Manufacturing of Artillery Shell Bodies/Bombshell

MANUFACTURING OF ARTILLERY SHELL BODIES/BOMBSHELL

[EIRI/EDPR/4785] J.C.: 3005XL

INTRODUCTION

India’s ambitious defense modernization programs are a key driver of growth in the Ammunition industry. The modernization efforts are backed by financial commitments, including a significant allocation of the defense budget to capital expenditures. The Government’s initiatives to promote defense production and export play a pivotal role in this context, aiming to increase domestic production and reduce reliance on imports.

The Indian Ammunition industry is on a fast track to grow. In the current defense budget, 27.67 percent of the total was allocated for capital acquisition. Self-reliance is a significant growth driver, propelling the industry towards greater independence and enhanced capabilities. The Indian Government’s ‘Atmanirbhar Bharat’ initiative underscores this focus by prioritizing domestic production and reducing dependency on imports.

In the positive indigenization list released to date, there are approximately 85 items that have been identified by Ministry of Defense (MoD) to be indigenized by 2034.

COST ESTIMATION

Plant Capacity            1200 Nos/Day

Land & Building (10 Acres)    Rs. 34.43 Cr

Plant & Machinery                    Rs. 134.73 Cr

Working Capital for 2 Months    Rs. 83.26 Cr

Total Capital Investment          Rs. 262.09 Cr

Rate of Return                          36%

Break Even Point                      43%

CONTENTS

INTRODUCTION

MARKET SIZE

OVERVIEW OF AMMUNITION IMPORTS AND EXPORTS

IMPORT

EXPORT

CHALLENGES AND OPPORTUNITIES

TECHNOLOGICAL HURDLES

SUPPLY-SIDE CONSTRAINTS

REGULATORY BARRIERS

WAY FORWARD

INTERNATIONAL COLLABORATION

TECHNOLOGICAL CAPABILITIES

INDUSTRY OVERVIEW

MACROECONOMIC OUTLOOK

MACROECONOMIC OVERVIEW

PUBLIC ADMINISTRATION, DEFENCE, AND OTHER SERVICES SECTOR GVA GROWTH

BUDGET ALLOCATION TOWARDS DEFENSE IN INDIA

GEOPOLITICAL OVERVIEW

MANUFACTURING GVA GROWTH

GLOBAL GEOPOLITICAL CONTEXT

INDIA GEOPOLITICAL CONTEXT

IMPACT OF RECENT WARS ON THE DEFENCE SECTOR

IMPACT OF INLAND AND CIVILIAN CONFLICTS ON DEFENCE SECTOR

IMPACT OF TERRORISM ON DEFENCE SECTOR

DEFENCE INDUSTRY OVERVIEW

GLOBAL DEFENCE SPENDING OVERVIEW GLOBAL DEFENCE SPENDING

KEY TRENDS

INDIA’S DEFENCE SPENDING OVERVIEW

INDIA’S DEFENCE SPENDING

SHARE OF CAPITAL VERSUS REVENUE EXPENDITURE

GROWTH DRIVERS OF INDIA’S DEFENCE SPENDING

INDIAN DEFENCE MODERNIZATION PROGRAMME

FINANCIAL BUDGET FOR CAPITAL EXPENDITURE

GOVERNMENT’S ‘AATMANIRBHAR BHARAT’ INITIATIVE TO PRIORITIZE DOMESTIC PRODUCTION ACROSS SECTORS

GOVERNMENT INITIATIVES TO PROMOTE DEFENCE PRODUCTION

EFFORTS TO REDUCE RELIANCE ON IMPORTS AND PROMOTE EXPORTS

