for other categories of drones?

A. We’ve partnered with the Electronic City Industries Association (ELCIA) Cluster. We manufacture the mechanical components at the ELCIA Cluster, which is also under the supervision of TESCOM. This unique consortium is India’s first and only unmanned aircraft manufacturing hub. Since TESCOM manages our supply chain and has demonstrated specialised knowledge for innovation in every aspect of manufacturing and they have been a part of our journey, we have never felt the need to partner with other manufacturers.

Q. What unique advantage can TESCOM offer its customers through partnership?

Prajwal Bhat, Co founder, Flying Wedge

A. Our integrated manufacturing facility ensures the lowest cost, matching or surpassing Chinese prices. Swift delivery is a priority, and transparency in operations fosters customer loyalty. We prioritise partnerships aligned with shared goals, offering cost, quality, and innovation advantages through controlled supply chains.

In the dynamic landscape of rapid innovation, our intent is to create a competitive advantage for customers. Collaborative partnerships enable us to understand market requirements, ensuring a continuous supply chain while fostering innovation. Through strategic alliances, we transform into valued business partners, translating benefits for customers. Our centralised manufacturing, coupled with planned automation, guarantees the highest quality and efficiency.

Q. Will such a partnership enable TESCOM to attract more drone customers, or will it act as a deterrent?

A. Partnering with customers will allow us to anticipate what our customers need and, in turn, understand what the market needs. We can be more engaged with the customer and build loyalty and trust as we will take ownership of the business by understanding end customer and market needs. With the current plan and strategy, since we will always be market-ready, we may attract more customers. As contract manufacturers, we always maintain the confidentiality of our customers, so handling multiple customers from the same vertical will not be a challenge. We plan to have separate manufacturing blocks in our drone park where each customer’s design will be taken for manufacturing. This will ensure total confidentiality.

Q. Why should drone OEMs look at outsourcing their manufacturing to TESCOM and not setting up their plant?

A. TESCOM offers drone OEMs valuable partnerships, ensuring agility, responsiveness, and economies of scale to meet sudden demand surges. Outsourcing to TESCOM alleviates concerns about the fragile global supply chain affected by geopolitical changes. Plans for a 15-acre drone park, with strategic partners for key components, ensure a hurdle-free supply chain. TESCOM’s horizontal integration aims to address challenges, positioning it as a leading player in drone manufacturing. Though not fully mature, drone technology and demand benefit from TESCOM’s large-scale horizontal integration, providing early access to solutions. The seamless ecosystem created by TESCOM will make its offerings attractive for the OEMs.

Q. Is TESCOM ready to work with startups that initially deal in very low quantities of drones, or are you aiming for the major players?

A. TESCOM will support startups by offering alignment, assistance, and long-term guidance. Our objective is to become the preferred white-label manufacturer for major OEMs, ensuring controlled processes and quality systems. We aim to surpass Chinese prices and supply chain efficiency by catering to small and large companies. Our ultimate goal is customisation and white labelling, with a commitment to confidentiality through unique designs for each customer.

Q. How does TESCOM view various initiatives and policies by the government of India (and some state governments) to drive demand for drones in India?

A. India has implemented leading regulations and policies addressing drone industry demand and supply through PLI and import bans. The global market is expected to follow suit, fostering rapid growth. The Drone Rules 2021 is a pivotal change for India’s drone industry. Central government subsidies include the NAMO Drone Didi Scheme (80% subsidy up to 8 lakhs), FPO Kisan Drone Subsidy (75% subsidy), and Individual Kisan Drone (50% subsidy up to 5 lakhs). Government initiatives like Vikasit Bharat Sankalp Yatra raise awareness. IFFCO procured 2500 drones this year, planning to support agriculturists more. Collaboration among ministries and departments addresses industry challenges, supporting startups and large companies for ecosystem development. Schemes for women and self-help groups highlight the inclusion of women pilots in India’s growing drone sector.

Q. What is your vision for TESCOM regarding drone manufacturing in India?

A. TESCOM aims to be India’s drone manufacturer, and our vision is aligned with the Indian government’s vision to turn India into a global drone hub. We intend to lead India’s drone manufacturing aspirations by becoming India’s premier drone destination. We want to lead the manufacturing of a seamless supply of all types of drones from all sectors and all categories. Our team headed by our Director Nandini is working on this at various levels and consolidating all the available resources in India.

Q. What challenges does TESCOM see in achieving this vision, and how do you plan to overcome them?

A. The communication gap between lawmakers and drone makers will be a challenge. Also, slow technology adoption due to a lack of awareness will delay the industry’s growth. The fear of losing jobs in the ground-level workforce in the agricultural sector will also be challenging. Issues may arise in getting permission for drone flights, and overseas demonstration of drone technology will be challenging. Without export, we cannot lead in the sector, so regulatory bodies need to help us in easing out export norms for drones.

Discussions with central and state government departments are underway, and we are collectively expressing our concerns. We see that the support we are getting from the government machinery is phenomenal, and all these concerns and challenges will be addressed as the goal and vision of India is to become the “drone capital of the world.”

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