STRATEGIC MILITARY DEVELOPMENTS

POSITIVE INDIGENIZATION LIST BARRING AMMUNITION IMPORTS

INDIA’S DEFENCE EXPORTS

INDIA’S DEFENCE IMPORTS

INDIGENIZATION TRENDS AND IMPACT ON IMPORTS AND EXPORTS

INDIAN DEFENCE INDUSTRY EVOLUTION

INDIAN DEFENCE INDUSTRY POLICY AND REGULATION UPDATES

KEY TRENDS IN INDIAN DEFENCE INDUSTRY

INDIA DEFENCE MODERNIZATION PROGRAMS AND INCREASE IN BUDGET FOR MODERNIZATION OF 

DEFENCE

FAVOURABLE FACTORS SUPPORTING DEFENCE PRODUCTION AND EXPORT PROMOTION

AMMUNITION MARKET

OVERVIEW OF AMMUNITION AND VALUE CHAIN AND MANUFACTURING

VALUE CHAIN AND MANUFACTURING

GLOBAL AMMUNITION MARKET

GLOBAL AMMUNITION MARKET BREAKDOWN BY VARIOUS TYPES – SMALL, MEDIUM AND LARGE

INDIAN AMMUNITION MARKET

INDIAN AMMUNITION MARKET BREAKDOWN BY VARIOUS TYPES – SMALL, MEDIUM AND LARGE

KEY GROWTH DRIVERS OF AMMUNITION MARKET

COST ANALYSIS OF AMMUNITION

KEY TRENDS IN AMMUNITION

IMPACT OF INDIGENIZATION POLICY

REGULATORY COMPLIANCES FOR SETTING UP A DEFENCE COMPANY IN INDIA

EXPORT POTENTIAL

INDIAN MANUFACTURING INDUSTRY

INTRODUCTION

INVESTMENT

GOVERNMENT INITIATIVES

STEEL INDUSTRY

GLOBAL ECONOMY OUTLOOK

CHART 1: GLOBAL GROWTH OUTLOOK PROJECTIONS (REAL GDP, Y-O-Y CHANGE IN %)

ADVANCED ECONOMIES GROUP

EMERGING MARKET AND DEVELOPING ECONOMIES GROUP

TABLE : GDP GROWTH TREND COMPARISON - INDIA V/S OTHER EMERGING AND DEVELOPING ECONOMIES (REAL GDP, Y-O-Y CHANGE IN %)

GLOBAL & INDIAN STEEL INDUSTRY

GLOBAL STEEL PRODUCTION

GLOBAL PER CAPITA CONSUMPTION (IN KG)

REGION-WISE GLOBAL CAPACITY IN CY22 (IN MT)

GLOBAL STEEL PRODUCTION

GLOBAL CRUDE STEEL PRODUCTION

STEEL PRODUCTION GEOGRAPHICAL REGION IN CY22- 1,885 MT

GLOBAL STEEL CONSUMPTION

GLOBAL STEEL DEMAND

GLOBAL MACROECONOMIC VIEW

GLOBAL GDP GROWTH TO STAY MODERATE

GLOBAL ECONOMIC REVIEW AND OUTLOOK

P: PROJECTED

INFLATION TO EASE AFTER PEAKING IN CY 2022.

CPI INFLATION REVIEW AND OUTLOOK

DOMESTIC FOCUS TO RESTRICT WORLD TRADE GROWTH IN 2023

WORLD TRADE IN GOODS AND SERVICES

P: PROJECTED

GLOBAL FOREIGN DIRECT INVESTMENTS ACROSS WORLD DECLINED 12% IN 2022. INDIA WITNESSED A DECLINE IN TOTAL FDI3 BY 16% IN FISCAL 2023

SUPPORTIVE POLICY ENVIRONMENT TO MAKE INDIA KEY DESTINATION UNDER CHINA PLUS ONE

AMMUNITION MANUFACTURING PROCESS

THE LAPING PROCESS CAN BE BROADLY DEPICTED BY A PROCESS FLOW CHART GIVEN BELOW:

DETAILED SPECIFICATION

155MM AMMUNITION

AMMO 155M FOR IMMEDIATE DELIVERY FROM THE STOCK:

1. 155MM HE QUANTITY 12.100 PCS YEAR OF PRODUCTION 1975-1999

AMMUNITION FILLING PLANT METHOD OF SCREW EXTRUSION

FILLING OF AMMUNITION BY THE METHOD OF SCREW EXTRUSION

BASIC SPECIFICATION

ADVANTAGES OF FILLING AMMUNITION BY SCREW EXTRUSION METHOD

HOW DOES THE SCREW EXTRUSION FILLING WORK? 

QUALITY CONTROL

LAYOUT OF FILLING PLANT

BASIC DATA FOR IMPLEMENTATION OF SCREW EXTRUSION FILLING MACHINE

ROOMS DESIGNATION

SA-11 SCREW EXTRUSION FILLING MACHINE

SPECIFICATION

FEATURES

SECTIONS OF THE FILLED ARTILLERY SHELLS

OPTIONS IN SHELL HANDLING SYSTEM (SHS)

OPTION 1

MANUAL SHELL HANDLING SYSTEM

OPTION 2

SEMI - AUTOMATIC SHELL HANDLING SYSTEM

KEY REGULATIONS AND POLICIES IN INDIA

I. INDUSTRY SPECIFIC LEGISLATIONS

DEFENCE ACQUISITION PROCEDURE 2020, AS AMENDED (“DAP”)

DRAFT DEFENCE PRODUCTION & EXPORT PROMOTION POLICY, 2020 AS AMENDED (“DRAFT DPEPP”)

INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 (“INDUSTRIES ACT”)

THE ARMS ACT, 1959 AS AMENDED (“ARMS ACT”) AND THE ARMS RULES, 2016 AS AMENDED (“ARMS RULES”)

EXPLOSIVES ACT, 1884 AS AMENDED (“EXPLOSIVES ACT”) AND THE EXPLOSIVES RULES, 2008 AS AMENDED (“EXPLOSIVES RULES”)

BUREAU OF INDIAN STANDARDS ACT, 2016 (“BIS ACT”)

I. LABOUR AND WELFARE RELATED LEGISLATIONS

FACTORIES ACT, 1948, AS AMENDED ( THE “FACTORIES ACT”)

OTHER LABOUR LAW LEGISLATIONS

I. INTELLECTUAL PROPERTY LAWS

THE TRADE MARKS ACT, 1999 (THE “TRADEMARKS ACT”)

THE PATENTS ACT 1970, AS AMENDED (THE “PATENTS ACT”)

THE DESIGNS ACT, 2000 (THE “DESIGNS ACT”) AND THE DESIGNS RULES 2001, AS AMENDED

II. FOREIGN INVESTMENT AND TRADE REGULATIONS

FOREIGN EXCHANGE LAWS

FOREIGN TRADE POLICY (THE “FTP”) 2023

CUSTOMS ACT, 1962 (“CUSTOMS ACT”), THE CUSTOMS TARIFF ACT, 1975 AND RULES MADE THEREUNDER

I. OTHER APPLICABLE LEGISLATIONS

VI. STEEL AND STEEL PRODUCTS (QUALITY CONTROL) ORDER, 2020 (“QC ORDER”)

NATIONAL STEEL POLICY, 2017 (“NSP 2017”)

PROJECT LOCATION: GUJARAT

LIST OF DOCUMENTS REQUIRED TO GET FOR LICENSES

DOCUMENTS:

OTHER LICENSES REQUIRED FOR THE SETUP:

PRINCIPLES OF PLANT LAYOUT

STORAGE LAYOUT: 

EQUIPMENT LAYOUT: 

SAFETY:  

PLANT EXPANSION:    

FLOOR SPACE:  

UTILITIES SERVICING:  

BUILDING: 

MATERIAL-HANDLING EQUIPMENT:  

RAILCOADS  AND  ROADS :    

SOME OF THE FACTORS IN RAIL-TRACK PLANNING ARE:

MAJOR PROVISIONS IN ROAD PLANNING FOR MULTIPURPOSE SERVICE ARE :

PLANT LOCATION FACTORS

PRIMARY FACTORS

1. RAW-MATERIAL SUPPLY:

2. MARKETS:

3. POWER AND FUEL SUPPLY:

4. WATER SUPPLY:

5. CLIMATE:

SPECIFIC FACTORS

6. TRANSPORTATION:

7. WASTE DISPOSAL:

8. LABOR:

9. REGULATORY LAWS:

10. TAXES:

11. SITE CHARACTERISTICS:

12. COMMUNITY FACTORS:

13. VULNERABILITY TO WARTIME ATTACK:

14. FLOOD AND FIRE CONTROL:

EXPLANATION OF TERMS USED IN THE PROJECT REPORT

DEPRECIATION:

FIXED ASSETS:

WORKING CAPITAL:

BREAK-EVEN POINT:

OTHER FIXED EXPENSES:

MARGIN MONEY:

TERM LOANS:

TOTAL LOAD:

LAND AREA/MAN POWER RATIO:

UTILITIES 

POWER

WORKING 

TOTAL MANPOWER AND PAYROLL 

UTILITIES

PLANT & MACHINERY MANUFACTURER 

VESSEL SUPPLIERS

LABORATORTY EQUIPMENTS MANUFACTURERS

D.G. SET MANUFACTURERS & SUPPLIERS

SUPPLIERS OF BILLET CUTTING MACHINE

SUPPLIERS OF ELECTROPLATING PLANT

SUPPLIERS OF ANNEALING FURNACES

SUPPLIERS OF HEAT TREATMENT FURNACE

SUPPLIERS OF HARDNESS TESTING MACHINE

SUPPLIERS OF CLOSE DIE HOT FORGING MACHINE

SUPPLIERS OF FORGING DIES

SUPPLIERS OF INDUCTION HEATING FURNACE

SUPPLIERS OF CNC MACHINING CENTRE

SUPPLIERS OF METAL TESTING MACHINE

SS PIPE & TUBE MANUFACTURER

ELECRICAL GOOD & SWITCH MANUFACTURE

ELECTRICAL PANEL & BOARD MANUFACTURERS

LATHE MACHINE MANUFACTURERS

CNC MACHINE MANUFACTURERS

PANEL/SHEET BENDING MACHINE MANUFACTURERS

BRAZING MACHINE MANUFACTURERS

EXPANDER MANUFACTURER

SUPPLIERS/MANUFACTURERES OF EOT CRANE

WEIGHING BREIDGE MANUFACTURER

STEEL PRODUCTS MANUFACTURING PLANT & MACHINERY SUPPLIERS

PREHEATING FURNACE MANUFACTURERS

HIGH CAPCITY BOILERS MANUFACTURERS & SUPPLIERS

SWOT ANALYSIS

SWOT FOR THE DEFENCE INDUSTRY

ORGANIZATION CHART

PLANT LAYOUT

IMPLEMENTATION SCHEDULE

DRAFT

DEFENCE PRODUCTION & EXPORT PROMOTION POLICY (DPEPP) 2020

1. PREAMBLE

2. VISION

3. GOALS AND OBJECTIVES

4. FOCUS AREAS

5. PROCUREMENT REFORMS

6. INDIGENIZATION AND SUPPORT TO MSMES/STARTUPS

IN ORDER TO ACHIEVE THIS OBJECTIVE, FOLLOWING STRATEGIES ARE PROPOSED:

7. OPTIMIZE RESOURCE ALLOCATION

8. INVESTMENT PROMOTION, FDI AND EASE OF DOING BUSINESS

9. INNOVATION AND R&D

DEFENCE R&D

INNOVATION

10. DPSUS/OFB

11. QUALITY ASSURANCE AND TESTING INFRASTRUCTURE

12. EXPORT PROMOTION

13. GOVERNANCE

APPENDIX – A:

01. PLANT ECONOMICS

02. LAND & BUILDING

03. PLANT AND MACHINERY

04. OTHER FIXED ASSESTS

05. FIXED CAPITAL

06. RAW MATERIAL

07. SALARY AND WAGES

08. UTILITIES AND OVERHEADS

09. TOTAL WORKING CAPITAL

10. TOTAL CAPITAL INVESTMENT

11. COST OF PRODUCTION

12. TURN OVER/ANNUM

13. BREAK EVEN POINT

14. RESOURCES FOR FINANCE

15. INSTALMENT PAYABLE IN 5 YEARS

16. DEPRECIATION CHART FOR 5 YEARS

17. PROFIT ANALYSIS FOR 5 YEARS

18. PROJECTED BALANCE SHEET FOR (5 YEARS)